Legislature(2015 - 2016)HOUSE FINANCE 519

04/17/2015 01:30 PM FINANCE


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10:27:31 PM Start
10:28:27 PM SB26
11:08:27 PM Amendments
11:48:43 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to a Call of the Chair --
+= SB 26 BUDGET: CAPITAL TELECONFERENCED
+ SB 46 MUNI BOND BK;REG HEALTH ORGS;JT ACT AGNCY TELECONFERENCED
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 17, 2015                                                                                           
                         10:27 p.m.                                                                                             
                                                                                                                                
10:27:31 PM                                                                                                                   
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Thompson called the House Finance Committee                                                                            
meeting to order at 10:27 p.m.                                                                                                  
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Lance Pruitt                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Joe  Michel,  Staff,  Representative   Steve  Thompson;  Sana                                                                   
Eire,  Assistant  Commissioner,   Department  of  Health  and                                                                   
Social  Services;   Jeff  Ottesen,   Director,  Division   of                                                                   
Program   Development,  Department   of  Transportation   and                                                                   
Public Facilities.                                                                                                              
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 26     BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          HCS CSSB 26 (FIN) was REPORTED out of committee                                                                       
          with a "do pass" recommendation.                                                                                      
                                                                                                                                
Co-Chair Thompson reviewed the agenda for the meeting.                                                                          
CSSB 26(FIN)                                                                                                                  
                                                                                                                                
     "An Act  making and  amending appropriations,  including                                                                   
     capital  appropriations,   supplemental  appropriations,                                                                   
     reappropriations,   and  other  appropriations;   making                                                                   
     appropriations     to    capitalize    funds;     making                                                                   
     appropriations  under art. IX, sec.  17(c), Constitution                                                                   
     of the State  of Alaska, from the  constitutional budget                                                                   
    reserve fund; and providing for an effective date."                                                                         
                                                                                                                                
10:28:27 PM                                                                                                                   
                                                                                                                                
Co-Chair  Neuman  MOVED  to  ADOPT   the  proposed  committee                                                                   
substitute   for  CSSB  26(FIN),   Work  Draft   29-GS1781\L,                                                                   
Martin, 4/17/15.                                                                                                                
                                                                                                                                
JOE MICHEL,  STAFF, REPRESENTATIVE STEVE  THOMPSON, addressed                                                                   
the changes in  the committee substitute (CS).  He referenced                                                                   
page 14,  line 9 that added  $25 million in  federal receipts                                                                   
for the  Juneau access  project.  He moved  to page 27,  line                                                                   
22, and  noted that  the Medicaid  Services line was  reduced                                                                   
from  $40 million  to  $30 million.  He  turned  to page  35,                                                                   
Section 17, line 23 and read:                                                                                                   
                                                                                                                                
     (4)  to the  Department of  Corrections,  not more  than                                                                   
     seven percent of the total amount appropriated;                                                                            
                                                                                                                                
Mr.  Michel   reported  that   the  language  regarded   fuel                                                                   
triggers. He relayed  that the former Section  20 was removed                                                                   
from  the bill  and  was a  fund transfer  in  the amount  of                                                                   
$13.3 million, which  was appropriated from the  general fund                                                                   
to the  Alaska Housing Capital  Corporation account.  He drew                                                                   
attention  to Section 29,  beginning on  page 42,  subsection                                                                   
27 (line  4, page  45) which contained  the addition  of $175                                                                   
thousand  to  the Department  of  Environmental  Conservation                                                                   
(DEC)  appropriation  for  Naknek.  He  elaborated  that  the                                                                   
previous   Section  30   was   removed   which  contained   a                                                                   
reappropriation  of the  unexpended  and unobligated  balance                                                                   
not to  exceed $850 thousand of  the estimated balance  of $2                                                                   
million  from the Department  of Health  and Social  Services                                                                   
(DHSS)  Fairbanks  Virology  Lab   for  the  Municipality  of                                                                   
Anchorage's  Domestic  Violence  and  Sexual  Assault  (DVSA)                                                                   
program. The money  was going to be returned to  DHSS but the                                                                   
item  was  removed  from  the budget.  He  cited  Section  35                                                                   
beginning   on   page   48,   line  9)   that   was   a   DOT                                                                   
reappropriation  for  the Inter-Island  Ferry  Authority  for                                                                   
its northern  route service. He  pointed to Section  36 (page                                                                   
48,  line  24) and  remarked  that  the Norton  Sound  Health                                                                   
Corporation  funding  for  feasibility  planning  and  design                                                                   
work  for  the  Behavioral Health  and  Wellness  Center  was                                                                   
removed.  He identified  that Section 37  (beginning on  page                                                                   
48,  line  29),   the  governor's  reappropriation   of  $900                                                                   
thousand was  reduced to  $725 thousand  and of that  amount,                                                                   
$175   thousand  was   appropriated  to   Arctic  Power   for                                                                   
promoting Arctic  energy issues.  He concluded with  the last                                                                   
change  found  on  page  61 that  extended  the  13th  Avenue                                                                   
Gateway Elementary Improvements for one year.                                                                                   
                                                                                                                                
Representative  Gara asked  whether any  language related  to                                                                   
the Constitutional  Budget Reserve was included  in the bill.                                                                   
Co-Chair  Thompson replied  that language  had been  inserted                                                                   
but was subsequently  removed. Mr. Michel concurred  with Co-                                                                   
Chair Thompson.                                                                                                                 
                                                                                                                                
Representative  Gara  cited  the  cut  to  Medicaid  Services                                                                   
found on  page 27  and asked for  more information.  Co-Chair                                                                   
Thompson replied  that the original  figure was  $92 million,                                                                   
which  was  reduced to  $40  million  and combined  with  the                                                                   
current reduction totaled $30 million.                                                                                          
                                                                                                                                
10:36:54 PM                                                                                                                   
                                                                                                                                
SANA  EFIRD,  ASSISTANT COMMISSIONER,  DEPARTMENT  OF  HEALTH                                                                   
AND SOCIAL  SERVICES, responded  that the  money included  in                                                                   
the  $30  million   was  a  supplemental  request   from  the                                                                   
department.                                                                                                                     
                                                                                                                                
Representative  Gara  asked  whether  the  department  agreed                                                                   
with the item. Ms. Efrid responded affirmatively.                                                                               
                                                                                                                                
Representative   Gara  asked   about  the   removal  of   the                                                                   
reappropriation  for domestic  violence  and sexual  assault.                                                                   
Mr. Michelle  explained that the  transaction related  to the                                                                   
FY 2015  budget; DHSS funded the  money to the  DVSA project.                                                                   
The money  was reappropriated  back  to DHSS  in the FY  2016                                                                   
budget and  the reappropriation  was currently being  removed                                                                   
in the CS.                                                                                                                      
                                                                                                                                
Co-Chair Thompson  asked for  more information regarding  the                                                                   
$25 million  in federal receipts  for the Juneau  access road                                                                   
and the  $45 million  appropriation for  the Knik Arm  Bridge                                                                   
project and what  the consequences were of not  including the                                                                   
appropriations.                                                                                                                 
                                                                                                                                
JEFF  OTTESEN,  DIRECTOR, DIVISION  OF  PROGRAM  DEVELOPMENT,                                                                   
DEPARTMENT   OF   TRANSPORTATION   AND   PUBLIC   FACILITIES,                                                                   
answered  that  both  of  the  projects  remained  under  the                                                                   
governor's   administrative   order   number  271   and   the                                                                   
appropriations  could  only  be  accessed if  the  order  was                                                                   
lifted and "several  downstream steps were  accomplished." He                                                                   
explained  that the  Juneau access  project  had to  complete                                                                   
the  National  Environmental  Policy  Act  (NEPA)  record  of                                                                   
decision.  The Knik Arm  Bridge project  had to complete  the                                                                   
Transportation  Infrastructure  Finance  and  Innovation  Act                                                                   
(TIFIA)  application and  await approval.  He expounded  that                                                                   
the federal  agencies reacted to  any hesitancy shown  by the                                                                   
state  once a  plan was  approved.  The appropriations  would                                                                   
assist the process  of moving forward on the  projects if the                                                                   
administrative order was lifted.                                                                                                
                                                                                                                                
Co-Chair  Thompson  asked whether  the  appropriations  would                                                                   
negatively   affect   any  other   Statewide   Transportation                                                                   
Improvement  Program (STIP) projects.  Mr. Ottesen  responded                                                                   
in  the negative  and  stated  that the  appropriations  were                                                                   
demonstrating "intent"  and were not expected  to be expended                                                                   
in  FY 2016.  Co-Chair  Thompson  asked whether  the  federal                                                                   
government could  take the money  back if the funds  were not                                                                   
appropriated.  Mr. Ottesen informed  the committee  that each                                                                   
year the Department  of Transportation and  Public Facilities                                                                   
(DOT) was  federally required  to have enough  projects ready                                                                   
and eligible to  use federal funding or the  funding would be                                                                   
rescinded and reappropriated to  another state. He added that                                                                   
projects were  complex and sometimes  took several  years and                                                                   
could get  easily stalled  in the  process. The  department's                                                                   
challenge  was to have  enough projects  ready to retain  the                                                                   
federal monies  and the two  large projects would  assist DOT                                                                   
in the process.                                                                                                                 
                                                                                                                                
Co-Chair  Thompson asked  whether some  of the two  project's                                                                   
federal  dollars could  be  used for  other  projects on  the                                                                   
STIP using  a STIP amendment.  Mr. Ottesen answered  that the                                                                   
department's  challenge   was  not  having   enough  eligible                                                                   
projects for  the available funding.  He voiced that  DOT was                                                                   
averaging approximately  $100 million to $150  million during                                                                   
the course of  one fiscal year in excess money  from projects                                                                   
that were  being completed  under-budget. He delineated  that                                                                   
the  unused   project  funding   was  referred  to   as  "de-                                                                   
obligations."    The  department  must expend  the  funds  on                                                                   
another  federal  project within  the  same fiscal  year.  He                                                                   
maintained   that  the   de-obligations   allowed  the   mega                                                                   
projects  to move  forward  without impacting  the  "regular"                                                                   
program projects.                                                                                                               
                                                                                                                                
10:44:08 PM                                                                                                                   
                                                                                                                                
Representative  Gattis asked  whether  the funding  was in  a                                                                   
"use  it or  lose  it" situation.  She  wondered whether  the                                                                   
department  lost federal  funding in  the past  based on  the                                                                   
de-obligation   scenario.  Mr.   Ottesen  responded   in  the                                                                   
negative.  However, he worried  that DOT  was likely  to lose                                                                   
some funding in the future.                                                                                                     
                                                                                                                                
Representative Gara  asked whether the Juneau  Access project                                                                   
and the  Knik Arm crossing were  ready to receive  funds. Mr.                                                                   
Ottesen replied  that the projects  were not currently  ready                                                                   
but  it was  acceptable  if the  projects  were  ready in  FY                                                                   
2016,  FY  2017,  or  FY  2018.   Representative  Gara  asked                                                                   
whether  DOT had  considered  expanding  the "most  dangerous                                                                   
highway in  Alaska;" the road  between Anchorage  to Portage.                                                                   
Mr. Ottesen  responded  that DOT had  several Seward  Highway                                                                   
projects. He articulated  that the projects were  complex due                                                                   
to several  factors including  the endangered beluga  whales,                                                                   
Chugach  State Park "4(f)"  issues, active  utility line,  an                                                                   
active   railroad    line,   and   active    traffic   during                                                                   
construction. The  factors were slowing down  the preliminary                                                                   
work by several years.                                                                                                          
                                                                                                                                
Representative  Guttenberg   asked  whether  the   money  was                                                                   
appropriated  in  the  previous year's  budget.  Mr.  Ottesen                                                                   
responded  in the affirmative  and added  that DOT  requested                                                                   
funding  authority  on  a  sustained   basis  to  demonstrate                                                                   
intent.                                                                                                                         
                                                                                                                                
Representative Guttenberg  discussed how the STIP  worked. He                                                                   
thought that when  DOT accepted federal money  for a specific                                                                   
large  project  subsequently,  the STIP  was  reassessed  and                                                                   
other  projects were  displaced lower  on the  STIP and  were                                                                   
delayed  for one  or two  years. Previously  funding for  the                                                                   
Juneau  Access project  moved  other projects  down the  list                                                                   
displacing projects  that have  been in the planning  process                                                                   
for  one  or   more  years  and  displacing   other  projects                                                                   
indefinitely. He  expressed concern that accepting  the large                                                                   
project  funding  "constantly"  displaced and  delayed  other                                                                   
projects that  were "in the works  for a long time"  and were                                                                   
closer to being ready.                                                                                                          
                                                                                                                                
Mr. Ottesen  responded  that the question  was "complex"  and                                                                   
the department  played "a zero  sum game." He  explained that                                                                   
some  projects on  the  STIP slow  down  as  the fiscal  year                                                                   
progresses  either due  to permitting  or  other issues.  The                                                                   
STIP  displacement  process  that  Representative  Guttenberg                                                                   
referred to  was "very real" but  was driven largely  by "the                                                                   
facts on  the ground of  individual project progress"  rather                                                                   
than  any  indiscriminate  decision  making  process  by  the                                                                   
department.  The motivating  factor  for DOT  was not  losing                                                                   
the funding  to another state.  In essence, any  shovel ready                                                                   
project on  the STIP displaced  another project on  the STIP.                                                                   
He  discussed the  fact  that  historically a  large  project                                                                   
took  money  away  from  other   projects  on  the  STIP.  He                                                                   
exemplified  the  year  the marine  highway  vessel  the  M/V                                                                   
Kennicott was  built and a  large portion of  federal funding                                                                   
was  allocated to  the project  in  one fiscal  year, at  the                                                                   
expense  of   other  projects.   Presently,  the   department                                                                   
discovered   ways  to   "moderate"   the   pace  of   project                                                                   
construction  to  keep  each  project's  spending  relatively                                                                   
small compared to  the fiscal year's total  program spending.                                                                   
He added  that DOT  did not "necessarily"  expend funding  at                                                                   
the same  pace the  legislative authority  was requested.  He                                                                   
commented  that  DOT  was  "very   mindful  of  managing  the                                                                   
program" in  a way that  was inclusive  of every part  of the                                                                   
state.                                                                                                                          
                                                                                                                                
10:51:45 PM                                                                                                                   
                                                                                                                                
Representative  Guttenberg commented  that in  some ways  Mr.                                                                   
Ottesen   agreed  with   him.   He  related   from   personal                                                                   
experience  that he  saw a  project in  Fairbanks, "ready  to                                                                   
go" listed on  the STIP for approximately ten  years, only to                                                                   
be  displaced  year  after  year.  The  contractors  involved                                                                   
invested  in equipment  in preparation  for the project,  but                                                                   
were  delayed year  after  year.  He reiterated  his  concern                                                                   
about  new project  money displacing  other  projects on  the                                                                   
STIP "…that people are waiting for… year after year."                                                                           
Mr.  Ottesen restated  the  problem differently.  He  pointed                                                                   
out that currently  although over half of the  federal fiscal                                                                   
year  was over  only one  third  of the  federal funding  was                                                                   
obligated.  Therefore,  two-thirds  of  the  federal  funding                                                                   
must be  obligated in  less than  half of  the time  left. He                                                                   
emphasized   that  the   problem   was   that  the   projects                                                                   
themselves were  not ready and  eligible for funding  and had                                                                   
not passed  off on  the many requirements  imposed on  DOT by                                                                   
federal, state, and local governments.                                                                                          
                                                                                                                                
Co-Chair Thompson suggested that Representative Guttenberg                                                                      
pursue questioning the Fairbank's project at a later time.                                                                      
                                                                                                                                
Co-Chair Neuman asked  whether the two projects  added in the                                                                   
CS  affected any  other  projects on  the  STIP. Mr.  Ottesen                                                                   
replied in the negative.                                                                                                        
                                                                                                                                
Co-Chair Thompson  asked for  clarity about the  Inter-Island                                                                   
ferry  reappropriation.   Mr.  Ottesen  explained   that  the                                                                   
funding  was reappropriated  from  a completed  project  that                                                                   
had left over  funds. He furthered that there  were two ferry                                                                   
terminals  built with  federal  funding  that passed  through                                                                   
DOT  for the  Inter-Island  Ferry  Authority (IFA).  One  was                                                                   
located in  Coffman Cove  on Prince of  Wales Island  and the                                                                   
other  was  located   in  South  Mitkof  on   Mitkof  Island.                                                                   
Subsequently, the  IFA decided not to operate out  of the two                                                                   
locations  due to  cost  factors.  Therefore, the  state  was                                                                   
facing  repayment of  the $27  million in  capital costs  for                                                                   
the   two   terminals.  The   federal   government   required                                                                   
operating  out of the  terminals or  repaying the money.  The                                                                   
department agreed  to operate  marine highway vessels  out of                                                                   
both terminals beginning  in May 2015, but due  to the marine                                                                   
highway   budget  cuts   the  service   was  "impossible   to                                                                   
deliver."  The   department  decided  that  the   only  other                                                                   
solution  to  avoid  repayment  of the  $27  million  was  to                                                                   
subsidize  the  IFA  to  provide   the  service  to  the  two                                                                   
terminals.                                                                                                                      
                                                                                                                                
10:57:17 PM                                                                                                                   
                                                                                                                                
Co-Chair  Neuman commented  that Mr. Ottesen  had worked  for                                                                   
DOT  for  over  27 years  and  expressed  gratitude  for  his                                                                   
service to  the state.  He remarked that  it was  a privilege                                                                   
to work  with him over  the years and  commended him  for his                                                                   
many years of exemplary service.                                                                                                
                                                                                                                                
Co-Chair Thompson echoed the same sentiments.                                                                                   
                                                                                                                                
Representative  Pruitt asked how  many years the  state would                                                                   
have to operate  out of the two ferry terminals.  Mr. Ottesen                                                                   
answered that  the terminals  were 13 years  old and  that 20                                                                   
years  was considered  a  useful life  for  the project;  the                                                                   
obligation  would  last another  7  years. He  detailed  that                                                                   
$500 thousand  times 7  years amounted  to $3 million  versus                                                                   
$27 million for the full costs of the project.                                                                                  
                                                                                                                                
^AMENDMENTS                                                                                                                   
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 1:                                                                                 
                                                                                                                                
     Page 14, line 23 [SAME]:                                                                                                   
          Delete all material.                                                                                                  
                                                                                                                                
     Page 14, line 26 [line 27]:                                                                                                
          Delete "109,920,000" [84,920,000]                                                                                     
          Insert "155,220,000"                                                                                                  
                                                                                                                                
     Adjust fund sources and totals accordingly.                                                                                
                                                                                                                                
Co-Chair Neuman OBJECTED.                                                                                                       
                                                                                                                                
Representative  Gara explained  that  the amendment  reverted                                                                   
back to  the Senate version  numbers for the  Federal Surface                                                                   
Transportation program  receipt authority, which  removed the                                                                   
$45 million in  receipt authority for the Knik  Arm Crossing.                                                                   
He  believed that  it  was time  to give  up  on the  project                                                                   
because of  the excessively high  costs. He offered  that the                                                                   
first  phase costs  of the  project was  roughly $1  billion.                                                                   
Phase 2  and the new or  upgraded approach roads  would bring                                                                   
the project costs to $1.7 billion.                                                                                              
                                                                                                                                
Co-Chair Neuman maintained his objection.                                                                                       
                                                                                                                                
Representative  Guttenberg stated  that Administrative  Order                                                                   
271 halted  any projects  that would  obligate the  state and                                                                   
wondered  how the  receipt authority  could be  spent if  the                                                                   
order  was  not  lifted.  He also  objected  to  the  receipt                                                                   
authority  because  he  believed  the  money  would  displace                                                                   
other projects on  the STIP. He emphasized his  concern about                                                                   
other  projects in  the state  being  displaced farther  down                                                                   
the list or removed  due to the addition of the  Knik Arm and                                                                   
Juneau  Access   projects.  He  wanted  to   understand  what                                                                   
projects would  be displaced  or removed  from the  STIP with                                                                   
the addition  of the receipt  authority for the  projects. He                                                                   
strongly supported Amendment 1.                                                                                                 
                                                                                                                                
Co-Chair  Neuman  stated that  he  just heard  comments  that                                                                   
were in opposition  from the departments comments  in regards                                                                   
to the  issue. He  restated that  the department assured  him                                                                   
that no  other project on the  STIP would be affected  by the                                                                   
inclusion of  the two projects  in the CS. He  reiterated the                                                                   
comments stated by Mr. Ottesen.                                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Kawasaki, Gara, Guttenberg                                                                                            
OPPOSED:  Munoz,  Pruitt,  Saddler, Wilson,  Edgmon,  Gattis,                                                                   
Neuman, Thompson                                                                                                                
                                                                                                                                
The MOTION FAILED (3/8).                                                                                                        
                                                                                                                                
Representative Gara WITHDREW Amendment 2.                                                                                       
                                                                                                                                
Representative Guttenberg MOVED to ADOPT Amendment 3:                                                                           
                                                                                                                                
     Page 17, following line 24:                                                                                                
          Insert new material to read:                                                                                          
                                                                                                                                
                                    "APPROPRIATION GENERAL                                                                      
                                         ITEMS   FUND                                                                           
     UAF Engineering Building (HD 1-5) 8,000,000 8,000,000"                                                                     
                                                                                                                                
     Adjust fund sources and totals accordingly.                                                                                
                                                                                                                                
Co-Chair Neuman OBJECTED.                                                                                                       
                                                                                                                                
11:08:27 PM                                                                                                                   
                                                                                                                                
Representative   Guttenberg   explained  that   Amendment   3                                                                   
maintained  the work  on the  next phase  of the  engineering                                                                   
building  on   the  University  of  Alaska   Fairbanks  (UAF)                                                                   
campus.  Without the  funding,  the contractors  would  leave                                                                   
the  project making  startup  more  costly when  funding  was                                                                   
appropriated to finish  the project. The $8  million kept the                                                                   
project  in tact  at  a minimal  level.  He  voiced that  the                                                                   
funding was included in the governor's supplemental budget.                                                                     
                                                                                                                                
Co-Chair  Neuman  asked whether  the  $8 million  would  come                                                                   
from the  general fund.  Representative Guttenberg  responded                                                                   
in the affirmative.                                                                                                             
                                                                                                                                
Representative  Kawasaki  thanked  Representative  Guttenberg                                                                   
for   making  the   amendment.  He   communicated  that   the                                                                   
University of  Alaska Anchorage (UAA) project  "jumped" ahead                                                                   
at the expense  of the UAF  project. The future of  the state                                                                   
relied on  engineers and  he felt  the project was  important                                                                   
for   both   campuses.   He  concurred   that   halting   the                                                                   
construction now  would impose much higher restart  costs. He                                                                   
voiced that  the funding  would complete  two classrooms  and                                                                   
the building would  operate unfinished until the  $30 million                                                                   
additional needed was appropriated to complete the project.                                                                     
Representative    Gattis   understood    the   request    and                                                                   
acknowledged  that every  legislator had  projects needed  in                                                                   
their  areas. However  with a  fiscal crisis  looming in  the                                                                   
state  she could not  support  the amendment  due to lack  of                                                                   
funds.                                                                                                                          
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Kawasaki, Gara                                                                                            
OPPOSED: Gattis, Munoz, Pruitt, Saddler, Wilson, Edgmon,                                                                        
Neuman, Thompson                                                                                                                
                                                                                                                                
The MOTION FAILED (3/8).                                                                                                        
                                                                                                                                
11:13:44 PM                                                                                                                   
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 4:                                                                                 
                                                                                                                                
     * Sec.  A. LEGISLATIVE INTENT.  It is the intent  of the                                                                   
     legislature to  appropriate education funds  at the same                                                                   
     level  as would  be distributed  through the  foundation                                                                   
     formula  under  AS 14  .17.410  to keep  school  funding                                                                   
     even    with   the    fiscal    year   2015    education                                                                   
     appropriation,    including     the    one-time    funds                                                                   
     appropriated  by sec. 32(b) and  (c), ch. 18,  SLA 2014,                                                                   
     adjusted for inflation.                                                                                                    
                                                                                                                                
     *   Sec.   B.  DEPARTMENT   OF   EDUCATION   AND   EARLY                                                                   
     DEVELOPMENT.    (a)   The   sum   of    $32,243,700   is                                                                   
     appropriated  from the  general fund  to the  Department                                                                   
     of  Education and  Early Development  to be  distributed                                                                   
     as  state  aid  to school  districts  according  to  the                                                                   
     average  daily  membership  for each  district  adjusted                                                                   
     under AS  14.17.410(b)(l)(A) -  (D) for the  fiscal year                                                                   
     ending June 30, 2016.                                                                                                      
          (b)  The sum  of $37,000,000  is appropriated  from                                                                   
          the  general fund  to the  Department of  Education                                                                   
          and  Early Development to  be distributed  as state                                                                   
          aid  to school districts  according to  the average                                                                   
          daily membership  for each district  adjusted under                                                                   
          AS  14.17.410(b)(l)(A)-(D)   for  the  fiscal  year                                                                   
          ending June 30, 2016.                                                                                                 
          (c) The  amount necessary to fund the  base student                                                                   
          allocation  at  $5,880   under  AS  14.17.4  70  is                                                                   
          appropriated   from   the  general   fund  to   the                                                                   
          Department  of Education and Early  Development for                                                                   
          the fiscal year ending June 30, 2016.                                                                                 
                                                                                                                                
     *Sec. C. Section A of this Act takes effect June 30,                                                                       
     2015.                                                                                                                      
                                                                                                                                
     *Sec. D. Section B of this Act takes effect July 1,                                                                        
     2015.                                                                                                                      
                                                                                                                                
Co-Chair Neuman OBJECTED.                                                                                                       
                                                                                                                                
Representative  Gara  explained  Amendment  4. He  noted  the                                                                   
amendment  maintained the  education funding  at last  year's                                                                   
level  including inflation.  He believed  the education  cuts                                                                   
would result in  the loss of hundreds of teachers  across the                                                                   
state. He  stated that when  academic opportunities  were cut                                                                   
the students  lost  a level of  education that  could not  be                                                                   
reclaimed   when  funding   was   increased.  The   amendment                                                                   
restored the $47  million that was removed by  the Senate. He                                                                   
wanted students  to have the  resources necessary  to succeed                                                                   
in school.                                                                                                                      
                                                                                                                                
Representative Wilson  believed that the funding  belonged in                                                                   
the operating budget  and would not support  the inclusion of                                                                   
education funding in the capital budget.                                                                                        
                                                                                                                                
Representative  Kawasaki  asserted  that the  capital  budget                                                                   
represented the  "opportunity" for  the committee  to restore                                                                   
the  education funding  that was  removed by  the Senate.  He                                                                   
did not  want to rely  on a  six member conference  committee                                                                   
to  restore  the funding  and  felt  it was  the  appropriate                                                                   
vehicle to "do the right thing today."                                                                                          
                                                                                                                                
Representative Munoz  agreed with Representative  Wilson that                                                                   
the capital budget  was not the proper vehicle  for education                                                                   
funding but fully supported the intent of the amendment.                                                                        
                                                                                                                                
11:18:53 PM                                                                                                                   
                                                                                                                                
Representative    Edgmon   echoed   Representative    Munoz's                                                                   
sentiments and reminded  the committee that three  members of                                                                   
the  committee   sat  on  the  operating   budget  conference                                                                   
committee  and requested  that  the three  members carry  the                                                                   
"strong  message forward"  to restore  the education  funding                                                                   
in the operating budget.                                                                                                        
                                                                                                                                
Co-Chair Neuman maintained his objection.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Gara, Guttenberg, Kawasaki                                                                                            
OPPOSED:  Gattis,  Munoz, Pruitt,  Saddler,  Wilson,  Edgmon,                                                                   
Thompson, Neuman                                                                                                                
                                                                                                                                
The MOTION FAILED (3/8).                                                                                                        
                                                                                                                                
11:20:03 PM                                                                                                                   
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 5:                                                                                 
                                                                                                                                
     Page 60, following line 14:                                                                                                
                                                                                                                                
          Insert a new subsection to read:                                                                                      
          "(e)  The unexpended  and  unobligated balances  of                                                                   
          the  appropriations  made in  sec. 4,  ch. 16,  SLA                                                                   
          2013,  page 105,  lines 22  - 24,  and sec. 4,  ch.                                                                   
          18, SLA  2014, page 87,  lines 10 - 11,  lapse into                                                                   
          the general fund on June 30, 2015."                                                                                   
                                                                                                                                
     Page 60, line 19:                                                                                                          
                                                                                                                                
          Delete "and 41"                                                                                                       
          Insert "41, and 43(e)"                                                                                                
                                                                                                                                
Co-Chair Neuman OBJECTED.                                                                                                       
                                                                                                                                
Representative  Gara  explained  Amendment 5.  The  amendment                                                                   
removed  the  unobligated  funding   for  the  Susitna-Watana                                                                   
Hydroelectric  Project  from Alaska  Energy  Authority  (AEA)                                                                   
and  returned $6  million to  the general  fund. He  believed                                                                   
that  the  Susitna-Watana  Hydroelectric  Project  was  a  $6                                                                   
billion project  that would  most likely  never be  built due                                                                   
to  the  exorbitant  costs.  He  felt  that  the  legislature                                                                   
should focus  on the natural  gasline project and  apply some                                                                   
of the project funding to education.                                                                                            
                                                                                                                                
Representative  Pruitt  felt   that  it  was  appropriate  to                                                                   
retain  the money  for the  project  in the  AEA account  and                                                                   
urged the members to vote no on Amendment 5.                                                                                    
                                                                                                                                
Co-Chair Neuman  thought that  the decision to  continue with                                                                   
the  project   should  be  reexamined   in  the   future  but                                                                   
supported  retaining  the funding  as  part of  the  decision                                                                   
making process.                                                                                                                 
                                                                                                                                
Representative  Guttenberg pointed out  that the  project was                                                                   
included  under Administrative  Order 271  and the money  was                                                                   
not able  to be expended on  the project. He did  not believe                                                                   
the project  was going  to move forward  this summer  and did                                                                   
not want to  leave the $6 million  sitting in a fund  when it                                                                   
could be used for education and other needs.                                                                                    
                                                                                                                                
Representative  Kawasaki   relayed  a  story   from  personal                                                                   
experience  about  his discovery  in  2008 that  the  project                                                                   
would  benefit   Fairbanks  energy  needs   and  subsequently                                                                   
supported  the  project.  However,  with  the  fiscal  crisis                                                                   
looming  "it was  a matter  of  priorities" to  reappropriate                                                                   
the funding  for more realistic  projects of greater  need in                                                                   
the present. He  remarked that the hydroelectric  project was                                                                   
"stalled."                                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg, Kawasaki                                                                                            
OPPOSED:  Munoz,  Pruitt, Saddler,  Wilson,  Edgmon,  Gattis,                                                                   
Thompson, Neuman                                                                                                                
                                                                                                                                
The MOTION FAILED (3/8).                                                                                                        
                                                                                                                                
11:26:40 PM                                                                                                                   
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 6:                                                                                 
                                                                                                                                
     Page 60, following line 14:                                                                                                
                                                                                                                                
          Insert a new subsection to read:                                                                                      
          "(e)  The  unexpended  and unobligated  balance  of                                                                   
          the  appropriation  made  in  sec.  1,  ch.16,  SLA                                                                   
          2013,  page 12,  lines  20 -  25,  lapses into  the                                                                   
          general fund on June 30, 2015."                                                                                       
                                                                                                                                
     Page 60, line 19:                                                                                                          
                                                                                                                                
          Delete "and 41"                                                                                                       
          Insert "41, and 43(e)"                                                                                                
                                                                                                                                
Co-Chair Thompson OBJECTED.                                                                                                     
                                                                                                                                
Representative  Gara explained  Amendment  6.  He noted  that                                                                   
the   amendment  would   eliminate  the   $17.3  million   of                                                                   
unobligated funds  for the Bragaw  Extension road  project in                                                                   
Anchorage. He opined  that the project was  controversial, of                                                                   
questionable  benefit, and  was unaffordable  for the  state.                                                                   
The money  was better prioritized  for educational  needs. He                                                                   
addressed the  argument that the  extension could cut  one to                                                                   
three  minutes  of  time  off  of an  ambulance  drive  to  a                                                                   
hospital.  He delineated  that Anchorage  ambulances had  the                                                                   
capability  to turn red  lights to  green, which negated  the                                                                   
time saving argument.                                                                                                           
                                                                                                                                
Representative Pruitt  voiced that "sometimes  your ambulance                                                                   
is your  car" and  the few  minutes "could  mean a  lot." The                                                                   
road  could be  the  lifeline in  an emergency  scenario.  He                                                                   
acknowledged  that the  project  was controversial  but  felt                                                                   
that  it was  necessary to  enhance  the north/south  traffic                                                                   
flow. He asked the committee to vote no for the amendment.                                                                      
                                                                                                                                
Vice-Chair  Saddler asserted  that he  opposed the  amendment                                                                   
in favor  of quicker access to  the hospital in  an emergency                                                                   
situation.                                                                                                                      
                                                                                                                                
Representative  Kawasaki  initially did  not  think that  the                                                                   
extension  project  was  controversial.  He  shared  that  he                                                                   
received letters  from local Anchorage community  councils in                                                                   
opposition  to the project  and wanted  to respect  the local                                                                   
communities'  requests.   He  supported  reprioritizing   the                                                                   
funding for other priority needs.                                                                                               
                                                                                                                                
Co-Chair Neuman maintained his objection.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg, Kawasaki                                                                                            
OPPOSED:  Edgmon,  Gattis, Munoz,  Pruitt,  Saddler,  Wilson,                                                                   
Neuman, Thompson                                                                                                                
                                                                                                                                
The MOTION FAILED (3/8).                                                                                                        
                                                                                                                                
11:31:39 PM                                                                                                                   
                                                                                                                                
Co-Chair   Thompson  explained   the   sponsor  requested   a                                                                   
technical  correction on  (motion to amend  the amendment  to                                                                   
$50thousand from  $100 thousand)  Amendment 7 to  change $100                                                                   
thousand to $50 thousand.                                                                                                       
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 7:                                                                                 
                                                                                                                                
     Page 46, following line 21:                                                                                                
                                                                                                                                
          Insert a new subsection to read:                                                                                      
          "(e) The  sum of $100,000 is appropriated  from the                                                                   
          general  fund  to  the  Department  of  Health  and                                                                   
          Social  Services,  office of  children's  services,                                                                   
          for   foster   and  adoptive   parent   recruitment                                                                   
          advertising  for the fiscal  years ending  June 30,                                                                   
          2016, and June 30, 2017."                                                                                             
                                                                                                                                
     Page 60, line 19:                                                                                                          
                                                                                                                                
          Delete "28 - 39"                                                                                                      
          Insert "28, 29, 30(a) - (d), 31 - 39"                                                                                 
                                                                                                                                
Co-Chair Neuman OBJECTED.                                                                                                       
                                                                                                                                
Representative Gara  explained Amendment 7. He  reported that                                                                   
in prior capital  budgets approximately $50 thousand  to $100                                                                   
thousand  was included  to advertise for  adoptive or  foster                                                                   
parents.  He   declared  that   the  state  had   a  "massive                                                                   
shortage"  of   adoptive  parents.   He  believed   that  the                                                                   
amendment  would  save  the  state money  and  "was  a  small                                                                   
investment."  He  offered  that  if only  two  children  were                                                                   
adopted  due  to  advertising  the  children's  removal  from                                                                   
foster care would  save the state the costs  of the amendment                                                                   
and savings on social workers.                                                                                                  
                                                                                                                                
Representative Guttenberg  remarked that Representative  Gara                                                                   
was  a  tireless  advocate  on  behalf  of  foster  care.  He                                                                   
elaborated  that the  small investment  to  keep the  program                                                                   
intact  was  a huge  cost  saver  in  the future  for  social                                                                   
services,  public safety,  and  educational  costs. He  urged                                                                   
support of Amendment 7.                                                                                                         
                                                                                                                                
11:36:04 PM                                                                                                                   
                                                                                                                                
Representative Wilson  discerned that the capital  budget was                                                                   
not  the appropriate  vehicle  for  the amendment  and  would                                                                   
vote no  for Amendment 7.  Representative Gara  remarked that                                                                   
the  funding  for the  advertising  had  always been  in  the                                                                   
capital budget but  would try to include it  in the operating                                                                   
budget.                                                                                                                         
                                                                                                                                
Representative Gara WITHDREW Amendment 7.                                                                                       
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT conceptual  Amendment                                                                   
8:                                                                                                                              
                                                                                                                                
     Page 39, lines 25-31                                                                                                       
          Delete $5,000,000 for Barnette Magnet School's                                                                        
          phase 4 renovations.                                                                                                  
                                                                                                                                
Co-Chair Neuman OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Representative   Wilson   reported    that   the   conceptual                                                                   
amendment  removed the $5,000,000  reappropriation  for phase                                                                   
4  renovation at  the Barnette  Magnet  School in  Fairbanks.                                                                   
She detailed that  the school was initially  listed as number                                                                   
5 of  the school  construction fund  list and the  governor's                                                                   
proposed capital  budget funded school construction  projects                                                                   
through number 4  for a total of $10,867,503.  She maintained                                                                   
that  the  project was  not  more  important than  the  other                                                                   
school's  needs  on  the  list   that  was  not  funded.  She                                                                   
understood that  the Fairbanks  North Star Borough  was going                                                                   
to bond  for the  project and  even though  inclusion in  the                                                                   
capital budget  would save the  local constituents  money she                                                                   
did  not support  the idea  of prioritizing  the project  and                                                                   
funding it in this manner.                                                                                                      
                                                                                                                                
Representative  Kawasaki spoke  against conceptual  Amendment                                                                   
8.  He  asserted  that  the project  was  important  and  the                                                                   
number one priority  for the school district  and borough. He                                                                   
noted that  the project moved  up to  number 5 from  the 10th                                                                   
position on  the major maintenance  list. Phase  4 completion                                                                   
was guaranteed  in 2007 when  the project was  initiated. The                                                                   
$5,000,000 funding  was not enough  (half of the  amount) for                                                                   
completion,  but the  project  would procure  local  support.                                                                   
The borough planned  to bond for the phase  4 renovations. He                                                                   
pointed out that  SB 64 (An Act Relating to  School Bond Debt                                                                   
Reimbursement  - Enacted  4/25/2015) placed  bonding for  the                                                                   
project  in "jeopardy"  since the bill  eliminated the  state                                                                   
match. He opposed the conceptual amendment.                                                                                     
                                                                                                                                
11:42:03 PM                                                                                                                   
                                                                                                                                
Representative   Guttenberg  spoke   in  opposition   to  the                                                                   
amendment. He relayed  that he contacted the  borough and was                                                                   
told  that  bonding for  the  project  was not  certain;  the                                                                   
decision to  bond had  not been made.  He recounted  that the                                                                   
project  was number  5; the  next  project on  the list.  The                                                                   
method of  adding it  to the capital  budget by a  legislator                                                                   
"reaching  out and  advancing  it" was  entirely  appropriate                                                                   
and was "done all of the time" by the legislature.                                                                              
                                                                                                                                
Co-Chair Neuman removed his objection.                                                                                          
                                                                                                                                
Representative Kawasaki OBJECTED.                                                                                               
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gattis, Munoz, Pruitt, Saddler, Wilson, Edgmon,                                                                       
Thompson, Neuman                                                                                                                
                                                                                                                                
OPPOSED: Gara, Guttenberg, Kawasaki                                                                                             
                                                                                                                                
The MOTION PASSED (8/3).                                                                                                        
                                                                                                                                
Co-Chair Neuman move MOVED to REPORT HCS CSSB 26 (FIN) out                                                                      
of committee with individual recommendations.                                                                                   
                                                                                                                                
There being NO OBJECTION, HCS CSSB 26 (FIN) was REPORTED                                                                        
out of committee with a "do pass" recommendation.                                                                               
                                                                                                                                
11:45:38 PM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:48:03 PM                                                                                                                   
RECONVEYNED                                                                                                                     
                                                                                                                                
Co-Chair Thompson discussed the agenda for the following                                                                        
morning                                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
11:48:43 PM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 11:48 p.m.                                                                                         
                                                                                                                                

Document Name Date/Time Subjects
SB71 Sectional Analysis.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Sponsor Statement.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Document - Pharmacist Collaborative Prctc Detail.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Document-Collaborative Agreement costs.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents - Letter AK Pharmacists Assn 3-13-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents- Emails- 3-19-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents -Letter-NACDS 3-13-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents -Physician Collaborative Prctce detail.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents-Letter- Brown 3-13-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents-Letter- Island Pharmacy 3-13-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents-Letter- Ron's Apothecary 3-13-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents-Letter Soden 3-23-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents-Letter-Adele Garrison.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents-Letter-Bd of Pharmacy 3-13-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Supporting Documents-Letter-Safeway 3-16-15.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB71 Vac Certification Pharmacists vsn W.pdf HFIN 4/17/2015 1:30:00 PM
SB 71
SB 46 FIN Explanation of Changes.PDF HFIN 4/17/2015 1:30:00 PM
SB 46
SB 46 FIN Sectional.PDF HFIN 4/17/2015 1:30:00 PM
SB 46
SB 46 Supporting Documents - 1.25.14 YKHC Letter.pdf HFIN 4/17/2015 1:30:00 PM
SB 46
SB 46 Sponsor Statement.pdf HFIN 4/17/2015 1:30:00 PM
SB 46