Legislature(1997 - 1998)

04/04/1997 06:25 PM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                          April 4, 1997                                        
                            6:25 P.M.                                          
                                                                               
                                                                               
  TAPES                                                                        
                                                                               
  SFC-97, # 77, Sides 1 & 2 (000-590, 590-000)                                 
  SFC-97, # 78, Side 1 (000-305)                                               
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator  Bert  Sharp,  Cochair,  Senate  Finance  Committee,                 
  reconvened the meeting at approximately 6:25 P.M.                            
                                                                               
  PRESENT                                                                      
                                                                               
  In addition to COCHAIR  SHARP, SENATORS PHILLIPS, TORGERSON,                 
  PARNELL  and  ADAMS  were  present   when  the  meeting  was                 
  convened.   COCHAIR  PEARCE arrived  as the  meeting was  in                 
  progress.  SENATOR DONLEY did not attend the meeting.                        
                                                                               
  Also Attending:                                                              
  SENATOR WILKEN, JACK  CHENOWETH, Legislative Legal  Counsel,                 
  Legislative Affairs  Agency (LAA);  KEN BISCHOFF,  Director,                 
  Division  of Administrative  Services, Department  of Public                 
  Safety;  MARYLOU  BURTON,  Budget  Director,  University  of                 
  Alaska;  PETER BUSHRE,  Chief  Financial Officer,  Permanent                 
  Fund Corporation, Department of Revenue (DOR);  MARY SUTTON,                 
  Finance Officer, Division  of Administrative Services,  DOR;                 
  GLENDA STRAUBE, Director, Child Support Enforcement Division                 
  (CSED), DOR;  JOHN MALLONEE, Assistant Director,  CSED, DOR;                 
  JOHN  BITNEY,  Legislative Liaison,  Alaska  Housing Finance                 
  Corporation (AHFC),  DOR; JOHN CAMPBELL,  Financial Officer,                 
  AHFC, DOR; PAM VARNI, Executive  Director, LAA; STUART HALL,                 
  Ombudsman;  MIKE  GREANY,   Director,  Legislative   Finance                 
  Division; fiscal analysts and aides to committee members.                    
                                                                               
                                                                               
  SUMMARY INFORMATION                                                          
       SB 13  INCREASE TOBACCO TAXES                                           
                                                                               
       COCHAIR  SHARP  noted  Amendment #2  had  been  adopted                 
       previously,  but  a  "cleaned  up"  version  from Legal                 
       Services  was  in  members' files.    Amendment  #1 was                 
       before   the  committee.     SENATOR   TORGERSON  MOVED                 
       Amendment #1.   COCHAIR PEARCE objected.   Amendment #1                 
       FAILED by a 2-4  vote.  SENATOR ADAMS MOVED  to rescind                 
       previous action  in  adopting Amendment  #2.    Without                 
       objection,  Amendment  #2   was  RESCINDED.     SENATOR                 
       PHILLIPS MOVED the "cleaned up" version of Amendment #2                 
       from Legal  Services.  Without objection,  Amendment #2                 
                                                                               
                                                                               
       was ADOPTED.   SENATOR  WILKEN addressed the  committee                 
       regarding Section  4 of  the HESS  CS.   COCHAIR PEARCE                 
       MOVED CSSB  13(FIN) from  committee, then  WITHDREW her                 
       motion.  SENATOR PHILLIPS MOVED  Amendment #3.  COCHAIR                 
       PEARCE objected.   Amendment #3  failed by a  1-5 vote.                 
       COCHAIR PEARCE MOVED  CSSB 13(FIN) from  committee with                 
       individual  recommendations   and  appropriate   fiscal                 
       notes.   Without objection,  CSSB 13(FIN) was  REPORTED                 
       OUT with a forthcoming fiscal  note from the Department                 
       of Revenue.                                                             
                                                                               
       SB 107  APPROPRIATIONS: CAPITAL & FUNDS                                 
                                                                               
       Testimony  was  heard  on  capital  budget  items  from                 
       representatives from the  Department of Public  Safety,                 
       the  University,  Department  of  Revenue,  AHFC,   the                 
       Legislature and  the Ombudsman.   SB 107  was HELD  for                 
       further consideration.                                                  
                                                                               
  SENATE BILL NO. 13                                                           
  "An  Act  relating  to  taxes   on  cigarettes  and  tobacco                 
  products, and to the use of the proceeds of those taxes; and                 
  providing for an effective date."                                            
                                                                               
  COCHAIR SHARP recapped  the previous  action on SB  13.   He                 
  brought attention to  Amendment #2, which had  been adopted.                 
  A new "cleaned up" version of the amendment was in committee                 
  files for consideration.                                                     
                                                                               
  SENATOR  TORGERSON  MOVED  Amendment  #1.    COCHAIR  PEARCE                 
  objected.   SENATOR TORGERSON  explained that  the amendment                 
  puts a question before  the voters for approval in  the 1998                 
  election.  Section  11 refers to  the tax reverting back  to                 
  the  general  fund  if  a  court challenge  were  successful                 
  regarding  dedication  of   the  tax  for  education.     If                 
  challenged,  the  money may  be  put  in escrow,  making  it                 
  unavailable until after the court  hearing.  This placed  it                 
  before the voters  in a ballot  proposition and removed  the                 
  legal  questions  in  trying to  dedicate  it.    There were                 
  opposing   opinions   regarding  the   constitutionality  of                 
  dedicating the tax and this was a third option.  In response                 
  to a  question from SENATOR  PHILLIPS, he explained  that if                 
  the amendment  were adopted,  there wouldn't be  a need  for                 
  much of the language in Section 11.                                          
                                                                               
  A roll  call vote was taken on the MOTION to adopt Amendment                 
  IN FAVOR: Torgerson, Parnell                                                 
  OPPOSED: Phillips, Adams, Pearce, Sharp                                      
  Amendment #1 FAILED by a 2 to 4 vote.                                        
                                                                               
  SENATOR ADAMS MOVED  to rescind previous action  in adopting                 
                                                                               
                                                                               
  Amendment  #2.     Without   objection,  Amendment  #2   was                 
  RESCINDED.                                                                   
                                                                               
  SENATOR  PHILLIPS  MOVED Amendment  #2,  version LS0159/Q.1.                 
  Without objection, Amendment #2 was ADOPTED.                                 
  SENATOR WILKEN addressed  the committee.  He  commented that                 
  the Senate Health,  Education and Social Services  Committee                 
  proposed a school construction savings  account.  Should the                 
  tax  law  be  judged unconstitutional,  the  money  would go                 
  directly into the  general fund.   The proposal  would be  a                 
  safety net.   It would  remove the immediate  drop into  the                 
  general  fund and it  would address the  temporary nature of                 
  the tax.   If the  tax was successful,  it would  eventually                 
  drop to zero.  If the  money were put into a school  savings                 
  account, there  would be  an endowment  to construct  public                 
  schools.     He   encouraged  the   committee  to   consider                 
  reinstating the proposal into SB 13.                                         
                                                                               
  COCHAIR PEARCE MOVED the bill from committee with individual                 
  recommendations.  SENATOR PHILLIPS questioned SENATOR WILKEN                 
  about the  proposal.   COCHAIR  SHARP pointed  out that  the                 
  Finance  Committee   version  removed   the  automatic   CPI                 
  escalators.  COCHAIR PEARCE withdrew her MOTION.                             
                                                                               
  SENATOR  PHILLIPS MOVED  the  section containing  the school                 
  construction  savings fund  for  discussion purposes,  which                 
  would  be Amendment #4.   COCHAIR PEARCE  objected.  SENATOR                 
  ADAMS requested testimony from Jack  Chenoweth regarding the                 
  constitutionality of dedicating the fund.                                    
                                                                               
  JACK  CHENOWETH,  Legislative  Legal   Counsel,  Legislative                 
  Affairs  Agency, explained  the  provisions referred  to  by                 
  Senator  Wilken.  He  further  explained  that the  way  the                 
  Finance  Committee  CS  was  drafted,  the proceeds  of  the                 
  increase in  the cigarette tax  would be directly  paid into                 
  the  school  fund,  a  dedicated  fund that  existed  before                 
  statehood.  If a challenge were entered based on the loss of                 
  the dedication because  of the increase  in the rate of  the                 
  tax, the increase would go to a non-dedicated fund.                          
                                                                               
  COCHAIR SHARP clarified that there was also the ramification                 
  that the  money going  into that  account would  accumulate,                 
  called for inflation proofing, and only the amount left over                 
  would be available to spend.  MR. CHENOWETH confirmed that.                  
                                                                               
  COCHAIR  PEARCE  appreciated  the   concerns  expressed  and                 
  supported the tobacco tax, but  didn't feel it was necessary                 
  to develop a special fund to set aside the money.  There was                 
  more state money being spent per  year to combat the effects                 
  of tobacco products  than the tax would ever bring  in.  She                 
  didn't believe  the legislature  should tie  its hands  more                 
  than necessary in terms of how  they make spending decisions                 
  and did not see a need to include that section in the bill.                  
                                                                               
                                                                               
  SENATOR PHILLIPS wanted to make sure  that in voting for the                 
  tax it  went for  something other  than general  funds.   He                 
  reiterated his motion to adopt Amendment #3.   COCHAIR SHARP                 
  believed the  original dedication would hold up  and be used                 
  for  school  construction and  maintenance.   He  stated his                 
  opposition to the amendment based on the fact that the money                 
  would still be subject to  legislative appropriation.  There                 
  was additional discussion and clarification about the effect                 
  of the amendment.                                                            
                                                                               
  A roll call vote was taken  on the MOTION to adopt Amendment                 
  IN FAVOR: Phillips                                                           
  OPPOSED: Parnell, Adams, Torgerson, Pearce, Sharp                            
  Amendment #3 FAILED by a 1 to 5 vote.                                        
                                                                               
  COCHAIR PEARCE MOVED the bill from committee with individual                 
  recommendations.    Without   objection,  CSSB  13(FIN)  was                 
  REPORTED  OUT  with  a  forthcoming  fiscal  note  from  the                 
  Department of Revenue (41.5).                                                
                                                                               
  SENATE BILL NO. 107                                                          
  "An Act making and amending capital and other appropriations                 
  and  to  capitalize funds;  and  providing for  an effective                 
  date."                                                                       
                                                                               
  COCHAIR SHARP announced that the  committee would hear first                 
  from the Department of Public Safety.                                        
                                                                               
  KEN BISCHOFF, Director, Division of Administrative Services,                 
  Department  of Public  Safety  testified that  their capital                 
  projects were typical of  what they submit every year.   The                 
  first, on page 17, line 15, for Fish and Wildlife Protection                 
  aircraft and vessel  maintenance was for annual  maintenance                 
  and operation of  43 aircraft  and 19 marine  vessels.   The                 
  next project was for replacement of outboard motors, skiffs,                 
  snow machines,  marine radar,  etc.   The third  project was                 
  equipment for Alaska State  Troopers.  Next was a  data base                 
  system to capture demographic and  program data for domestic                 
  violence  and  sexual assault.   Line  21  was a  request to                 
  replace  the  fingerprint  system  that  had  been  declared                 
  obsolete.                                                                    
                                                                               
  COCHAIR SHARP brought up the University next.                                
                                                                               
  MARYLOU BURTON, Budget Director, University of Alaska, noted                 
  the first item that affected the university was in the front                 
  section of the bill,  Section 11.  The  intent was to  allow                 
  the university some  flexibility to carry forward  a limited                 
  amount of funds  for renewal  and replacement projects  that                 
  don't fall  within the confines of a  fiscal year.  They had                 
  been  working with OMB to develop a mechanism to do this and                 
  it was a  step in that direction.   Since the time  the bill                 
                                                                               
                                                                               
  was drafted, they implemented a  RIP program and reevaluated                 
  current year needs  and didn't  anticipate they would  lapse                 
  any general funds and exercise the  provision.  If they did,                 
  it would be  to a  limited degree.   SENATOR ADAMS  inquired                 
  what number they would  like the committee to utilize.   MS.                 
  BURTON thought  the maximum they  could lapse would  be $100                 
  thousand, but if  the provision were eliminated,  she didn't                 
  believe it would affect the university.                                      
                                                                               
  The remainder of items  were on page 29.  The  first on line                 
  15  for  $7  million  was  for  deferred  maintenance,  code                 
  compliance  and renovation.   There was  still a  backlog of                 
  $165 million in deferred maintenance and it was the  highest                 
  priority.    She  had  copies  of the  university's  project                 
  priority list for  distribution to the committee.   Next was                 
  $1.5   million   for   development   of   the  $33   million                 
  International Arctic Research Center.   She noted that sixty                 
  percent  of funding  for the  facility  was coming  from the                 
  Japanese government, the balance would come from the federal                 
  government,    private    sources,   prior    general   fund                 
  appropriations   and   university   revenue  bonds.      The                 
  appropriation would bring  the university receipt  authority                 
  up  to  a level  necessary to  receive  and expend  the full                 
  contribution of the Japanese government.                                     
                                                                               
  The last item was on line 19, a request of $450 thousand for                 
  the  small business development programs at UAA.  Until last                 
  year, these funds  were channeled through the  Department of                 
  Commerce and Economic  Development, but  last year and  this                 
  year it is being funneled directly to the university through                 
  the governor's budget. The difference this year was that the                 
  funding would come from AIDEA.  COCHAIR SHARP brought up the                 
  Department of Revenue next.                                                  
                                                                               
  PETER  BUSHRE,  Chief  Financial  Officer,  Permanent   Fund                 
  Corporation,  Department  of  Revenue  (DOR)  described  the                 
  request   of  $190  thousand  on   page  17,  line  23,  for                 
  integration  of  office space  with  new office  space being                 
  developed.                                                                   
                                                                               
  End SFC-97 #77, Side 1, Begin Side 2                                         
                                                                               
  MR.  BUSHRE  added  that  the  project would  be  paid  from                 
  corporate receipts.                                                          
                                                                               
  MARY  SUTTON,  Finance Officer,  Division  of Administrative                 
  Services, DOR, pointed  out the next  item on line 25,  that                 
  being  the department's  computer  security system  project.                 
  The purpose was to reduce the threat of unauthorized  access                 
  to various systems containing sensitive information.                         
                                                                               
  GLENDA STRAUBE, Director, Child Support Enforcement Division                 
  (CSED), DOR,  and JOHN MALLONEE,  Assistant Director,  CSED,                 
  DOR, spoke of the next project on line 26.  The  project was                 
                                                                               
                                                                               
  in  response to the requirements  of the welfare reform law,                 
  which provides federal matching funds to help states further                 
  develop existing computer  systems to  comply with the  many                 
  new requirements under the act.  It was a three part project                 
  consisting  of  developing  two data  bases  that  will feed                 
  information into  national data bases.   One was  a national                 
  child  support  case  registry, the  other  was  a new  hire                 
  directory of all  employees hired in  the state.  They  were                 
  contracting with the Department of Labor  on the latter.  He                 
  gave additional information  on the projects and  the amount                 
  of staff hours that  would be saved.  COCHAIR  SHARP brought                 
  up Alaska Housing Finance Corporation next.                                  
  JOHN  BITNEY,  Legislative   Liaison,  and  JOHN   CAMPBELL,                 
  Financial Officer, AHFC, DOR, addressed  the committee first                 
  by  pointing   out  that   AHFC  will   provide  the   state                 
  approximately $130 million for transfers to the treasury and                 
  capital projects  in  FY  97.   They  are  requesting  $34.8                 
  million in  corporate receipts for  capital projects,  along                 
  with $16.1  million in  federal matching  funds for  housing                 
  programs within AHFC.   Most projects are  for housing needs                 
  for seniors, handicapped and low-income people, and facility                 
  maintenance.  A  detailed report of the  individual requests                 
  was provided to the committee and is on file.                                
                                                                               
  COCHAIR PEARCE commented that last year the legislature made                 
  a designated  grant to AHFC  for the  Alaska Craftsman  Home                 
  Program.   AHFC chose  to ignore  it and  spent it at  their                 
  will.  She indicated that as long  as the agency is going to                 
  ignore the legislature's appropriations  she did not  intend                 
  to appropriate any money to AHFC.                                            
                                                                               
  MR. BITNEY responded that there had been such a grant and at                 
  the time the governor signed  the capital bill, he requested                 
  that  AHFC  follow the  procedures  outlined in  statute for                 
  designated grants which  allows the agency to  solicit other                 
  proposals,  which AHFC proceeded to do.  During the process,                 
  AHFC  recommended  the  Alaska  Craftsman  Home  Program  be                 
  awarded the funds as appropriated.  Meanwhile, AHFC has been                 
  working to  get a plan from them for  what they intend to do                 
  with the funds, some funds have been advanced  to date.  The                 
  designated funds were federal so they were restricted in use                 
  and  they requested  a  work plan  that  conformed with  the                 
  restrictions placed by the federal Department of Energy.                     
                                                                               
  COCHAIR  PEARCE  questioned why  it  had suddenly  become so                 
  different because the entity had received designated  grants                 
  through the same process over a  number of years without any                 
  question of meeting  the federal  requirements.  MR.  BITNEY                 
  explained that there had not been monitoring of the  program                 
  in the past.   AHFC initiated a grant review  program of all                 
  grantees, but was unsure of what problems existed.  He noted                 
  AHFC would be making a $300 thousand request for the program                 
  for FY 98, which would be put out to competitive bid.                        
                                                                               
                                                                               
  MR. CAMPBELL began with  the first AHFC project on  page 18,                 
  line  5,  that  being Central  Terrace/Fairmont  Phase  I in                 
  Anchorage, to dispose, replace and  renovate about 187 units                 
  of low rent housing.   They intend to sell 100  of the units                 
  and  use the  proceeds to  supplement the renovation  of the                 
  remaining units.   SENATOR PHILLIPS queried where  the units                 
  were in Anchorage.   MR. CAMPBELL  responded that they  were                 
  primarily four-plex units scattered throughout the  Fairview                 
  and Mountainview communities.                                                
                                                                               
  The next project was on line  7 for their computer mainframe                 
  renovation and upgrades.  It would provide lower maintenance                 
  costs and greater storage capacity with a smaller unit  that                 
  could  be upgraded  in  the future.    MR. BITNEY  explained                 
  further.                                                                     
                                                                               
  The Homeless Assistance Program was  next and considered one                 
  of  the states most  critical needs to  help communities and                 
  agencies develop programs  to prevent homelessness.   It was                 
  comprised  of three  components.  SENATOR  PARNELL requested                 
  additional description of  the components  and MR.  CAMPBELL                 
  complied.     There  was  additional  discussion  about  the                 
  components,   homelessness,   the    definition   of    near                 
  homelessness,   and   anticipated   shortfalls  in   federal                 
  assistance.                                                                  
                                                                               
  Line 10 featured a project comprised of two components: Low-                 
  Income Weatherization and Residential Energy Rehabilitation.                 
  MR.  CAMPBELL   detailed  the  components.    COCHAIR  SHARP                 
  inquired if there was a required match for federal receipts,                 
  to which MR. CAMPBELL replied there was not.                                 
                                                                               
  MR.  CAMPBELL   next  spoke  of  the   Supplemental  Housing                 
  Development  Program  on line  11.   It would  use corporate                 
  funds to supplement  anticipated HUD funds of  approximately                 
  $40 million  for safe  and sanitary  housing.    There  were                 
  additional questions and discussion about projects on a list                 
  provided  by  AHFC  to  the  committee reflecting  what  was                 
  applied for but not  funded last year.  MR.  BITNEY informed                 
  the  committee  that they  were  largely projects  in remote                 
  communities.  There  was some  discussion about projects  in                 
  Metlakatla.                                                                  
                                                                               
  The next project was on line 12 using corporate receipts for                 
  Public  Housing  Environmental  Cleanup  and  Abatement  for                 
  underground  storage  tank  removal,  asbestos  removal  and                 
  environmental assessments.  SENATOR TORGERSON questioned  if                 
  the environmental assessment  was contracted.   MR. CAMPBELL                 
  responded  that  it   was.    There  was   an  environmental                 
  specialist that supervises the work being done.                              
                                                                               
  Senior and  Statewide Deferred  Maintenance using  corporate                 
  receipts was  the next project.   It  was partially  matched                 
  with federal funds  of $988.9 thousand.   It was part  of an                 
                                                                               
                                                                               
  ongoing  ten-year plan which will  continue for the next two                 
  or three  years.   In response  to a  question from  COCHAIR                 
  SHARP, MR. CAMPBELL stated there  was no minimum requirement                 
  of state money to match the federal funds.                                   
                                                                               
  Spruce  Park Renovation  of public  housing on  line 16  was                 
  next,  entailing  disposition of  18  units,  demolition and                 
  replacement of 30 units.  MR. CAMPBELL described the project                 
  in  further detail.  COCHAIR SHARP requested he advise staff                 
  if the project could be a two-phase development.                             
                                                                               
  The  Senior  Housing  Development  Fund  Program  would  use                 
  corporate funds to  make grants to municipalities  and other                 
  agencies  for  the development  of  senior  citizen housing.                 
  They would be used for the  purchase of building sites, site                 
  preparation,  materials,  construction  and  rehabilitation.                 
  Awards would be made on a competitive basis.  In response to                 
  a question from SENATOR TORGERSON,  MR. CAMPBELL stated that                 
  they  were  requesting  $3.3 million,  but  there  were $3.6                 
  million of  projects that  had been  applied for,  and would                 
  have to be resubmitted.                                                      
                                                                               
  Next was a project  using $3.1 million of federal  funds for                 
  the HUD  Comprehensive Grant  program to  help renovate  and                 
  modernize public housing  units, provide for  administrative                 
  expenses, education  projects, drug  elimination and  safety                 
  projects and management improvements.                                        
                                                                               
  The HUD Federal  HOME Grant followed on  line 21.  It  was a                 
  required match program with $750 thousand in corporate funds                 
  and $3 million  of federal funds for  safe, energy-efficient                 
  and affordable housing for low-income families.                              
                                                                               
  Line  23  featured a  request of  $1.5 million  of corporate                 
  funds and $3 million of federal  funds for federal and other                 
  competitive grants  that target  housing for low-income  and                 
  special needs groups such as  senior citizens, mentally ill,                 
  disabled  and homeless  people.   It  would  also apply  for                 
  energy grants related to housing.   Match requirements would                 
  vary among different federal programs.                                       
                                                                               
  The Oil Overcharge Restitution program  of $2.5 million were                 
  federal funds  received from  court settlements against  oil                 
  companies who overcharged in the early seventies.  The funds                 
  were for restitution to the public through programs approved                 
  by the Department of Energy  for various energy conservation                 
  activities and would be awarded competitively.                               
                                                                               
  Competitive Grants for Public Housing on Line 26 was federal                 
  and corporate match funds in which  AHFC would apply for HUD                 
  grants that  target  low-income and  special  needs  groups,                 
  crime prevention and substance abuse  in public housing, and                 
  assistance  to   help   families   attain   economic   self-                 
  sufficiency.                                                                 
                                                                               
                                                                               
  The Energy  Conservation  Retrofit program  was  an  ongoing                 
  program to use corporate funds to increase energy efficiency                 
  in  public housing  units and lower  utility expenses.   MR.                 
  CAMPBELL described the types of improvements.                                
                                                                               
  On  Line  28 was  the  Alaska  Craftsman Home  Program.   It                 
  focused on training builders, energy raters and consumers in                 
  northern building  science  and the  development of  related                 
  education materials  to encourage  high energy  standards in                 
  building.  The grants were to  be competitively awarded on a                 
  bi-yearly basis contingent on annual appropriations.                         
                                                                               
  The  last  project  was the  Energy  Rated  Homes  of Alaska                 
  program, which would use corporate funds of $300 thousand to                 
  promote energy-efficient construction  throughout the  state                 
  and awarded the same as the above project.                                   
                                                                               
  End SFC-97 # 77, Side 2                                                      
  Begin SFC-97 #78, Side 1                                                     
                                                                               
  MR. CAMPBELL continued  with his  presentation with a  brief                 
  discussion about the  restricted use  of federal funds  from                 
  the  Department  of Energy.    This  year they  brought  the                 
  programs  into corporate  receipt  categories and  will make                 
  them available on an RFP basis to qualified groups.  COCHAIR                 
  SHARP referred to the  last three items on page  18, stating                 
  that they should  fit under  the Stripper well  funds.   MR.                 
  CAMPBELL responded that  the activities would fit  under the                 
  program, but would  only apply  to AHFC properties,  whereas                 
  the Stripper well  funds were  to be made  available to  all                 
  Alaskans.      There   was   additional   discussion   about                 
  restrictions on  the three  items and  categories under  the                 
  Stripper funds.                                                              
                                                                               
  COCHAIR  SHARP   stated  that   beside  the  projects   just                 
  discussed, another  $18  million of  corporate receipts  had                 
  been proposed for other  agency budgets, for a total  of $53                 
  million  of corporate receipt  expenditures.    That was $20                 
  million  over  the long  range  forecast limitation  and may                 
  require a reduction.                                                         
                                                                               
  In response to a question from SENATOR PARNELL, MR. CAMPBELL                 
  discussed  dispersement and availability  of funds  from the                 
  Federal  Competitive   Grants  program.     SENATOR  PARNELL                 
  requested additional back-up information on the topic.                       
                                                                               
  MR. BITNEY clarified that the $70  million that was shown in                 
  the revenue forecast  counted the  $50 million dividend  and                 
  $27.6 million of  assets from  the state mortgage  insurance                 
  fund.  Added to that was the $53 million in expenditures for                 
  capital  projects,  which  brought  the  figure up  to  $130                 
  million.  SENATOR ADAMS inquired about the maximum figure of                 
  corporate  funds that the finance committees could use.  MR.                 
                                                                               
                                                                               
  BITNEY responded that  the total of $130 million would allow                 
  them  to  meet  their debt  obligations  and  maintain their                 
  credit worthiness.                                                           
                                                                               
  COCHAIR  SHARP announced  the  legislature's capital  budget                 
  would be presented by Pam Varni.                                             
                                                                               
  PAM VARNI,  Executive Director, Legislative  Affairs Agency,                 
  listed  ten  projects  for  the  capital   and  supplemental                 
  budgets.  First  was $55 thousand for completion of rewiring                 
  for  the  ethernet  project  in  the  capitol  building  for                 
  legislative  offices.   Second  was  $75 thousand  for BASIS                 
  analysis and design for the wide  area network (WAN), to get                 
  independent of  the state mainframe.  Third was $98 thousand                 
  for conversion of the WAN,  to save up to $120  thousand per                 
  year.  Fourth  was $110  thousand for  replacement of  seven                 
  copiers  in  Juneau, Anchorage,  Homer  and Fairbanks.   The                 
  fifth item  was $38.3 thousand  for teleconference equipment                 
  replacement.    The  sixth project  was  $12.5  thousand for                 
  window glass  replacement in the  capitol.  Seventh  was $10                 
  thousand for re-roofing above the capitol steps.  Eighth was                 
  $10  thousand for  routine  outside  brick  replacement  and                 
  maintenance of the capitol.   Ninth was $134.5 thousand  for                 
  replacement of  the print shop  collator.  The  last project                 
  was $33 thousand  to replace the  e-mail system and make  it                 
  compatible with the executive branch.                                        
                                                                               
  STUART  HALL,  Ombudsman,  described  a two-element  capital                 
  project request of $100 thousand.   One was development of a                 
  PC-based  software  program  for  case  management  for  $50                 
  thousand.  The  other was  replacement of existing  computer                 
  servers  with   hardware  capable  of   handling  the   case                 
  management  software.    The  replacement  of  the  outdated                 
  software and  hardware  was  expected  to  save  maintenance                 
  costs,  streamline,  modernize and  simplify the  system for                 
  staff as  well  as public  access.   He  hoped  to have  the                 
  ability to provide data by legislative district and provided                 
  additional details.                                                          
  COCHAIR SHARP  announced the agenda for tomorrow.   He noted                 
  that the  only remaining  capital project  overview was  for                 
  DOTPF.                                                                       
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 8:20 P.M.                         

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