Legislature(2005 - 2006)SENATE FINANCE 532

05/03/2005 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 187 AMERADA HESS INCOME; CAPITAL INCOME FUND TELECONFERENCED
Moved CSHB 187(FIN)(efd fld)Out Committee
+= SB 46 APPROP: CAPITAL BUDGET TELECONFERENCED
Heard & Held
+= SB 102 COASTAL MANAGEMENT PROGRAMS TELECONFERENCED
Moved CSSB 102(FIN) Out of Committee
*+ SB 192 SCHOOL CONSTRUCTION BOND REIMBURSEMENT TELECONFERENCED
Heard & Held
+ SB 22 MEDICAID COVERAGE FOR BIRTHING CENTERS TELECONFERENCED
Moved CSSB 22(FIN) Out of Committee
+ SB 78 SENIOR CARE PROGRAM TELECONFERENCED
Scheduled But Not Heard
+ SB 125 LICENSING MEDICAL OR CARE FACILITIES TELECONFERENCED
Moved CSSB 125(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
= HB 178 SPECIAL REQUEST LICENSE PLATES
Moved CSHB 178(STA) am Out of Committee
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                            May 3, 2005                                                                                       
                             9:15 a.m.                                                                                        
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Green convened the meeting at approximately 9:15:51 AM.                                                              
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
Also Attending: GINGER  BLAISDELL, Staff to Senator Lyda Green; PETE                                                          
ECKLUND, Staff to Representative  Kevin Meyer; ROB CARPENTER, Fiscal                                                            
Analysis,  Legislative   Finance  Division;  DOUG  LETCH,  Staff  to                                                            
Senator Gary Stevens;  JOE BALASH, Staff to Senator  Gene Therriault                                                            
and  Aide to  the  Legislative  Budget &  Audit  Committee;  RICHARD                                                            
BENAVIDES,  Staff to  Senator Bettye  Davis;  EDDY JEANS,  Director,                                                            
Division  of  School Finance,  Department  of  Education  and  Early                                                            
Development;  RICHARD  MANDSAGER,  M.D.,  Department  of Health  and                                                            
Social  Services;   MATT  ROBUS,  Director,  Division   of  Wildlife                                                            
Conservation,  Department of Fish and Game; KELLY  KEPLER, Director,                                                            
Division of Sport Fish, Department of Fish and Game                                                                             
                                                                                                                                
Attending  via Teleconference:  From an Offnet  Site: JERRY  FULLER,                                                          
Medicaid Director,  Office of Program  Review, Department  of Health                                                            
and  Social  Services;  KIM  FLOYD, Representative,   Mat-Su  School                                                            
District; Mat-Su: TOM RYAN; From Anchorage: TORA GERRICK                                                                        
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
                                                                                                                                
SB 46-APPROP: CAPITAL BUDGET                                                                                                    
                                                                                                                                
The Committee heard from  Committee staff and the Department of Fish                                                            
and  Game.  A  committee  substitute   was  adopted  and  to  it  36                                                            
amendments  were considered  with 30 adopted  and three amended  and                                                            
adopted. The bill was held in Committee.                                                                                        
                                                                                                                                
HB 187-AMERADA HESS INCOME; CAPITAL INCOME FUND                                                                                 
                                                                                                                                
The Committee  heard  from the bill's  sponsor and  the Division  of                                                            
Legislative Finance. The bill reported from Committee.                                                                          
                                                                                                                                
SB 102-COASTAL MANAGEMENT PROGRAMS                                                                                              
                                                                                                                                
The Committee  heard from the bill's  sponsor as well as  staff from                                                            
the office  of Senator Gene Therriault.  A committee substitute  and                                                            
three  amendments   were  adopted,   and  the  bill  reported   from                                                            
Committee.                                                                                                                      
                                                                                                                                
SB 22-MEDICAID COVERAGE FOR BIRTHING CENTERS                                                                                    
                                                                                                                                
The  Committee heard  from  the bill's  sponsor,  the Department  of                                                            
Health and Social  Services, and took public testimony.  A committee                                                            
substitute was adopted and the bill reported from Committee.                                                                    
                                                                                                                                
SB 192-SCHOOL CONSTRUCTION BOND REIMBURSEMENT                                                                                   
                                                                                                                                
The  Committee heard  from  the bill's  sponsor,  the Department  of                                                            
Education  and Early  Development,  and took  public testimony.  The                                                            
bill was held in Committee.                                                                                                     
                                                                                                                                
HB 178-SPECIAL REQUEST LICENSE PLATES                                                                                           
                                                                                                                                
The bill reported from Committee.                                                                                               
                                                                                                                                
SB 125-LICENSING MEDICAL OR CARE FACILITIES                                                                                     
                                                                                                                                
The bill heard  from the Department  of Health and Social  Services,                                                            
and the bill reported from Committee.                                                                                           
                                                                                                                                
SB 78-SENIOR CARE PROGRAM                                                                                                       
                                                                                                                                
The bill was scheduled but not heard.                                                                                           
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 46                                                                                                         
     "An Act making capital appropriations and appropriations to                                                                
      capitalize funds; and providing for an effective date."                                                                   
                                                                                                                                
                                                                                                                                
This  bill  had  previously   been  heard  in  the  Senate   Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
9:16:44 AM                                                                                                                    
                                                                                                                                
Co-Chair Green noted that  a revised work draft, Version 24-GS1074\Y                                                            
was before the  Committee for consideration. Version  "Y" contains a                                                            
few changes as a result  of the Committee discussion on the previous                                                            
work draft,  Version 24-GS1074\G.  Ms. Blaisdell,  Co-Chair  Green's                                                            
capital budget  aide, would  explain the  changes to the  Committee.                                                            
Amendments  to Version  "Y" would  be addressed  when the  Committee                                                            
reconvened  at  approximately  4:00  P.M. this  afternoon.  To  that                                                            
point, she asked  that Committee Members provide amendments  by 3:00                                                            
P.M.                                                                                                                            
                                                                                                                                
GINGER BLAISDELL, Staff  to Senator Green, verified that the Version                                                            
"Y" work draft had been distributed.                                                                                            
                                                                                                                                
Co-Chair Wilken  moved to adopt committee substitute  Version "Y" as                                                            
the working document.                                                                                                           
                                                                                                                                
Co-Chair Green objected for explanation.                                                                                        
                                                                                                                                
Ms. Blaisdell explained  the changes contained in Version "Y". Pages                                                            
one through 74  include the individual agency requests  for projects                                                            
that  would be  typically  included in  a Capital  Budget.  Governor                                                            
Frank  Murkowski   originally  submitted   the  majority   of  those                                                            
requests.  She pointed  out that a  large component  of the  bill is                                                            
dedicated to named recipients  grants and grants to communities. The                                                            
majority  of  those  are requests  of  Legislators.  Some  of  those                                                            
requests  might be separately  included  under specific Departments                                                             
such as the Department of Transportation and Public Facilities.                                                                 
                                                                                                                                
Ms.  Blaisdell  characterized  pages 75  through  90 as  being  "the                                                            
contingent section" of  the bill that would finance SB 155 education                                                            
projects.  That  section would  be  unfunded  were SB  155  adopted;                                                            
however,  were SB  155  to fail,  its education  projects  would  be                                                            
funded from the general fund.                                                                                                   
                                                                                                                                
Ms. Blaisdell stated that  approximately $60,000,000 of Amerada Hess                                                            
interest earnings  would be appropriated to the projects  identified                                                            
in  Sec.  6  on  page  91.  There  is  also  an additional   section                                                            
pertaining  to the Capital Income  Account. However, she  noted that                                                            
that Account  must  be established  prior to  enacting the  language                                                            
included in Sec. 6.                                                                                                             
                                                                                                                                
Co-Chair  Green noted  that  the Capital  Income  Account, which  is                                                            
addressed  in  SB  187, would  be  heard  during  today's  Committee                                                            
meeting.                                                                                                                        
                                                                                                                                
Ms. Blaisdell  continued that  Sec. 7 on page  91 would provide  the                                                            
authorization  for  Legislative  Budget &  Audit and  other  general                                                            
provisions  that are  typically  included in  Capital Appropriation                                                             
Budgets.                                                                                                                        
                                                                                                                                
9:20:21 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  stated that language in Sec. 13 pages  93 through 106                                                            
would address  the supplemental appropriations that  were originally                                                            
presented in SB 97.                                                                                                             
                                                                                                                                
9:20:54 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell identified  that language in Sec. 13 differs from that                                                            
of the  previous version  of the bill. Sections  13(f) and  13(g) on                                                            
page  93  would  provide  two  appropriations  to  the  Division  of                                                            
Retirement  and Benefits,  Department  of Administration,  for  work                                                            
relating to SB 141.                                                                                                             
                                                                                                                                
9:21:27 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  informed the Committee that due to  a drafting error,                                                            
a correction must be made  in Sec. 20, page 96, lines 17 and 18. The                                                            
language reading  "the sum of $34,563,300  is appropriated  from the                                                            
general fund to  the Alaska Debt Retirement Fund"  should be deleted                                                            
from the bill.                                                                                                                  
                                                                                                                                
Ms.  Blaisdell  noted that  language  referring  to the  Alaska  Gas                                                            
Pipeline  appropriations  is located on  page 21  of the bill.  That                                                            
language would  mirror the language  contained in the previous  work                                                            
draft.                                                                                                                          
                                                                                                                                
Ms. Blaisdell  noted that language in Sec. 35, subsection  (d), page                                                            
106, lines  12 through  14, pertaining  to the  Expenditures  by the                                                            
Department of  Commerce, Community and Economic Development  for the                                                            
ratification  of the Qualified Trade  Association contract,  differs                                                            
from the language in the previous work draft.                                                                                   
                                                                                                                                
Ms. Blaisdell  stated  that Sec. 36,  pages 106  through 119,  would                                                            
begin the reappropriation  language in the bill. Any  appropriations                                                            
that might be lapsing would be addressed in this section.                                                                       
                                                                                                                                
9:23:35 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  noted that Sec. 52  pages 119 through 122,  beginning                                                            
with  the   Department   of  Administration,   would  also   address                                                            
reappropriations.  This language is  identical to the language  that                                                            
was forwarded in SB 97, the supplemental bill.                                                                                  
                                                                                                                                
Ms. Blaisdell  continued that  Sections 60  and 61, page 122,  would                                                            
pertain to  the provisions of the  Capital Income Fund. A  number of                                                            
calls and emails  were received "regarding the necessity  of having"                                                            
these  sections  in the  bill. Were  the  Capital Income  Fund  bill                                                            
adopted,  this provision must  be included,  as absent it,  existing                                                            
language would  mandate that the funds  go to Permanent Fund  rather                                                            
than the Capital Income Account.                                                                                                
                                                                                                                                
9:24:51 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green understood  therefore  that this  language would  be                                                            
"null and void" were SB 187 to fail.                                                                                            
                                                                                                                                
Ms.  Blaisdell concurred.  This  concluded  the explanation  of  the                                                            
committee substitute.                                                                                                           
                                                                                                                                
Senator  Hoffman  asked  for  assistance   in  locating  the  agency                                                            
requests  for  $825,000  for the  Bethel  Courthouse;  the  $233,900                                                            
Department  of Health and Social Services  request for the  security                                                            
system  for  the Bethel  Youth  Facility;  the  one  million  dollar                                                            
Department of  Commerce, Community and Economic Development  request                                                            
for the Bethel  Learning Center; and the one million  dollar federal                                                            
receipt  request for  the Department  of Natural  Resources  coastal                                                            
wetlands grant. He asked  whether these or any other agency requests                                                            
might have been excluded in this version of the bill.                                                                           
                                                                                                                                
9:26:53 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  responded that the  Governor had originally  proposed                                                            
the use  of Amerada  Hess  bonds as  the funding  mechanism for  the                                                            
Bethel Courthouse project.  Due to the fact that the Legislature has                                                            
not passed  a bond bill,  efforts were made  to identify other  fund                                                            
sources to  support as many of the  Amerada Hess funded projects  as                                                            
possible.  No funds to  support the Bethel  Courthouse project  were                                                            
identified. She  stated that further review of the  funding relating                                                            
to  the  Department  of  Health  and  Social  Services  request  for                                                            
enhanced security  for the Bethel Youth facility would  be required.                                                            
                                                                                                                                
Senator Hoffman  pointed out that  the security needs of  the Bethel                                                            
Youth  Facility were  identified  by the  Department  of Health  and                                                            
Social Services as being its number one priority.                                                                               
                                                                                                                                
9:27:38 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  stated that  further review  of that funding  request                                                            
would be undertaken.                                                                                                            
                                                                                                                                
Ms. Blaisdell communicated  that no funds were identified to replace                                                            
the Amerada Hess funding to support the Bethel Learning Center.                                                                 
                                                                                                                                
Senator Hoffman  clarified that the original funding  for the Bethel                                                            
Learning Center was general funds                                                                                               
                                                                                                                                
Ms. Blaisdell  responded therefore,  that the  decision was  made to                                                            
not fund that  facility. Choices had to be made in  light of limited                                                            
general funds.                                                                                                                  
                                                                                                                                
9:27:58 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman asked  regarding the  decision to  exclude the  one                                                            
million  dollars  federal receipts  request  for the  Department  of                                                            
Natural Resources coastal wetlands grant.                                                                                       
                                                                                                                                
Ms. Blaisdell responded  that, while no State general funds would be                                                            
required, three similar  federally funded projects were removed from                                                            
the capital  budget.  The decision  to remove those  projects  was a                                                            
policy call, as  further understanding pertaining  to the use of the                                                            
land and the impact  that accepting those federal  funds might incur                                                            
on the Alaska Department  of Natural Resources and its management of                                                            
that land would be desired.                                                                                                     
                                                                                                                                
Senator Hoffman  requested that, at  some future point in  time, the                                                            
Department  of Natural Resources  could testify  in regards  to that                                                            
concern.  He ascertained  that absent this  endeavor, more  problems                                                            
could occur in these areas;  specifically in regards to land that is                                                            
held  privately.  Acquiring  land,  with  the  assistance  of  these                                                            
federal grants, could assist  in averting problems being experienced                                                            
with privately  held lands,  for example, with  the Chignik  Dip Net                                                            
Fishery.                                                                                                                        
                                                                                                                                
9:30:07 AM                                                                                                                    
                                                                                                                                
Co-Chair Green asked Senator  Hoffman whether he was a member of the                                                            
Committee's Natural Resources subcommittee.                                                                                     
                                                                                                                                
Senator Hoffman replied in the negative.                                                                                        
                                                                                                                                
9:30:19 AM                                                                                                                    
                                                                                                                                
Co-Chair Green recalled  that that subcommittee had raised questions                                                            
regarding  "the line  of command"  and other  procedures  associated                                                            
with this funding. Further information would be sought.                                                                         
                                                                                                                                
Senator Hoffman noted that,  based upon the forthcoming information,                                                            
an associated  amendment might be  developed. He requested  that the                                                            
Department of  Natural Resources be present to respond  to questions                                                            
in this regard.                                                                                                                 
                                                                                                                                
Co-Chair  Green reminded  the  Committee  that amendments  would  be                                                            
considered during the afternoon hearing on this bill.                                                                           
                                                                                                                                
9:31:22 AM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  requested  that amendments  be  submitted in  written                                                            
form rather than through telephonic or email communication.                                                                     
                                                                                                                                
Co-Chair Green  asked Ms. Blaisdell  whether the written  amendments                                                            
should be provided prior to the 4:00 PM hearing.                                                                                
                                                                                                                                
Ms.  Blaisdell   responded   that  that  would   be  welcome,   time                                                            
permitting.                                                                                                                     
                                                                                                                                
Senator  Hoffman  remarked   that  he  was  targeting  noon  as  his                                                            
amendment submittal deadline.                                                                                                   
                                                                                                                                
[NOTE: the  Version "Y"  committee substitute  was formally  adopted                                                            
after the following At Ease.]                                                                                                   
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
AT EASE 9:32:40 AM / 9:36:06 AM                                                                                             
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 46                                                                                                         
     "An Act making capital appropriations and appropriations to                                                                
      capitalize funds; and providing for an effective date."                                                                   
                                                                                                                                
                                                                                                                                
The bill was again before the Committee.                                                                                        
                                                                                                                                
Co-Chair  Green removed  her  objection  to adopting  the  committee                                                            
substitute.                                                                                                                     
                                                                                                                                
There being no  further objection, Committee Substitute  Version "Y"                                                            
was adopted as the working document.                                                                                            
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
[NOTE: Additional  action on  this bill was  conducted later  in the                                                            
meeting. See Time Stamp 5:00:22 PM.]                                                                                            
                                                                                                                                
9:36:22 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 187(FIN)(efd fld)                                                                                    
     "An Act relating  to money deposited into the  Alaska permanent                                                            
     fund as  a result of the settlement  of State v. Amerada  Hess;                                                            
     relating  to the Alaska capital income fund and  to deposits of                                                            
     income  from State v.  Amerada Hess  settlement money  into the                                                            
     Alaska capital income fund."                                                                                               
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
PETE  ECKLUND,  Staff to  Representative  Kevin  Meyer,  the  bill's                                                            
sponsor on behalf  of Governor Frank Murkowski, explained  that this                                                            
bill would  establish  the Alaska  Capital Income  Fund "within  the                                                            
General  Fund and  would authorize  the  deposit into  that fund  of                                                            
earnings  received …  from the  Amerada Hess  lawsuit." The  Amerada                                                            
Hess (AH) Settlement was  the end result of a 1982 lawsuit the State                                                            
filed against  oil and gas companies.  At the time, "both  State and                                                            
federal  judges expressed  concerns  about the  capacity of  Alaskan                                                            
judges and juries  to participate in the case on an  impartial basis                                                            
in light of the  fact that earnings on that portion  of any recovery                                                            
in the case would  be deposited into the Permanent  Fund and be used                                                            
to pay Permanent  Fund Dividends to all Alaskan juries  and judges."                                                            
This led to the  enactment of Alaska Statute (AS)  37.13.145(d) that                                                            
required the interest  earned on that lawsuit's settlement  money to                                                            
be deposited into the principal  of the Permanent Fund. Furthermore,                                                            
it directed that  no earnings derived from that money  could be used                                                            
to fund Permanent Fund Dividends.                                                                                               
                                                                                                                                
Mr. Ecklund  stated  that this  action eliminated  the impartiality                                                             
concern  regarding  the  Permanent  Fund  Dividend   (the  Dividend)                                                            
amount.  Although  the  AH  case  was  settled,  there  remains  the                                                            
possibility  that it could  be reopened or  subject to arbitration.                                                             
Approximately   $424,000,000,  including   earnings  and   inflation                                                            
proofing,  is contained  within an  AH subaccount  in the  Permanent                                                            
Fund. This  bill would propose  to retain  the AH subaccount  at the                                                            
$424,000,000 level,  but to move money that would  be contributed to                                                            
inflation  proof   the  subaccount  into  another   portion  of  the                                                            
Permanent Fund principal.                                                                                                       
                                                                                                                                
Mr. Ecklund  stated that this bill  would authorize the earnings  on                                                            
the  AH  principal,   which  is  estimated  to  be  $25,000,000   to                                                            
$30,000,000  annually, to be deposited  into the new Alaska  Capital                                                            
Income Fund (ACIF). Money  deposited into the ACIF could be utilized                                                            
to support "any valid public purpose".                                                                                          
                                                                                                                                
Mr. Ecklund  noted that the 2006 Capital  Budget bill, SB  46, would                                                            
include provisions  to utilize approximately  $60,000,000  "of these                                                            
earnings" to support capital projects.                                                                                          
                                                                                                                                
Mr.  Ecklund assured  the  Committee that  this endeavor  would  not                                                            
impact  the calculation  of  the Dividend  "and  is  neutral on  the                                                            
dollar amount of each Alaskan's Dividend".                                                                                      
                                                                                                                                
9:39:03 AM                                                                                                                    
                                                                                                                                
In response to  a question from Senator Dyson, Mr.  Ecklund restated                                                            
the fact that "this legislation  is neutral on the dividend"; it has                                                            
no impact on  either the calculation  of the Dividend or  the amount                                                            
of each Dividend check.                                                                                                         
                                                                                                                                
9:39:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken,  referencing  the chart  titled  "Current  System"                                                            
[copy  on file)  provided  by  the  sponsor,  asked the  reason  the                                                            
decision was made  to establish the ACIF instead of  specifying that                                                            
the money be utilized for the debt reimbursement fund.                                                                          
                                                                                                                                
Mr. Ecklund  responded that the Committee  could alter the  proposal                                                            
to specify  that the earnings from  the ACIF be utilized  to support                                                            
the debt retirement fund.                                                                                                       
                                                                                                                                
9:39:45 AM                                                                                                                    
                                                                                                                                
Mr. Ecklund  stated that the  decision not  to do that at this  time                                                            
was based on the fact that  "the debt retirement fund is a sweepable                                                            
fund".  There would  be no  sweepablity  concern  were the  earnings                                                            
appropriated to support capital projects.                                                                                       
                                                                                                                                
9:40:00 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  understood that the language in this  bill would not                                                            
prohibit using the earnings for debt retirement.                                                                                
                                                                                                                                
Mr. Ecklund affirmed. The  money "could be used for any valid public                                                            
purpose."  Once the money  is deposited into  the ACIF, it  could be                                                            
used  for  such  things   as  debt  retirement,  capital   projects,                                                            
operating budgets, and future bond obligations.                                                                                 
                                                                                                                                
Co-Chair Wilken  asked for confirmation  that the funds in  the ACIF                                                            
would be non-sweepable.                                                                                                         
                                                                                                                                
Mr. Ecklund clarified that  the ACIF would be sweepable, however, as                                                            
proposed in  the capital budget bill,  the money deposited  into the                                                            
ACIF  could be  utilized to  fund capital  projects  in the  capital                                                            
budget.                                                                                                                         
                                                                                                                                
Co-Chair Green  understood therefore,  that in order to prevent  the                                                            
funds from being  sweepable, they must be identified  as the funding                                                            
mechanism in the capital budget, for instance.                                                                                  
                                                                                                                                
Mr. Ecklund  explained that,  "when the money  is appropriated  from                                                            
the Alaska Income  Fund to capital projects, those  capital projects                                                            
are then non-sweepable".                                                                                                        
                                                                                                                                
Co-Chair Green  understood therefore, that when ACIF  money "is used                                                            
in a capital  project or  for debt reimbursement,  and is paid  out,                                                            
it's not sweepable".                                                                                                            
                                                                                                                                
Mr. Ecklund clarified  that any balance in the debt  retirement fund                                                            
would be sweepable.  On the other hand, "capital projects  that have                                                            
been appropriated are non-sweepable".                                                                                           
                                                                                                                                
9:41:35 AM                                                                                                                    
                                                                                                                                
Senator Stedman asked regarding  "the mechanics of sweepability" and                                                            
whether ACIF  could be structured  to prohibit its funds  from being                                                            
swept.  In  addition,  he  asked   how  the  AH  earnings  would  be                                                            
calculated.                                                                                                                     
                                                                                                                                
9:42:18 AM                                                                                                                    
                                                                                                                                
Mr.  Ecklund stated  that  "most funds  are  sweepable".  The FY  06                                                            
capital budget  would propose "to  expend the money that  flows into                                                            
the" ACIF for capital projects,  as, once that money is appropriated                                                            
for a capital project,  that capital project would not be subject to                                                            
the sweep.  He reiterated  that most funds  are sweepable,  and that                                                            
the "very few  exceptions" to that  would include the new  education                                                            
fund that  was created  this year  and the  Power Cost Equalization                                                             
(PCE) Endowment Fund.                                                                                                           
                                                                                                                                
Senator Stedman asked whether  this fund could be protected from the                                                            
sweep.                                                                                                                          
                                                                                                                                
Mr. Ecklund responded that  "the Department of Administration is the                                                            
entity  that makes"  the determination  as to which  funds would  be                                                            
sweepable.  A multitude of standards  and calculations are  involved                                                            
in the endeavor. He deferred  to the Department of Administration in                                                            
this regard.                                                                                                                    
                                                                                                                                
Senator  Stedman   asked  regarding   the  calculation  that   would                                                            
determine how much money would be deposited into the ACIF.                                                                      
                                                                                                                                
9:44:24 AM                                                                                                                    
                                                                                                                                
Mr. Ecklund  replied that a representative  of the Alaska  Permanent                                                            
Fund  Corporation,  Department  of Revenue  could best  answer  that                                                            
question;  however,  he  understood   that  "the  earnings  on  this                                                            
subaccount would  be calculated the same way as the  earnings of the                                                            
rest of the Permanent Fund".                                                                                                    
                                                                                                                                
Senator  Stedman asked whether  "any smoothing  mechanism"  would be                                                            
incorporated   or   whether   an   annual   calculation   would   be                                                            
automatically   moved  into  the  account.  He  surmised   that  the                                                            
calculation  would be  conducted at  the conclusion  of each  fiscal                                                            
year, as that would provide  the information to the Governor in time                                                            
to incorporate  it into his budget proposal that is  due by December                                                            
15th of each year.                                                                                                              
                                                                                                                                
Mr. Ecklund  confirmed  that the  funding transfer  would not  occur                                                            
until the  end of  the fiscal year.  The amount  could be  estimated                                                            
earlier.                                                                                                                        
                                                                                                                                
Co-Chair Green asked whether  it would be possible to calculate this                                                            
year's amount  based on last year's  actual performance.  That would                                                            
assist in removing the estimation factor.                                                                                       
                                                                                                                                
Mr. Ecklund  supported estimating  the amount rather than  basing it                                                            
on last year's  performance; the amount would be easier  to pinpoint                                                            
as the end of  the fiscal year nears. Approximately  $30,000,000 has                                                            
been the recent historical range.                                                                                               
                                                                                                                                
Co-Chair Green concluded  therefore that the range of estimation, at                                                            
this point,  is pretty narrow; there  might be a deviation  range of                                                            
$2,000,000  or $3,000,0000  from the actual  amount. She  questioned                                                            
"whether the forecasting could be that close".                                                                                  
                                                                                                                                
Mr. Ecklund affirmed that it could.                                                                                             
                                                                                                                                
9:46:39 AM                                                                                                                    
                                                                                                                                
Senator  Stedman ascertained  that  this process  would differ  from                                                            
that of  estimating oil prices,  which are  based on such things  as                                                            
volume and price.  When "operating within the portfolio  confines of                                                            
the Permanent  Fund, it depends on their buying and  selling, profit                                                            
taking  or losses,  and then  dividend  income". He  asked why,  for                                                            
budgetary purposes, a one-year  lag time had not been proposed. That                                                            
would allow any  money that might remain in the ACIF  to be utilized                                                            
rather than swept.  Were the amount based on the prior  year, it, in                                                            
its entirety, could be appropriated.                                                                                            
                                                                                                                                
9:48:09 AM                                                                                                                    
                                                                                                                                
Mr. Ecklund  responded that the Governor's  capital budget  proposal                                                            
included $340  million of AH bonding.  "It appears that that  is not                                                            
going to happen"  and different sources  were identified  with which                                                            
to fund  the capital  budget.  This proposal  is one  area that  the                                                            
House of Representatives accepted.                                                                                              
                                                                                                                                
Senator  Stedman rephrased  his question.  The question  was not  in                                                            
regards  to "the mechanics"  utilized  this year;  it "is more  of a                                                            
policy decision"  as to whether  there might  be the desire  to "put                                                            
forth  mechanisms  within  the budgetary  process  to  get a  higher                                                            
predictability  of  the  revenue stream  that  we  are going  to  be                                                            
working with".  Imbedding  a one-year delay  on this proposal  would                                                            
provide exact figures as  opposed to dealing with fluctuating market                                                            
conditions and  other influences. Doing so would provide  "a cleaner                                                            
budgetary cycle".                                                                                                               
                                                                                                                                
9:50:30 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green   asked  whether   the  bill  might  contain   "that                                                            
retroactivity", as she  noted that Sec. 4, page two lines 27 through                                                            
30  of the  bill  specifies  that  Sections  1-3  of this  bill  are                                                            
retroactive  to July 1, 2004. Therefore,  half of the year  would be                                                            
"a look-back".                                                                                                                  
                                                                                                                                
Mr. Ecklund  replied that,  "the bill does  contain a retroactivity                                                             
clause that would  allow the FY 05 earnings to be  used in the FY 06                                                            
capital budget".                                                                                                                
                                                                                                                                
Co-Chair Green  understood therefore that the FY 05  amount would be                                                            
an "actual" amount.                                                                                                             
                                                                                                                                
Mr. Ecklund  stated that it would  be "very close" to being  actual.                                                            
                                                                                                                                
Co-Chair Green  understood that were $60,000,000 allocated  to FY 06                                                            
capital  projects through  this process,  the  Legislature would  be                                                            
able to review  the actual FY 05 fiscal  year amount, and,  were the                                                            
actual   amount  to  be   $2,000,000  less   than  anticipated   and                                                            
appropriated, they would  be able to utilize a mechanism to "repair"                                                            
that  funding  shortfall  issue.  Either  a  project  would  not  be                                                            
furthered or it  might be addressed through a supplemental  request.                                                            
The latter would not be  preferred. She stated that some flexibility                                                            
might be available.                                                                                                             
                                                                                                                                
9:52:44 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green voiced uncertainty  as to  whether a one-year  look-                                                            
back had been  discussed. She stated that the interest  would remain                                                            
in the AH account until withdrawn to fund a project.                                                                            
                                                                                                                                
9:53:28 AM                                                                                                                    
                                                                                                                                
Mr. Ecklund remarked  that the earnings would flow  into the capital                                                            
income  fund,   and  from  there,   they  would  flow  to   whatever                                                            
appropriation  the Legislature  had specified,  such as the  capital                                                            
projects  proposed  in the  Governor's FY  06 capital  budget.  Were                                                            
sufficient  funds unavailable to fund  the entirety of the  projects                                                            
specified for  FY 06, a supplemental  request could be provided.  In                                                            
addition,  ACIF FY  07 deposits  could  be used  to fund  previously                                                            
authorized projects. There  would be methods to fully fund a capital                                                            
project in the FY 06 budget.                                                                                                    
                                                                                                                                
Co-Chair  Green expressed  therefore that  "the shortfall"  could be                                                            
corrected.                                                                                                                      
                                                                                                                                
9:54:37 AM                                                                                                                    
                                                                                                                                
Senator  Stedman  understood   "the  backfill  mechanism"   options.                                                            
However,  "it's  a  policy  call"  as  the  Legislature  could  fund                                                            
projects with funds from  the year 2010. The question is whether "we                                                            
want" to develop  a budget based on  an estimate of projected  funds                                                            
subject  to financial  market volatility,  with  "the potential"  to                                                            
backfill  the  allocation  "or do  we want  to  work with  a  number                                                            
certain".  He stated that  it would  be easier  to develop a  budget                                                            
with a "number certain".                                                                                                        
                                                                                                                                
9:55:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Green asked whether  the legislation would require that the                                                            
entirety of  the interest earnings  deposited into the ACIF  must be                                                            
utilized.                                                                                                                       
                                                                                                                                
Mr. Ecklund responded in  the negative, the amount "would be subject                                                            
to appropriation".                                                                                                              
                                                                                                                                
Co-Chair Green  asked whether it might  be possible for the  "number                                                            
certain" approach, as suggested  by Senator Stedman, to encounter an                                                            
under-funding situation.                                                                                                        
                                                                                                                                
Mr. Ecklund  affirmed that the Legislature  could specify  an amount                                                            
of $100,000,000, and only $20,000,000 might be earned.                                                                          
                                                                                                                                
9:56:35 AM                                                                                                                    
                                                                                                                                
In response  to  a question  from  Co-Chair Green,  Senator  Stedman                                                            
voiced that he had no further comments. He had made his point.                                                                  
                                                                                                                                
Senator Dyson asked to  language in the Sponsor's Statement [copy on                                                            
file] that  professes that ending  the inflation proofing  of the AH                                                            
principal would "maintain  a static balance in the AH principal". To                                                            
that point, he asked whether  "any unrealized gains as the result of                                                            
the growth  of  the value  of what ever  instruments  that money  is                                                            
invested in" would remain in the AH principal account.                                                                          
                                                                                                                                
9:57:49 AM                                                                                                                    
                                                                                                                                
Mr. Ecklund  responded that  the current  $424,000,000 Amerada  Hess                                                            
principal  balance is  the static  amount being  referenced. He  was                                                            
unsure as to how  the account would be affected by  unrealized gains                                                            
or  losses.   A  representative   of  the   Alaska  Permanent   Fund                                                            
Corporation would best respond to the question.                                                                                 
                                                                                                                                
Senator Dyson expressed  that the reference to "maintaining a static                                                            
balance"  should   not  prohibit   the  account  from  growing   and                                                            
appreciating  due to  inflation  proofing and  "prudent investments                                                             
over time".                                                                                                                     
                                                                                                                                
Mr. Ecklund  explained "the current  practice with the Amerada  Hess                                                            
subaccount"  by stating that  the account  consists of its  earnings                                                            
and an  inflation-proofing  amount, as determined  by the  Permanent                                                            
Fund Corporation.  Once the earnings are determined,  the inflation-                                                            
proofing  amount is  subtracted from  the earnings  amount, and  the                                                            
earnings balance is deposited  into the subaccount. This is required                                                            
by Statute,  as none of the subaccount's  earnings could  be used in                                                            
the  calculation  of the  Dividend.  Therefore, the  subaccount  has                                                            
experienced growth by both  its earnings and the inflation proofing.                                                            
                                                                                                                                
Mr.  Ecklund stated  that  this  bill "would  freeze  the  principal                                                            
amount  for  accounting  purposes  at  $424,000,000.  The  inflation                                                            
proofing  amount that is  applicable to the  $424,000,000"  would be                                                            
deposited  into the other  portion of the  Permanent Fund  principal                                                            
rather than into the AH subaccount.                                                                                             
                                                                                                                                
Senator Dyson  clarified that his question pertained  to "the value"                                                            
of the  AHS rather than  to its earnings  or the inflation-proofing                                                             
calculations.   Continuing,  he  commented   that  the  fund   might                                                            
appreciate  due to  its investments;  therefore,  he was asking  for                                                            
assurance that  the increasing value  of the fund that might  result                                                            
from its own investments  would not removed from the  account "to be                                                            
spent".                                                                                                                         
                                                                                                                                
Mr.  Ecklund   assured  that  the   fund's  "unrealized   gains  and                                                            
unrealized   losses  are   not  included   in  the  calculation   of                                                            
principal".                                                                                                                     
                                                                                                                                
Senator Dyson acknowledged.                                                                                                     
                                                                                                                                
[Co-Chair Wilken assumed chair of the meeting.]                                                                                 
                                                                                                                                
10:01:50 AM                                                                                                                   
                                                                                                                                
Senator Stedman asked the  reason that the State would take an asset                                                            
at, for example, the $424,000,000  level and not inflation-proof it.                                                            
That would serve  to erode the level at, for example,  three-percent                                                            
a year. Inflation-proofing  the account  "would not affect  the rest                                                            
of  the   Permanent  Fund   anyway  because   this  is  a   separate                                                            
[indiscernible]  entity." Halting  the inflation-proofing  of the AH                                                            
subaccount  and instead  depositing  that money  into the  Permanent                                                            
Fund would serve  to over-inflate an already over-inflated  account,                                                            
and would serve to reduce  the purchasing power of the AH subaccount                                                            
over time.  Every year the  account "would  go backwards".  He could                                                            
not "understand the conceptual long-range goal here".                                                                           
                                                                                                                                
10:03:20 AM                                                                                                                   
                                                                                                                                
Mr. Ecklund stated  that the House of Representatives  had discussed                                                            
inflation-proofing the  sub-account. The Governor's proposal had not                                                            
included inflation-proofing  the subaccount. The House  decided that                                                            
in an effort  to not diminish  the total value  of the principal  of                                                            
the Permanent  Fund, the subaccount would be included  in the amount                                                            
upon  which  the  total  inflation  proofing  calculation  would  be                                                            
calculated. The question  is whether the desire would be to grow the                                                            
subaccount, which could  not be used for dividends, or, as proposed,                                                            
to spin  off money  to be used  for any valid  public purpose.  That                                                            
would be a policy call.                                                                                                         
                                                                                                                                
Senator Stedman  warned that a short-range  view of the issue  could                                                            
be "easily captivating".  The Governor presented a  concept that has                                                            
been altered.  The long-range ramifications  of the proposal  should                                                            
be considered.                                                                                                                  
                                                                                                                                
[NOTE: Co-Chair Green resumed Chair of the Committee.]                                                                          
                                                                                                                                
10:04:44 AM                                                                                                                   
                                                                                                                                
Senator  Stedman avowed  that  a slow  erosion of  the subaccount's                                                             
purchasing  power  would  not  be desired.  Inflation-proofing   the                                                            
account  would not have  any affect,  as the  inflation dollars  are                                                            
already being  calculated, and therefore,  instead of crediting  the                                                            
inflation-proofing   into  the  Permanent  Fund,  which  is  already                                                            
inflation proofed, the  money should be credited to the principal of                                                            
the AH subaccount to, "at  least, keep the purchasing power constant                                                            
over time".  Inflation-proofing this  account would be an  easy fix.                                                            
He warned that it is "conceptually  easy to walk away from inflation                                                            
proofing, but,  absent this endeavor, there would  be "substantially                                                            
less capital available to us" in ten years.                                                                                     
                                                                                                                                
10:06:00 AM                                                                                                                   
                                                                                                                                
Senator  Hoffman ascertained  therefore that  the question  would be                                                            
whether  to continue the  buying power  of the  AH subaccount  or to                                                            
enhance  the   calculation  of  the   Dividend,  by  crediting   the                                                            
inflation-proofing money  into the Permanent Fund corpus rather than                                                            
into the AH subaccount.                                                                                                         
                                                                                                                                
Senator Stedman  responded  that the answer  to that question  would                                                            
depend on  whom you ask.  Numerous people  would be concerned  about                                                            
protecting the Permanent Fund and their Dividend.                                                                               
                                                                                                                                
Senator  Stedman stated  that the  AH money  "today  … is a  virtual                                                            
subaccount of the Alaska  Permanent Fund and has never had an affect                                                            
on the  Dividend  calculations".  Were the  desire  to redirect  the                                                            
earnings from  the AH settlement, which is an "entity  that does the                                                            
State  no good  at all  other than  a growing  pot of  money",  in a                                                            
similar manner  to how the State uses the earnings  of the Permanent                                                            
Fund, while continuing  to inflation proof the AH  subaccount, would                                                            
"at least" hold "its purchase  power constant over time". He did not                                                            
anticipate this  being an issue to most of the people  in the State.                                                            
                                                                                                                                
Senator Dyson viewed an  investment that does not exceed the rate of                                                            
inflation  as  "a lousy  investment".  "What  we have  been  calling                                                            
inflation proofing  is just kind of supplemental income  to increase                                                            
the principal." Therefore,  his question would be to the reason that                                                            
the State  should  inflation proof  investments as  opposed to  just                                                            
making wise  investments  that ought to,  traditionally, double  the                                                            
CPI [consumer price index]."                                                                                                    
                                                                                                                                
10:08:26 AM                                                                                                                   
                                                                                                                                
Co-Chair Green  asked Rob Carpenter  of the Division of Legislative                                                             
Finance to explain,  among other things, how the amount  of interest                                                            
earned  on  the  AH  Settlement  would  be  calculated   under  this                                                            
legislation.                                                                                                                    
                                                                                                                                
ROB CARPENTER,  Fiscal  Analyst,  Division of  Legislative  Finance,                                                            
understood that some of  the Committee's concerns revolve around the                                                            
issues of how not inflation  proofing the AH subaccount would affect                                                            
it, and  "that  the income  stream would  be very  flat because  the                                                            
principal amount would  not change". "The principal idea behind" the                                                            
current AHS  process "is to avoid  a change in the actual  amount of                                                            
the Dividend", as no part  of the AH subaccount is factored into the                                                            
Dividend calculation. "Therefore,  any inflation-proofing of the AMS                                                            
portion will reduce future Dividends".                                                                                          
                                                                                                                                
Co-Chair Wilken  understood that Senator  Stedman's desire  would be                                                            
to, rather than contributing,  for example, the entire eight percent                                                            
earnings,   or  $32,000,000,   on   the  approximate   $400,000,000                                                             
subaccount balance  into the ACIF to support public  purposes, three                                                            
percent of that  amount would be retained to inflation-proof  the AH                                                            
subaccount  and the five-percent  balance,  or $20,000,000  would be                                                            
provided  to the ACIF. Such  action would  continue to maintain  the                                                            
purchasing  power   of  the  AH  subaccount.  Senator   Stedman  has                                                            
identified the need for  there to be a policy call regarding whether                                                            
the AH subaccount should  be a static account in terms of dollars or                                                            
in purchasing power.                                                                                                            
                                                                                                                                
10:11:23 AM                                                                                                                   
                                                                                                                                
Senator Stedman  responded that Co-Chair Wilken's  interpretation is                                                            
"very close" to  his intent. The desire would be that  in ten years,                                                            
the equivalent  purchasing  power would  be available  "to work  for                                                            
us".                                                                                                                            
                                                                                                                                
Co-Chair  Wilken  concluded  therefore,   that  the  discussion  has                                                            
returned  to Senator Dyson's  question regarding  the definition  of                                                            
static: static  in terms of purchasing  power or static in  terms of                                                            
dollars.                                                                                                                        
                                                                                                                                
Mr. Ecklund  stated  that the House  had discussed  this issue.  "In                                                            
rough numbers",  inflation proofing "the AH subaccount  with its own                                                            
earnings"  would  provide  a  payout  of approximately  $21,000,000                                                             
rather than  the full $30,000,000  to support  public purposes.  The                                                            
effort being  undertaken "was  to fund as  many capital projects  as                                                            
possible"  using  as many  funding sources  as  possible,  including                                                            
utilizing  the money  that might  be provided  by this legislation.                                                             
This proposal could be adopted and revisited in the future.                                                                     
                                                                                                                                
10:12:43 AM                                                                                                                   
                                                                                                                                
Senator  Dyson  communicated  his  difficulty  in  "integrating  the                                                            
answers"  that  have  been  provided.   It  would  appear  that  the                                                            
$400,000,000  plus  money  would   appreciate  in  value,  and  have                                                            
increasing  purchasing power  and increased  earnings without  being                                                            
inflation proofed.                                                                                                              
                                                                                                                                
10:13:27 AM                                                                                                                   
                                                                                                                                
Mr.  Carpenter  reviewed the  manner  in  which the  Permanent  Fund                                                            
currently works. The AH,  the entire ERA (Earnings Reserve Account),                                                            
and the  principal  are all invested  through  the Permanent  Fund's                                                            
asset  allocation.  They have  both "an  unrealized  and a  realized                                                            
earnings flow.  The realized earnings stream is their  statutory net                                                            
minus the Am Hess  which then goes back into the Am  Hess principal"                                                            
along with all its earnings.                                                                                                    
                                                                                                                                
Mr.  Carpenter  continued  that  this bill  would  flow  the  entire                                                            
realized  earnings  associated  with the  AH subaccount  balance  of                                                            
$425,000,000  into the  capital income  account.  There would  be no                                                            
inflation proofing. Any  realized earnings would be paid out. "There                                                            
could be an accounting  of unrealized gains associated  with that Am                                                            
Hess  portion, but  the  way the  principal  of the  Permanent  Fund                                                            
works,  that   just  a  part  of   the  Permanent  Fund   unrealized                                                            
earnings"….  "The  principal  of  the  Permanent  Fund  is  just  an                                                            
accounting  notion; whereas the market  value of the Permanent  Fund                                                            
is far in excess."                                                                                                              
                                                                                                                                
10:14:42 AM                                                                                                                   
                                                                                                                                
Senator  Dyson asked  the reason  why the  unrealized  gains of  the                                                            
Amerada  Hess could  not stay with  the Amerada  Hess principal  and                                                            
therefore would be an appreciated [indiscernible due to cough]".                                                                
                                                                                                                                
10:15:05 AM                                                                                                                   
                                                                                                                                
Mr. Carpenter  stated that  this would be  possible; "it would  be a                                                            
matter of structuring it that way".                                                                                             
                                                                                                                                
10:15:16 AM                                                                                                                   
                                                                                                                                
Co-Chair Green  stressed the fact that the bill contains  "all 'may'                                                            
language". It would not  require that this action must be taken each                                                            
year. It simply  states that the Legislature  "may provide  money to                                                            
the Capital Income Fund".                                                                                                       
                                                                                                                                
Mr. Ecklund appreciated  that clarification. In response  to Senator                                                            
Stedman's  concerns, he  noted that,  through the  inclusion of  the                                                            
term  "valid  public  purpose",  the  Legislature  could  choose  to                                                            
reappropriate  money   in  the  ACIF  back  into  the  Amerada  Hess                                                            
subaccount.                                                                                                                     
                                                                                                                                
Co-Chair Green reiterated  that this legislation would not establish                                                            
"a mandate";  there would  not be an automatic  process. Any  use of                                                            
the funds must proceed  through the budgetary process. A valid pubic                                                            
purpose must be demonstrated.                                                                                                   
                                                                                                                                
Mr.  Carpenter commented  in  regards  "to the  cash  flow from  the                                                            
Fund". He pointed  out that because most capital projects  could not                                                            
be completed within one  year, a shortfall in ACIF funding allocated                                                            
for a specific year, might  not be that critical. "The revenue would                                                            
seem to fall into place in future years."                                                                                       
                                                                                                                                
Co-Chair Green  affirmed that "the  State generally leaves  money on                                                            
the table each year"; capital  money is not entirely spent each year                                                            
as  reflected  by the  fact  that  the budget  contains  money  from                                                            
previous  years'  allocation   that  have  lapsed.  "Some  of  those                                                            
projects never even got started" or were only halfway completed.                                                                
                                                                                                                                
Co-Chair Green ordered the bill to be SET ASIDE.                                                                                
                                                                                                                                
AT EASE 10:17:14 AM / 10:20:52 AM                                                                                           
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 187(FIN)(efd fld)                                                                                    
     "An Act relating  to money deposited into the  Alaska permanent                                                            
     fund as  a result of the settlement  of State v. Amerada  Hess;                                                            
     relating  to the Alaska capital income fund and  to deposits of                                                            
     income  from State v.  Amerada Hess  settlement money  into the                                                            
     Alaska capital income fund."                                                                                               
                                                                                                                                
                                                                                                                                
The bill was again before the Committee.                                                                                        
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There being no objection,  CS HB 187(FIN)(efd fld) was REPORTED from                                                            
Committee  with zero fiscal  note #2 dated  April 26, 2005  from the                                                            
Department of Revenue.                                                                                                          
                                                                                                                                
10:22:03 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 102(RES)                                                                                            
     "An  Act relating to  an extension for  review and approval  of                                                            
     revisions  to the Alaska coastal management program;  providing                                                            
     for an  effective date by amending  the effective date  of sec.                                                            
     45, ch. 24, SLA 2003; and providing for an effective date."                                                                
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
DOUG  LETCH, Staff  to Senator  Gary  Stevens, the  bill's  sponsor,                                                            
testified  in  support  of  the forthcoming  committee  substitute,                                                             
Version 24-LS0491\P,  that would be  being presented by Joe  Balash,                                                            
staff  to  Senator  Gene  Therriault.  The  Version   "P"  committee                                                            
substitute  would  further Senator  G.  Stevens' desire  to  provide                                                            
additional time in which  coastal districts could revise their plans                                                            
pertaining to Statutes that were implemented two years prior.                                                                   
                                                                                                                                
Co-Chair Green pointed  out that the addition of such language added                                                            
ten pages to the previous version of the bill.                                                                                  
                                                                                                                                
Mr. Letch affirmed.                                                                                                             
                                                                                                                                
Co-Chair Green  observed that those ten pages must  contain a lot of                                                            
repeat language and very little actual change.                                                                                  
                                                                                                                                
10:22:44 AM                                                                                                                   
                                                                                                                                
JOE  BALASH,  Staff to  Senator  Gene  Therriault  and Aide  to  the                                                            
Legislative  Budget   &  Audit  Committee,  stated  that   committee                                                            
substitute,  Version 24-LS0491\P  would accomplish  four things.  It                                                            
would extend by six months,  with one exception, the entirety of the                                                            
deadlines  specified in  HB 191, which  had been  adopted two  years                                                            
prior. The proposed  six-month extension would be  acceptable to the                                                            
Governor Frank  Murkowski Administration. The exception  to the six-                                                            
month extension would be  the deadline pertaining to "the submission                                                            
of the revised  local plans": those plans would receive  a two-month                                                            
extension.  This  would  allow coastal  districts  to  review  "what                                                            
standards"  the  federal  Office   of Ocean   and Coastal   Resource                                                            
Management  (OCRM) approved  before the  coastal districts  provided                                                            
their final submissions.                                                                                                        
                                                                                                                                
Mr. Balash continued that  one portion of the ten-page bill increase                                                            
would be  attributed  to the July  1, 2011  termination or  "sunset"                                                            
component of  the program. This date  would provide sufficient  time                                                            
in which  "the  full implementation"  of  the changes  to the  coast                                                            
management  program  could  occur.  It  would also  allow  time  for                                                            
federal approval of both  the State standards and the local district                                                            
plans, as  well as "four  years of operation  of the program".  This                                                            
timeframe  would  be similar  to  what  the State  provides  to  the                                                            
operation of its  boards, commissions, and other regulatory  bodies.                                                            
                                                                                                                                
Mr. Balash  noted that  the committee substitute  would clarify  the                                                            
scope  of the local  district plans  and would  also "automatically                                                             
make changes  to the  old district  plans that  the Legislature  has                                                            
twice indicated  in the past three  years that it would like  to see                                                            
made".                                                                                                                          
                                                                                                                                
10:24:24 AM                                                                                                                   
                                                                                                                                
Mr. Balash informed the  Committee that some changes must be made to                                                            
the Version  "P" committee  substitute. One  of those changes  would                                                            
pertain to  language in Sec. 14(b)  page 11 lines 10 through  16, as                                                            
the original  language in AS 46.40.030(b)  must be re-incorporated.                                                             
In addition the word "may",  as denoted on line 12 should be changed                                                            
to the word "shall".                                                                                                            
                                                                                                                                
Co-Chair  Wilken moved  to adopt  committee substitute  Version  24-                                                            
LS0491\P as the working document.                                                                                               
                                                                                                                                
There being  no objection,  Version "P" was  ADOPTED as the  working                                                            
document.                                                                                                                       
                                                                                                                                
Conceptual  Amendment #1: This amendment  reinstitutes the  original                                                            
Statute language  into Sec.  14(b) page 11  lines 10 through  16. In                                                            
addition, the word "may"  in that original language is replaced with                                                            
the word "shall". The revised language reads as follows.                                                                        
                                                                                                                                
          (b) In developing enforceable policies in its coastal                                                                 
     management  plan under (a) of this section, a  coastal resource                                                            
     district shall meet  the requirements of AS 46.40.070 and shall                                                            
     not duplicate,  restate, or incorporate  by reference  statutes                                                            
     and  administrative  regulations  adopted by  state or  federal                                                            
     agencies.                                                                                                                  
                                                                                                                                
Senator Dyson moved to adopt Conceptual Amendment #1.                                                                           
                                                                                                                                
There being no objection, Conceptual Amendment #1 was ADOPTED.                                                                  
                                                                                                                                
Mr. Balash explained that  other changes are requested in regards to                                                            
language  in  Sec. 20  page  12, line  25.  Currently,  language  in                                                            
Sections  1 through  13  provides  "the clean  up language  and  the                                                            
entirety  of  the  references  to  the  Coastal  Management  Program                                                            
consistency  determinations  in  other areas  of statute.  Sec.  17,                                                            
which is a fairly lengthy  repeal section is designed to be a sunset                                                            
provision  that  will  be  renewed   in the  future".   However,  no                                                            
provision is included in  the bill "that links to direction for the"                                                            
Division  of  Legislation  Audit   "to conduct   a  sunset  review".                                                            
Therefore,  another  conceptual  amendment  would  be  requested  to                                                            
specify "that  the Alaska Coastal Management Program  be added to AS                                                            
44.66.020."                                                                                                                     
                                                                                                                                
In response  to a comment  by Co-Chair Green,  Mr. Balash  clarified                                                            
that AS 44.66.010  is a listing of  boards and commissions,  whereas                                                            
AS  44.66.020 is  a list  of  programs that  would  be eligible  for                                                            
audits.                                                                                                                         
                                                                                                                                
Amendment  #2: This amendment  inserts language  into the bill  that                                                            
adds the Alaska  Coastal Zone Management program to  AS 44.66.020 in                                                            
order to make it audit eligible.                                                                                                
                                                                                                                                
Co-Chair Wilken moved to adopt Conceptual Amendment #2.                                                                         
                                                                                                                                
There being no objection, Conceptual Amendment #2 was ADOPTED.                                                                  
                                                                                                                                
Mr. Balash stated  that the Governor Frank Murkowski  Administration                                                            
has requested  "that they  be granted authority  to issue  emergency                                                            
regulations to  implement this Act". Legislative Legal  and Research                                                            
Services  has informed the  bill's sponsors  that the Department  of                                                            
Natural Resources  "already has the  statutory authority  necessary,                                                            
they simply  need to  issue a written  finding  … that an  emergency                                                            
exists." However, the Department  of Natural Resources has requested                                                            
that  such  language  be included  in  the  bill  for clarification                                                             
purposes.                                                                                                                       
                                                                                                                                
Amendment  #3: This  amendment amends  uncodified law  to add  a new                                                            
section that reads as follows.                                                                                                  
                                                                                                                                
     Sec. 4. The uncodified law of the State of Alaska is amended                                                               
     by adding a new section to read:                                                                                           
          EMERGENCY REGULATIONS: The need to adopt regulations                                                                  
     consistent  with this  Act is  declared an  emergency, and  the                                                            
     Department   of  Natural  Resources  shall  proceed   to  adopt                                                            
     emergency  conforming regulations  to implement the  provisions                                                            
     of this Act.                                                                                                               
                                                                                                                                
AT EASE 10:30:39 AM / 10:33:35 AM                                                                                           
                                                                                                                                
Co-Chair Wilken moved to adopt Conceptual Amendment #3.                                                                         
                                                                                                                                
There being no objection, Conceptual Amendment #3 was ADOPTED.                                                                  
                                                                                                                                
Co-Chair  Wilken  moved  to  report   the  bill,  as  amended,  from                                                            
Committee with  individual recommendations  and accompanying  fiscal                                                            
notes.                                                                                                                          
                                                                                                                                
There  being  no  objection,  CS SB  102  (FIN)  was  REPORTED  from                                                            
Committee  with zero fiscal  note #2  dated March  8, 2005 from  the                                                            
Department  of Commerce,  Community and  Economic Development;  zero                                                            
fiscal note #3  dated March 8, 2005 from the Department  of Fish and                                                            
Game; zero fiscal  note #4 dated March 14, 2005 from  the Department                                                            
of Environmental Conservation;  and new a zero fiscal note dated May                                                            
3, 2005 from the Department of Natural Resources.                                                                               
                                                                                                                                
10:35:15 AM                                                                                                                   
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 22                                                                                                         
     "An Act adding birthing centers to the list of health                                                                      
     facilities eligible for payment of medical assistance for                                                                  
     needy persons."                                                                                                            
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken moved  to adopt  committee substitute  Version  24-                                                            
LS0209\F as the working document.                                                                                               
                                                                                                                                
There being no  objection, the Version "F" committee  substitute was                                                            
ADOPTED as the working document.                                                                                                
                                                                                                                                
Co-Chair  Green  communicated  that  during  this  bill's  committee                                                            
hearing process,  the concern was "expressed about  the fact that we                                                            
have  no  doubt  a  very  very  legitimate  cause  for  support  for                                                            
midwifery  centers  and the  funding". She  noted  that the  State's                                                            
Medicaid  program  has been  based on  federal  Medicaid  standards;                                                            
consequently,  language has  been included  in Section 1(B)  on page                                                            
one,  lines  ten  through  twelve  of  the  Version   "F"  committee                                                            
substitute to  specify that birthing centers, which  are included in                                                            
the definition  of health facilities, would be eligible  for funding                                                            
"under  the State plan  approved under  AS 47.07.040  by the  United                                                            
States Department of Health and Human Services".                                                                                
                                                                                                                                
10:37:16 AM                                                                                                                   
                                                                                                                                
RICHARD  BENAVIDES,  Staff  to  Senator  Bettye  Davis,  the  bill's                                                            
sponsor, asked that clarification  be provided in regards to whether                                                            
the language in  Version "F" would require the Department  of Health                                                            
and Social Services  to develop an amendment to the  State's plan or                                                            
whether  the State should  wait for  a federal  determination  as to                                                            
whether they would fund midwifery centers.                                                                                      
                                                                                                                                
Co-Chair Green  voiced being uncertain  of the State's procedure  in                                                            
this  regard.  The State  might  be  able to  develop  the  required                                                            
language. She assumed that  the inclusion of midwifery centers would                                                            
require federal  policies to be rewritten  in regards to  what would                                                            
be deemed acceptable  for federal  Medicaid "reimbursables".  States                                                            
must be able to provide  input and ask that "various things be added                                                            
to the list".  She understood that the procedure in  this regard has                                                            
been a point of ongoing discussion.                                                                                             
                                                                                                                                
Co-Chair  Green stressed that  it is not the  desire of the  Finance                                                            
Committee  to  provide  "100  percent  State  Medicaid  dollars  for                                                            
programs that are not currently  funded with federal Medicaid." "The                                                            
list would  be endless and it would  be very very difficult."  Since                                                            
the  State "is  subject to  federal  Medicaid with  their  arbitrary                                                            
changes,  it's  very difficult"  for  the  State,  on its  own,  "to                                                            
expand"  what the State  would pay,  even though  that use might  be                                                            
considered "very legitimate"  and might save money. That point could                                                            
be argued.                                                                                                                      
                                                                                                                                
10:39:58 AM                                                                                                                   
                                                                                                                                
Mr. Benavides  noted that  during the bill's  hearing in the  Senate                                                            
Health, Education, and  Social Services Committee that Department of                                                            
Health and Social  Services had communicated that,  were the bill to                                                            
pass, the Department  would be required  to develop an amended  plan                                                            
in order to have  a determination made by the federal  government as                                                            
to whether  they would accept it.  Thus the reason for his  question                                                            
as to  whether  the Department  would be  directed  to further  that                                                            
endeavor  or   whether  the  federal   government  would   make  the                                                            
determination  as to whether they  would expand their coverage.  The                                                            
committee substitute is  unclear in its direction to the Department.                                                            
                                                                                                                                
10:40:54 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green  stated  that  input from  the  Department  must  be                                                            
sought.  In the  meantime,  she voiced  the understanding  that  the                                                            
Department did  not object to the bill. Therefore,  she would not be                                                            
surprised  were  the  Department  to advance  an  amendment  to  the                                                            
federal Medicaid program.                                                                                                       
                                                                                                                                
Mr. Benavides asked that  he be allowed to clarify this further with                                                            
the Department and provide their response to the Committee.                                                                     
                                                                                                                                
Co-Chair Green agreed.                                                                                                          
                                                                                                                                
JERRY  FULLER,   Medicaid  Director,   Office  of  Program   Review,                                                            
Department   of   Health  and   Social   Services,   testified   via                                                            
teleconference  from an offnet site, and stated that,  were the bill                                                            
approved by  the Legislature, the  Department would submit  language                                                            
for federal  approval. He  concurred with  Co-Chair Green's  earlier                                                            
remarks  as  to the  fluidness  of  the policies  occurring  in  the                                                            
federal Medicaid program.                                                                                                       
                                                                                                                                
In response to a question  from Co-Chair Green, Mr. Benavides stated                                                            
that Mr. Fuller had answered his question.                                                                                      
                                                                                                                                
Co-Chair  Green   noted  her  intention  to  move   this  bill  from                                                            
Committee.  In the  interest  of time,  she  asked teleconferencing                                                             
participants to briefly state their position on the bill.                                                                       
                                                                                                                                
10:42:43 AM                                                                                                                   
                                                                                                                                
Mr. Fuller informed the  Committee that the Department has a neutral                                                            
position on this bill                                                                                                           
                                                                                                                                
10:43:01 AM                                                                                                                   
                                                                                                                                
TOM RYAN, testified via  teleconference from Mat-Su and communicated                                                            
that this  bill would provide  a "great benefit"  to both the  State                                                            
and  its  citizens.  It would  save  the  State  money  and  provide                                                            
Alaskans other health care options.                                                                                             
                                                                                                                                
10:43:29 AM                                                                                                                   
                                                                                                                                
TORA GERRICK testified  via teleconference from Anchorage in support                                                            
of the bill.                                                                                                                    
                                                                                                                                
10:43:45 AM                                                                                                                   
                                                                                                                                
Senator Dyson, noting that  he is one of bill's co-sponsors, thanked                                                            
Co-Chair Green  for her ability "to see things" that  he had missed.                                                            
                                                                                                                                
Senator  Dyson  moved  to  report  the  committee   substitute  from                                                            
Committee with individual recommendations and new fiscal note.                                                                  
                                                                                                                                
Co-Chair  Green noted  that a new  fiscal note  would accompany  the                                                            
bill,   as   the  previous   one   contained   language   that   was                                                            
"problematic".                                                                                                                  
                                                                                                                                
There being no objection,  CS SB 22(FIN) was REPORTED from Committee                                                            
with  a  new  zero  fiscal  note  dated  April  28,  2005  from  the                                                            
Department of Health and Social Services.                                                                                       
                                                                                                                                
10:45:10 AM 10:45:54 AM                                                                                                     
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 192                                                                                                        
     "An Act relating to reimbursement of municipal bonds for                                                                   
     school construction; and providing for an effective date."                                                                 
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green,  the bill's sponsor, explained that  this bill would                                                            
extend the original  January 1, 2005 termination date  applicable to                                                            
the public  school construction dept  reimbursement program  to July                                                            
1, 2006.  This one  and a half  year program  extension would  allow                                                            
schools  to  bond  and solicit  State  assistance  in  building  and                                                            
renovating schools. While  the Sponsor Statement primarily addressed                                                            
school  expansion needs  in the  Mat-Su  Valley area,  which is  the                                                            
State's  "most  problematic   area",  for  over  population  in  its                                                            
schools, many  school districts have  similar expansion needs.  Were                                                            
the current student  growth trend to continue in the  Mat-Su area, a                                                            
new school  would  need to  be constructed  each year.  "It is  very                                                            
difficult to keep  up and keep our classrooms, not  only in sizes, …                                                            
but to  provide for  enough services  … for all  our students."  She                                                            
noted  that  areas   of  the  Mat-Su  Valley  that  had   previously                                                            
experienced little  growth are now being developed.  Other districts                                                            
throughout  the   State  are  also  experiencing  construction   and                                                            
renovation needs.                                                                                                               
                                                                                                                                
10:48:45 AM                                                                                                                   
                                                                                                                                
EDDY JEANS,  Director,  Division of  School Finance,  Department  of                                                            
Education  and Early  Development,  stated that  "the Department  is                                                            
opposed to the  extension" of this program "at this  time". When the                                                            
Legislature  authorized the debt reimbursement  program in  the year                                                            
2002, they  had included a provision  requiring that the  Department                                                            
provide  a  report  by  February  1,  2006  that  would  review  the                                                            
effectiveness   of  the   school  construction   grant  and   school                                                            
construction debt reimbursement program.                                                                                        
                                                                                                                                
Mr.  Jeans reminded  the Committee  that  a separate  State  General                                                            
Obligation  (GO) bond package was  authorized in the year  2002 that                                                            
provided funding  for Rural schools.  The citizens of the  State had                                                            
approved  the school construction  debt  reimbursement program,  and                                                            
approximately  $728,000,000  in school  construction  projects  have                                                            
been authorized  throughout the State. The Department  is requesting                                                            
that it be provided  time to review the resulting  financial impacts                                                            
on the State and  develop a report that would convey  to Legislators                                                            
what  the anticipated  annual  debt  would  be under  this  program.                                                            
$84,000,000 in  debt expenses would be included in  the FY 06 budget                                                            
with the  anticipation for  that number  increasing were  additional                                                            
bonds sold.                                                                                                                     
                                                                                                                                
Senator Dyson  appreciated the Department's desire  to undertake the                                                            
study. He asked regarding  any specific school construction projects                                                            
that could be affected by this legislation.                                                                                     
                                                                                                                                
10:51:22 AM                                                                                                                   
                                                                                                                                
Mr. Jeans  identified  that the  Mat-Su School  District would  have                                                            
some needs. The Anchorage  School district has also identified needs                                                            
they would  like to present  to their voters.  The Department  would                                                            
appreciate being able to  review "the effectiveness" of that program                                                            
before an extension occurred.                                                                                                   
                                                                                                                                
10:51:57 AM                                                                                                                   
                                                                                                                                
Senator  Olson   asked  whether  this   bill  would  affect   school                                                            
construction in Bush Alaska.                                                                                                    
                                                                                                                                
10:52:13 AM                                                                                                                   
                                                                                                                                
Mr. Jeans  clarified that  the debt reimbursement  program  "is only                                                            
available  to municipal  school  districts"  such as  the  Northwest                                                            
Arctic Borough and the  North Slope Borough. Areas such as the Lower                                                            
Kuskokwim/Lower Yukon school areas would not be affected by it.                                                                 
                                                                                                                                
10:52:32 AM                                                                                                                   
                                                                                                                                
Senator  Olson   asked  therefore   for  an  example  of   how  this                                                            
legislation would affect  the Northwest Arctic Borough and the North                                                            
Slope Borough.                                                                                                                  
                                                                                                                                
Mr. Jeans  responded that  those Boroughs  could develop a  proposal                                                            
for local voter  approval. A proposal  approved by the local  voters                                                            
would   either   qualify   for   the   70-percent    or   60-percent                                                            
reimbursement.  He  pointed  out that  this  legislation,  like  the                                                            
legislation that was passed  in the year 2002, would not impose "any                                                            
limits by region."                                                                                                              
                                                                                                                                
10:53:16 AM                                                                                                                   
                                                                                                                                
Co-Chair Wilken  recalled that either a provision  in SB 155-APPROP:                                                            
SCHOOLS/UNIV/VIROLOGY  LAB/MUSEUM or the FY 06 Capital  Budget bill,                                                            
would  allow projects  in organized  Alaska  to be funded  at a  70-                                                            
percent  State/30-percent  local  funding  ratio  "under  the  grant                                                            
provision". Therefore,  he understood that this legislation would be                                                            
required  in order  to  conduct a  community  vote on  local  school                                                            
projects  in, for  instance,  the Mat-Su  Borough  or the  Fairbanks                                                            
North Star Borough.                                                                                                             
                                                                                                                                
Mr. Jeans asked for further clarification of the question.                                                                      
                                                                                                                                
Co-Chair  Wilken expressed  that  a provision  of SB  155 or in  the                                                            
Capital Budget  would apply to named  projects in organized  Alaska.                                                            
Those projects  would  be included  in the list  of the traditional                                                             
70/30  reimbursement   funding  mechanism.  Therefore   absent  this                                                            
legislation,  an organized  borough  would  be unable  to develop  a                                                            
proposal for local voter consideration.                                                                                         
                                                                                                                                
10:54:42 AM                                                                                                                   
                                                                                                                                
Mr. Jeans replied,  "that is not correct".  The grants specified  in                                                            
SB 46-BUDGET:  CAPITAL & OTHER/ BRF  are grant projects through  the                                                            
Department  of Education  and Early  Development.  The projects  and                                                            
their funding  levels as  identified in that  bill "are the  State's                                                            
share at 70-percent."  The municipality would be responsible  for "a                                                            
30-percent local match on top of that".                                                                                         
                                                                                                                                
10:55:11 AM                                                                                                                   
                                                                                                                                
Co-Chair Wilken asked regarding  the procedure were the municipality                                                            
to  desire  to  fund   their  30-percent  match  with   bond  money;                                                            
specifically whether this  legislation would be required in order to                                                            
conduct a Statewide vote.                                                                                                       
                                                                                                                                
Further Committee discussion in this regard ensued.                                                                             
                                                                                                                                
In  order to  clarify  the  funding  mechanism  at hand,  Mr.  Jeans                                                            
clarified  that  there are  two  different  programs.  One is  grant                                                            
program in  which "the Legislature  lists out the grant projects  in                                                            
the State's share".  AS 14.11.008 specifies the participating  share                                                            
for  that  grant  program.  The  program  being  discussed  in  this                                                            
legislation refers to AS  14.11.100, which is the debt reimbursement                                                            
program. Were  this legislation adopted, "then a municipality  would                                                            
take before  their voters  the entire project,  issue bonds  for the                                                            
entire project,  and the State would either reimburse  them at 70 or                                                            
60 percent, depending on  the individual project's legibility." This                                                            
funding  mechanism  "is  quite   a bit  different   than  the  grant                                                            
program."                                                                                                                       
                                                                                                                                
Co-Chair   Green  opined   that  the  programs   "are  similar   but                                                            
different."                                                                                                                     
                                                                                                                                
Mr.  Jeans replied  that  they "are  similar  in terms  of what  the                                                            
participating share is."                                                                                                        
                                                                                                                                
Co-Chair Green acknowledged.                                                                                                    
                                                                                                                                
Mr. Jeans  continued  that under the  grant program,  "the State  is                                                            
providing the 70-percent up front".                                                                                             
                                                                                                                                
Co-Chair  Green surmised  therefore that the  school district  would                                                            
not be required to expend money and then get reimbursed.                                                                        
                                                                                                                                
Mr. Jeans affirmed.                                                                                                             
                                                                                                                                
10:57:02 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green understood  that  "the authority  to go  to bond  is                                                            
implied in the Capital bill".                                                                                                   
                                                                                                                                
10:57:14 AM                                                                                                                   
                                                                                                                                
Mr. Jeans responded  that in the capital bill, municipalities  could                                                            
bond for  their local  share. "Municipalities  could  bond for  100-                                                            
percent of a project right  now; it would simply not be reimbursable                                                            
by the State at any rate."                                                                                                      
                                                                                                                                
10:57:30 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken  therefore, questioned  the  need  to further  this                                                            
legislation prior to the  Department's report being developed, since                                                            
$120,000,000  in school construction  needs would be included  in SB                                                            
155 or  in the capital  budget.  He understood  that that amount  of                                                            
money would address districts' needs.                                                                                           
                                                                                                                                
10:57:53 AM                                                                                                                   
                                                                                                                                
Co-Chair Green  responded that those  bills would provide  less than                                                            
one-half  of  the  Mat-Su  School  District's  needs.  However,  she                                                            
allowed  that, based on  increased enrollment,  the Mat-Su  District                                                            
might  be alone in  their situation.  Other  districts might  desire                                                            
this funding mechanism  and might be eligible, depending  on what is                                                            
passed  or offered. Were  the capital  bill in  its current  form to                                                            
pass, it would  provide funding for  the next year, but not  for the                                                            
Mat-Su District's  anticipated  future needs.  Again, she  qualified                                                            
that the Mat-Su  District might be unique in its population  growth.                                                            
She asked the Department to elaborate on this issue.                                                                            
                                                                                                                                
10:58:53 AM                                                                                                                   
                                                                                                                                
Mr. Jeans expressed  that the population  of "the Mat-Su  Borough is                                                            
growing  at tremendous  rate"  and  its schools  "are  operating  at                                                            
capacity".  However,  some   schools  in  the  State  are  currently                                                            
operating at 200 percent capacity.                                                                                              
                                                                                                                                
Co-Chair Green understood  therefore that other schools have similar                                                            
needs.                                                                                                                          
                                                                                                                                
Mr. Jeans affirmed.                                                                                                             
                                                                                                                                
10:59:21 AM                                                                                                                   
                                                                                                                                
Senator Hoffman  recalled the original legislation  as being a "very                                                            
contentious issue."  The crux of that dialogue is  that, while areas                                                            
such as the  Mat-Su Valley are experiencing  tremendous growth,  the                                                            
Legislature acts  on behalf of the whole State. Without  Legislative                                                            
action, nothing  would occur in regards to the unorganized  areas of                                                            
the State.  All areas of the State  should benefit from the  oil and                                                            
gas  revenues generated  from  the North  Slope;  quality  education                                                            
opportunities should be  provided to children under the age of 17 in                                                            
all areas of the  State. This was an issue during  the debate on the                                                            
original legislation.  A list for  school construction projects  has                                                            
been developed  that amounts to approximately  $527,000,000.  In the                                                            
past, a percentage  of schools would be built in Rural  areas of the                                                            
State.  A  formula  must  be  developed   that  would  consider  the                                                            
education  needs  of  the  entire  State.   He  suggested  that  the                                                            
Department  address  this  issue in  its  report. An  amendment  was                                                            
discussed during the development  of the original authorization that                                                            
addressed this issue.                                                                                                           
                                                                                                                                
Senator  Hoffman stated  that  the advent  of a  Gas Pipeline  would                                                            
result  in more and  more school  needs throughout  the State.  This                                                            
issue must  be discussed  and resolved on  a long term basis  rather                                                            
than being "piecemealed"  in legislation such as this.  The majority                                                            
of the  Rural projects  addressed  in the Capital  Budget are  major                                                            
maintenance needs rather than new school construction needs.                                                                    
                                                                                                                                
11:02:42 AM                                                                                                                   
                                                                                                                                
Senator  Hoffman   asked  therefore   whether  the  scope   of  this                                                            
legislation  could be limited to specifically  address the  needs of                                                            
the Mat-Su Valley.                                                                                                              
                                                                                                                                
11:04:01 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green agreed that  a "valid discussion"  must be  had. She                                                            
noted  that the  FY  06 Capital  budget  is totally  different  from                                                            
previous budgets in regards to its "huge investment Statewide".                                                                 
                                                                                                                                
11:04:34 AM                                                                                                                   
                                                                                                                                
Co-Chair Wilken provided  an overview of pending school construction                                                            
legislation: approximately  $260,000,000 would be  specified through                                                            
either  SB 155  or the  Capital Budget  including  $118,000,000  for                                                            
school  construction   and  $141,000,000   for  major  maintenance.                                                             
$69,900,000  would be provided  to "people  that don't pay  a nickel                                                            
for their schools"; organized  Alaska would be provided $72,000,000.                                                            
He doubted  that  a formula  could be  developed that  would be  any                                                            
fairer as the  funding is fairly evenly divided. A  formula would be                                                            
a matter of importance  only when everyone in all parts of the State                                                            
contributed  equally to education.  That should be a consideration.                                                             
                                                                                                                                
11:06:22 AM                                                                                                                   
                                                                                                                                
KIM FLOYD,  Representative,  Mat-Su School  District, testified  via                                                            
teleconference  from an offnet site and voiced appreciation  for the                                                            
Committee's  discussion on this legislation.  Continuing,  she spoke                                                            
to the fact that the Mat-Su  District is experiencing "unprecedented                                                            
enrollment  growth" and is  the fastest growing  school district  in                                                            
the   State.  This   growth   is  projected   to   continue.   State                                                            
demographers'  projections were incorrect and "have  been revised to                                                            
reflect  reality."  Currently  all classrooms  are  overcrowded  and                                                            
portable classrooms are  being utilized. 28 portables in addition to                                                            
the current  48  would be  required to  meet enrollment  needs  next                                                            
year. However,  the District  has only enough  funding to  construct                                                            
five. While  she acknowledged  the Department's  desire to  complete                                                            
their  report,  she characterized  the  District  as being  "out  of                                                            
time".  While the  District  has compiled  a  20-year  plan that  is                                                            
updated  annually, its  construction  needs are  a "day  late and  a                                                            
dollar short".  Voters understand  the situation and would  "support                                                            
critically  essential  projects".   She  asked  that  the  Committee                                                            
approve the  extension of the bond  debt reimbursement program.  She                                                            
also spoke in  support of SB 155. The District is  considering every                                                            
opportunity thought which to address its student growth needs.                                                                  
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
Co-Chair  Green announced  that  the  Committee would  reconvene  at                                                            
approximately  4:00  PM in order  to address  amendments  to SB  46.                                                            
Other legislation would also be considered.                                                                                     
                                                                                                                                
RECESS TO CALL OF THE CHAIR 11:10:03 AM / 4:26:40 PM                                                                        
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 178(STA) am                                                                                          
     "An Act relating to special motor vehicle registration plates;                                                             
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green  stated that this legislation would  allow the use of                                                            
specialty  license plates  on commercial  vehicles.  She noted  that                                                            
during the previous hearing  on this bill, there had been a question                                                            
in regards to  the "correctness" of the fiscal note.  To that point,                                                            
a new $45,000  fiscal note dated May 2, 2005 from  the Department of                                                            
Administration has been provided.                                                                                               
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There being  no objection, CS FOR  HB 178(STA) am was REPORTED  from                                                            
Committee with a new $45,000  fiscal note dated May 2, 2005 from the                                                            
Department of Administration.                                                                                                   
                                                                                                                                
4:28:28 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 125(JUD)                                                                                            
     "An  Act relating to  the licensing,  regulation, enforcement,                                                             
     and  appeal rights  of ambulatory  surgical  centers,  assisted                                                            
     living homes, child  care facilities, child placement agencies,                                                            
     foster   homes,  free-standing   birth  centers,  home   health                                                            
     agencies,  hospices or agencies  providing hospice services  or                                                            
     operating   hospice  programs,  hospitals,  intermediate   care                                                            
     facilities for the  mentally retarded, maternity homes, nursing                                                            
     facilities,  residential  child  care  facilities, residential                                                             
     psychiatric  treatment  centers,  runaway shelters,  and  rural                                                            
     health  clinics;   relating  to  possession  of  a  firearm  at                                                            
     licensed entities  and facilities; relating to criminal history                                                            
     requirements,  and  a  registry,  regarding  certain  licenses,                                                            
     certifications,    approvals,   and   authorizations   by   the                                                            
     Department  of Health  and Social Services;  making  conforming                                                            
     amendments; and providing for an effective date."                                                                          
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green  explained that this legislation would  relate to the                                                            
licensing,  regulation,   and  reinforcement   of  medical  or  care                                                            
facilities.  She  specified  that  this legislation  would  have  no                                                            
fiscal impact,  as zero  fiscal notes accompany  it. Four  Committee                                                            
Members heard testimony  on this bill during its hearings before the                                                            
Senate Health,  Education, and Social Services (HES)  Committee. Due                                                            
of an inadvertent  oversight  on her part,  the intent to waive  the                                                            
bill from Committee  had not occurred. Therefore the  bill is before                                                            
the Committee with the desire that a brief discussion occur.                                                                    
                                                                                                                                
4:29:03 PM                                                                                                                    
                                                                                                                                
RICHARD  MANDSAGER,  M.D.,  Director,  Division  of  Public  Health,                                                            
Department   of  Health   and   Social  Services   explained   that,                                                            
originally, a zero fiscal  note from the Department accompanied this                                                            
bill. A Department  of Law zero fiscal  note was subsequently  added                                                            
to account for  a federal grant that would provide  for the expenses                                                            
the Department  of Law might experience  in its regulation  revision                                                            
and review.                                                                                                                     
                                                                                                                                
Dr. Mandsager  stated that this legislation  "would bring  together"                                                            
in a  standardized  manner the  different statutory  and  regulatory                                                            
authorities  for the  various entities  such  as hospitals,  nursing                                                            
homes,  hospice,  and assisted  living  homes  that  the  Department                                                            
licenses. This  legislation would make the process  easier for these                                                            
entities to manage.                                                                                                             
                                                                                                                                
Dr. Mandsager  continued that the bill would align  background check                                                            
processes  for  employees  and entities  that  provide  services  to                                                            
vulnerable Alaskans. Public  and criminal information regarding such                                                            
issues  as  abuse,  fraud,  neglect,  or  Medicaid  fraud  would  be                                                            
streamlined to develop  a measurement to determine which individuals                                                            
would be prohibited  from working in the affected  fields. Were this                                                            
bill adopted, one entity would monitor the background checks.                                                                   
                                                                                                                                
4:30:15 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green spoke  to "the  consistency"  that this legislation                                                             
would provide  to the different users and providers  of services. It                                                            
would provide  one set of qualifiers as opposed to  multiple sets as                                                            
is the  current mode  of operation.  In addition,  higher  standards                                                            
would be implemented.                                                                                                           
                                                                                                                                
Dr. Mandsager  affirmed.  He noted  that currently,  the  Department                                                            
does not conduct  background checks on the entirety  of the entities                                                            
it might license.  In addition, some  employers voluntarily  conduct                                                            
background  checks  on  its  employees   and  others  do  not.  This                                                            
legislation  would align  the same  standard to  all entities.  This                                                            
information   is  included  in  the   Department's  "Public   Health                                                            
Protecting and  Promoting The Health of All Alaskans"  handout [copy                                                            
on file] that is included in Members' bill packets.                                                                             
                                                                                                                                
4:31:08 PM                                                                                                                    
                                                                                                                                
Senator Olson  asked whether there has been any response  from small                                                            
clinics or single practitioner  in the State in regard to the impact                                                            
this legislation might incur on them.                                                                                           
                                                                                                                                
Dr. Mandsager  explained that this  legislation would only  apply to                                                            
entities that  the Department currently  licenses. Therefore  single                                                            
doctor offices  and health aid clinics that the Department  does not                                                            
currently license would not be affected by this legislation.                                                                    
                                                                                                                                
Co-Chair  Wilken moved to  report SB 125  (JUD) from committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There being no  objection, SB 125 (JUD) was REPORTED  from Committee                                                            
with previous  zero fiscal note #2 dated February  28, 2005 from the                                                            
Department  of Health and  Social Services  and zero fiscal  note #3                                                            
dated April 12, 2005 from the Department of Law.                                                                                
                                                                                                                                
AT EASE: 4:32:00 PM / 5:00:22 PM                                                                                            
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 46                                                                                                         
     "An Act making capital appropriations and appropriations to                                                                
      capitalize funds; and providing for an effective date."                                                                   
                                                                                                                                
                                                                                                                                
The bill  was heard  earlier in the  meeting and  was held to  allow                                                            
Committee  members   to  prepare  amendments  to  the   Version  "Y"                                                            
committee substitute.                                                                                                           
                                                                                                                                
Amendment #1:  This amendment inserts  a new Alaska Native  Heritage                                                            
Center component  to the Grants to  Named Recipients (AS  37.05.316)                                                            
Budget Request  Unit (BRU) of the Department of Commerce,  Community                                                            
and Economic Development  on page 3, lines 30 and 31. This amendment                                                            
also appropriates $500,000 general funds to the component.                                                                      
                                                                                                                                
Senator Dyson moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Senator Dyson  expounded on  the Alaska Native  Heritage Center  and                                                            
its displays depicting  "all the major cultural aboriginal groups in                                                            
Alaska."  The  Center is  utilized  for education  purposes  of  the                                                            
history and  heritage of Alaska's  first people. This funding  would                                                            
be utilized to upgrade  existing exhibits and construct new exhibits                                                            
to display artifacts  currently held in storage. He  understood this                                                            
funding had  been included  in the Governor's  FY 06 capital  budget                                                            
request.                                                                                                                        
                                                                                                                                
Co-Chair Green maintained her objection.                                                                                        
                                                                                                                                
5:02:13 PM                                                                                                                    
                                                                                                                                
Senator Olson  furthered that the  Center has received funding  from                                                            
private sources and that  the funding requested in this amendment is                                                            
necessary to complete the project.                                                                                              
                                                                                                                                
Co-Chair  Wilken commented  that the  Center is  a benefit.  However                                                            
when initially  funded, the intent  was expressed that the  facility                                                            
would be self-supporting.                                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman, Senator Dyson, Senator Hoffman                                                                       
                                                                                                                                
OPPOSED: Co-Chair Green Co-Chair Wilken, Senator Stedman                                                                        
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion FAILED (3-3-1)                                                                                                       
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Amendment   #2:  This  amendment   inserts  a  new  Local   Boundary                                                            
Commission,  Chugiak   Eagle  River  Detachment  Study   (HD  [house                                                            
district]  17-18) component  to the Grants  to Named Recipients  (AS                                                            
37.05.316)  BRU  of  the  Department  of  Commerce,   Community  and                                                            
Economic  Development on  page 3,  lines 30 and  31. This  amendment                                                            
also appropriates $50,000 general funds to the component.                                                                       
                                                                                                                                
Senator Dyson moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Senator Dyson explained  that the community of Eagle River wished to                                                            
organize but  need a study conducted  to determine whether  it would                                                            
be economically viable.  An analysis was conducted the previous year                                                            
but the funding  was insufficient to provide a complete  assessment.                                                            
                                                                                                                                
5:05:21 PM                                                                                                                    
                                                                                                                                
Co-Chair Green asked the legislators requesting this.                                                                           
                                                                                                                                
Senator Dyson  listed himself, Representative Bill  Stoltze, Senator                                                            
Con Bunde and Representative Mike Hawker.                                                                                       
                                                                                                                                
Co-Chair  Green  asked the  amount  of funding  remaining  from  the                                                            
earlier effort.                                                                                                                 
                                                                                                                                
Senator Dyson answered $25,000.                                                                                                 
                                                                                                                                
Co-Chair Green commented against the additional allocation.                                                                     
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Dyson, Senator Hoffman, and Senator Olson                                                                     
                                                                                                                                
OPPOSED: Senator Stedman, Co-Chair Wilken, and Co-Chair Green                                                                   
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion FAILED (3-3-1)                                                                                                       
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
5:06:54 PM                                                                                                                    
                                                                                                                                
Amendment #3: This amendment  inserts a new Arctic Winter Games Team                                                            
Alaska component  to the Grants to  Named Recipients (AS  37.05.316)                                                            
BRU  of  the   Department  of  Commerce,   Community  and   Economic                                                            
Development  on  page  3,  lines 30  and  31.  This  amendment  also                                                            
appropriates $250,000 general funds to the component.                                                                           
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Senator Olson  described the international competition  comprised of                                                            
contestants from urban and rural communities.                                                                                   
                                                                                                                                
AT EASE: 5:07:56 PM / 5:08:35 PM                                                                                            
                                                                                                                                
Co-Chair Green  noted the two groups seeking funding  for the Games.                                                            
She  asked  whether   this  amendment  would  provide   funding  for                                                            
preparations to  hold the event in Kenai or for expenses  associated                                                            
with the team representing the State.                                                                                           
                                                                                                                                
Senator  Olson answered  that this  money would  support the  Alaska                                                            
team itself.                                                                                                                    
                                                                                                                                
Co-Chair  Green commented that  a request for  this purpose  had not                                                            
been submitted earlier.                                                                                                         
                                                                                                                                
Co-Chair  Wilken agreed  that  no representative  of  the Games  had                                                            
approached the  legislature prior to this. He would  not support the                                                            
amendment, as more effort should have been made.                                                                                
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman, Senator Olson, and Senator Dyson                                                                     
                                                                                                                                
OPPOSED: Co-Chair Wilken, Senator Stedman, and Co-Chair Green                                                                   
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion FAILED (3-3-1)                                                                                                       
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Amendment  4A:  This  amendment  inserts   a  new African   American                                                            
Historical  Society Juneteenth Celebration  component to  the Grants                                                            
to  Named  Recipients  (AS  37.05.316)  BRU  of  the  Department  of                                                            
Commerce,  Community and Economic  Development  on page 3,  lines 30                                                            
and 31. This  amendment also appropriates  $30,000 general  funds to                                                            
the component.  Accompanying explanatory language  reads as follows.                                                            
                                                                                                                                
     This would  help fund the capital costs for the  celebration of                                                            
     Juneteenth.  The grant  would  provide funding  for the  tents,                                                            
     shelters,  display  units,  exhibits,  equipment  and  supplies                                                            
     necessary to continue  their educational objectives during this                                                            
     public outreach celebration.                                                                                               
                                                                                                                                
This amendment  also reduces the appropriation to  the Department of                                                            
Commerce,   Community   and   Economic   Development,    Grants   to                                                            
Municipalities  (AS 37.05.315) BRU,  Muldoon Road, Tudor  Road Sound                                                            
Barrier  Fence (HD 17-32)  component on  page 24,  lines 3 -  6 from                                                            
$600,000  general  funds to  $590,200  general  funds. Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     This project will construct a sound barrier fence between a                                                                
     major arterial street and local neighborhoods. (Project design                                                             
      has been funded and construction could occur in 2005.)                                                                    
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Senator  Hoffman  explained  that the  African  American  Historical                                                            
Society hosts  the Juneteenth Celebration  on the third Saturday  in                                                            
June to commemorate  the abolition of slavery in the  United States.                                                            
This event has been celebrated in Anchorage for 30 years.                                                                       
                                                                                                                                
5:12:20 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  continued  that the Society  exists to promote  and                                                            
preserve  the historical  recognition  and  culture  of the  African                                                            
Americans living in Alaska.                                                                                                     
                                                                                                                                
Co-Chair Green maintained her objection.                                                                                        
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Stedman, Senator  Dyson, Co-Chair Wilken,  and Co-                                                            
Chair Green.                                                                                                                    
                                                                                                                                
ABSENT: Senator Bunde                                                                                                           
                                                                                                                                
The motion FAILED (2-4-1)                                                                                                       
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
5:14:24 PM                                                                                                                    
                                                                                                                                
Amendment 4B:  This amendment inserts a new Russian  Jack Elementary                                                            
School Computer  & Library Book Purchase component  to the Grants to                                                            
Named Recipients  (AS 37.05.316) BRU of the Department  of Commerce,                                                            
Community and Economic  Development on page 3, lines 30 and 31. This                                                            
amendment also appropriates  $20,000 general funds to the component.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This funding  would be used to purchase Apple  eMacs to replace                                                            
     older machines,  which cannot run today's powerful  educational                                                            
     software. This would  also be utilized for the purchase of more                                                            
     books and materials to upgrade their library collection.                                                                   
                                                                                                                                
Senator Hoffman  moved for adoption  and overviewed the explanation                                                             
statement.                                                                                                                      
                                                                                                                                
There being no objection, the amendment was ADOPTED.                                                                            
                                                                                                                                
AT EASE: 5:14:48 PM / 5:15:07 PM                                                                                            
                                                                                                                                
5:15:43 PM                                                                                                                    
                                                                                                                                
Amendment #5:  This amendment increases the general  fund allocation                                                            
to the Department  of Commerce, Community and Economic  Development,                                                            
Grants  to  Named Recipients  (AS  37.05.316)  BRU,  Alaska  Siberia                                                            
Research  Center,   Inc.  -  Alaska   Siberia  WWII  Memorial   Park                                                            
Construction  (HD  7-11) component  on  page 4,  lines 8  - 11  from                                                            
$40,000  to $65,000.  Accompanying  explanatory  language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     In the 5/2/05 work draft Version "F" there was $65,000                                                                     
     appropriated to the project which funds the Lend Lease                                                                     
     Memorial Park project.                                                                                                     
     In the 5/3/05 work draft Version "Y" this funding was reduced                                                              
     to $40,000 due to a technical drafting error by the                                                                        
     legislative finance division. This amendment simply corrects                                                               
     this drafting omission.                                                                                                    
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected for an explanation.                                                                                     
                                                                                                                                
Co-Chair Wilken  explained the drafting  error this amendment  would                                                            
correct.                                                                                                                        
                                                                                                                                
Without further objection, the amendment was ADOPTED.                                                                           
                                                                                                                                
5:17:01 PM                                                                                                                    
                                                                                                                                
Amendment #6:  This amendment increases the general  fund allocation                                                            
to the Department  of Commerce, Community and Economic  Development,                                                            
Grants to Named  Recipients (AS 37.05.316) BRU, Mary  Magdalene Home                                                            
Alaska, Inc.  - Transitional Housing  Program Facilities  (HD 17-32)                                                            
on page 6 lines 30 - 33 from $250,000 to $263,500.                                                                              
                                                                                                                                
Senator Dyson moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Green objected for an explanation.                                                                                     
                                                                                                                                
Senator Dyson  reminded that when the decision was  made to not fund                                                            
a separate  project, $13,000  remained unallocated.  This  amendment                                                            
would appropriate  that amount to  the Mary Magdalene Home  project.                                                            
                                                                                                                                
Co-Chair Green asked if  this addition would bring the total funding                                                            
to the "discretionary amount" requested.                                                                                        
                                                                                                                                
Senator Dyson  replied that it would  not, as the $250,000  proposed                                                            
appropriation is $50,000 less than requested.                                                                                   
                                                                                                                                
There being no further objection, the amendment was ADOPTED.                                                                    
                                                                                                                                
5:18:21 PM                                                                                                                    
                                                                                                                                
Amendment #7:  This amendment increases the general  fund allocation                                                            
to the Department  of Commerce, Community and Economic  Development,                                                            
Grants  to  Named  Recipients  (AS  37.05.316)   BRU,  Midnight  Sun                                                            
Council, Boy  Scouts of America -  Boy Scout Food Service  component                                                            
on  page  7 lines  3  - 6  from  $40,000  to $60,000.  Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     In the 5/2/05 work draft Version "F" there was $80,000                                                                     
     appropriated to the project.                                                                                               
     In the 5/3/05  work draft Version "Y" this funding  was reduced                                                            
     to  $40,000   due  to  a  technical   drafting  error   by  the                                                            
     legislative  finance division.  This amendment simply  corrects                                                            
     this drafting omission.                                                                                                    
                                                                                                                                
Co-Chair  Wilken moved  for adoption  and outlined  the explanatory                                                             
statement.                                                                                                                      
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
5:18:57 PM                                                                                                                    
                                                                                                                                
Amendment  #8:  This   amendment  inserts  a  new  Municipality   of                                                            
Anchorage  -  Anchorage  School  District/Eagle  River  High  School                                                            
Traffic Control  & Turn  Lanes (Veterans  Memorial Highway)  (HD 16-                                                            
18,32) component to the  Grants to Municipalities (AS 37.05.315) BRU                                                            
of the Department  of Commerce, Community  and Economic Development                                                             
on  page 8,  lines  11  and 12.  This  amendment  also appropriates                                                             
$950,000 general funds to the component.                                                                                        
                                                                                                                                
Senator Dyson moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Senator Dyson  informed that the allocation for this  project should                                                            
be to the Department of  Transportation and Public Facilities rather                                                            
than the Municipality of  Anchorage. This project would be necessary                                                            
once the  high school  is constructed,  as the  current road  system                                                            
would be "very dangerous".                                                                                                      
                                                                                                                                
Co-Chair Green asked the location of the proposed project.                                                                      
                                                                                                                                
Senator Dyson  described the location  of the school located  in the                                                            
election district represented by Senator Bunde.                                                                                 
                                                                                                                                
Co-Chair Green  asked if this project  could be included  in another                                                            
project planned for the Veterans' Memorial Highway.                                                                             
                                                                                                                                
Senator Dyson replied it  could not, as the other project is located                                                            
north of this location.                                                                                                         
                                                                                                                                
5:21:45 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked the reason this  funding request had  not been                                                            
submitted earlier.                                                                                                              
                                                                                                                                
Senator  Dyson   attributed  the  delay  to  the  number   of  other                                                            
Department of  Transportation and Public Facilities  project funding                                                            
requests.                                                                                                                       
                                                                                                                                
Co-Chair  Green  removed  her  objection  to  the  adoption  of  the                                                            
amendment  with the  understanding that  the exact  location of  the                                                            
proposed project is specified in the legislation.                                                                               
                                                                                                                                
Co-Chair  Green offered  a friendly  amendment to  the amendment  to                                                            
appropriate  the funding  to the  Department  of Transportation  and                                                            
Public Facilities and make necessary conforming changes.                                                                        
                                                                                                                                
There  being  no objection   from the  sponsor,  the  amendment  was                                                            
AMENDED.                                                                                                                        
                                                                                                                                
Without further objection Amendment #8, as amended, was ADOPTED.                                                                
                                                                                                                                
AT EASE 5:23:55 PM / 5:24:33 PM                                                                                             
                                                                                                                                
Amendment  #9: This  amendment  inserts a  new Bristol  Bay  Borough                                                            
Community   Matching   Project    component   to   the   Grants   to                                                            
Municipalities  (AS 37.05.315)  BRU of the  Department of  Commerce,                                                            
Community and Economic  Development on page 8, lines 11 and 12. This                                                            
amendment   also  appropriates   $150,000   general  funds   to  the                                                            
component.                                                                                                                      
                                                                                                                                
This amendment also increases  the general fund appropriation to the                                                            
Department of  Commerce, Community and Economic Development,  Grants                                                            
to  Municipalities  (AS 37.05.315)  BRU,  City  of Unalaska  -  Boat                                                            
Harbor (HD  37) component on page  13 lines 3 and 4 from  $2 million                                                            
to $4 million.                                                                                                                  
                                                                                                                                
This amendment also adds  a new Togiak/Twin Hills Bridge Feasibility                                                            
Study  component  to the  Department  of Transportation  and  Public                                                            
Facilities   and  appropriates   $150,000   general  funds   to  the                                                            
component.                                                                                                                      
                                                                                                                                
This amendment also increases  the allocation to the Cold Bay Access                                                            
Improvements  (HD  37)  component  of  the  Surface  Transportation                                                             
Improvements   BRU,   Department   of  Transportation   and   Public                                                            
Facilities,  on page 58,  lines 30  and 31 from  $2 million  to $2.5                                                            
million.                                                                                                                        
                                                                                                                                
This amendment  also increases  the general  fund allocation  to the                                                            
Department of  Education and Early Development, School  Construction                                                            
Grant  Fund  (AS  14.11.005)  BRU,  Dillingham  Middle/High   School                                                            
construction  and  renovation  - Dillingham   City Schools  (HD  38)                                                            
component on page 83 lines  14 - 17 from $7 million to $9.5 million.                                                            
                                                                                                                                
Co-Chair Green moved for adoption.                                                                                              
                                                                                                                                
Co-Chair Green  then offered a friendly  amendment to the  amendment                                                            
to  change   "Bristol  Bay  Borough   Community  Matching   Project"                                                            
component to read  "Bristol Bay Borough Community  Mapping Project."                                                            
                                                                                                                                
This amendment  to the  amendment also  deletes additional  $500,000                                                            
general  fund  allocation  to  the  Cold  Bay  Access  Improvements                                                             
component.                                                                                                                      
                                                                                                                                
This  amendment to  the amendment  also  adds a  new Aleutians  East                                                            
Borough  - Cold  Bay Airport  Terminal  component to  the Grants  to                                                            
Municipalities   (AS  37.05.315)   BRU,  Department   of   Commerce,                                                            
Community  and  Economic   Development  and  appropriates   $500,000                                                            
general funds to the component.                                                                                                 
                                                                                                                                
AT EASE 5:25:29 PM / 5:26:20 PM                                                                                             
                                                                                                                                
Co-Chair Green  continued to outline  the friendly amendment  to the                                                            
amendment.                                                                                                                      
                                                                                                                                
Without objection the amendment was AMENDED.                                                                                    
                                                                                                                                
Senator  Stedman  objected  to the  amended  amendment  for  further                                                            
information on the City of Unalaska - Boat Harbor component.                                                                    
                                                                                                                                
Co-Chair Green  informed that upon review, this amount  was included                                                            
in an earlier committee substitute.                                                                                             
                                                                                                                                
Co-Chair Wilken  asked whether the  project expansion of  the Little                                                            
South America Boat Harbor.                                                                                                      
                                                                                                                                
Senator Hoffman understood it was.                                                                                              
                                                                                                                                
Co-Chair  Green  noted  the  Members  have  discussed  this  project                                                            
previously.                                                                                                                     
                                                                                                                                
There being no objection, Amendment #9 as amended was ADOPTED.                                                                  
                                                                                                                                
5:28:10 PM                                                                                                                    
                                                                                                                                
Amendment  #10: This amendment  adds a LKSD  - The Peoples  Learning                                                            
Center  component  to the  Department  of  Commerce,  Community  and                                                            
Economic Development  [BRU not specified] and appropriates  $100,000                                                            
general funds  to the component. Accompanying  explanatory  language                                                            
reads, "Restores  the Governor's original  capital budget  request."                                                            
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Hoffman reminded  the Committee of the residential technical                                                            
education facility  located in Bethel.  The amount of secured  funds                                                            
for  this  project  total  $15  million.  Approximately  $4  million                                                            
additional  funding is needed, although  funding sources  of most of                                                            
the amount have been identified.  This project is a collaboration of                                                            
the City  of Bethel,  the Yukon-Kuskokwim  Health  Corporation,  the                                                            
Association   of   Village   Council   Presidents,    the   Chalista                                                            
Corporation, the  Alaska National Guard, the Lower  Kuskokwim School                                                            
District, the  University of Alaska  Kuskokwim Campus, the  Regional                                                            
Housing Authority, and the Coastal Village Regional Fund.                                                                       
                                                                                                                                
5:29:45 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  informed the Committee  that this item was  included                                                            
in the Governor's proposed budget.                                                                                              
                                                                                                                                
There was no objection and Amendment #10 was ADOPTED.                                                                           
                                                                                                                                
5:30:19 PM                                                                                                                    
                                                                                                                                
Amendment #11:  This amendment deletes the City of  Hope - Community                                                            
Safety  and  Development  (HD  17-32) component   of the  Grants  to                                                            
Municipalities   (AS  37.05.315)   BRU,  Department   of   Commerce,                                                            
Community  and  Economic   Development  and  $25,000   general  fund                                                            
appropriation on page 10, lines 18 - 20.                                                                                        
                                                                                                                                
This amendment also inserts  a new Hope, Inc. - Community Safety and                                                            
Development (HD  17-32) component to the Grants to  Named Recipients                                                            
(AS 37.05.316)  BRU  in the Department  of Commerce,  Community  and                                                            
Economic Development  and appropriates $25,000 general  funds to the                                                            
component.                                                                                                                      
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     The  original   request  was  made  to  "Hope,  Inc.".   During                                                            
     drafting,  the name was changed to "City of Hope"  and moved to                                                            
     "Grants  to Municipalities.  After discussion  with the  grants                                                            
     administrator  at  the  Division  of  Community  Advocacy,  the                                                            
     original  name "Hope,  Inc.) was determined  to be the  correct                                                            
     one.                                                                                                                       
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green overviews the explanatory statement.                                                                             
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
5:31:01 PM                                                                                                                    
                                                                                                                                
Amendment  #12: This  amendment  changes the  title of  the City  of                                                            
Homer - Homer  Public Library Materials  component of the  Grants to                                                            
Municipalities  BRU, Department of Commerce, Community  and Economic                                                            
Development  on page 10, lines  13 - 15 to  "City of Homer  - Public                                                            
Library Construction".  The $100,000 general fund appropriation does                                                            
not change.                                                                                                                     
                                                                                                                                
Co-Chair  Green  moved  for  adoption  and  explained  the  language                                                            
correction.                                                                                                                     
                                                                                                                                
There being no objection, Amendment #12 was ADOPTED.                                                                            
                                                                                                                                
AT EASE 5:31:41 PM / 5:31:41 PM                                                                                             
                                                                                                                                
Amendment #13: This amendment  deletes the Denali Borough - Anderson                                                            
School/Septic  Leach Field Replacement  (HD 7-11) component  and the                                                            
Denali Borough  - Cantwell School/Sprinkler System  Fire Upgrade and                                                            
New Well (HD  7-11) component of the  Grants to Municipalities  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
10, lines 17 - 23.                                                                                                              
                                                                                                                                
This amendment also increases  the general fund appropriation to the                                                            
Alaska Siberia Research  Center, Inc. - Alaska Siberia WWII Memorial                                                            
Park  Construction  (HD  7-11)  component  of the  Grants  to  Named                                                            
Recipients  BRU,  Department  of Commerce,  Community  and  Economic                                                            
Development on page 4, lines 8 - 11 from $40,000 to $105,200.                                                                   
                                                                                                                                
This amendment also increases  the general fund appropriation to the                                                            
Morris  Thompson   Cultural  and  Visitors  Center  -  Construction                                                             
component  of the  Grants  to Named  Recipients BRU,  Department  of                                                            
Commerce, Community  and Economic Development on page  7, lines 11 -                                                            
13 from $200,000 to $300,000.                                                                                                   
                                                                                                                                
This amendment also inserts  a new Ester - Volunteer Fire Department                                                            
component  to the  Grants  to Named  Recipients BRU,  Department  of                                                            
Commerce,  Community  and  Economic  Development   and appropriates                                                             
$125,000 general funds to the component.                                                                                        
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Partial  funding  for the  Anderson School/Septic  Leach  Field                                                            
     Replacement  and  the  Cantwell  School/Sprinkler  System  Fire                                                            
     Upgrade  and New Well projects  totals $260,200 are  deleted in                                                            
     this amendment.                                                                                                            
     Full funding for these two projects are contained on page 77,                                                              
     lines 24 - 31 of the work draft.                                                                                           
     This amendment reallocates the $260,200 to the following three                                                             
     projects:                                                                                                                  
          Alaska Siberia Research Center           $ 35,200                                                                     
          Morris Thompson Cultural Center           100,000                                                                     
          Ester Volunteer Fire Department           125,000                                                                     
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Co-Chair  Wilken overviewed  the amendment,  which  he sponsored  on                                                            
behalf of  Senator Ralph  Seekins. This amendment  would have  a net                                                            
zero impact.                                                                                                                    
                                                                                                                                
AT EASE 5:32:34 PM / 5:32:57 PM                                                                                             
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
5:33:21 PM                                                                                                                    
                                                                                                                                
Amendment  #14:  This  amendment  changes  the title  of  the  Kenai                                                            
Peninsula  Borough -  Mobile Hydration  Unit (HD  33-35), Grants  to                                                            
Municipalities  BRU, Department of Commerce, Community  and Economic                                                            
Development  on page  14, lines  28 -  30 to read  "Kenai  Peninsula                                                            
Borough/Bear Creek Fire  Service Area - Mobil Hydration Unit (HD 33-                                                            
35)". The $71,500 general fund appropriation remains unchanged.                                                                 
                                                                                                                                
Co-Chair  Wilken  moved  for  adoption  on behalf  of  Senator  Gary                                                            
Stevens.                                                                                                                        
                                                                                                                                
There was no objection and Amendment #14 was ADOPTED.                                                                           
                                                                                                                                
5:33:36 PM                                                                                                                    
                                                                                                                                
Amendment #15: This amendment  deletes the Kenai Peninsula Borough -                                                            
Refurbish Kachemak Fire  Truck (HD 33-35) component of the Grants to                                                            
Municipalities  BRU, Department of Commerce, Community  and Economic                                                            
Development  and $100,000  general  fund appropriation  on page  15,                                                            
lines 9 - 11.                                                                                                                   
                                                                                                                                
Co-Chair  Wilken moved for  adoption of the  amendment on behalf  of                                                            
Senator G. Stevens.                                                                                                             
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
5:34:02 PM                                                                                                                    
                                                                                                                                
Amendment  #16:  This  amendment  changes  the title  of  the  Kenai                                                            
Peninsula Borough - Road  Access to Utilities to Senior Housing Site                                                            
(HD  33-35)   component  of  the   Grants  to  Municipalities   BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
15, lines 12  - 16 to read "Kenai  Peninsula Borough/Cooper  Landing                                                            
Senior Citizens  Corp., Inc.  - Road Access  to Utilities to  Senior                                                            
Housing  Site (HD 33-35)".  The $71,000  general fund appropriation                                                             
remains unchanged.                                                                                                              
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
5:34:17 PM                                                                                                                    
                                                                                                                                
Amendment  #17:  This  amendment  changes  the title  of  the  Kenai                                                            
Peninsula   Borough   -  Water   Tender   (HD  33-35),   Grants   to                                                            
Municipalities  BRU, Department of Commerce, Community  and Economic                                                            
Development  on page 15,  lines 19 and 20  to read "Kenai  Peninsula                                                            
Borough/Kachemak Emergency  Service Area - Water Tender (HD 33-35)".                                                            
The $75,000 general fund appropriation remains unchanged.                                                                       
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
There being no objective Amendment #17 was ADOPTED.                                                                             
                                                                                                                                
5:34:29 PM                                                                                                                    
                                                                                                                                
Amendment #18: This amendment  changes the title of the Municipality                                                            
of Anchorage - Anchorage  School District/Gladys Elementary Supplies                                                            
(HD  17-32)   component  of  the   Grants  to  Municipalities   BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
18, lines  19-22 to  read …"Gladys  Wood Elementary  Supplies".  The                                                            
$10,000 general fund appropriation remains unchanged.                                                                           
                                                                                                                                
This amendment also changes  the Municipality of Anchorage - Kincaid                                                            
Park Summer  and Winter  Recreational Improvements,  Fields,  Paving                                                            
and Equipment  (HD 17-32) component of the Grants  to Municipalities                                                            
BRU, Department  of Commerce, Community and Economic  Development on                                                            
page 23,  lines 18 - 23  to be a new component  titled Kincaid  Park                                                            
Project  Group  -  Kincaid  Park  Summer  and  Winter  Recreational                                                             
Improvements, Fields, Paving  and Equipment (HD 17-32). The $480,000                                                            
general fund appropriation remains allocated to the project.                                                                    
                                                                                                                                
This amendment  also changes the Municipality  of Anchorage  - South                                                            
Anchorage  Sports Complex  Ball Fields (HD  17-32) component  of the                                                            
Grants to Municipalities  BRU, Department of Commerce, Community and                                                            
Economic  Development  on  page  24,  lines 19  -  22  to be  a  new                                                            
component  titled  American  Legion  Baseball  Association  -  South                                                            
Anchorage  Sports  Complex  Ball Fields  (HD  17-32).  The  $450,000                                                            
general fund appropriation remains allocated to the project.                                                                    
                                                                                                                                
Co-Chair  Green  moved  for adoption  and  explained  the  technical                                                            
corrections.                                                                                                                    
                                                                                                                                
There being no objection Amendment #18 was ADOPTED.                                                                             
                                                                                                                                
5:35:12 PM                                                                                                                    
                                                                                                                                
Amendment #19: This amendment  inserts a new bill section to read as                                                            
follows.                                                                                                                        
                                                                                                                                
     Sec.  XX. DEPARTMENT OF  FISH AND GAME.  The sum of $50,000  is                                                            
     appropriated  from the general  fund to the Department  of Fish                                                            
     and  Game,  Boars of  Fisheries  and Game,  for  Board of  Game                                                            
     activities  related to review of Tier II subsistence  proposals                                                            
     for the fiscal year ending June 30, 2005.                                                                                  
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected for an explanation.                                                                                     
                                                                                                                                
Co-Chair  Wilken read  the language  of the  amendment and  informed                                                            
that Board of Game member,  Ron Summerville, brought this request to                                                            
his attention.                                                                                                                  
                                                                                                                                
Senator  Dyson objected  for further discussion.  Committee  Members                                                            
were told  that appropriations  in this budget  would be limited  to                                                            
construction  projects  and that funding  for studies  would not  be                                                            
considered. While he considered  this proposed study to be valid and                                                            
appropriate,  he asked the  criterion in  determining which  studies                                                            
would receive funding.                                                                                                          
                                                                                                                                
Senator  Hoffman  requested  an explanation   of what  the  proposed                                                            
review is expected to accomplish.                                                                                               
                                                                                                                                
5:36:47 PM                                                                                                                    
                                                                                                                                
MATT ROBUS, Director, Division  of Wildlife Conservation, Department                                                            
of  Fish  and  Game,  testified  this  item  is  actually  a  FY  05                                                            
supplemental  budget request.  The  Board of  Game, with  assistance                                                            
from the Department,  is developing a system to improve  the Tier II                                                            
permit process for subsistence  hunting. The Board determined that a                                                            
series of public hearings  held in various areas of the State should                                                            
be held  to inform  people of the  proposed changes  and to  receive                                                            
input before final  action is taken at the March 2006  Board of Game                                                            
Meeting.  This amendment would  fund the  expenses of holding  these                                                            
hearings.                                                                                                                       
                                                                                                                                
Senator Stedman  asked if this item should be included  as a capital                                                            
project.                                                                                                                        
                                                                                                                                
5:38:27 PM                                                                                                                    
                                                                                                                                
GINGER  BLASDELL,  Staff  to  Co-Chair  Green,  testified  that  the                                                            
amendment would be included  in the portion of this legislation that                                                            
provides FY 06 supplemental  appropriations. Similar amendment would                                                            
be offered.                                                                                                                     
                                                                                                                                
Co-Chair Green  stated the method of including supplemental  capital                                                            
appropriations  in the  following fiscal  year capital  budget  is a                                                            
historical practice.                                                                                                            
                                                                                                                                
5:39:27 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  asked whether  the hearings  could be completed  by                                                            
June 30, 2005, the end of the fiscal year.                                                                                      
                                                                                                                                
5:39:37 PM                                                                                                                    
                                                                                                                                
Mr. Robus informed  that the hearings had already  been held and the                                                            
expenses  incurred. Final action  was not taken  at the March  Board                                                            
Meeting,  as all  considerations were  not resolved.  An  additional                                                            
Board of  Game meeting is  scheduled for June  2005 to continue  the                                                            
process.                                                                                                                        
                                                                                                                                
Co-Chair  Green noted  that  this funding  request  would have  been                                                            
submitted as a FY 05 operating  budget supplemental item if the need                                                            
had been identified earlier.                                                                                                    
                                                                                                                                
Senator Olson  asked if hearings would  be held at locations  within                                                            
the election district he represents.                                                                                            
                                                                                                                                
Mr. Robus  replied that the  proposed changes  would be specific  to                                                            
the moose  and caribou subsistence  hunts in  the Nelchina  Basin of                                                            
Southcentral  Alaska. Therefore,  the hearings  have been  primarily                                                            
held in that  region. Most of the  State-issued subsistence  hunting                                                            
permits   are  granted  for   these  hunts   and  the  majority   of                                                            
controversies  are centered  in this  area. If  successful, the  new                                                            
system could serve  as a pilot project for Tier II  hunting in other                                                            
areas.                                                                                                                          
                                                                                                                                
Senator Stedman objected to the adoption of this amendment.                                                                     
                                                                                                                                
Senator Olson  asked if additional  travel would be planned  for the                                                            
following year.                                                                                                                 
                                                                                                                                
Mr. Robus was unsure. The intent is that regulations would be                                                                   
adopted at the June meeting.                                                                                                    
                                                                                                                                
Senator Stedman removed his objection.                                                                                          
                                                                                                                                
Senator Dyson removed his objection.                                                                                            
                                                                                                                                
Without further objection, Amendment #19 was ADOPTED.                                                                           
                                                                                                                                
5:42:15 PM                                                                                                                    
                                                                                                                                
Amendment  #20:  This  amendment  inserts  a  new  National  Coastal                                                            
Wetland  Conservation   Grant  - Snyder   Parcel  component  to  the                                                            
Department  of Fish and Game  on page 35  and appropriates  $310,000                                                            
Other  Funds to  the component.  Accompanying  explanatory  language                                                            
reads as follows.                                                                                                               
                                                                                                                                
     The Snyder  parcel is 135 acres of undeveloped  wetland habitat                                                            
     on the Gustavus forelands.  The parcel is used by waterfowl and                                                            
     shorebirds and provides  important habitat for sandhill cranes.                                                            
     It  adjoins  the  Dude  Creek  Critical   Habitat  Area  (CHA),                                                            
     designated  for the protection  of sandhill crane habitat,  and                                                            
     is  of  interest  to the  Department  of  Fish  and Game  as  a                                                            
     potential  addition  to the CHA.  Funding  for the acquisition                                                             
     will  come from  a third National  Coastal  Wetland grant,  and                                                            
     private donations.  Title to the property will  ultimately rest                                                            
     with the  state. The federal  grant will have a $104,000  match                                                            
     (25%) provided by The Nature Conservancy (TNC).                                                                            
                                                                                                                                
     Acquisition of this  parcel is the third and final phase of the                                                            
     most  biologically  sensitive and  least developable  lands  in                                                            
     Gustavus;  it will purchase approximately 135  acres. This is a                                                            
     private parcel;  the owner, John Snyder, contacted  TNC with an                                                            
     offer  to  sell.  The  lands  will  be  managed  to  complement                                                            
     adjacent  habitats  including  the Dude  Creek  CHA. A  further                                                            
     management  objective is to allow  continues public  use of the                                                            
     lands for hunting,  fishing, and recreation to the extent those                                                            
     uses are  consistent with the  goal of protecting wetlands  and                                                            
     wildlife habitat.                                                                                                          
                                                                                                                                
Senator Hoffman moved for adoption. He outlined the explanatory                                                                 
statement, pointing out that general funds would not be used.                                                                   
                                                                                                                                
There being no objection Amendment #20 was ADOPTED.                                                                             
                                                                                                                                
5:43:23 PM                                                                                                                    
                                                                                                                                
Amendment  #21: This  amendment  adds a  new Bethel  Youth  Facility                                                            
Security  Improvements  component to  the Department  of Health  and                                                            
Social Services  on page 26 and appropriates $233,900  general funds                                                            
to the component.                                                                                                               
                                                                                                                                
Senator Hoffman  moved for adoption  of Amendment #21 and  explained                                                            
the need for these improvements.                                                                                                
                                                                                                                                
Co-Chair Green remarked  that the proposed security improvements are                                                            
a worthy project.                                                                                                               
                                                                                                                                
There being no objection Amendment #21 was ADOPTED.                                                                             
                                                                                                                                
5:44:20 PM                                                                                                                    
                                                                                                                                
Amendment  #22:  This amendment  increases  the  allocation  to  the                                                            
Bethel Readiness  Center New Construction  - Phase 2 (HD  38) to the                                                            
Department  of  Military   and  Veterans  Affairs  on  page  38  and                                                            
appropriates  $8,062,500  federal  funds  and $2.5  million  general                                                            
funds to the component.  Accompanying explanatory  language reads as                                                            
follows.                                                                                                                        
                                                                                                                                
     The  Governor  had funded  the  $2.5  million match  with  ASLC                                                            
     [Alaska  Student Loan  Corporation] funds  that were denied  in                                                            
     this version  of the capital budget. $1 million  in other funds                                                            
     were  kept but is not  enough to match  the $8,062,500  federal                                                            
     funds.  This  amendment  adds  the additional  $1  million  the                                                            
     Governor requested.                                                                                                        
                                                                                                                                
Senator  Hoffman moved  for adoption  and stressed  that the  Bethel                                                            
Readiness Center is a very important project to the region.                                                                     
                                                                                                                                
Co-Chair Green  clarified that $8 million in federal  funds would be                                                            
received for this project.                                                                                                      
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
5:45:31 PM                                                                                                                    
                                                                                                                                
Amendment  #23: This  amendment  adds a  new Forest  Legacy  Federal                                                            
Grant Program  component to the Department of Natural  Resources and                                                            
appropriates  $630,000   federal  funds.  Accompanying  explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     These  federal receipts  have  been approved  under the  Forest                                                            
     Legacy  Federal Grant Program  for a conservation easement  for                                                            
     Aleknagik  Natives Limited for over 20,000 acres  of their land                                                            
     within  Wood-Tikchik State Park,  which includes both  banks of                                                            
     the  Agulowak   River,  a  major  salmon  spawning   area,  and                                                            
     approximately  32 miles of shoreline along Lakes  Aleknagik and                                                            
     Nerka.  The Native  allotments  are in prime  locations in  the                                                            
     southern half of the  park. Wood-Tikchik State Park is near the                                                            
     town of Dillingham in Southwest Alaska.                                                                                    
                                                                                                                                
     The Governor's original  budget request included $2,930,963 for                                                            
     three  projects, which  was not included  in the work  draft CS                                                            
     (FIN)  for SB  46. The federal  government  has just  completed                                                            
     their review  of the project request and has  approved $630,000                                                            
     in funding  to begin  phase one for one  of the projects,  with                                                            
     the initial phase  to begin in FY 06, resulting in this amended                                                            
     request.  The other projects  were not approved in this  budget                                                            
     year.                                                                                                                      
                                                                                                                                
Senator Hoffman  moved for adoption  and overviewed the explanatory                                                             
statement.                                                                                                                      
                                                                                                                                
There being no objection Amendment #23 was ADOPTED                                                                              
                                                                                                                                
5:46:33 PM                                                                                                                    
                                                                                                                                
AMENDMENT #24:  This amendment adds  a new Coastal Wetlands  Grant -                                                            
Nushagak  Bay Watershed,  phase  2 component  to  the Department  of                                                            
Natural Resources  and appropriates  $1 million federal receipts  to                                                            
the component.                                                                                                                  
                                                                                                                                
Senator Hoffman moved for  adoption and noted this item was included                                                            
in the Governor's FY 06 budget request.                                                                                         
                                                                                                                                
There being no objection Amendment #24 was ADOPTED.                                                                             
                                                                                                                                
5:47:16 PM                                                                                                                    
                                                                                                                                
Amendment  #25: This amendment  adds a new  Petersburg North  Harbor                                                            
Deferred  Maintenance   and  Transfer   (HD  5)  component   to  the                                                            
Department  of Transportation  and  Public Facilities,  with  intent                                                            
language,  and  appropriates  $2.5  million  general  funds  to  the                                                            
component. The intent language reads as follows.                                                                                
                                                                                                                                
     It  is  the  intent  of  the  Legislature   that  the  City  of                                                            
     Petersburg  enters  into an agreement  with  the Department  of                                                            
     Transportation   and   Public   Facilities   to   accept   full                                                            
     responsibility  for  ownership  and  maintenance  of the  North                                                            
     Harbor at the time of transfer.                                                                                            
                                                                                                                                
Senator Stedman moved for  adoption, noting this item relates to the                                                            
process of transferring  ownership of boat harbors from the State to                                                            
local municipalities.  Funding for  this transfer had been  included                                                            
in the Governor's  proposed FY 06 budget utilizing  a different fund                                                            
source.                                                                                                                         
                                                                                                                                
AT EASE 5:48:20 PM / 5:49:08 PM                                                                                             
                                                                                                                                
Co-Chair  Green  remarked  that  the intent  language  is  clear  in                                                            
stipulating that  the City of Petersburg would assume  ownership and                                                            
responsibility for maintenance and repairs.                                                                                     
                                                                                                                                
There being no objection Amendment #25 was ADOPTED.                                                                             
                                                                                                                                
5:49:34 PM                                                                                                                    
                                                                                                                                
Amendment   #26:  This   amendment  corrects   the  House   District                                                            
designation  of  the Craig  Roads  component  in  the Congressional                                                             
Earmarks BRU, Department  of Transportation and Public Facilities on                                                            
page  65,  line  19 to  reflect  the  project's  location  in  House                                                            
District 5. The $1 million allocation remains unchanged.                                                                        
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green explained the technical change.                                                                                  
                                                                                                                                
There being no objection Amendment #26 was ADOPTED.                                                                             
                                                                                                                                
5:50:00 PM                                                                                                                    
                                                                                                                                
Amendment  #27:  This amendment  inserts  a  new  Bethel  Courthouse                                                            
Improvements component  to the Alaska Court System  and appropriates                                                            
$825,000 general  funds to the component.  Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This  capital request  is  one piece  of two-part  fix for  the                                                            
     Bethel court facility.  The second piece is a $92,000 operating                                                            
     budget  increment  to  cover increased  costs  associated  with                                                            
     additional  space. This has been funded in both  the Senate and                                                            
     House operating budgets.                                                                                                   
                                                                                                                                
     The court  system currently rents 10,000 s.f.  from the City of                                                            
     Bethel.  The operating  component will  provide increased  rent                                                            
     for  an additional 2,600  s.f. to be  constructed by the  City.                                                            
     This  capital component  will allow  the court  system to  make                                                            
     tenant improvements to the existing space.                                                                                 
                                                                                                                                
     Bethel  is a high-volume superior  court location. Even  though                                                            
     the population  of the area is less than 20%  of the population                                                            
     of  Fairbanks,  it had about  80%  as many  felony cases.  Even                                                            
     though  it is much smaller  than either  Palmer or Kenai,  last                                                            
     year  it had almost  as many  civil jury  trials as Palmer  and                                                            
     Kenai put together.                                                                                                        
                                                                                                                                
     This court  has two superior court judges and  two magistrates,                                                            
     and  a judge from Fairbanks  is frequently  there to help  with                                                            
     the  caseload.  In addition,  the  House and  Senate  operating                                                            
     budgets have approved  an upgrade of one magistrate position to                                                            
     a district judgeship.  However, the Bethel Courthouse currently                                                            
     has only  one superior courtroom, one district  courtroom (with                                                            
     room  for only a six  member jury), and  a small hearing  room.                                                            
     Moreover,  the remainder  of the space  is inadequate.  Changes                                                            
     proposed include adding  two superior courtrooms, expanding and                                                            
     soundproofing  the  cramped jury  deliberation  room, fixing  a                                                            
     number  of  security issues  (for  example,  in-custody  felony                                                            
     defendants   must  currently  be  transported  through   public                                                            
     areas),   creating  magistrate  and  law  clerk   offices,  and                                                            
     expanding the clerk's office.                                                                                              
                                                                                                                                
     The  FY 06 request  is for  bid document  preparation,  project                                                            
     management and construction.                                                                                               
                                                                                                                                
Senator Hoffman  moved for adoption  and overviewed the explanatory                                                             
statement.                                                                                                                      
                                                                                                                                
Co-Chair Green shared that  she has received several telephone calls                                                            
regarding this project.                                                                                                         
                                                                                                                                
There being no objection Amendment #27 was ADOPTED.                                                                             
                                                                                                                                
5:50:55 PM                                                                                                                    
                                                                                                                                
Amendment   #28:   This   amendment   reduces   the   general   fund                                                            
appropriation  to the Kenai  Peninsula College  Student Housing  (HD                                                            
33-35) component  of the  University of Alaska  on page 89,  lines 4                                                            
and 5 from $7.5 million to $6 million.                                                                                          
                                                                                                                                
This amendment  also reduces the general  fund appropriation  to the                                                            
Kodiak  College Vocational  Technology  Addition  Phase  I -  Kodiak                                                            
Island  Borough (HD 36)  of the  University of  Alaska, on page  89,                                                            
lines 6 - 9 from $10 million to $8.5 million.                                                                                   
                                                                                                                                
This  amendment also  inserts  a new  Kachemak Bay  Campus  Addition                                                            
component to the  University of Alaska and appropriates  $3 million.                                                            
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green  explained the amendment  noting it would  have a net                                                            
zero fiscal impact to the FY 06 budget.                                                                                         
                                                                                                                                
Senator  Stedman  clarified  the  affected  campuses  of  the  Kenai                                                            
Peninsula College, the Kodiak College, and Kachemak Bay.                                                                        
                                                                                                                                
There being no objection Amendment #28 was ADOPTED.                                                                             
                                                                                                                                
5:51:52 PM                                                                                                                    
                                                                                                                                
Amendment   #29:  This   amendment  deletes   the  Fairbanks   Area,                                                            
University Avenue/Geist  Road/Johansen intersection  project and the                                                            
$3.5  million  Alaska  capital  income  fund  appropriation  to  the                                                            
project  from Section  6. DEPARTMENT  OF TRANSPORTATION  AND  PUBLIC                                                            
FACILITIES., on page 91, lines 7 and 8.                                                                                         
                                                                                                                                
This  amendment   also  inserts  a  new  Fairbanks,  Wilbur   Street                                                            
Extension project  in to Section 6 and appropriates  $1.1 million to                                                            
the project.                                                                                                                    
                                                                                                                                
This  amendment also  inserts  a new  Fairbanks,  2nd Avenue,  Moore                                                            
Street Realignment  and New Airport  Way Intersection project  in to                                                            
Section 6 and appropriates $2,550,000 to the project.                                                                           
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     These  two projects  are on the FMATS  [Fairbanks Metropolitan                                                             
     Area  Transportation   Study]  priority   list  and  will  work                                                            
     together  with the currently  funded upgrade of 2nd  Avenue and                                                            
     Wilbur  Street  to  fund  all planned  access/egress   projects                                                            
     related  to  the  Carlson  Center/Growden  Park/Fish   Hatchery                                                            
     complex area.                                                                                                              
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Co-Chair  Wilken   detailed  the   road  changes  and  improvements                                                             
proposed.                                                                                                                       
                                                                                                                                
AT EASE 5:52:35 PM / 5:53:08 PM                                                                                             
                                                                                                                                
Co-Chair  Wilken  offered   a motion   to  amend  the  amendment  to                                                            
appropriate  $1 million to the Wilbur  Street Extension project  and                                                            
$2.5 million to the 2nd Avenue project.                                                                                         
                                                                                                                                
Without objection Amendment #29 was AMENDED and ADOPTED.                                                                        
                                                                                                                                
5:53:43 PM                                                                                                                    
                                                                                                                                
Amendment #30:  This amendment deletes  the language of Section  10.                                                            
NATIONAL PETROLEUM  RESERVE - ALASKA  IMPACT GRANT PROGRAM;  INTENT.                                                            
(b), on page 92,  lines 16 - 20 and inserts new language  to read as                                                            
follows.                                                                                                                        
                                                                                                                                
          (b) The sum of $24,706,539, received by the National                                                                  
     Petroleum Reserve  - Alaska special revenue fund (AS 37.05.530)                                                            
     under  42 U.S.C. 6508  by August 31,  2005, is appropriated  to                                                            
     the Department of  Commerce, Community and Economic Development                                                            
     from  capital  project  grants  under  the  National  Petroleum                                                            
     Reserve  -  Alaska  impact  grant   program  to  the  following                                                            
     municipalities for  the purposes stated in the amounts set out:                                                            
          MUNICIPALITY               PROJECT                   AMOUNT                                                           
          (1)  North Slope Borough   Social and cultural      $275,880                                                          
                                       study - phase 2                                                                          
          (2) North Slope Borough Wainwright youth             229,500                                                          
                                       program                                                                                  
          (3) Nuiqsut                Local government          468,000                                                          
                        operations/cultural                                                                                     
                                       coordinator                                                                              
          (4) North Slope Borough Wainwright softball           35,000                                                          
                                       field                                                                                    
          (5) Barrow                 City impound and          174,389                                                          
                                       disposal site project                                                                    
          (6) North Slope Borough Atqasuk energy               100,042                                                          
                                       assessment                                                                               
          (7) North Slope Borough Wainwright local             311,500                                                          
                                       government operations                                                                    
          (8) Barrow                 City Hall building         69,413                                                          
                                       addition feasibility                                                                     
                                       study                                                                                    
          (9) Nuiqsut                Youth center operations 150,000                                                            
                                       and maintenance                                                                          
          (10) Atqasuk               Atqasuk local             336,468                                                          
                                       government operations                                                                    
          (11) Barrow                Roller rink renovation     63,556                                                          
                         feasibility study                                                                                      
          (12) North Slope Borough Utility master plan/        106,221                                                          
                                       emergency plan                                                                           
          (13)  North Slope Borough  Misdemeanor probation     346,071                                                          
                                       officer                                                                                  
          (14) North Slope Borough Fire equipment and          250,000                                                          
                                       training                                                                                 
          (15) Barrow                Barrow local            1,385,843                                                          
                                       government operations                                                                    
          (16) Nuiqsut               Design/install            200,000                                                          
                                       retractable boat ramp                                                                    
          (17)  North Slope Borough  Continuing studies to  2,461,368                                                           
                                       investigate                                                                              
                                       wildlife/subsistence                                                                     
          (18)  North Slope Borough  Oil spill response team   737,867                                                          
          (19)  North Slope Borough  Police officers for    1,486,689                                                           
                                       NPR-A villages                                                                           
          (20)  North Slope Borough  Health, survival, and     654,426                                                          
                                       sustainability of key                                                                    
                                       subsistence resources                                                                    
          (21)  North Slope Borough  Workforce development  3,729,451                                                           
                                       program                                                                                  
          (22)  North Slope Borough  Mayor's job program    2,527,961                                                           
          (23)  North Slope Borough  Police importation     1,101,512                                                           
                                       combat program                                                                           
          (24) North Slope Borough North Slope science         425,578                                                          
                                       initiative                                                                               
          (25) North Slope Borough Village capacity            968,182                                                          
                                       building                                                                                 
          (26) North Slope Borough NPR-A technical          1,468,508                                                           
                                       review team                                                                              
          (27) North Slope Borough Allied health            3,400,000                                                           
                                       training center                                                                          
          (28)  North Slope Borough  Wainwright city office     38,114                                                          
                                       renovation                                                                               
          (29) Atqasuk               Youth center addition     680,000                                                          
                        to community center                                                                                     
          (30) North Slope Borough Wainwright lagoon           525,000                                                          
                                       boat launch                                                                              
                                                                                                                                
          (c) If the amount available for appropriation from the                                                                
     National  Petroleum Reserve -  Alaska special reserve  fund (AS                                                            
     37.05.530) under (b)  of this section is less than $24,706,539,                                                            
     then each  of the appropriations made by (b)(1)  - (30) of this                                                            
     section  is  reduced   in  proportion  to  the  amount  of  the                                                            
     shortfall.                                                                                                                 
                                                                                                                                
This amendment  also stipulates  a lapse date  of June 30,  2006 for                                                            
the appropriations  made in Section  10(b)(1)-(13); a lapse  date of                                                            
June 30, 2007 for the appropriations  made in subsections (14)-(16);                                                            
a  lapse date  of  June 30,  2008  for the  appropriations  made  in                                                            
subsections  (17)-(26); and  a lapse date of  June 30, 2009  for the                                                            
appropriation  made in subsection  (27). The appropriations  made in                                                            
subsections (28)-(30) lapse under AS 37.25.020.                                                                                 
                                                                                                                                
Co-Chair  Wilken  moved  for  adoption  and  outlined  the  projects                                                            
intended to receive federal  National Petroleum Reserve-Alaska (NPR-                                                            
A)  grant  funds.  The listing  of  projects  would  prioritize  the                                                            
projects.                                                                                                                       
                                                                                                                                
Senator  Olson  clarified  that  the  lapse  date for  most  of  the                                                            
appropriations is the end of FY 06.                                                                                             
                                                                                                                                
Co-Chair  Wilken  replied that  the  standard five-year  lapse  date                                                            
would apply  to most of  the capital projects.  Appropriations  made                                                            
for most of the operating  expenses would lapse at the conclusion of                                                            
the fiscal year. Other items have specified lapse dates.                                                                        
                                                                                                                                
Senator Olson questioned  whether adequate time would be allowed for                                                            
implementation.                                                                                                                 
                                                                                                                                
5:57:40 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  noted that the appropriations would  not expire for                                                            
14 months.                                                                                                                      
                                                                                                                                
Senator Olson surmised  the lapse date of June 30, 2006 would be too                                                            
early to expend funds for capital projects.                                                                                     
                                                                                                                                
5:58:11 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  explained that  the  designated monies  should  be                                                            
expended in  the fiscal year. Monies  that would be carried  forward                                                            
would  automatically  do so  until the  specified  lapse date.  This                                                            
would provide  oversight for projects  that currently have  none. If                                                            
at the conclusion  of FY 06, the lapse  date were insufficient,  the                                                            
affected community  would be required  to explain the situation  and                                                            
request an extension.                                                                                                           
                                                                                                                                
5:59:39 PM                                                                                                                    
                                                                                                                                
Senator Dyson  appreciated Co-Chair  Wilken's attempt. He  asked the                                                            
percentage  of  the  total  appropriation  allocated  for  operating                                                            
expenses.                                                                                                                       
                                                                                                                                
Co-Chair  Wilken  answered   that  42  percent  of  the  funding  is                                                            
designated  to  capital  projects   and  58 percent   for  operating                                                            
expenditures.                                                                                                                   
                                                                                                                                
Co-Chair Wilken then pointed  out that of the $24 million total NPR-                                                            
A  grant, $22  million  would be  appropriated  to the  North  Slope                                                            
Borough. He also noted the 21 percent administrative charge.                                                                    
                                                                                                                                
Co-Chair  Green understood  the  provisions  of this  amendment  are                                                            
intended to provide a review of the NPR-A grant program.                                                                        
                                                                                                                                
Co-Chair Wilken  affirmed. Appropriations made in  this manner would                                                            
allow for  oversight  of the expenditures.  The  intent is that  the                                                            
grant  funds are  expended  on  those communities  impacted  by  oil                                                            
development.                                                                                                                    
                                                                                                                                
Senator  Stedman  asked  if  the inclusion  of  funds  intended  for                                                            
operating  expenses  are included  in  this  capital budget  due  to                                                            
delays.                                                                                                                         
                                                                                                                                
Co-Chair  Wilken concurred.  Previous appropriation  of NPR-A  grant                                                            
funds has been included  as a single line item with no specification                                                            
of  actual projects  and  programs.  The  language proposed  in  the                                                            
amendment allocates  the funding for  the four communities  impacted                                                            
by activities  in the NPR-A. Subsection  (a) of Section 10  provides                                                            
intent language  that future NPR-A impact mitigation  program grants                                                            
be designated for this purpose.                                                                                                 
                                                                                                                                
6:03:20 PM                                                                                                                    
                                                                                                                                
Without objection Amendment #30 was ADOPTED.                                                                                    
                                                                                                                                
6:04:00 PM                                                                                                                    
                                                                                                                                
Amendment  #31:  This amendment  changes  the name  of  the City  of                                                            
Wasilla sewer  plant expansion project in subsection  (e) of Section                                                            
43.  HOUSE  DISTRICTS  13-16.,  on  page 113,  line  6  to  "septage                                                            
facility".                                                                                                                      
                                                                                                                                
Co-Chair  Green  moved  for adoption  and  explained  the  technical                                                            
change.                                                                                                                         
                                                                                                                                
There being no objection, Amendment #31 was ADOPTED.                                                                            
                                                                                                                                
6:04:23 PM                                                                                                                    
                                                                                                                                
Amendment  #32: This amendment  deletes subsections  (b) and  (d) of                                                            
Section  53.   DEPARTMENT  OF  COMMERCE,   COMMUNITY  AND   ECONOMIC                                                            
DEVELOPMENT.,  on page 120, lines 1 - 4 and 9 - 12.  The language of                                                            
the two subsections is identical and reads as follows.                                                                          
                                                                                                                                
     The sum  of $900,000 is appropriated  from the general  fund to                                                            
     the Department of  Commerce, Community and Economic Development                                                            
     for  payment  as a  grant  under  AS 37.05.316  to  the  Alaska                                                            
     Housing  Finance  Corporation  for  construction  of  the  cold                                                            
     climate housing research center.                                                                                           
                                                                                                                                
This amendment  also  inserts a  new Cold Climate  Housing  Research                                                            
Center  - Cold Climate  Building  & Infrastructure  Research &  Test                                                            
Facility component to the  Grants to Named Recipients (AS 37.05.316)                                                            
BRU, Department of Commerce, Community and Economic Development, on                                                             
page 3 and appropriates $900,000 general funds to the component.                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     In  the 5/3/05  work  draft version  "Y" there  were  duplicate                                                            
     requests   (sections  (b)   and  (d))   of  $900,000   for  the                                                            
     construction of the Cold Climate Research Center.                                                                          
                                                                                                                                
     This amendment  deletes one of the $900,000 appropriations  and                                                            
     moves  the  funding  to  the Grants  to  Named  Recipients  (AS                                                            
     37.05.316)  portion  of  the work  draft  that begins  on  page                                                            
     three.                                                                                                                     
                                                                                                                                
     This  is consistent  with previous appropriations  made  to the                                                            
     project.                                                                                                                   
                                                                                                                                
Co-Chair Wilken moved for adoption and explained the changes.                                                                   
                                                                                                                                
There being no objection, Amendment #32 was ADOPTED.                                                                            
                                                                                                                                
6:05:11 PM                                                                                                                    
                                                                                                                                
Amendment #33:  this amendment inserts  a new Sport Fish  Hatcheries                                                            
component to the Department  of Fish and Game on page 35 line 11 and                                                            
appropriates $62,140,000  to the component. Accompanying explanatory                                                            
language reads as follows.                                                                                                      
                                                                                                                                
     The state Department  of Revenue would issue revenue bonds with                                                            
     a  gross amount  of  $69,000,000  but the  actual construction                                                             
     costs  of the statewide  hatcheries would  be $62,140,000.  The                                                            
     gross bond  amount would have adjustments made  for underwriter                                                            
     spread,  true interest  costs,  debt service  reserve fund  and                                                            
     earnings.                                                                                                                  
                                                                                                                                
     The  $62.14 million in  hatchery bond  funds would be  spent as                                                            
     follows:                                                                                                                   
                                                                                                                                
     Interior  Alaska - Fish  presently stocked  in interior  Alaska                                                            
     are produced in Anchorage  and transported via the road system.                                                            
     Currently,  about  20% of  the fish  produced  in the  existing                                                            
     hatchery  program go  to Fairbanks and  the surrounding  areas.                                                            
     The  imminent  loss of  heat  at the  existing  Anchorage  area                                                            
     hatcheries   will  drastically  affect  the  interior-stocking                                                             
     program.  Without warm water (which doubles the  growth rate of                                                            
     fish), the  hatcheries will not be able to produce  fish in the                                                            
     sizes currently stocked  in interior waters. A recent study has                                                            
     indicated  that building  a new  hatchery in  Fairbanks is  the                                                            
     best way  to remediate the problem. The proposed  hatchery will                                                            
     at least  double the  existing fish  production goals  for this                                                            
     area,  meeting projected demand  over the next 25 years.  It is                                                            
     estimated  that the hatchery will cost $25 million,  15 million                                                            
     of  which will  be funded  under the  CIP. The  balance of  the                                                            
     monies  will  come  from  federal   funds  already  secured  or                                                            
     anticipated.                                                                                                               
                                                                                                                                
     Southcentral   Alaska  - The  imminent  loss  of  heat  at  the                                                            
     existing Anchorage  area hatcheries will drastically affect the                                                            
     southcentral  Alaska  stocking  program.  Loss of  heat at  the                                                            
     existing  hatcheries will not only decrease the  number of fish                                                            
     planted throughout  southcentral Alaska, but  will decrease the                                                            
     number  of  sites that  will  be stocked.  A recent  study  has                                                            
     indicated  that building  a new  hatchery in  Anchorage is  the                                                            
     best way  to remediate the problem. We propose  to address this                                                            
     issue  by constructing a new  hatchery facility at the  site of                                                            
     the existing  Fort Richardson  hatchery in Anchorage.  Hatchery                                                            
     operations  at the  existing  Elmendorf Hatchery  in  Anchorage                                                            
     will  be shut  down. The new  hatchery  facility will  increase                                                            
     production  by 50%,  sufficient to meet  projected demand  over                                                            
     the next  25 years. We anticipate this hatchery  will cost just                                                            
     over $45  million, the cost of  which will be entirely  covered                                                            
     under the proposed bond.                                                                                                   
                                                                                                                                
     Southeast Alaska -  The Division of Sport Fish does not operate                                                            
     any  hatchery  facilities  in southeast  Alaska,  but  supports                                                            
     targeted    private   sector   hatchery   operations    through                                                            
     cooperative  agreements   aimed  at increasing   sport  fishing                                                            
     opportunities. Bond  funds totaling $2.14 million will fund the                                                            
     following  projects:  $1.5 million  to the City  of Skagway  to                                                            
     build  a hatchery which  they would  operate; $0.5 million  for                                                            
     deferred  maintenance   for  the  Crystal  Lake  Hatchery  near                                                            
     Petersburg;  and $140,000 for one time capital  improvements by                                                            
     the  Northern   Southeast  Regional   Aquaculture  Association                                                             
     (NSRAA) for Haines king salmon release.                                                                                    
                                                                                                                                
Co-Chair Wilken moved for adoption and objected to the motion to                                                                
allow the Department of Fish and Game to explain the amendment.                                                                 
                                                                                                                                
6:05:42 PM                                                                                                                    
                                                                                                                                
KELLY KEPLER, Director, Division of Sport Fish, Department of Fish                                                              
and Game, explained this amendment would authorize the issuance of                                                              
bonds to support construction of hatchery facilities.                                                                           
                                                                                                                                
Senator Hoffman asked the affect were the amendment not adopted.                                                                
                                                                                                                                
Mr. Kepler replied that the monies would not be expended.                                                                       
                                                                                                                                
There being no objection, Amendment #33 was ADOPTED.                                                                            
                                                                                                                                
6:07:10 PM                                                                                                                    
                                                                                                                                
Amendment #34:  This amendment changes  the YMCA of Fairbanks  - Van                                                            
(HD  7-11)  component   of  the  Grants  to  Named  Recipients   (AS                                                            
37.05.316)  BRU,  Department  of Commerce,  Community  and  Economic                                                            
Development on  page 8, lines 9 and 10 to read "ASYMCA  of Fairbanks                                                            
- Van purchase  and operation (HD  7-11)". The $50,000 general  fund                                                            
appropriation remains unchanged.                                                                                                
                                                                                                                                
Co-Chair  Wilken   moved  for  adoption  and  explained   that  this                                                            
amendment  proposes a  technical change  to reflect  program as  the                                                            
armed services YMCA.                                                                                                            
                                                                                                                                
There being no objection, Amendment #34 was ADOPTED.                                                                            
                                                                                                                                
6:07:49 PM                                                                                                                    
                                                                                                                                
Amendment #35: This amendment  inserts a new subsection into Section                                                            
52. DEPARTMENT  OF ADMINISTRATION.,  on page 119, following  line 26                                                            
to read as follows.                                                                                                             
                                                                                                                                
          (c) The sum of $4,350,000 is appropriated from the                                                                    
     general    fund   to   the   Department   of   Administration,                                                             
     commissioner's  office, for distribution  to state agencies  to                                                            
     offset  the increased chargeback  rates for statewide  services                                                            
     as identified  in the statewide  federal cost allocation  plan.                                                            
                                                                                                                                
Co-Chair Green moved for adoption.                                                                                              
                                                                                                                                
Ms. Blaisdell  explained this appropriation, plus  the appropriation                                                            
proposed in Amendment  #36, would provide funding  to offset some of                                                            
the expenses  incurred through delivery  of centralized services  to                                                            
other State  agencies that  would otherwise  be reimbursed  by those                                                            
agencies.                                                                                                                       
                                                                                                                                
Co-Chair Green  remarked that inadequate funding has  been allocated                                                            
for these reimbursements.  This amendment would allow departments to                                                            
continue to receive centralized administrative services.                                                                        
                                                                                                                                
There being no objection, Amendment #35 was ADOPTED.                                                                            
                                                                                                                                
AT EASE 6:10:44 PM / 6:16:27 PM                                                                                             
                                                                                                                                
Co-Chair   Green  reiterated   the  intent   of  Amendment   #35  in                                                            
appropriating funding to  all agencies for reimbursement of the cost                                                            
of centralized services.                                                                                                        
                                                                                                                                
Ms.  Blaisdell   stated  that  normally   general  funds   would  be                                                            
appropriated  directly  to  the agencies,  and  the  agencies  would                                                            
reimburse  the Department  of Administration  for  the costs of  the                                                            
centralized  services. Conversely,  this amendment  would allow  the                                                            
Department  of Administration to provide  the general funds  to each                                                            
agency  based on a  cost-allocation  plan. A  similar provision  was                                                            
adopted several  years prior. She would verify the  legality of this                                                            
action.                                                                                                                         
                                                                                                                                
Co-Chair Green  noted that this amendment is generally  not allowed,                                                            
although an exception would be made in this instance.                                                                           
                                                                                                                                
6:17:43 PM                                                                                                                    
                                                                                                                                
Amendment  #36: This  amendment  inserts  two new  subsections  into                                                            
Section 20. FUND  TRANSFERS., on page 96, following  line 18 to read                                                            
as follows.                                                                                                                     
                                                                                                                                
          (d) The sum of $12,000,000 is appropriated from the                                                                   
     general   fund  to   the  Alaska  public   building  fund   (AS                                                            
     37.05.570).                                                                                                                
          (e) The amount necessary to have an unobligated balance                                                               
     of  $5,000,000  in  the  state insurance   catastrophe  reserve                                                            
     account  in accordance with AS  37.05.289 is appropriated  from                                                            
     the  general fund to  the state insurance  catastrophe  reserve                                                            
     account (AS 37.05.289).                                                                                                    
                                                                                                                                
This  amendment  also deletes  "$300,000"  from  subsection  (b)  of                                                            
Section 52. DEPARTMENT  OF ADMINISTRATION., on page 119, line 25 and                                                            
inserts "$40,300,000". The amended language reads as follows.                                                                   
                                                                                                                                
          (b) The sum of $40,300,000 is appropriated from the                                                                   
     general   fund   to   the   information   services   fund   (AS                                                            
     44.21.045(a)).                                                                                                             
                                                                                                                                
Co-Chair Green moved for adoption.                                                                                              
                                                                                                                                
Ms. Blaisdell  explained the $12 million appropriated  to the Alaska                                                            
public building  fund would be distributed  to those state  agencies                                                            
that participate  in the public building  fund. The monies  would be                                                            
utilized for maintenance expenses.                                                                                              
                                                                                                                                
Ms.  Blaisdell next  reminded  that  the State  of Alaska  is  self-                                                            
insured. The appropriation  made in Sec 20(e) would  be utilized for                                                            
management costs.                                                                                                               
                                                                                                                                
Ms. Blaisdell  spoke to the  fund transfer  of $40.3 million  to the                                                            
information  services   fund.  The  information  services   fund  is                                                            
utilized  to   pay  expenses  including   payroll  associated   with                                                            
information services  activities, communications and  the enterprise                                                            
technology fund.                                                                                                                
                                                                                                                                
6:19:46 PM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  clarified that the  effective date of the  provisions                                                            
in the amendment should be July 1, 2005.                                                                                        
                                                                                                                                
Senator  Stedman asked  if the  original dollar  amount of  $300,000                                                            
appropriated in Section 52(b) page 19 was a typographical error.                                                                
                                                                                                                                
Ms. Blaisdell affirmed.                                                                                                         
                                                                                                                                
Co-Chair Green  reminded the Committee  of the discussions  relating                                                            
to this matter  beginning six to eight weeks prior,  in which it was                                                            
determined  that no  more than 30  percent of  the amount  requested                                                            
would be  appropriated for  the information  services fund.  Many of                                                            
the  participating  agencies  have  received  less  than  sufficient                                                            
funding for this purpose for several years.                                                                                     
                                                                                                                                
There being no objection, Amendment #36 was ADOPTED.                                                                            
                                                                                                                                
AT EASE 6:21:36 PM / 8:25:39 PM                                                                                             
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Green adjourned the meeting at 08:25 PM.                                                                               

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