Legislature(2005 - 2006)

05/05/2005 04:55 PM FIN


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                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                            May 5, 2005                                                                                       
                             4:55 p.m.                                                                                        
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Green convened the meeting at approximately 4:55:06 PM.                                                              
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Co-Chair Wilken, Co-Chair                                                                                                       
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Donny Olson                                                                                                             
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
Also  Attending: SHALON  SZYMANSKI,  Staff to  Representative  Lesil                                                          
McGuire;  GLENN PETERSON,  District  Manager -  Anchorage  District,                                                            
Carrs/Safeway   Grocery  Store;   JASON  MOLTON,   Loss   Prevention                                                            
Director,  Seattle  Division,  Carrs/Safeway;  DEAN  GUANELI,  Chief                                                            
Assistant  Attorney   General,  Legal  Services  Section,   Criminal                                                            
Division, Office  of the Attorney  General, Department of  Law; JANE                                                            
PEARSON, Staff to Representative  Jay Ramras; HEATHER NOBREGA, Staff                                                            
to Norm  Rokeberg,  PEGGY ANN  MCCONNOCHIE,  Representative,  Alaska                                                            
Association  of Realtors;  HEATH HILLIARD,  Staff to Representative                                                             
Mike Kelly;  DR. RICHARD  MANDSANGER, Director,  Division of  Public                                                            
Health,  Department of Health  and Social  Services; JOSH  APPLEBEE,                                                            
Staff  to Representative  Tom Anderson;  PAT  DAVIDSON, Legislative                                                             
Auditor, Division of Legislative  Audit, Legislative Affairs Agency;                                                            
MIKE  BURNS,   Chief  Executive  Officer,   Alaska  Permanent   Fund                                                            
Corporation, Department  of Revenue; GINGER BLAISDELL,  Staff to Co-                                                            
Chair  Green; CHERYL  FRASCA,  Director,  Office of  Management  and                                                            
Budget, Office of the Governor;  JOHN MACKINNON, Deputy Commissioner                                                            
of Highways and Public  Facilities, Department of Transportation and                                                            
Public   Facilities;    DAN   SPENCER,    Director,   Division    of                                                            
Administrative   Services,  Department   of  Public  Safety;   JAMES                                                            
ARMSTRONG,  Staff  to  Co-Chair  Wilken;  NANCY  SLAGLE,   Director,                                                            
Division of  Administrative Services,  Department of Transportation                                                             
and Public Facilities;  GUY BELL, Assistant Commissioner, Department                                                            
of Labor  and Workforce  Development;  ART CHANCE,  Director,  Labor                                                            
Relations, Department of Administration;                                                                                        
                                                                                                                                
Attending  via  Teleconference:  From  an Offnet  Site:  JIM  TOWLE,                                                          
Executive Director, Alaska Dental Society                                                                                       
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 61-GAMING: CALCUTTA POOLS & CRANE CLASSICS                                                                                   
                                                                                                                                
The Committee  heard from the bill's  sponsor and reported  the bill                                                            
from Committee.                                                                                                                 
                                                                                                                                
HB 149-CONTROLLED SUBSTANCES                                                                                                    
                                                                                                                                
The committee heard from  the bill's sponsor, the Department of Law,                                                            
and  retail   industry  representatives.   The  bill  was   held  in                                                            
Committee.                                                                                                                      
                                                                                                                                
HB 169-REAL ESTATE LICENSEES                                                                                                    
                                                                                                                                
The Committee heard from  the bill's sponsor and a representative of                                                            
the real estate industry. The bill reported from Committee.                                                                     
                                                                                                                                
HB 211-DENTISTS; HYGIENISTS; BD OF DENTAL EXAM.                                                                                 
                                                                                                                                
The  Committee  heard  from  the  bill's  sponsor  and  took  public                                                            
testimony. The bill reported from Committee.                                                                                    
                                                                                                                                
HB 225-MEDICAL EXAMINERS & AUTOPSIES                                                                                            
                                                                                                                                
The Committee  heard from the bill's  sponsor and the Department  of                                                            
Health and Social Services. The bill reported from Committee.                                                                   
                                                                                                                                
HB 123-OCCUPATIONAL BDS: EXTENSION/RECEIPTS/PSYCH                                                                               
                                                                                                                                
The Committee  heard  from the bill's  sponsor and  the Division  of                                                            
Legislative Audit. The bill reported from Committee.                                                                            
                                                                                                                                
HB 215-PERM FUND CORP. INVESTMENTS/REGULATIONS                                                                                  
                                                                                                                                
The Committee  heard from the Alaska Permanent Fund  Corporation and                                                            
reported the bill from Committee.                                                                                               
                                                                                                                                
SB 46-APPROP: CAPITAL BUDGET                                                                                                    
                                                                                                                                
The Committee  heard from Committee Staff, the Office  of Management                                                            
and Budget, the Department  of Transportation and Public Facilities,                                                            
the  Department  of  Public  Safety, the  Department  of  Labor  and                                                            
Workforce  Development, and  the Department  of Administration.  The                                                            
Committee considered  amendments to  the bill. The bill was  held in                                                            
Committee.                                                                                                                      
                                                                                                                                
SB 108-INSURANCE                                                                                                                
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
HB 257-STATE PROCUREMENT ELECTRONIC TOOLS                                                                                       
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
HB 275-TRANSPORTATION PROJECT BONDS                                                                                             
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 61(L&C)                                                                                
     "An Act relating to Calcutta pools and crane classics as                                                                   
     authorized forms of charitable gaming."                                                                                    
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
4:55:40 PM                                                                                                                    
                                                                                                                                
Senator Dyson  spoke to the concern  he had raised during  the first                                                            
hearing on  this bill regarding  whether  a for-profit entity  might                                                            
make a business  out of helping charities with a Calcutta  endeavor.                                                            
While the answer had been  that the inclusion of the term "operator"                                                            
would deter such  activity, he has learned that the  term "operator"                                                            
is simply defined  as an entity that  is licensed and bonded.  Thus,                                                            
"there is  nothing that  would keep enterprising  individuals"  from                                                            
assisting  in organizing a  sporting event  "and making a deal  with                                                            
some charity to  conduct a Calcutta pool. While this  activity would                                                            
raise  money for the  charity,  for-profit entities  could also  use                                                            
this  tactic  as "an  opportunity"  to  make  money. This  has  been                                                            
experienced in  other states; a Calcutta pool was  bid up and behind                                                            
the scene deals were made  in regards to which team would win. While                                                            
he hoped that  such a scenario would not occur in  Alaska, he warned                                                            
that it could occur in relationship to major sporting events.                                                                   
                                                                                                                                
Senator Stedman  asked whether the intent was to move  the bill from                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green affirmed.                                                                                                        
                                                                                                                                
Senator  Stedman  voiced being  "uncomfortable  with  enlarging  the                                                            
gambling opportunities  in the state in general". While he would not                                                            
contest  moving the  bill from Committee,  it was  unlikely that  he                                                            
would support it passing from the Senate.                                                                                       
                                                                                                                                
4:58:38 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  understood "the reality"  to be that Calcutta  games                                                            
are  occurring  in  the  State.  While   that  does  not  make  that                                                            
occurrence  okay, this legislation  would allow  places such  as the                                                            
Palmer Golf  Course to increase their  business and raise  money for                                                            
charitable organizations.                                                                                                       
                                                                                                                                
Co-Chair Green  asked whether the bill contains a  mechanism through                                                            
which  to account  for the  money that  would be  raised during  the                                                            
auction associated with the event.                                                                                              
                                                                                                                                
SHALON SZYMANSKI, Staff  to Representative Lesil McGuire, the bill's                                                            
sponsor,  responded  that Sec.  2  page two  lines two  through  ten                                                            
specifies  that the  event organizer  must  file a  report with  the                                                            
Department  of  Revenue  upon  the  conclusion  of  the  event.  The                                                            
Department  of Revenue would  develop the  report form, which  would                                                            
require  an accounting  of the  money raised  as well  as the  money                                                            
provided to the charity.                                                                                                        
                                                                                                                                
5:00:26 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green read the  requirements listed  in Sec. 2. She  asked                                                            
for  clarification  as to  timeframe  in which  the  report must  be                                                            
received by the Department of Revenue.                                                                                          
                                                                                                                                
5:00:32 PM                                                                                                                    
                                                                                                                                
Ms. Szymanski  clarified  that the  report must  be filed after  the                                                            
event.                                                                                                                          
                                                                                                                                
5:00:57 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked for an example of what information  would meet                                                            
the "amount and nature  of each expense" requirement as specified in                                                            
Sec. 2 page two, line eight.                                                                                                    
                                                                                                                                
Ms.  Szymanski replied  that  expenses for  such  things as  banners                                                            
advertising the event must be reported.                                                                                         
                                                                                                                                
Co-Chair Green asked for  further information about the auction that                                                            
would occur the  night before the sporting event;  specifically what                                                            
allowable  expenses  the operator  or the  host of  the event  could                                                            
conduct.                                                                                                                        
                                                                                                                                
Ms. Szymanski  stated that  the auction would  usually be held  in a                                                            
banquet  setting the  night  before the  sporting  event. The  teams                                                            
participating in the event  would be auctioned off, and people would                                                            
bid on the  team they believed would  win the tournament.  After the                                                            
conclusion  of the sporting  event, the high  bidder on the  winning                                                            
team  would  receive up  to  50-percent  of the  money  raised.  The                                                            
organization  holding the  event could  specify the  percent of  the                                                            
revenue that  would be contributed  to the  charity; it could  range                                                            
between a minimum of 50-percent and 100-percent of the revenue.                                                                 
                                                                                                                                
Co-Chair Green  asked whether the  amount specified for the  charity                                                            
would be 50-percent of the net or gross revenue.                                                                                
                                                                                                                                
Ms. Szymanski  understood that it  would be 50-percent of  the money                                                            
raised during the auction.                                                                                                      
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being no  objection, SCS  CS HB  61 (L&C)  was REPORTED  from                                                            
Committee  with previous  indeterminate fiscal  note #2 dated  April                                                            
14, 2005 from the Department of Revenue.                                                                                        
                                                                                                                                
5:04:07 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 149(JUD)                                                                               
     "An Act relating to  controlled substances regarding the crimes                                                            
     of   manslaughter  and   misconduct   involving  a   controlled                                                            
     substance;  relating to the manufacture of methamphetamine  and                                                            
     to  the sale, possession,  and delivery  of certain  substances                                                            
     and  precursors  used in the  manufacture  of methamphetamine;                                                             
     relating  to listing  certain anabolic  steroids as  controlled                                                            
     substances;   relating   to  the  listing   of  property   that                                                            
     constitutes  an illegal drug manufacturing site;  amending Rule                                                            
     41, Alaska  Rules of Criminal  Procedure; and providing  for an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Green asked whether  the bill's  sponsor or any  Committee                                                            
Member desired  to comment on the bill pursuant to  the beginning of                                                            
public testimony.  The response was in the negative.  She noted that                                                            
she had been  unable to be in attendance  during the previous  day's                                                            
hearing on the bill.                                                                                                            
                                                                                                                                
5:04:35 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  noted that the primary focus of the  previous day's                                                            
discussion   pertained  to  the  logbook   issue.  "The   retailer's                                                            
standpoint"  of that issue  would be provided  today. This  would be                                                            
helpful in "filling in some of the blanks".                                                                                     
                                                                                                                                
5:05:39 PM                                                                                                                    
                                                                                                                                
GLENN   PETERSON,    District   Manager   -   Anchorage    District,                                                            
Carrs/Safeway Grocery Store, introduced himself.                                                                                
                                                                                                                                
JASON   MOLTON,  Loss   Prevention   Director,   Seattle   Division,                                                            
Carrs/Safeway,  applauded the State's  efforts to address  the "very                                                            
difficult problem" of methamphetamine  addiction in the State. Prior                                                            
to being Carrs/Safeway's  Loss Prevention Director for the states of                                                            
Washington,  Oregon, Idaho, and Alaska,  he had spent 30  years as a                                                            
Special Agent with the  Federal Bureau of Investigation (FBI). He is                                                            
"accurately  aware" of the growing  "problems faced by retailers  as                                                            
the  result  of  methamphetamine  (meth)  addiction".  He  is  "very                                                            
attuned"   to  the  issue   at  hand  due   to  his  experience   at                                                            
Carrs/Safeway   and  his   appointment  to   the  Washington   State                                                            
Governor's  Council  on Substance  Abuse  and  his membership  on  a                                                            
variety of Washington countries' Methamphetamine Task Forces.                                                                   
                                                                                                                                
5:07:46 PM                                                                                                                    
                                                                                                                                
Mr.  Molton  voiced  strong  support  for  the increased   penalties                                                            
associated  with meth abuse proposed  in the bill; particularly  for                                                            
those  who   show  "reckless  disregard   for  young  children"   by                                                            
subjecting them to meth use in their home or residence.                                                                         
                                                                                                                                
Mr.  Molton   informed   the  Committee   that   two  years   prior,                                                            
Carrs/Safeway  took responsibility,  as "a good corporate  citizen",                                                            
by   removing,   without    regulatory   directive,    "high   theft                                                            
pseudoephedrine products",  such as Sudafed, from its store shelves.                                                            
Empty packages were placed  instead on the over-the-counter medicine                                                            
aisle. A person  desiring to purchase  that product would  take that                                                            
package up  to the customer service  counter where a store  employee                                                            
would provide  the product to them.  A three-box purchase  limit was                                                            
also implemented.                                                                                                               
                                                                                                                                
Mr. Molton  shared that this could  also be characterized  as an act                                                            
of  self-defense   as  many  of  these  products  were   targets  of                                                            
shoplifters.  This  action has  assisted the  store  in curbing  its                                                            
losses,  and the  belief is  that the  action has  also assisted  in                                                            
reducing the precursor of methamphetamine availability.                                                                         
                                                                                                                                
Mr. Molton  noted that Carrs/Safeway  is also the largest  corporate                                                            
sponsor  of  Meth  Watch in  Washington  and  Montana,  and  posters                                                            
promoting Meth  Watch are displayed in all four states  in which the                                                            
store  operates. The  belief is  that the corporation's  actions  in                                                            
regard  to both  Meth Watch  and the  removal of  the products  from                                                            
store shelves  have helped to reduce  the meth problem in  the state                                                            
of Washington.  At one  time Washington  had "the  dubious honor  of                                                            
having the  most meth labs in the  country" with a reported  high of                                                            
1,886 labs.  That number was reduced  to 1,339 in the year  2004 and                                                            
261 meth labs have been reported to date in 2005.                                                                               
                                                                                                                                
Mr. Molton  disclosed however, that  the cost of meth in  Washington                                                            
has remained constant  or is slightly lower than it  was a few years                                                            
ago.  Therefore,  it must  be assumed  that  the net  affect of  the                                                            
action has not  changed the overall situation since  price "is based                                                            
on the supply and demand theory of economics".                                                                                  
                                                                                                                                
Mr.  Molton  directed   Members  to  view  the  questdiagnostic.com                                                             
website,  which depicts that  "there has  been an extreme  increase"                                                            
each year  "in the  number of  methamphetamine users  who are  being                                                            
tested in the workplace".  "The problem continues unabated." Another                                                            
indicator of the growing  use of meth in the state of Washington and                                                            
possibly  the State of Alaska  "too, were  the figures checked",  is                                                            
the increasing number of  people who are receiving treatment through                                                            
the  federal or  State  aid such  as Medicaid.  People  as young  as                                                            
fourteen  have been  treated  for meth  addiction.  The most  recent                                                            
statistics  available for the state  of Washington indicate  that in                                                            
the year 2003,  12,000 individuals were treated for  Meth addiction.                                                            
                                                                                                                                
5:12:09 PM                                                                                                                    
                                                                                                                                
Mr. Molton  warned  that Meth addiction,  unlike  cocaine or  heroin                                                            
addiction, could  not be successfully treated in a  30-day treatment                                                            
program.  Meth addiction  treatment  is  a difficult  and  long-term                                                            
process.  "It is like  a barbed hook  hooked into  the mouth  of the                                                            
person; they simply can't get over it."                                                                                         
                                                                                                                                
Mr. Molton shared that  another indicator of meth usage is drug test                                                            
submissions.  Tracking  of  Washington  law  enforcement  drug  test                                                            
submissions  indicate that  approximately  46-percent test  positive                                                            
for meth. Cocaine  is second at 26 percent. All the  other drugs are                                                            
in the single digits. Meth  is "clearly the drug of choice … its the                                                            
drug most frequently encountered  by law enforcement" in Washington.                                                            
He anticipated that similar statistics would apply to Alaska.                                                                   
                                                                                                                                
5:13:31 PM                                                                                                                    
                                                                                                                                
Mr. Molton  informed the Committee  that Carrs/Safeway has  prepared                                                            
comments in  regards to HB 149. The  State of Washington  Governor's                                                            
Council  on Substance  Abuse  identified three  key  elements to  be                                                            
addressed in the  effort against meth abuse: prevention;  treatment;                                                            
and law enforcement  and justice.  "It is a three-legged  stool." HB                                                            
149 is  an "excellent bill"  in regards to  the law enforcement  and                                                            
justice  component; however,  absent  the prevention  and  treatment                                                            
components the  State would encounter difficulties.  A lot of people                                                            
would  be incarcerated,  but  there  would be  "no ability  to  fund                                                            
treatment  and no ability  to preclude  them from  getting into  the                                                            
problem" due to a lack of prevention funding.                                                                                   
                                                                                                                                
Mr. Molton noted  that a copy of the State of Washington  Governor's                                                            
Council on Substance  Abuse recommendations [copy  not provided] had                                                            
been provided to Co-Chair  Wilken. The report might provide guidance                                                            
to the State of Alaska.                                                                                                         
                                                                                                                                
5:14:55 PM                                                                                                                    
                                                                                                                                
Mr. Molton  made specific suggestions  to language in the  bill. One                                                            
suggestion would be that  the language in Sec. 3(d)(3) on page four,                                                            
beginning  on line nine that  would allow  certain entities  such as                                                            
lodges  to  possess  more than  nine  gram  of  pseudoephedrine,  be                                                            
amended to include  such things as "boat orders".  Carrs/Safeway and                                                            
other  retailers  routinely  handle  orders from  boats  in  fishing                                                            
fleets that exceed the allowable 24-gram limit.                                                                                 
                                                                                                                                
5:16:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked whether Carrs/Safeway ships  to Rural areas as                                                            
well.                                                                                                                           
                                                                                                                                
Mr. Peterson affirmed.                                                                                                          
                                                                                                                                
Co-Chair  Green asked whether  orders shipped  to Rural areas  might                                                            
also exceed the limit restriction.                                                                                              
                                                                                                                                
Mr. Peterson confirmed that such orders often exceed the limit.                                                                 
                                                                                                                                
Co-Chair Green  understood therefore  that the Rural order  scenario                                                            
could be likened to the boat order situation.                                                                                   
                                                                                                                                
5:16:40 PM                                                                                                                    
                                                                                                                                
Mr. Peterson  agreed.  He noted that  often times,  boat orders  are                                                            
received from vessels that spend months at sea.                                                                                 
                                                                                                                                
Mr.  Molton pointed  out  that  an area  that  might not  have  been                                                            
discussed is relation to  this bill is the consideration of the fact                                                            
that  the  three  crimes  of methamphetamine   production  and  use,                                                            
identity thief,  and mail thief "are  inseparability connected".  He                                                            
informed  that the majority  of the time "that  a search warrant  is                                                            
executed  at the Meth  production  facility", such  things as  false                                                            
identification  and counterfeit  checks  or information  to  support                                                            
such crimes are discovered.                                                                                                     
                                                                                                                                
5:17:36 PM                                                                                                                    
                                                                                                                                
To that point, Mr. Molton  explained that the current record keeping                                                            
system used by  most major retailers is referred to  as the point of                                                            
sale system.  It utilizes a scanner  to scan each item in  the sale,                                                            
and, at  the end of the  transaction, money  in the form of  cash, a                                                            
credit card, a  debit card, a gift card, an EBT card,  or a check is                                                            
tendered as payment. The  entirety of the transaction data is stored                                                            
in a  computer  and is  available for  retrieval  in the  retailer's                                                            
database for  a period of ninety days.  However, with extra  effort,                                                            
information  could be retrieved  for as long  as five years.  Stores                                                            
also  utilize   digital   closed  circuit   television  and   camera                                                            
surveillance  to  record  the  entrance/exit,  aisle,  and  checkout                                                            
counter activity in its  stores. It is possible that the store could                                                            
access a  record of the  person entering  the store, choosing  items                                                            
off the shelf, purchasing the items, and exiting the store.                                                                     
                                                                                                                                
5:19:33 PM                                                                                                                    
                                                                                                                                
Mr.  Molton  opined  that the  logbook  process  being  proposed  is                                                            
unnecessary;  "it  is  redundant",   and  would  be  an  expense  to                                                            
retailers.  No  "useful  purpose beyond"  the  information  that  is                                                            
already  maintained by  stores "in  the normal  course of  business"                                                            
would  be provided.  Stores  currently  comply  with  subpoenas  and                                                            
search warrants on a regular  basis, and "voluntarily provide closed                                                            
circuit  television  evidence  routinely  to  law  enforcement  upon                                                            
request". In addition,  such things as vehicle license plate numbers                                                            
of  people   suspected  of  buying   "precursors  for  the   use  of                                                            
methamphetamine"  are  also  provided to  law  enforcement  officers                                                            
through  the Carrs/Safeway's  Meth Watch  Program. These  activities                                                            
would continue.                                                                                                                 
                                                                                                                                
Mr. Molton stated that  another objection to the log is in regard to                                                            
the information  that would be required.  It is anticipated  that in                                                            
order for the  log to be helpful, its information  must "be sortible                                                            
in some  fashion".  As learned  from  his FBI  experience,  sortible                                                            
fields  of information  should include  the purchaser's  last  name,                                                            
first name,  middle initial,  date, type and  quantity of the  item,                                                            
the amount  of the transaction  as well as  the employee  conducting                                                            
the  transaction. This  activity  would extend  the  amount of  time                                                            
required to complete the  transaction beyond the typical transaction                                                            
time  of less than  30 seconds.  In  addition, each  city in  Alaska                                                            
could impose  its own requirements.  Further compounding  the burden                                                            
that would  be placed on a store is  the fact that each state  could                                                            
establish  differing requirements.  The state  of Oklahoma  requires                                                            
that the  logbook information  be transmitted  electronically.  This                                                            
would   require   additional   hardware   and   database   programs.                                                            
Administration  of the program across  the State of Alaska  and from                                                            
state-to-state could be tedious to comply with.                                                                                 
                                                                                                                                
5:22:30 PM                                                                                                                    
                                                                                                                                
Mr. Molton observed  that when such rules are enacted,  someone must                                                            
be responsible  for verifying such  things as whether retailers  are                                                            
maintaining  the logs  properly  or are  not selling  more than  the                                                            
allowed  quantities.   He  asked  whether  consideration   has  been                                                            
provided to the imposition of penalties for non-compliance.                                                                     
                                                                                                                                
Mr.   Molton   stated   that  Carrs/Safeway    has  "conservatively                                                             
calculated" that the cost  of implementing the logbook system in its                                                            
25 stores would incur $250,000  in labor costs. Other costs would be                                                            
associated  with   training  efforts.  Additional   costs  would  be                                                            
incurred were electronic data transmission required.                                                                            
                                                                                                                                
Mr. Molton  reiterated the support  for the proposed "stiffening  of                                                            
the sentences" associated with this issue.                                                                                      
                                                                                                                                
5:24:09 PM                                                                                                                    
                                                                                                                                
Mr. Molton  concluded his  remarks by stating  that the store  would                                                            
like to work  further with Representative  Ramras and Senator  Guess                                                            
in regards to the logbook issue.                                                                                                
                                                                                                                                
5:24:23 PM                                                                                                                    
                                                                                                                                
Co-Chair   Green  voiced   appreciation   for   the  "enlightening"                                                             
testimony.                                                                                                                      
                                                                                                                                
Co-Chair Green  asked the percentage of the State's  population that                                                            
might be served by major  retailers with similar scanning systems to                                                            
that utilized by Carrs/Safeway.                                                                                                 
                                                                                                                                
5:25:06 PM                                                                                                                    
                                                                                                                                
Mr. Peterson  expressed that it is  likely that all major  retailers                                                            
in the State's metropolitan  areas utilize such systems. The systems                                                            
are available in its stores  in communities such as Dutch Harbor and                                                            
Nome. It  is questionable  whether small  village retailers  utilize                                                            
such systems.                                                                                                                   
                                                                                                                                
Co-Chair  Green  clarified that  the  gist of  her question  was  to                                                            
determine   how   much  redundancy   might   be  incurred   by   the                                                            
implementation of the logbook.  Some Members are concerned about the                                                            
logbook section of the  bill. "We want to be sure we get this on its                                                            
way, but have  it in a condition that  is acceptable for  all of us.                                                            
We certainly want to work with the sponsor as well."                                                                            
                                                                                                                                
Senator Olson asked whether  other alternatives to the log have been                                                            
considered in the desire to track purchases.                                                                                    
                                                                                                                                
Mr. Molton shared  that programs such as the Meth  Watch program are                                                            
being utilized  in the State  of Washington.  When an individual  is                                                            
observed  repeatedly  visiting  the store  and purchasing  meth  lab                                                            
materials such  as pseudoephedrine,  batteries, acetone,  and coffee                                                            
filters,  it is an alert  that a meth lab  might be functioning.  In                                                            
that  case,  law  enforcement   personnel  would  be   notified  and                                                            
information such as license  plate numbers and names and pictures of                                                            
the individuals  would  be provided.  Were  a subpoena  or a  search                                                            
warrant  delivered,   the  store   would  provide  the  information                                                             
contained  in the store's  files relating  to the transaction.  This                                                            
"is a very viable alternative to the log".                                                                                      
                                                                                                                                
Co-Chair  Wilken   thanked  the  gentlemen   for  their   testimony.                                                            
Continuing  he asked, with  the exception of  the "boat orders"  and                                                            
the log issue, whether other sections of bill were acceptable.                                                                  
                                                                                                                                
Mr. Molton stated  that other sections of the bill  were acceptable.                                                            
The penalty  "enhancements", specifically  the ones relating  to the                                                            
endangerment of those under the age of 18, "are commendable".                                                                   
                                                                                                                                
Senator Stedman  shared that  some pharmacies  in his district  have                                                            
also voiced  concern about the log,  specifically in regards  to how                                                            
it would be maintained  and the time that would be  involved in that                                                            
process. While  pharmacists are supportive  of the direction  of the                                                            
legislation,  there is concern  about its affect  on "small  mom and                                                            
pop"  stores that  might  not have  a sophisticated   point of  sale                                                            
system.                                                                                                                         
                                                                                                                                
5:28:54 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  again thanked the Carrs/Safeway representatives  for                                                            
their insight on the matter.  Continuing, she invited the Department                                                            
of Law and  the bill's sponsor  to join the  discussion in  order to                                                            
develop a compromise  in regard to the log section  of the bill. She                                                            
reiterated  that  several Members  have  voiced concern  about  that                                                            
issue.                                                                                                                          
                                                                                                                                
Co-Chair Green,  voicing an understanding  of the intent  of the log                                                            
requirement,  asked  whether  methods  such  as  the aforementioned                                                             
Carrs/Safeway   Meth   Watch  program   have  been   considered   as                                                            
alternatives to that requirement.                                                                                               
                                                                                                                                
5:30:12 PM                                                                                                                    
                                                                                                                                
DEAN  GUANELI,  Chief Assistant  Attorney  General,  Legal  Services                                                            
Section,  Criminal   Division,  Office  of  the  Attorney   General,                                                            
Department of  Law stated that the bill would only  require that the                                                            
purchase  of the  specified  products must  be logged.  While  other                                                            
states, including  the state of Washington,  require the  logging of                                                            
other "suspicious  transactions",  such burden would not  be imposed                                                            
on retailers  by this bill. Carrs/Safeway  operates stores  in other                                                            
states whose requirements  are more labor intensive than those being                                                            
proposed  in  HB 149.  It  should  be noted  that  the restrictions                                                             
imposed by other  states "have been effective". This  legislation is                                                            
viewed as "a reasonable accommodation".                                                                                         
                                                                                                                                
5:31:49 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green  understood  that  Mexico  is one  of  the  greatest                                                            
sources  of the  finished  meth product.  While  the  import of  the                                                            
product, which is contributing  to its usage, is not being addressed                                                            
in bill,  such  importation might  be the  reason that  meth use  in                                                            
other states  is not  being reduced  even though  such efforts  have                                                            
been made.                                                                                                                      
                                                                                                                                
Mr.  Guaneli noted  that Interstate  5  (I-5), which  transits  from                                                            
Mexico through  the states of Washington, Oregon and  California, is                                                            
difficult for  law enforcement officers to monitor.  Thankfully, I-5                                                            
does  not  transit  to  Alaska.  Alaska   State  Troopers  would  be                                                            
appreciative  were the  results of  this legislation  to mirror  the                                                            
reduction in meth production  that has occurred in other states that                                                            
have adopted  similar legislation.  Such  legislation would  provide                                                            
them the ability  to concentrate on other sources  such airports and                                                            
the mail.                                                                                                                       
                                                                                                                                
5:33:11 PM                                                                                                                    
                                                                                                                                
JANE  PEARSON,  Staff  to  Representative  Jay  Ramras,  the  bill's                                                            
sponsor, informed  the Committee that  Representative Ramras  "is in                                                            
favor  of the logs".  Representatives  of the  Department of  Public                                                            
Safety should  be provided  an opportunity  to speak to the  reasons                                                            
for their support of the logs.                                                                                                  
                                                                                                                                
Mr. Guaneli spoke  to the importance of the logbooks.  He noted that                                                            
language  in Sec. 6(a),  page six,  beginning on  line 13 makes  the                                                            
purchase  or possession of  more than nine  grams of the  identified                                                            
drugs  within  a  30-day  period,  a  crime.   Absent  the  logbook,                                                            
"positive  proof of such  action" would be  difficult to  prosecute.                                                            
Tips from the store or  from other Meth users would be insufficient.                                                            
The log entries are important  to the "overall effectiveness" of the                                                            
bill.                                                                                                                           
                                                                                                                                
Mr. Guaneli  restated  his May  4, 2005  comments  to the  Committee                                                            
regarding  the  fact  that  the  logbooks  would  be  "an  effective                                                            
deterrent",  as people who  purchase pseudoephedrine  to provide  to                                                            
meth manufacturers  are  often users  themselves  and, as a  result,                                                            
become  paranoid and  would not  desire to use  identification.  The                                                            
logbook requirement "would make a difference".                                                                                  
                                                                                                                                
5:35:46 PM                                                                                                                    
                                                                                                                                
Mr. Guaneli  voiced  being uncertain  as to  what Carrs/Safeway  "is                                                            
proposing  "in exchange" for  the log books.  While their stores  do                                                            
have cameras,  the information  that  could be provided  by them  is                                                            
unclear. "Even  if you have cameras  showing people coming  into the                                                            
store and  showing people  going up to the  counter; unless  you can                                                            
really tie  that to a specific transaction;  tie that to  a specific                                                            
amount;  tie  that to  a specific  person,  its  going  to be  maybe                                                            
interesting information  but not anything that can really be used by                                                            
an investigator to pursue it further."                                                                                          
                                                                                                                                
Mr. Guaneli  stated that another  point he  had made in the  May 4th                                                            
hearing   is  that   before  the   state  of   Iowa  enacted   their                                                            
pseudoephedrine  legislation,  an Iowa  university  had conducted  a                                                            
survey  to   gauge  public  reaction   to  it.  The  result   was  "                                                            
overwhelmingly" public  support for the identification and signature                                                            
requirements  as  well as  the purchase  quantity  limitations.  The                                                            
public "understood the  importance of doing so". Given that there is                                                            
both public  and law enforcement support  of such legislation  would                                                            
identify the action as "an important step".                                                                                     
                                                                                                                                
Mr. Guaneli  opined  that the bill's  sponsor has  endeavored  to be                                                            
responsive  to retail  industry  concerns.  The specification  of  a                                                            
logbook termination date  would provide an opportunity to review the                                                            
success  of the  effort.  The fact  that  the Department  of  Public                                                            
Safety would be  required to establish the logbook  guidelines would                                                            
provide retailers another opportunity to provide input.                                                                         
                                                                                                                                
Mr. Guaneli  stated that  while there are  many large retailers  who                                                            
have  sophisticated  point of  sale  technology, many  small  stores                                                            
might  not. The  logbook being  proposed,  "was chosen"  because  it                                                            
would provide a uniform  method of collecting information that would                                                            
work for  both small and  large stores.  Similar logbook  provisions                                                            
have worked well in other states and should work well in Alaska.                                                                
                                                                                                                                
Co-Chair Wilken  characterized this as being a good  bill. "A lot of                                                            
work  has gone  into  it  … by  a  lot of  different  authors."  The                                                            
implementation  of  many  of  its provisions  would  do  some  good;                                                            
however,  he  voiced  concern  about the  logbook  issue.  While  he                                                            
respected Mr.  Guaneli's remarks, he also heard the  concerns raised                                                            
by retailers.  Therefore, in an effort to move the  bill forward, he                                                            
suggested that  the logbook language  be removed from the  bill. The                                                            
bill's  sponsor  could  work  with retailers  over  the  Interim  to                                                            
determine how  to make the logbook  "less intrusive". "Even  if that                                                            
weren't  to happen",  such  an event  as  a "reverse  sunset"  might                                                            
eventually occur in that,  while the provisions of the bill might be                                                            
having an affect, Legislators  might choose at some point to include                                                            
the logbook as a means to further enhance the effort.                                                                           
                                                                                                                                
Co-Chair  Wilken  stated he  would  support the  bill  were the  log                                                            
provisions removed. Not  "enough work" has been conducted in regards                                                            
to its  affect  on either  large or  small retailers  or  consumers.                                                            
There is also  a question as to the  level of benefit that  would be                                                            
provided  by the log  and whether  it might also  be an invasion  of                                                            
privacy.                                                                                                                        
                                                                                                                                
Co-Chair Green doubted  whether the bill would move forward were the                                                            
logbook  language included.  Perhaps another  component of  the bill                                                            
could "be strengthened in exchange" for the logbook's removal.                                                                  
                                                                                                                                
5:40:57 PM                                                                                                                    
                                                                                                                                
To that  point, Co-Chair  Green suggested that  language in  Sec. 11                                                            
(a) page  nine beginning  on  line 16 could  be changed  to read  as                                                            
follows.                                                                                                                        
                                                                                                                                
     (a)  A wholesaler,  manufacturer,  or distributor  of  products                                                            
     containing ephedrine,  pseudoephedrine, or phenylpropanolamine,                                                            
     or  their salts,  isomers, or  salts of isomers,  or iodine  or                                                            
     crystal  iodine, has  an affirmative  duty to  report to  a law                                                            
     enforcement agency  or offices suspicious purchases, shall keep                                                            
     complete records of  all transactions involving those products,                                                            
     including   the  names   of   all  parties   involved  in   the                                                            
     transaction,  the date  of the transaction,  and the amount  of                                                            
     the drug  products involved. The records shall  be kept readily                                                            
     retrievable  for  inspection by  law enforcement  officers  and                                                            
     separate  from all other  invoices or  records of transactions                                                             
     not involving  those products  and shall be maintained  for one                                                            
     year,  or   a  shorter  period  of  time  established   by  the                                                            
     Department  of Public Safety by regulation, and  must allow for                                                            
      inspection of the records by law enforcement officers.                                                                    
                                                                                                                                
Co-Chair Green also suggested  that language in Sec. 11 (d) page ten                                                            
lines  19  through   21  could  be  "strengthened   as  a  reporting                                                            
standard".                                                                                                                      
                                                                                                                                
Mr. Guaneli agreed that  there was an opportunity to strengthen that                                                            
language; however, that  determination could be made via regulations                                                            
adopted by  the Department  of Public Safety.  The Department  could                                                            
outline  what would  constitute a  suspicious  purchase that  "would                                                            
then trigger some reporting".                                                                                                   
                                                                                                                                
Co-Chair Green  asked whether current  language in Sec. 11  on pages                                                            
nine and  ten of  the bill would  provide the  Department of  Public                                                            
Safety sufficient  "leeway in making  those kinds of requirements".                                                             
                                                                                                                                
Mr.  Guaneli   conveyed  that  the   Legislative  Review   Committee                                                            
carefully assesses the  specifics of language that provides agencies                                                            
the authority  to adopt administrative  regulations" and  when it is                                                            
not "crystal clear, agencies  are criticized for doing so". Specific                                                            
regulation  making  authority"  language could  be  included in  the                                                            
bill.                                                                                                                           
                                                                                                                                
5:43:25 PM                                                                                                                    
                                                                                                                                
Mr. Guaneli  expressed that Co-Chair  Wilken's idea of some  kind of                                                            
"reverse  sunset" is  an interesting  idea.  The  question would  be                                                            
whether it would be "the  desire to have this matter come before the                                                            
Legislature  again  or"  at a  specified  time  in the  future,  the                                                            
Commissioner of the Department  of Public Safety might "certify that                                                            
there has  not been any  significant reduction  in the diversion  of                                                            
pseudoephedrine  from  legitimate sources  to the  manufacturers  of                                                            
methamphetamine",  and that action  would allow for the adoption  of                                                            
logbooks at that point.                                                                                                         
                                                                                                                                
5:44:05 PM                                                                                                                    
                                                                                                                                
Mr. Guaneli  continued therefore  that the  question is whether  the                                                            
desire would be  for the Legislature to revisit the  legislation in,                                                            
for example,  a year or  whether some sort  of certification  by the                                                            
Department of Public Safety would suffice.                                                                                      
                                                                                                                                
Co-Chair Green  interjected that rather than the Legislative  action                                                            
being to preordain  anything, it would  simply provide for  a review                                                            
of the process, by a date certain.                                                                                              
                                                                                                                                
Mr. Guaneli acknowledged.                                                                                                       
                                                                                                                                
Co-Chair Green  stated that rather  than this being a decision  made                                                            
solely by the  Committee, Representative  Ramras, Senator  Guess and                                                            
others should  be involved  in the discussion.  Language in  written                                                            
form should be developed for further consideration.                                                                             
                                                                                                                                
Mr. Guaneli affirmed that he would "work in that direction".                                                                    
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
5:45:02 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 169(FIN)                                                                                             
     "An Act  relating to the educational  requirements for  certain                                                            
     real estate  brokers, associate brokers, and  salespersons with                                                            
     new or  suspended licenses; relating  to review of real  estate                                                            
     transactions  by attorneys  or associate  brokers; relating  to                                                            
     the  requirements  for  a real  estate  broker license  and  an                                                            
     associate  real estate  broker  license; and  providing for  an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
HEATHER NOBREGA, Staff  to Norm Rokeberg, the bill's sponsor, stated                                                            
that   this  bill   would  require   newly  licensed   real   estate                                                            
professionals  to undergo 20 hours  of practical education  courses,                                                            
as determined  by  the Alaska  Real  Estate Commission,  during  the                                                            
first year  after they receive  their license.  The bill would  also                                                            
allow  a real  estate  broker to  retain  an attorney  or  associate                                                            
broker to assist  in reviewing each  real estate transaction  before                                                            
the transaction closed,  as reflected in Sec. 12 page seven lines 25                                                            
through  28. This  would  assist  larger  brokerage firms  with  the                                                            
onerous "duty" of having to review each file before it closes.                                                                  
                                                                                                                                
5:46:56 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green understood  that in  that case,  the primary  broker                                                            
would still be responsible.                                                                                                     
                                                                                                                                
Ms. Nobrega affirmed.                                                                                                           
                                                                                                                                
Senator  Olson  asked regarding  the  current  continuing  education                                                            
requirements.                                                                                                                   
                                                                                                                                
Ms.  Nobrega  responded   that  the  current  continuing   education                                                            
requirement  is 20  hours every  two years.  That requirement  would                                                            
continue unaffected. The  20 hours of practical education that newly                                                            
licensed real  estate professionals must undergo during  their first                                                            
year of practice  would involve such things as contract  writing and                                                            
client interaction. Currently,  the broker assists with teaching the                                                            
everyday practices. There  is no established education guideline for                                                            
new realtors,  and each firm differs in its actions  in this regard.                                                            
                                                                                                                                
PEGGY  ANN  MCCONNOCHIE,   Representative,  Alaska  Association   of                                                            
Realtors, explained that  a person endeavoring to receive their real                                                            
estate license  must undergo  20 hours  of prescribed pre-licensing                                                             
education. After receiving  the license, the individual must take 20                                                            
hours  of specified  education courses  and an  additional 12  hours                                                            
chosen from  a list of course options  developed by the Commission.                                                             
                                                                                                                                
Ms. McConnochie  noted  that 18  other states  have adopted  similar                                                            
post-licensing  legislation, boosted  by the concern that  the newly                                                            
licensed realtors should  "have actual practical education as to how                                                            
to  do the  job they  are  supposed  to do".  The states  that  have                                                            
implemented  the  post-licensing   regulations  have  experienced  a                                                            
dramatic  reduction in  public complaints  caused  by the  realtor's                                                            
lack of  experience. The  industry has determined  that this  action                                                            
would improve  the industry overall. The new regulations  would also                                                            
require that an  associate broker who upgrades to  a broker take the                                                            
20  hours of  practical  education  during  their  first  year as  a                                                            
broker.                                                                                                                         
                                                                                                                                
Senator Olson  ascertained therefore  that the real estate  industry                                                            
is supportive of the legislation,  even though taking the additional                                                            
courses would incur an expense.                                                                                                 
                                                                                                                                
Ms. McConnochie  affirmed the industry's  support of the  additional                                                            
education requirement.                                                                                                          
                                                                                                                                
Co-Chair  Green asked for  confirmation that  Legislators would  not                                                            
receive complaints from those affected by the legislation.                                                                      
                                                                                                                                
Ms.  McConnochie shared  that  95-percent  of the  respondents to  a                                                            
survey of both  long and short-term  realtors that was conducted  by                                                            
the Alaska  Association of Realtors  "wholeheartedly" supported  the                                                            
bill.  The   other  five   percent  indicated   acceptance   of  the                                                            
requirement.  She  shared   that  while  she,  a  broker,  had  been                                                            
initially   concerned  about  having   to  provide  the   additional                                                            
education to  new licensees she is  now convinced of its  merit. "No                                                            
phone calls will come your way."                                                                                                
                                                                                                                                
Co-Chair Green  asked regarding the  schedule of the post-licensing                                                             
requirement,  specifically  if  it would  typically  occur over  two                                                            
weekends.                                                                                                                       
                                                                                                                                
Ms. McConnochie  responded that the  schedule would be dependent  on                                                            
the  needs specific  to  the licensee  or  an area  as  well as  the                                                            
instructor.    The training  could  be  delivered  in a  variety  of                                                            
formats,  including via the  Internet, in order  to insure  that new                                                            
licensees  had access  to the required  courses.  The courses  would                                                            
require a minimum  of three days.  That time could be stretched  out                                                            
over several weeks.                                                                                                             
                                                                                                                                
5:51:59 PM                                                                                                                    
                                                                                                                                
Senator Stedman  understood therefore that individuals  would not be                                                            
required to travel to a central location such as Anchorage.                                                                     
                                                                                                                                
Ms. McConnochie  stated that  that is "correct";  there would  be no                                                            
desire "to  burden people with the  cost of a plane trip".  The only                                                            
requirement is that the  education be received. The courses would be                                                            
available throughout the  State. She informed that in her role as an                                                            
educator  she has  conducted training  by  correspondence.  "Quality                                                            
education would  transpire no matter where the licensee  practices."                                                            
                                                                                                                                
Senator  Stedman  asked  for  further  information  as  to  how  the                                                            
distance delivery would be accomplished.                                                                                        
                                                                                                                                
Ms. McConnochie expressed  that there would be a variety of delivery                                                            
systems,  including "face  to face" or  correspondence courses.  The                                                            
licensee could choose the method they preferred.                                                                                
                                                                                                                                
Senator  Stedman  understood  that  each real  estate  office  would                                                            
continue  to  be  limited  to  having  one  broker.   Therefore,  he                                                            
understood  that  other  brokers  in that  office  would  be  deemed                                                            
associate brokers.                                                                                                              
                                                                                                                                
Ms. McConnochie  affirmed. She noted that while there  could only be                                                            
one broker, there  could be any number of associate  brokers. Rather                                                            
than setting  up their  own real  estate office,  these individuals                                                             
have chosen to associate  with another broker. The allowance of only                                                            
one broker  would assure that there  was one person responsible  for                                                            
the proceedings at that particular office.                                                                                      
                                                                                                                                
5:53:56 PM                                                                                                                    
                                                                                                                                
Senator Stedman  opined that there is a difference  between 20 hours                                                            
conducted  in  a  classroom  setting  and  20  hours  conducted  via                                                            
correspondence.                                                                                                                 
                                                                                                                                
Ms. McConnochie  understood Senator  Stedman's position because,  in                                                            
her role  as an educator,  she has conducted  both face-to-face  and                                                            
correspondence  formatted courses. The Real Estate  Commission would                                                            
be  responsible   for  developing,  reviewing,  and   approving  the                                                            
courses. As she  also serves as chair of the Commission's  education                                                            
subcommittee,  she  shared  that  the  subcommittee   is  developing                                                            
"matrixes for the Real  Estate Commission" that would enable them to                                                            
determine  what  hands-on  material  should  be  addressed  in,  for                                                            
example, a Contracts  class. This effort would assist  in developing                                                            
a program  that would meet  the spirit and  purpose of the  statutes                                                            
and regulations.                                                                                                                
                                                                                                                                
5:55:25 PM                                                                                                                    
                                                                                                                                
Senator  Stedman noted  that  there are  national  firms that  could                                                            
provide continuing  education correspondence  courses for  a variety                                                            
of professions.  Those  firms utilize  computerized  test forms.  He                                                            
asked  whether   such  firms  would  be  utilized   or  whether  the                                                            
Commission would develop its own program.                                                                                       
                                                                                                                                
Ms. McConnochie  stated that the Commission would  be developing its                                                            
own program.  Individuals could not  enroll with a national  company                                                            
to meet the 20-hour  requirement, as the goal would  be to develop a                                                            
program  specific to  the needs of,  for instance,  the real  estate                                                            
market  in  Juneau.  National  courses   would  not  address  issues                                                            
associated  with the various parts  of the State. For instance,  the                                                            
Juneau  course  would address  such  local  issues as  avalanche  or                                                            
hazard  zones,  and  a course  in  Fairbanks  would  address  issues                                                            
related  with  ice  conditions.  In general,  continuing   education                                                            
courses  would "assume"  that one  would already  possess the  basic                                                            
knowledge of the  field. Therefore, the effort would  be "to improve                                                            
upon those  skills" and provide a  "better class" of realtors.  This                                                            
would further protect the public.                                                                                               
                                                                                                                                
Senator  Stedman  asked  for  further  clarification  regarding  the                                                            
frequency  of the  20-hour  requirement proposed  in  this bill.  In                                                            
addition,  he  asked whether  the  requirement  would  apply to  all                                                            
licensed realtors.                                                                                                              
                                                                                                                                
5:58:06 PM                                                                                                                    
                                                                                                                                
Ms. McConnochie  clarified that all licensed realtors  must take 20-                                                            
hours  of  continuing  education   courses  every  two  years.  This                                                            
legislation would  specifically require that, within  the first year                                                            
of a new  realtor acquiring  his or her license,  they must  take an                                                            
additional one-time only  20-hour post-licensing practical education                                                            
course. This would also  be a requirement were a licensed realtor to                                                            
upgrade to an associate  broker position or were an associate broker                                                            
to upgrade  to a  broker position.  The industry's  belief is  "that                                                            
everything  changes" and  it is  the industry's  "responsibility  to                                                            
keep up on new information"  in order for provide quality service to                                                            
clients.                                                                                                                        
                                                                                                                                
Senator Stedman asked for  confirmation that all brokers, regardless                                                            
of  how  long  they   had  their  broker's  license,   must  undergo                                                            
continuing education courses every two years.                                                                                   
                                                                                                                                
Ms.  McConnochie  affirmed  that there  were  "no  exclusions".  All                                                            
licensed  realtors,  associate  brokers, and  brokers  must take  20                                                            
hours of continuing education courses every two years.                                                                          
                                                                                                                                
Senator Olson asked regarding the cost of the course.                                                                           
                                                                                                                                
Ms. McConnochie  responded  that the  cost could  not be  determined                                                            
until the program  was developed.  "A variety of different  types of                                                            
courses"  would  be anticipated.   Major brokerage  firms  in  large                                                            
communities  such as Anchorage  and Fairbanks  would likely  provide                                                            
"in-house post licensing  education". How much or whether they would                                                            
charge their  agents is an unknown.  The price would depend  on what                                                            
the market  would bear, and what the  licensees would be  willing to                                                            
pay. The bill  would allow the Commission  to have until  January 1,                                                            
2006 to develop the program. This time would be sufficient.                                                                     
                                                                                                                                
6:00:34 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  ascertained that the 20-hour course  would not be a                                                            
pass/fail type of program.                                                                                                      
                                                                                                                                
6:00:49 PM                                                                                                                    
                                                                                                                                
Ms. McConnochie  responded that the  State's Real Estate  Commission                                                            
currently  requires that  an individual must  pass a correspondence                                                             
course with at  least a 75 percent or better test  grade; testing in                                                            
a  face-to-face   course  is  determined  by  the  instructor.   The                                                            
Commission's  education subcommittee  would  be recommending  to the                                                            
Commission  that,  in order  to pass  the  practical post-licensing                                                             
course, the individual  must demonstrate the ability to complete the                                                            
work taught.                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objection,  CS  HB  169(FIN)   was  REPORTED  from                                                            
Committee  with previous  zero fiscal  note #1 dated  April 6,  2005                                                            
from   the  Department   of   Commerce,   Community   and   Economic                                                            
Development.                                                                                                                    
                                                                                                                                
6:02:01 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 211(FIN)                                                                                             
     "An Act extending the termination date of the Board of Dental                                                              
     Examiners; and relating to dentists and dental hygienists."                                                                
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
HEATH  HILLIARD,  Staff to  Representative  Mike Kelly,  the  bill's                                                            
sponsor, explained that,  while this bill would "essentially" extend                                                            
the Board  of Dental  Examiners, it  would impose  a few changes  to                                                            
existing  Statutes   to  make  them   "more  relevant  to   existing                                                            
situations".  All involved  entities,  including  the Alaska  Dental                                                            
Society (ADS), the Alaska  State Dental Hygiene Association (ASDHA),                                                            
and the Division of Occupational  Licensing, Department of Commerce,                                                            
Community  and Economic  Development,  have agreed  to the  proposed                                                            
changes. The changes would  include the implementation of continuing                                                            
education   requirements  for  Dental   Hygienists,  modifying   the                                                            
inspection  period for  radiological  equipment  used in  dentistry,                                                            
clarifying  licensing  qualifications   regarding  impairments  that                                                            
might  impair an  applicant's  ability  to practice  dentistry,  and                                                            
clarifying  the statutes for specialty  licensure by requiring  that                                                            
the  applicant  meet certain  qualifications   for dentists  in  the                                                            
State. The  extension of the Board,  as well as some of the  changes                                                            
included  in  the  bill,  were  supported   in  the  findings  of  a                                                            
Legislative  Audit  report  for Audit  Control  Number 08-20031-04,                                                             
[copy on file] conducted in August 2004.                                                                                        
                                                                                                                                
Co-Chair  Green  noted  that  the  Committee  had  recently  adopted                                                            
legislation  regarding  foreign  trained  medical doctors.  To  that                                                            
point, she asked whether that bill would affect dentists.                                                                       
                                                                                                                                
Mr. Hilliard voiced  being unsure of the impact of  that legislation                                                            
on  the dental  profession.  However,  he noted  that  there such  a                                                            
concern in regards to the status of one dental practitioner.                                                                    
                                                                                                                                
Co-Chair  Green voiced that  the impact of  that bill on the  dental                                                            
field should  be established,  as this could  be the opportunity  to                                                            
address  issues  that  might  be occurring  in  regards  to  foreign                                                            
trained dentists.                                                                                                               
                                                                                                                                
6:04:50 PM                                                                                                                    
                                                                                                                                
JIM TOWLE, Executive Director,  Alaska Dental Society, testified via                                                            
teleconference from an  offnet site and voiced being unfamiliar with                                                            
the  bill  pertaining   to  foreign  trained  medical   doctors.  He                                                            
understood  that currently a dentist  could not get licensed  in the                                                            
State  of Alaska  unless they  had graduated  from  a dental  school                                                            
accredited  by the Commission  of Dental  Accreditation, which  is a                                                            
quasi-governmental   operation  supported  by  the  American  Dental                                                            
Association.                                                                                                                    
                                                                                                                                
In response  to a  question from  Co-Chair Green,  Mr. Towle  stated                                                            
that in order to be licensed  in the State of Alaska, a dentist must                                                            
be a  graduate of a  school in  either the United  States or  Canada                                                            
that is  accredited  by the Commission.  Therefore  a graduate  of a                                                            
foreign  dental  school would  be  ineligible to  be  licensed as  a                                                            
dentist in  Alaska unless they had  attended and graduated  from one                                                            
of the accredited schools.                                                                                                      
                                                                                                                                
Co-Chair Green asked whether  Mr. Towle was aware of the legislation                                                            
that had recently been  passed regarding medical doctor licensure in                                                            
the State.                                                                                                                      
                                                                                                                                
Mr. Towle communicated that he was unaware of that legislation.                                                                 
                                                                                                                                
Co-Chair Green  stated therefore, that the question  is whether that                                                            
legislation would affect  the licensure of foreign trained dentists.                                                            
                                                                                                                                
Senator  Olson  conveyed   that  that  bill  pertained   to  medical                                                            
doctors/physicians.                                                                                                             
                                                                                                                                
Co-Chair  Green  asked  whether that  terminology  might  include  a                                                            
Doctor of Dentistry (DDS).                                                                                                      
                                                                                                                                
Mr. Towle  responded  that some  dentists  "are duel  degreed"  as a                                                            
DDS/MD.                                                                                                                         
                                                                                                                                
Senator  Olson,  who was  a medical  doctor,  affirmed  that only  a                                                            
DDS/MD  would be  affected  by the  legislation on  foreign  trained                                                            
medical doctors.                                                                                                                
                                                                                                                                
Co-Chair Green acknowledged.  She noted that were this an issue with                                                            
dentists, it could be addressed separately.                                                                                     
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objections,  CS  HB  211(FIN)  was  REPORTED  from                                                            
Committee  with  fiscal  note   #1 dated   March  29,2005  from  the                                                            
Department  of Commerce,  Community and  Economic Development.  This                                                            
note depicts an expense of $124,100 in fiscal year FY 07.                                                                       
                                                                                                                                
                                                                                                                                
     SENATE CS FOR HOUSE BILL NO. 225(HES)                                                                                      
     "An Act relating to medical examiners and medical death                                                                    
     examinations."                                                                                                             
                                                                                                                                
                                                                                                                                
6:08:41 PM                                                                                                                    
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
SHALON SZYMANSKI, Staff  to Representative Lesil McGuire, the bill's                                                            
sponsor, explained that  this bill would require the Commissioner of                                                            
the Department  of Health  and Social Services  to appoint  a second                                                            
medical examiner in the  State. Currently, only one medical examiner                                                            
is  required.  The  workload  of the  State's  Medical  Examiner  is                                                            
increasing  as exampled by the fact  that approximately 1,100  cases                                                            
were filed  with the  Office the  previous year.  The duties  of the                                                            
medical examiner  range from conducting autopsies  to administrative                                                            
duties  and legal duties,  which require  him to  testify in  Court.                                                            
Current  State law  requires that  autopsies be  conducted in  cases                                                            
involving a crime  or a suspicious death. However,  on occasion, due                                                            
to current workloads, no autopsy is conducted on the latter.                                                                    
                                                                                                                                
Ms. Szymanski  noted that  there is currently  "no backup"  were the                                                            
State's lone medical examiner unable to fulfill his duties.                                                                     
                                                                                                                                
Co-Chair  Wilken  communicated  that  he  had  participated  in  the                                                            
discussions  on this  bill during  its Senate  Health, Education,  &                                                            
Social  Services Committee,  of which  he is a  member. His  concern                                                            
then was that  the Legislature "was  doing the job" of the  Governor                                                            
Frank Murkowski  Administration;  continuing  that point, he  stated                                                            
that the question is whether  the Administration could hire a deputy                                                            
medical examiner without this legislation.                                                                                      
                                                                                                                                
Ms. Szymanski  responded  that a  second medical  examiner could  be                                                            
hired provided funding  was available. The issue therefore, is that,                                                            
absent  this  legislation,   those  funds  might  not  be  constant.                                                            
Therefore,  the State  might continue  to be served  by one  medical                                                            
examiner  and,  as  a result,  many  cases  might  not  receive  the                                                            
attention they deserve.                                                                                                         
                                                                                                                                
6:11:07 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  voiced that it "bothers  me structurally"  that one                                                            
or several Legislators  might decide that a position  was needed and                                                            
that,  without question,  that  decision might  be  approved by  the                                                            
Legislature.  There is a  reason for the  budgeting process  and the                                                            
separation of powers. The  merits of hiring another medical examiner                                                            
should be determined through  the budgeting process. Furthering this                                                            
legislation  might establish an unwanted  precedence. Were  a second                                                            
medical  examiner   deemed  necessary,  the  Administration   should                                                            
advance it through the budgetary process.                                                                                       
                                                                                                                                
Ms. Szymanski  "expressed"  the sponsor's  concern that the  problem                                                            
with the medical examiner  position is one that "would not go away".                                                            
The State's  population  is increasing  and would  warrant a  second                                                            
medical examiner.  "It's an issue  that needs to be dealt  with, and                                                            
that's the only reason why we bring this forward."                                                                              
                                                                                                                                
Co-Chair Wilken acknowledged.                                                                                                   
                                                                                                                                
Senator Olson, a medical  doctor, spoke to the need of there being a                                                            
second medical  examiner.  The current medical  examiner is  nearing                                                            
retirement age and "is  overworked". He has been "worked to the bone                                                            
and has  done a  very good  job of trying  to keep  up, but he  only                                                            
human". The  requirements of the position  are numerous.  Therefore,                                                            
he would support  adding a Deputy Medical Examiner  position due "to                                                            
the intensity of the need".                                                                                                     
                                                                                                                                
Co-Chair  Green  voiced  concern  to  the fact  that  the  bill  was                                                            
accompanied  by a  Department  of Health  and Social  Services  zero                                                            
fiscal  note,  as  the  funding  mechanism  of  the  second  medical                                                            
examiner position was unclear.                                                                                                  
                                                                                                                                
6:13:49 PM                                                                                                                    
                                                                                                                                
Co-Chair Green joined Co-Chair  Wilken in his concern of the process                                                            
being forwarded  by this legislation, as, in her tenure  as a member                                                            
of  the  Legislature,  she could  not  recall  ever  entertaining  a                                                            
request  to  add a  staff  position  "through  this  process".  Such                                                            
requests  have  historically  been advanced  through  the  budgetary                                                            
process.                                                                                                                        
                                                                                                                                
DR.  RICHARD  MANDSANGER,  Director,   Division  of  Public  Health,                                                            
Department  of Health  and Social  Services informed  the  Committee                                                            
that the Department  currently has sufficient funding  in its budget                                                            
for  two  medical  examiners.  He informed  the  Committee  that  an                                                            
individual  was  offered the  job  as deputy  medical  examiner  the                                                            
previous day. This legislation  would "mandate" that the State would                                                            
always  have a  minimum of  two medical  examiners.  That number  is                                                            
warranted.  No fiscal expense  accompanies  this bill, as funds  are                                                            
currently available through  which to support two medical examiners.                                                            
While  the  Department  has had  the  ability  to have  two  medical                                                            
examiners,  this  legislation would  include  in State  Statute  the                                                            
language "shall appoint" a deputy medical examiner.                                                                             
                                                                                                                                
Dr.  Mandsanger  acknowledged   Co-Chair  Wilken's  comments   about                                                            
adhering  to   budgetary  process   procedures,  and  informed   the                                                            
Committee  that,  in  all likelihood,   he would  be  testifying  in                                                            
support of the needs of  the Medical Examiners' Office during future                                                            
budgetary proceedings.                                                                                                          
                                                                                                                                
6:15:41 PM                                                                                                                    
                                                                                                                                
Dr. Mandsanger informed  the Committee that a $100,000 increment was                                                            
included  in the  Governor's  FY  06 operating  budget  proposal  to                                                            
support the infrastructure and needs of two medical examiners.                                                                  
                                                                                                                                
Co-Chair Green  ascertained therefore  that that was the  reason for                                                            
there  being  a  zero   fiscal  note  with  this  legislation.   The                                                            
Governor's  budget would include the  funding needed to support  the                                                            
second medical examiner position.                                                                                               
                                                                                                                                
Dr. Mandsanger concurred.                                                                                                       
                                                                                                                                
6:16:07 PM                                                                                                                    
                                                                                                                                
In response  to  a question  from  Co-Chair Green,  Co-Chair  Wilken                                                            
stated that his  concerns, as previously stated, are  on the record.                                                            
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
AT EASE 6:16:39 PM / 6:17:37 PM                                                                                             
                                                                                                                                
There  being  no  objection,  SCS  HB  225(HES)  was  REPORTED  from                                                            
Committee  with zero fiscal  note #1 dated  March 30, 2005  from the                                                            
Department of Health and Social Services.                                                                                       
                                                                                                                                
6:18:04 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 123(RLS) am                                                                                          
     "An  Act relating to  occupational licensing  fees, fines,  and                                                            
     penalties   and  to  regulatory  board  fines;   extending  the                                                            
     termination  dates of the Boards  of Barbers and Hairdressers,                                                             
     Social  Work  Examiners,  Pharmacy,  Professional  Counselors,                                                             
     Psychologist   and  Psychological   Associate  Examiners,   and                                                            
     Veterinary  Examiners;  relating to psychologist  licensing  by                                                            
     credentials;  relating to an exemption that allows  one bill to                                                            
     continue  more than one board,  commission, or agency  program;                                                            
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
JOSH APPLEBEE,  Staff  to Representative  Tom  Anderson, the  bill's                                                            
sponsor, informed the Committee  that this legislation would provide                                                            
for  the extension  of  six  different  State  Boards slated  to  be                                                            
terminated. The  Division of Legislative Audit has  recommended that                                                            
each  of the six  boards  be extended.  This bill  would extend  the                                                            
Board of Barbers  and Hairdressers  to the year 2011; the  Boards of                                                            
Social   Work   Examiners,   Pharmacy,   Professional   Counselors,                                                             
Psychologist  and  Psychological  Associate  Examiners  to the  year                                                            
2010, and the Board of Veterinary Examiners to the year 2009.                                                                   
                                                                                                                                
Mr. Applebee  shared that  the bill  would also  allow the Board  of                                                            
Psychologist   and  Psychological   Associate  Examiners   to  adopt                                                            
regulations that  would recognize other credentialing  organizations                                                            
beyond the  current American  Board of  Professional Psychology.  To                                                            
this  point, the  Board must  insure that  this  expansion would  be                                                            
limited to  recognizing only those  organizations whose credentials                                                             
were similar or higher  than the licensing requirements specified in                                                            
State Statute.                                                                                                                  
                                                                                                                                
6:19:51 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked whether the  extensions of these Boards  could                                                            
be characterized as "routine" extensions.                                                                                       
                                                                                                                                
Mr. Applebee affirmed.                                                                                                          
                                                                                                                                
Co-Chair Green  noted that the one exception would  be the expansion                                                            
of the credential  language pertaining to the Board  of Psychologist                                                            
and Psychological Associate Examiners.                                                                                          
                                                                                                                                
PAT DAVIDSON,  Legislative Auditor,  Division of Legislative  Audit,                                                            
Legislative  Affairs Agency  commented  in regards  to the  proposed                                                            
extension  dates.  She  noted  that the  Division  was  required  to                                                            
conduct  audits  of 12  boards  and  commissions  that were  due  to                                                            
terminate  this year. Therefore,  in an effort  to avert  overlaying                                                            
auditing  of numerous boards  in the future,  the Division  utilized                                                            
extension timeframes  ranging between four to six  years, as opposed                                                            
to the standard  four-year extension.  In addition, the audit  noted                                                            
that  contrary to  previous audit  findings  in which  the Board  of                                                            
Barbers  and  Hairdressers  licensing   fees  had  not sufficiently                                                             
covered the expenses  of operating its Board, the  increased license                                                            
fees are now sufficient  in that regard. However, the Division would                                                            
recommend  that the licensing  fees of both  the Boards of  Pharmacy                                                            
and   Psychologist   and  Psychological   Associate   Examiners   be                                                            
increased.                                                                                                                      
                                                                                                                                
AT EASE 6:21:50 PM / 6:22:37 PM                                                                                             
                                                                                                                                
Senator   Olson  understood   that   the   credentialing   expansion                                                            
pertaining to the Board  of Psychologist and Psychological Associate                                                            
Examiners, as  reflected in Sec. 7(3) page two lines  25 through 28,                                                            
would serve to  allow a person meeting the specified  credentials to                                                            
obtain their license.                                                                                                           
                                                                                                                                
Mr.  Applebee  affirmed  that  to  be  correct,  provided  that  the                                                            
individual's  credentials   were  the  same  or  higher  than  those                                                            
specified in Statute.                                                                                                           
                                                                                                                                
6:23:21 PM                                                                                                                    
                                                                                                                                
Senator  Olson asked  the  reason for  expanding  the credentialing                                                             
organizations in that regard.                                                                                                   
                                                                                                                                
Mr.  Applebee responded  that  the  goal would  be to  increase  the                                                            
number of people practicing in that field.                                                                                      
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being no  objections,  CS HB 123(RLS)  am  was REPORTED  from                                                            
Committee with  zero fiscal note #1 dated February  3, 2005 from the                                                            
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
6:24:27 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 215(FIN)                                                                                             
     "An  Act relating  to the  investment responsibilities  of  the                                                            
     Alaska  Permanent  Fund Corporation;  relating  to regulations                                                             
     proposed  and adopted  by the Board of  Trustees of the  Alaska                                                            
     Permanent  Fund Corporation  and providing  procedures  for the                                                            
     adoption  of regulations  by the  board; and  providing for  an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
MIKE  BURNS,   Chief  Executive  Officer,   Alaska  Permanent   Fund                                                            
Corporation,  Department of Revenue,  stated that the issue  at hand                                                            
is  the question  as  to "why  the  Prudent  Investor  Rule even  be                                                            
considered   as  the  primary  overarching   policy  governing   the                                                            
investment  of  the Alaska  Permanent  Fund."  The initial  step  in                                                            
addressing  this question  would be to review  the Alaska  Permanent                                                            
Fund Corporation  (APFC)'s "mission, which is to maximize  the value                                                            
of  the Permanent  Fund  through prudent  long-term  investment  and                                                            
protection   of  principal   to  produce   income  to  benefit   all                                                            
generations of Alaskans".                                                                                                       
                                                                                                                                
Mr. Burns read  portions of his written testimony  [copy on file] as                                                            
follows.                                                                                                                        
                                                                                                                                
     It is not difficult  to see the many challenges inherent in the                                                            
     Permanent  Fund's  mission and  equally easy  to see that  they                                                            
     often are  in conflict. Maximizing returns in  a manner that is                                                            
     prudent,  doing so over  the long-run  (indeed perpetuity)  and                                                            
     still  protecting   Fund  principle  while  at  the  same  time                                                            
     producing   and  distributing  substantial   levels  of  income                                                            
     annually  in perpetuity (across future generations)  is a major                                                            
     challenge  for those charged with investing the  Fund's assets.                                                            
                                                                                                                                
     For  several  hundred  years,  most  trustees   facing  similar                                                            
     challenges  have operated under a "prudent" policy  implemented                                                            
     by a simple  constraint: permit  the investment of fund  assets                                                            
     in  only those  instruments  which, when  viewed individually,                                                             
     were likely to produce  income and protect the nominal value of                                                            
     the fund.  These instruments were few and primarily  focused on                                                            
     fixed  income.   This  particular  foundation   for  a  prudent                                                            
     investment   policy  succeeded   in  some  respects,   but  has                                                            
     generally  failed  to meet the  full spectrum  of requirements                                                             
     such  as those  expressed in  the Permanent  Fun's Mission.  IN                                                            
     particular:                                                                                                                
                                                                                                                                
        · The predominate, and in some cases, exclusive use of                                                                  
          fixed income and related securities left the real corpus                                                              
          extremely vulnerable to inflation.                                                                                    
                                                                                                                                
     Over the last three  decades, trustees facing challenges highly                                                            
     similar,  and  in some  cases identical,  to  those facing  the                                                            
     Alaska  Permanent Fund, have  been abandoning the "restrictive                                                             
     list" foundation  for implementing a prudent  investment policy                                                            
     and  instead have  adopted  the Prudent  Investor  Rule as  the                                                            
     guiding policy for investment fund assets.                                                                                 
                                                                                                                                
Mr. Burns noted  that 44 of the 50 states in the United  States have                                                            
moved away from the restrictive or statutory lists.                                                                             
                                                                                                                                
     The  Prudent Investor  Rule's  underlying premise  is that  the                                                            
     primary  responsibility  of the fiduciaries  is to ensure  that                                                            
     the  estimated  risk  and  return  of the  total  portfolio  is                                                            
     appropriate  in light  of risk  tolerances  and the  particular                                                            
     objectives of the  assets. This focus on the least estimates of                                                            
     the  total  portfolio's  long-term   behavior  along  with  the                                                            
     development  of  modern  portfolio  theory   has fundamentally                                                             
     changed the foundation for "prudent" fiduciary behavior…                                                                   
                                                                                                                                
     In current  law, this  emphasis on the  whole portfolio  rather                                                            
     than individual investment  categories the fiduciary is said to                                                            
     have  " a duty to  evaluate investments  in the context  of the                                                            
     portfolio  as  a whole  while  the duty  to  select  reasonable                                                            
     levels  of risk are  targeted to the  fund and diversification                                                             
     itself becomes as a fiduciary obligation…                                                                                  
                                                                                                                                
     The relevant point  for the Alaska Permanent Fund is that it is                                                            
     quite possible  that either now or at some time  in the future,                                                            
     the inability  to access a broader  range of asset classes  may                                                            
     result  in the creation of a  Fund that contains either  excess                                                            
     risk or unnecessarily lower long-term returns.                                                                             
                                                                                                                                
Mr. Burns referred  Committee Members  to the "'Efficient  Frontier'                                                            
of Investments"  graph  on page four  of the  Alaska Permanent  Fund                                                            
Corporation handout titled  "Reducing Risk, Increasing Return" [copy                                                            
on  file].  The graph's  horizontal  axis  measures  risks  and  the                                                            
vertical  axis measures expected  returns.  The lower graph-line  in                                                            
the chart depicts the "Efficient  Frontier" for the Alaska Permanent                                                            
Fund "as  constrained by  the current statutory  list". Each  of the                                                            
dots on that line  reflects the "risk and return characteristics  of                                                            
different  asset  allocations".   The  square  mark  on  that  line,                                                            
referred to as "#8 March  2004 Target" is indicative of the risk and                                                            
return level of the Fund  today, which is a 7.83 percent return with                                                            
10.29 percent standard deviation.                                                                                               
                                                                                                                                
Mr. Burns  continued  that the upper  graph line  would reflect  the                                                            
Permanent  Fund's  portfolio  were  it instead  constrained  by  the                                                            
Prudent  Investor  Rule.  The  points  on  that  line  also  reflect                                                            
differing  asset allocation  categories. The  "green square"  on the                                                            
upper  graph  line  would reflect  the  7.83  percent  return  being                                                            
currently experienced.  Under the  Prudent Investor Rule  that level                                                            
would be  obtained with  lesser risk.  The level  of risk  currently                                                            
being  experienced  is reflected  on  the upper  line  by mark  "6";                                                            
however,  under the proposed  Prudent Investor  rule, that  level of                                                            
risk would be accompanied by a one percent increase in returns.                                                                 
                                                                                                                                
Mr. Burns  stressed  that, "the  constraints of  the statutory  list                                                            
today are  pushing us  in the direction  of higher  risks for  lower                                                            
returns and that is not what any of us are seeking".                                                                            
                                                                                                                                
[NOTE: Co-Chair Wilken assumed chair of the Meeting.]                                                                           
                                                                                                                                
6:31:32 PM                                                                                                                    
                                                                                                                                
Senator   Stedman,   referencing   the   differences   between   the                                                            
aforementioned  marks  "6"  and  "8", asked  "how  accurate  is  the                                                            
measurement  of that when  you have static  investments that  aren't                                                            
actively traded". He noted  that the Alaska State Pension Investment                                                            
Board (ASPIB)  had provided  testimony to  the effect that  standard                                                            
deviations were difficult  to estimate and therefore not included in                                                            
their reports.                                                                                                                  
                                                                                                                                
Mr.  Burns asked  whether  Senator  Stedman  was referring  to  real                                                            
estate or private equities.                                                                                                     
                                                                                                                                
Senator  Stedman clarified  that his  remarks  pertained to  private                                                            
equities.                                                                                                                       
                                                                                                                                
Mr. Burns explained  that the APFC includes "those  in our financial                                                            
projections  with  their  expected  internal  rate of  return."  The                                                            
determination  is that that is the most accurate manner  in which to                                                            
reflect it. Private equities,  at a level of $2,900,000, are a small                                                            
asset, and  at this time,  do not have much  affect. He pointed  out                                                            
that the graph depicts  "expected return and expected risk" based on                                                            
"historical factors for these asset categories".                                                                                
                                                                                                                                
6:33:03 PM                                                                                                                    
                                                                                                                                
Senator Stedman  recalled  that the APFC  asset allocation  had been                                                            
increased by  five-percent the previous  year in order to  allow the                                                            
Fund "to have  more liquid assets classes" to help  it "increase its                                                            
return and,  in theory, decrease its  volatility at the same  time".                                                            
He asked whether that level had been obtained to date.                                                                          
                                                                                                                                
6:33:42 PM                                                                                                                    
                                                                                                                                
Mr. Burns replied that  that level has not been reached. He exampled                                                            
that the  University  of Alaska  Foundation has  specified that  18-                                                            
percent  of  its  assets  would  go into  what  is  referred  to  as                                                            
"alternative investments",  which "are basically basket  clause type                                                            
of investments"  to which Senator Stedman has referred.  Even though                                                            
the University  is having difficulty reaching the  18-percent, there                                                            
are  now commitments  to increase  that  level to  24-percent.  "You                                                            
don't  control  when the  money  goes out  the  door and  you  don't                                                            
control  when  it comes  back  on  some  of these  private  type  of                                                            
investments, so  you need to over-commit if you are  going to get to                                                            
your  target." APFC  Trustees,  through "the  powers  granted to  us                                                            
through  the   additional  basket   clause  made  a  commitment   of                                                            
$600,000,000 to private  equity". $240,000,000 of that $600,000,000,                                                            
allocation   has  been   committed,   and  of   that  $240,000,000,                                                             
"$2,900,000  is out the door. It is  a very lengthy process."  It is                                                            
necessary to  over-commit in order  to reach the level desired.  The                                                            
mechanism  to avoid  a situation  of over-commitment  is to  include                                                            
"contractual  obligations  and a  statutory limitation".  Those  are                                                            
necessary even  though "it would be highly unlikely"  for all of the                                                            
commitments "to be called at one time".                                                                                         
                                                                                                                                
6:35:20 PM                                                                                                                    
                                                                                                                                
Senator Stedman acknowledged.                                                                                                   
                                                                                                                                
[NOTE: Co-Chair Green resumed chair of the meeting.]                                                                            
                                                                                                                                
Senator Stedman  spoke to the "bigger issue" of the  underfunding of                                                            
the  Public Employees  Retirement  System  (PERS) and  the  Teachers                                                            
Retirement  System (TRS).  Efforts are being  taken to address  that                                                            
$5,700,000,000   under-funding   situation.   To   that  point,   he                                                            
questioned  whether this would be  the appropriate time to  consider                                                            
the  proposal being  advanced  in  this bill.  He suggested  that  a                                                            
better  time would be  to address  it in January  and February  2006                                                            
when the Committee  could review the  portfolio of the PERS  and TRS                                                            
Trust Assets and  the Permanent Fund (PF). He noted  that ASPIB does                                                            
not currently  operate under  the auspice of  a statutory list,  and                                                            
that they currently  "have more volatility, and they  seem to have a                                                            
little  higher return  on the  upside and  a lower  one on the  down                                                            
side."  He argued  that it would  be "a  nice fit"  for the  Finance                                                            
Committee to address  "this issue at the same time  because they are                                                            
very closely  related. The  education" that  would be gained  on the                                                            
part of both  the public and the Legislature  were those  efforts to                                                            
"run simultaneously" or in close sequence would be beneficial.                                                                  
                                                                                                                                
6:37:31 PM                                                                                                                    
                                                                                                                                
Senator Stedman noted that  the five-percent allocation increase the                                                            
Legislature  had provided  APFC through the  basket clause  does not                                                            
appear  to  be  "maxed  out yet"  so  a  delay  in  addressing  this                                                            
legislation would  not place "the PF at any major  disadvantage". He                                                            
"recognized"  that over  the last  decade the PF  has endeavored  to                                                            
move away from the statutory list.                                                                                              
                                                                                                                                
6:37:48 PM                                                                                                                    
                                                                                                                                
Mr.  Burns spoke  to the  timing  issue by  conveying  that APFC  is                                                            
convinced that the proposal  being forwarded "is the right concept".                                                            
In addition, APFC is convinced  that the current process is "hurting                                                            
the Fund's performance".  Yesterday, for example, the Fund increased                                                            
in value  for approximately  $250,000,000,  which is less than  one-                                                            
percent.  To that point,  he questioned  whether  waiting to  act on                                                            
this proposal would be  the right thing to do considering the Fund's                                                            
volatility.  "We would love  to be part of  the State's process  "of                                                            
re-thinking  how the State invests  its assets", however,  it should                                                            
be noted that,  were this legislation  adopted, it would  not become                                                            
effective until  January 1, 2006.  Adopting this proposal  now would                                                            
allow  time for  regulations  to be developed  so  that the  process                                                            
could  begin in  January.  It would  also allow  APFC  to develop  a                                                            
report "as  a precursor to how you  deal with the new" PERS  and TRS                                                            
Board and the PERS/TRS assets. That "would be very timely".                                                                     
                                                                                                                                
6:39:23 PM                                                                                                                    
                                                                                                                                
Senator Stedman  pointed out  that many of  the asset classes  being                                                            
considered  "are  already liquid".  Therefore,  he  questioned  "the                                                            
accuracy of pricing;  at best they're estimates".  The true value is                                                            
provided when the asset is liquidated.                                                                                          
                                                                                                                                
6:39:39 PM                                                                                                                    
                                                                                                                                
Mr. Burns agreed  to Senator Stedman's  comments as they  pertain to                                                            
"the real estate  side". Those prices  are re-evaluated every  other                                                            
or every third year. While  those changes in value are not reflected                                                            
in the  Fund's  financial  statements, they  are  considered in  the                                                            
Fund's performance.  "You don't know what real estate's  worth until                                                            
you sell it." Some of the  Fund's longer term liquid assets in terms                                                            
of the  Efficient Frontier",  as opposed to  assets we have,  again,                                                            
are historical performances  of these asset categories". Each dot on                                                            
the aforementioned  graph represents  "historical costs".  Therefore                                                            
rather than  reflecting performance,  the graph would present  asset                                                            
allocation.                                                                                                                     
                                                                                                                                
6:40:41 PM                                                                                                                    
                                                                                                                                
Senator  Stedman  stated  that  in  order  "to  calculate   standard                                                            
deviation, you have to  have a movement in price". Absent a movement                                                            
in price, "you  have to estimate or  guessimate it". Therefore  when                                                            
considering "inactively  traded security you've got daily monthly or                                                            
weekly  pricing"  which  could  be  used  "to  gauge  that  standard                                                            
deviation that moves over time".                                                                                                
                                                                                                                                
6:41:14 PM                                                                                                                    
                                                                                                                                
Mr. Burns agreed,  with the exception  being for instance  that such                                                            
things as private  equity "is a liquid,  it's not priced  daily, but                                                            
the standard deviation  is figured from its historical movement", or                                                            
"its actual movement over  time". There is enough history from which                                                            
to develop standard deviations  and historical returns for all these                                                            
asset classes.  The historical performance upon which  we are basing                                                            
asset allocation is "there for all the asset categories".                                                                       
                                                                                                                                
6:41:57 PM                                                                                                                    
                                                                                                                                
Senator  Stedman responded  "that, at  best it's  a smoothing  issue                                                            
with the price movements".  Absent movement in the market from which                                                            
"to actually gauge what  it is, you're going to have points when you                                                            
sell it and points when you buy it".                                                                                            
                                                                                                                                
Senator Stedman  reiterated that ASPIB, which does  not operate with                                                            
statutory  list constraints,  would appear  to have more  volatility                                                            
than the PF,  "with higher highs and  lower lows". He was  uncertain                                                            
as  to whether  the  Legislature  "wouldn't  be  better  served"  to                                                            
address these  situations "at a similar  timeframe" when  time could                                                            
be provided to thoroughly make a decision.                                                                                      
                                                                                                                                
6:43:18 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  noted that "it has  been interesting … to  watch the                                                            
transition over the years  and how it's moved very slowly … from the                                                            
different  percentages  and the  changes  …. It  is  always a  tough                                                            
conversation."                                                                                                                  
                                                                                                                                
Mr. Burns  stated that when  discussing "the  valuations of  some of                                                            
these assets…"  it must be  noted that the  PF is not solely  basing                                                            
the standard  deviation on  how the PF assets  perform, but  also on                                                            
the information  of APFC's  consultant who  has a universe of  a 110                                                            
funds similar  to the PF. "It's how  these assets perform  over that                                                            
universe." He "agreed completely  with the assessment that as we get                                                            
into these in  small amounts, our experience won't  be that additive                                                            
to what  the universe  is for  quite a  while, but  the universe  is                                                            
there  and,  for  our purposes  and  planning,  it's  a  very  valid                                                            
timeframe and returns."                                                                                                         
                                                                                                                                
Co-Chair  Wilken recalled this  being the third  time that  APFC has                                                            
asked this  Committee to  change the Statute  that controls  how the                                                            
Fund could be invested.  Both of the previous requests were approved                                                            
and the Fund continues,  "to exceed all of our expectations".  While                                                            
being  appreciative of  Senator  Stedman's concerns,  he  calculated                                                            
that a one percent  change that would equate to $300,000,000  a year                                                            
or  $6,000,000 a  week,  could be  lost  were this  legislation  not                                                            
advanced.  That would fund  a lot of education  needs in the  State.                                                            
Therefore delaying  this legislation  a year would cost the  State a                                                            
significant amount of money.                                                                                                    
                                                                                                                                
Mr.  Burns  affirmed   that  Co-Chair  Wilken's  calculations   were                                                            
correct. "Time  is not your friend  on this." Delaying this  process                                                            
would not  correct "what  all of our experts  and consultants"  have                                                            
concluded we are  doing to ourselves. "This fund is  very deliberate                                                            
in its  approach to  things", and  therefore, a  lengthy process  is                                                            
involved. This  issue has been discussed for quite  a while and APFC                                                            
is "convinced that this is the right thing to do".                                                                              
                                                                                                                                
6:46:39 PM                                                                                                                    
                                                                                                                                
Senator Stedman  argued against the  correctness of the math,  as it                                                            
is dependent  on the  market. Were  the market  to advance  "sharply                                                            
higher", he would  expect the returns to be larger.  Were the market                                                            
to continue flat  or to decline, as reflected by ASPIB's  portfolio,                                                            
the results  might be "average  or worse".  Therefore, the  movement                                                            
from  the  point  at  which  the  policy  was  implemented  "to  the                                                            
measuring point"  would be a factor.  "Markets do not always  go up"                                                            
and  were  the  measurements   taken  "on  an  up  day   that's  one                                                            
measurement period"  and were they taken on a "down  day" that would                                                            
be another period. "It's not a linear relationship."                                                                            
                                                                                                                                
Mr. Burns concurred  that markets move both ways.  He had considered                                                            
Co-Chair Wilken's  remarks to reflect  "the opportunity"  that might                                                            
be there.                                                                                                                       
                                                                                                                                
Co-Chair Wilken  remarked that that  is a measure of risk.  However,                                                            
he  noted  that,  as  reflected  on  the  aforementioned   Efficient                                                            
Frontier graph that the  State would not be changing its risk factor                                                            
were this legislation  adopted. "The  fluctuation up and  down would                                                            
be the same regardless"  of whether the status quo  was continued or                                                            
changed to the asset allocation being proposed.                                                                                 
                                                                                                                                
Mr. Burns affirmed  that changing  to the proposed asset  allocation                                                            
would not alter the standard  deviation. "What is equally important"                                                            
to note  is that the point  at which the  proposed allocation  would                                                            
achieve  the same  yield  as the  status quo,  as  reflected by  the                                                            
"Expected  Return" point  on the  proposed asset  allocation  graph-                                                            
line, would  be a point of reduced  risk. This would provide  "quite                                                            
an opportunity".                                                                                                                
                                                                                                                                
Co-Chair  Wilken  voiced  appreciation  for  the  inclusion  of  the                                                            
language reflected at the  bottom of page four on the aforementioned                                                            
handout that reads as follows.                                                                                                  
                                                                                                                                
     Increasing  the  Fund's  investment  options  would  allow  the                                                            
     Trustees  greater  flexibility  in managing  the  Fund for  the                                                            
     benefit  of all  Alaskans, whether  it is  for greater  return,                                                            
     lower risk or both. This is especially important as the                                                                    
     Legislature begins to contemplate the use of Fund earnings for                                                             
     more than just the dividend program.                                                                                       
                                                                                                                                
Senator  Stedman  understood  that  "the  Efficient  Frontier  is  a                                                            
dynamic instrument"  and would change  according to the measurement                                                             
period  being considered.  "It's not  static line."  The line  would                                                            
appear different according to the time period.                                                                                  
                                                                                                                                
6:49:43 PM                                                                                                                    
                                                                                                                                
Mr.  Burns  clarified  that  the  Efficient   Frontier  chart  being                                                            
referenced  "is not  a point  in time,  that is  an accumulation  of                                                            
time; those are historical  numbers". He was uncertain as to whether                                                            
the graph  depicted the  scenario for  either the  past five  or ten                                                            
years.                                                                                                                          
                                                                                                                                
Senator Stedman  understood that to  be the case. His point  is that                                                            
the line would change for any ten-year rolling average.                                                                         
                                                                                                                                
Mr. Burns concurred  that the slope  of the line on the graph  would                                                            
change according to the timeframe.                                                                                              
                                                                                                                                
Senator  Stedman  agreed  that, "theoretically,   these investments                                                             
should produce  and allow the portfolio  to receive a higher  return                                                            
for less volatility".                                                                                                           
                                                                                                                                
Mr. Burns responded that that is exactly the point.                                                                             
                                                                                                                                
6:50:43 PM                                                                                                                    
                                                                                                                                
Senator  Olson  asked how  significant  the  three-percentage  point                                                            
standard  deviation   reflected  on  the  aforementioned   Efficient                                                            
Frontier graph is when compared to other investment scenarios.                                                                  
                                                                                                                                
Mr. Burns responded  that the standard deviation in  relationship to                                                            
today's 10.29 percent return would be "pretty significant".                                                                     
                                                                                                                                
Senator Olson  asked how the three percent standard  deviation would                                                            
compare to other similar investment portfolios.                                                                                 
                                                                                                                                
Mr.  Burns   communicated  that  the   PF  portfolio  is   a  fairly                                                            
"conservative asset mix".  It is very different from a pension fund,                                                            
which has fixed  liabilities. While  he did not consider  the Fund's                                                            
standard deviation to be  "out of line", he expressed that it is out                                                            
of line  when considered  the return it is  generating. "That's  the                                                            
ratio" that should be considered.                                                                                               
                                                                                                                                
6:52:06 PM                                                                                                                    
                                                                                                                                
Senator Stedman  commented that the portfolio's assets  have evolved                                                            
to  a  60-percent   equities  and   40-percent  bonds  balance.   He                                                            
understood  that  since the  market  experienced  "turbulent"  times                                                            
around the year 2000, there  has been a tendency "for asset managers                                                            
to look out  away from the equity  markets that are traded"  on such                                                            
things as the  New York stock exchange and to "try  to go into other                                                            
asset  classes to  tone down  the volatility"  and  to achieve  more                                                            
diversitility.                                                                                                                  
                                                                                                                                
6:53:03 PM                                                                                                                    
                                                                                                                                
Mr.  Burns affirmed  this  to be true.  The  PF has  a very  diverse                                                            
portfolio  including  investments in  worldwide  equity markets;  in                                                            
small, mid,  and large  capitalized markets;  and emerging  markets.                                                            
Efforts are exerted  to achieve a good balance. He  anticipated that                                                            
"the  bigger  change"  would  be  the  shift   "to  absolute  return                                                            
strategies" rather than  fixed income markets in an effort to remove                                                            
volatility.                                                                                                                     
                                                                                                                                
AT EASE 6:54:00 PM / 6:54:23 PM                                                                                             
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
AT EASE 6:54:42 PM / 6:56:35 PM                                                                                             
                                                                                                                                
There  being  no  objection,  CS  HB  215(FIN)   was  REPORTED  from                                                            
Committee  with zero fiscal  note #1  dated April  8, 2005 from  the                                                            
Department of Revenue.                                                                                                          
                                                                                                                                
6:56:53 PM                                                                                                                    
                                                                                                                                
AT EASE 6:57:21 PM / 7:12:54 PM                                                                                             
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 46                                                                                                         
     "An Act making capital appropriations and appropriations to                                                                
      capitalize funds; and providing for an effective date."                                                                   
                                                                                                                                
                                                                                                                                
This  bill  had  been   heard  previously  in  the  Senate   Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Amendments   are  considered   to   the  working   draft   committee                                                            
substitute, Version 24-GS1074\Y, unless otherwise noted.                                                                        
                                                                                                                                
Amendment   #64:  This   amendment   increases   the  general   fund                                                            
appropriation  made in subsection  (B) of Section 32. DEPARTMENT  OF                                                            
TRANSPORTATION  AND PUBLIC  FACILITIES., on  page 102, lines  16 and                                                            
17, to the Department for  emergency and nonroutine maintenance from                                                            
$743,400 to $1,631,400.  Accompanying explanatory  language reads as                                                            
follows.                                                                                                                        
                                                                                                                                
     This increase is needed in the FY 05 Supplemental for                                                                      
     emergency and non routine maintenance and is allocated for the                                                             
     following:                                                                                                                 
     $486,000 Susitna River Road, Trapper Creek                                                                                 
     $402,000 M.P. 13 Tok Cutoff                                                                                                
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
GINGER  BLAISDELL, Staff  to Co-Chair  Green,  stated the  increased                                                            
funding  would  be  utilized  to  address  some  emergency  projects                                                            
revealed in the last few weeks.                                                                                                 
                                                                                                                                
Co-Chair Green told of  "gaping holes" in roads near Tok and Trapper                                                            
Creek. The  Department would have  made these repairs and  requested                                                            
supplemental funding  for the costs if the legislature  had not been                                                            
in session. Because  this bill is still under consideration,  it was                                                            
deemed appropriate to include funding in its appropriation.                                                                     
                                                                                                                                
There being no objection, Amendment #64 was ADOPTED.                                                                            
                                                                                                                                
7:14:24 PM                                                                                                                    
                                                                                                                                
Amendment  #65: This  amendment  deletes  reduces the  general  fund                                                            
appropriation  to the UAF  - Biological  and Computational  Sciences                                                            
Facility (HD [house  district] 7-11) component of  the University of                                                            
Alaska on  page 89, lines  14 through 16 from  $32 million  to $24.2                                                            
million.                                                                                                                        
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell  clarified the amendment reduces the  appropriation by                                                            
$7.8 million.                                                                                                                   
                                                                                                                                
There being no objection, Amendment #65 was ADOPTED.                                                                            
                                                                                                                                
Amendment  #66: This amendment  increases  the appropriation  to the                                                            
Fairbanks  Virology Laboratory  Replacement  (HD 1-40) component  of                                                            
the Department  of Health  and Social Services  on page 88  lines 21                                                            
through  23  from  $4.8 million  to  $24.2  million.  The  amendment                                                            
indicates the  funding source as Certificates of Participation  fund                                                            
code 1163. Accompanying explanatory language reads as follows.                                                                  
                                                                                                                                
     This project is the  Department's number 1 priority. The amount                                                            
     of  $4,800,000  is  not  sufficient  to construct  a  lab.  The                                                            
     original  requested amount of $24,200,000 needs  to be restored                                                            
     to the bill.  Funds would be used for the design,  construction                                                            
     and  equipping  of a  new virology  laboratory  located on  the                                                            
     University  of  Alaska Fairbanks  campus.  Virology  laboratory                                                            
     functions  are a vital  component of public  health. This  is a                                                            
     service  that the state simply  cannot afford to live  without.                                                            
     The existing  virology lab is  old, undersized, and  unsafe. An                                                            
     independent  report refers to  the lab as "an accident  waiting                                                            
     to happen".                                                                                                                
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell outlined the explanatory statement.                                                                               
                                                                                                                                
Co-Chair  Green  understood  the Committee  would  receive  separate                                                            
legislation for  consideration that would provide  for this project.                                                            
                                                                                                                                
Ms. Blaisdell affirmed.                                                                                                         
                                                                                                                                
7:15:57 PM                                                                                                                    
                                                                                                                                
Senator Stedman requested clarification.                                                                                        
                                                                                                                                
Ms.  Blaisdell explained  that  this  amendment would  increase  the                                                            
appropriation the amount  requested in the Governor's proposed FY 06                                                            
capital budget, and change  the funding source from general funds as                                                            
originally proposed.                                                                                                            
                                                                                                                                
Senator Stedman  asked if this appropriation  is in addition  to the                                                            
$4.2 million appropriated for a separate science facility.                                                                      
                                                                                                                                
Ms.  Blaisdell replied  that  the total  appropriation  for the  two                                                            
projects  would be $48.4  million.  The funding  source of the  $4.2                                                            
million appropriation is general funds.                                                                                         
                                                                                                                                
Co-Chair Green  informed of separate legislation to  provide for the                                                            
construction  of a  virology laboratory  utilizing  certificates  of                                                            
participation.                                                                                                                  
                                                                                                                                
Senator  Stedman   requested  further   information  regarding   the                                                            
certificates of participation funding source at a later time.                                                                   
                                                                                                                                
Senator Hoffman  questioned the reference to the project  as located                                                            
in house districts  1 through 40, although the next  project listed,                                                            
the Anchorage  Integrated Science  Facility, is classified  as house                                                            
districts 17 through 32.                                                                                                        
                                                                                                                                
Co-Chair Green replied  that the virology facility would be operated                                                            
by  the Department  of  Health  and  Social Services  and  would  be                                                            
utilized for all house districts.                                                                                               
                                                                                                                                
Senator  Hoffman asked  if the  virology facility  project would  be                                                            
calculated   in  the  total   appropriations   for  each   district,                                                            
specifically   for  the  Fairbanks  area  districts.   He  suggested                                                            
uniformity in comparison to other projects.                                                                                     
                                                                                                                                
Co-Chair  Green   responded  that   further  information   would  be                                                            
forthcoming.                                                                                                                    
                                                                                                                                
7:20:48 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green presumed  the determination  was  made based on  the                                                            
function  of the building.  The proposed  virology laboratory  would                                                            
function  statewide versus  the University  science facility,  which                                                            
would serve the University of Alaska Anchorage primarily.                                                                       
                                                                                                                                
7:21:20 PM                                                                                                                    
                                                                                                                                
CHERYL FRASCA, Director,  Office of Management and Budget, Office of                                                            
the  Governor,  suggested  that to  clarify  that the  project  were                                                            
"statewide in nature" "Fairbanks"  could be deleted from the project                                                            
title. The facility  would be intended to service  the entire state.                                                            
                                                                                                                                
Co-Chair Green  stated that the amendment could be  amended later if                                                            
deemed necessary.                                                                                                               
                                                                                                                                
Co-Chair Green announced that Amendment #66 was ADOPTED.                                                                        
                                                                                                                                
7:22:19 PM                                                                                                                    
                                                                                                                                
Amendment #67:  This amendment changes the name of  the Willow Creek                                                            
State Recreation Area -  Shallow Water Boat Launch and Winter Access                                                            
Trailhead  at Mile 49.7 (HD  13-16) component  of the Department  of                                                            
Natural Resources  on page 42, line 30 through page  43, line 3. The                                                            
amended  component  reads, "Willow  Creek  State Recreation  Area  -                                                            
Phase II:  Parking lot at  crude shallow water  boat launch  site at                                                            
Mile 49.7."                                                                                                                     
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair  Green  stated  this amendment  was  requested  by  Senator                                                            
Charlie Huggins.                                                                                                                
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
7:22:49 PM                                                                                                                    
                                                                                                                                
Amendment  #68: This  amendment  deletes  the Fairbanks  North  Star                                                            
Borough - Chena  River State Recreation  Area / Extend Fire  Control                                                            
Line (HD 7-11) component  and $184,000 general fund appropriation to                                                            
the component from the  Grants to Municipalities (AS 37.05.315) BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
14, lines 4 through 7.                                                                                                          
                                                                                                                                
This amendment also inserts  a new Chena River State Recreation Area                                                            
/ Extend Fire Control Line  (HD 7-11) component to the Department of                                                            
Natural  Resources on  page 39,  line 13 and  appropriates  $184,000                                                            
general funds to the component.                                                                                                 
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This amendment  transfers the funding from the  Fairbanks North                                                            
     Star  Borough to the  Department of  Natural Resources,  as the                                                            
     Chena River State Recreation Area is a state park.                                                                         
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green overviewed the explanatory statement.                                                                            
                                                                                                                                
There being no objection, Amendment #67 was ADOPTED.                                                                            
                                                                                                                                
Amendment #69: This amendment reads as follows.                                                                                 
                                                                                                                                
     1. Amendment  #5 and #13 created a slight imbalance:  Amendment                                                            
     #13 should  change the amount  for the Alaska Siberia  Research                                                            
     Center  to  $100,200  rather  than  $105,200.  This  correction                                                            
     creates the "net zero" reallocation of projects.                                                                           
     2. Point  of clarification only: Amendment #30  does not reduce                                                            
     the total amount of  the NPR-A impact grant program anticipated                                                            
     receipts  it  clarifies  the anticipated  distribution  of  the                                                            
     grants  to affected communities.  The difference of  the amount                                                            
     of  grant awards  compared  to the  amount of  the anticipated                                                             
     receipts  is the amount that  is distributed by statute  to the                                                            
     Public Education Fund and the Power Cost Equalization fund.                                                                
     3.  Point  of clarification   only: Amendment  #33  Sport  Fish                                                            
     Hatcheries  projects are contingent on the sale  of the Revenue                                                            
     Bonds.  The projects are  funded in the  amount of the  revenue                                                            
     bonds.                                                                                                                     
     4. Amendment #35 and  #36: add the following intent: "It is the                                                            
     intent   of   the   Legislature    that   the   Department   of                                                            
     Administration,  Commissioner's  Office distribute the  general                                                            
     fund appropriation  of $4,350,000 across appropriation lines to                                                            
     other  state agencies  to assist  with the  statewide  services                                                            
     chargeback   obligations."  And  "It  is  the   intent  of  the                                                            
     Legislature  that all state agencies  will reimburse  the funds                                                            
     as  required  by the  Statewide  Federal Cost  Allocation  Plan                                                            
     chargeback  to the level that  the funds have been capitalized                                                             
     for future statewide services needs."                                                                                      
     5. Amendment  #37 technical correction: Near  the bottom of the                                                            
     amendment, where the  Sec__ EFFECTIVE DATE (a) Section XX(a) is                                                            
     effective July 1,  2005 - the second (a) should have referenced                                                            
     "(c)".                                                                                                                     
     6. Point  of clarification only:  Amendment #38 Marine  highway                                                            
     fuel  increase is appropriated  directly  to the Department  of                                                            
     Transportation and  Public Facilities, Marine Vessel Operations                                                            
     and not into the marine highway system fund.                                                                               
     7.  Point  of clarification  only:  Amendment  #39  - the  last                                                            
     allocation  list should be $1,000,000  to the Cold Bay  Airport                                                            
     Terminal Redevelopment (not Sand Point).                                                                                   
     8. Clarification to  the amended amendment #50 that the project                                                            
     title  for  $125,000  is  for the  "Arctic  Winter  Games  Team                                                            
     Alaska"                                                                                                                    
     9. Amendment  #55 states "Municipality of Anchorage  - 74th Ave                                                            
     Pedestrian  Facilities  -  Arctic Boulevard  to  Chad St."  and                                                            
     should state 76th Ave…                                                                                                     
     10.  Amendments  #52 through  #56  were  reallocating  priority                                                            
     projects  that  were  originally  identified  under  Grants  to                                                            
     Municipalities  Page  24,  lines 13-15.  With  the addition  of                                                            
      amendments #52 - #56, Page 24, lines 13-15 are deleted.                                                                   
     11. Page 121, Sec 56(b), line 9                                                                                            
     Delete: $2,723,800                                                                                                         
     Insert: $2,723,000 (corrects a mathematical error)                                                                         
     12.  One section was  mission from  Section 61. CONSTITUTIONAL                                                             
     BUDGET  RESERVE  FUND. This  section  is required  so that  the                                                            
     Department of Revenue  can balance the State's cash flow at the                                                            
     fiscal year end.                                                                                                           
     Add:  (c) Unrestricted  interest  earned on  investment of  the                                                            
     general  fund  balances for  the fiscal  year  ending June  30,                                                            
     2006,  is appropriated  to the  budget reserve  fund (art.  IX,                                                            
     sec.   17,  Constitution   of   the  State   of  Alaska).   The                                                            
     appropriation   made   by  this  subsection   is  intended   to                                                            
     compensate   the  budget  reserve  fund  (art.   IX,  sec.  17,                                                            
     Constitution  of the  State of  Alaska) for  any lost  earnings                                                            
     caused  by use of the fund's  balance to permit expenditure  of                                                            
     operating and capital  appropriations in the fiscal year ending                                                            
     June  30,  2006,  in anticipation   of receiving  unrestricted                                                             
     general   fund  revenue.  The   amount  appropriated   by  this                                                            
     subsection may not  exceed an amount equal to the earnings lost                                                            
     by the  budget reserve fund as  the result of the use  of money                                                            
     from  the  budget   reserve  fund  to  permit  expenditure   of                                                            
     operating and capital  appropriations in the fiscal year ending                                                            
     June  30,  2006,  in anticipation   of receiving  unrestricted                                                             
     general fund revenue.                                                                                                      
     13. Page 123, Sec 61(c), line 16                                                                                           
     Delete: $25,000                                                                                                            
     Insert: $167,000                                                                                                           
     14. Section 65. EFFECTIVE DATE.                                                                                            
     (a) include "Sections 4 and 5"                                                                                             
     (c) "Sections 1-5" is changed to "Sections 1-3"                                                                            
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell  stated this amendment  corrects errors in  amendments                                                            
previously  adopted by the Committee.  She read the language  of the                                                            
amendment into the record.                                                                                                      
                                                                                                                                
Ms. Blaisdell noted item #7 should read as follows.                                                                             
                                                                                                                                
     7.  Point  of clarification  only:  Amendment  #39  - the  last                                                            
     allocation listed should be $1,000,000 to Sand Point.                                                                      
                                                                                                                                
7:26:36 PM                                                                                                                    
                                                                                                                                
Senator Olson requested clarification of item #7.                                                                               
                                                                                                                                
Ms. Blaisdell  explained the  allocation of  funds would be  made to                                                            
Sand Point.                                                                                                                     
                                                                                                                                
7:27:32 PM                                                                                                                    
                                                                                                                                
Ms.  Blaisdell continued  reading  the  language of  the  amendments                                                            
language.                                                                                                                       
                                                                                                                                
Without objection, Amendment  #69 was ADOPTED. [No formal action was                                                            
taken on the  proposed amendment to  the amendment. The Committee's                                                             
intent is assumed that the amendment was amended.]                                                                              
                                                                                                                                
7:30:33 PM                                                                                                                    
                                                                                                                                
Amendment  #70: This amendment  deletes the  language of Section  6.                                                            
DEPARTMENT  OF TRANSPORTATION  AND PUBLIC  FACILITIES., on  page 91,                                                            
lines  1 through  16  and inserts  a  new bill  section  to read  as                                                            
follows.                                                                                                                        
                                                                                                                                
          Sec. 6. DEPARTMENT OF TRANSPORTATION AND PUBLIC                                                                       
     FACILITIES.  Subject  to  Sec.  62  of  this Act,  the  sum  of                                                            
     $62,000,000  is  appropriated from  the Alaska  capital  income                                                            
     fund to the Department  of Transportation and Public Facilities                                                            
     for the  following projects in  the amounts stated,  subject to                                                            
      reallocation among the projects under AS 37.07.080(e):                                                                    
                                                               AMOUNT                                                           
                                               From the General Fund                                                            
                                                                                                                                
          McCarthy Road, major maintenance                  $2,000,000                                                          
          Denali  Borough, Stampede  Road Improvements       5,000,000                                                          
                Chena overflow bridge for gas pipeline                                                                          
          DeLong Mountaion, port expansion EIS               2,000,000                                                          
                Completion                                                                                                      
          North Slope, Foothills West Road EIS               4,000,000                                                          
          North Slope, Bullen Point EIS                      5,000,000                                                          
          Dalton Highway, surfacing upgrades                 9,000,000                                                          
          Dalton Highway, Washington Creek Bridge            3,500,000                                                          
          Richardson  Highway, highway  passing lanes        7,500,000                                                          
                Mile Post 265-341                                                                                               
          Richardson Highway, Shaw Creek Bridge              2,500,000                                                          
          Kenai Peninsula: Kalifornsky Beach Road           11,000,000                                                          
                Rehabilitation                                                                                                  
          Industrial Roads                                   7,000,000                                                          
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Note: all of the above road projects are classified as                                                                     
     "Resource Development Projects" and are using revenues from                                                                
     the interest earnings of the AMHESS settlement.                                                                            
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair  Wilken then  offered a motion  to amend  the amendment  to                                                            
reduce the  allocation to Industrial  Roads from $7 million  to $3.5                                                            
million  and insert  a new  Wickersham  Street Upgrade  -  Fairbanks                                                            
project and allocate $3.5 million to that project.                                                                              
                                                                                                                                
Co-Chair Green  clarified the amendment to the amendment  would have                                                            
a net zero impact on the provisions of the amendment.                                                                           
                                                                                                                                
Senator  Hoffman asked  the  location of  the industrial  roads  and                                                            
which of those  industrial road projects would be  eliminated by the                                                            
amendment of the amendment.                                                                                                     
                                                                                                                                
7:32:19 PM                                                                                                                    
                                                                                                                                
Ms.  Blaisdell replied  that  most  of the  roads were  included  as                                                            
projects  in the  Governor's  proposed  FY  06 capital  budget.  She                                                            
detailed the location of each road listed in the amendment.                                                                     
                                                                                                                                
Co-Chair Wilken  and Ms. Blaisdell  established the location  of the                                                            
roads.                                                                                                                          
                                                                                                                                
Co-Chair Green  clarified that Senator  Hoffman was inquiring  about                                                            
the industrial roads.                                                                                                           
                                                                                                                                
Ms. Blaisdell explained  that the classification of industrial roads                                                            
is  discretionary  by  the  Department  and  are  "high  use  roads"                                                            
utilized by heavy equipment.                                                                                                    
                                                                                                                                
7:34:50 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  announced that the Committee amended  Amendment #70,                                                            
as  proposed  by  Co-Chair  Wilken.  She  requested  the  Department                                                            
respond to Senator Hoffman's question.                                                                                          
                                                                                                                                
JOHN  MACKINNON,   Deputy  Commissioner   of  Highways  and   Public                                                            
Facilities, Department  of Transportation and Public Facilities, was                                                            
unable  to immediately  state which  projects  would be eliminated.                                                             
Some of the funds proposed  for this item are intended for "projects                                                            
of  opportunity  that  come  along". The  reduced  amount  would  be                                                            
adequate.                                                                                                                       
                                                                                                                                
Senator Hoffman  requested identification of some  industrial roads.                                                            
                                                                                                                                
7:36:19 PM                                                                                                                    
                                                                                                                                
Mr. MacKinnon told of a  suspended project on the Culver River Road,                                                            
efforts undergoing  on the "Pebble Copper" including  reconnaissance                                                            
engineering,  preliminary   environmental  impact  statement   (EIS)                                                            
activities and coordination work with Northern Dynasty.                                                                         
                                                                                                                                
Senator  Stedman clarified  the allocation  to the industrial  roads                                                            
item is  a discretionary  fund for use projects  intended to  expand                                                            
resource development.                                                                                                           
                                                                                                                                
Mr. MacKinnon affirmed the characterization.                                                                                    
                                                                                                                                
Co-Chair Green announced that Amendment #70 was ADOPTED.                                                                        
                                                                                                                                
Ms. Blaisdell stated that  although the amendment stipulates general                                                            
funds as the  funding source, the  appropriation would be  made from                                                            
interest  earnings  from  the  commonly  referred  to  Amerada  Hess                                                            
account of the Alaska Permanent Fund.                                                                                           
                                                                                                                                
Senator Hoffman called  a point of order in that no action was taken                                                            
on the motion to amend the amendment.                                                                                           
                                                                                                                                
Co-Chair Wilken moved for adoption of Amendment #70 as AMENDED.                                                                 
                                                                                                                                
Without objection the amended amendment was ADOPTED.                                                                            
                                                                                                                                
7:37:45 PM                                                                                                                    
                                                                                                                                
Amendment #71: This amendment reads as follows.                                                                                 
                                                                                                                                
     The following projects are appropriated under a new program                                                                
     classification called "Congestion Mitigation and Safety                                                                    
     Initiative"                                                                                                                
          Technical Change:                                                                                                     
          Assign  this program classification to the projects listed                                                            
          on page 47, lines 7-19                                                                                                
          Add    the   following    projects    to   this    project                                                            
          classification:                                                                                                       
                                                               AMOUNT                                                           
                                                From the General Fund                                                           
          Dowling Road East                                $19,000,000                                                          
          *Fairbanks, Wilbur Street Extension                1,000,000                                                          
          *Fairbanks, 2nd Avenue, Moore Street               2,500,000                                                          
                Realignment and New Airport Way Intersection                                                                    
          Glenn Highway Corridor                            30,500,000                                                          
          Tudor Bragaw Intersection                          7,000,000                                                          
     *The two Fairbanks projects reflect the passage of Amendment                                                               
     #29 and are not intended to duplicate funding for these                                                                    
     projects.                                                                                                                  
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green announced this amendment would be NOT OFFERED to                                                                 
defer to Amendment #71A.                                                                                                        
                                                                                                                                
Amendment #71A: This amendment reads as follows.                                                                                
                                                                                                                                
     The following projects are appropriated under a new program                                                                
     classification called "Congestion Mitigation and Safety                                                                    
     Initiative"                                                                                                                
          Technical Change:                                                                                                     
          Assign  this program classification to the projects listed                                                            
          on page 47, lines 7-19                                                                                                
          Add    the   following    projects    to   this    project                                                            
          classification:                                                                                                       
                                                               AMOUNT                                                           
                                                From the General Fund                                                           
          Dowling Road East                                $19,000,000                                                          
          *Fairbanks, Wilbur Street Extension                1,000,000                                                          
          *Fairbanks, 2nd Avenue, Moore Street               2,500,000                                                          
                Realignment and New Airport Way Intersection                                                                    
          Glenn Highway Corridor                            30,500,000                                                          
          Tudor Bragaw Intersection                          7,000,000                                                          
          Prince  of Wales: Hollis  to Klawock Pavement      5,000,000                                                          
          Sitka: Rocky Guitierrez Airport Access             3,500,000                                                          
                Improvements                                                                                                    
          Fairbanks: Gaffney Road Upgrade                    6,250,000                                                          
          Fairbanks: Cartright Road Extension                3,650,000                                                          
          Nome: City Streets, Phase 2                        5,000,000                                                          
          Juneau: Glacier Highway Road Extension             5,000,000                                                          
          Kodiak: Rezanof Drive Rehabilitation               4,300,000                                                          
                Lighting and Intersection Safety Improvements                                                                   
     *The two Fairbanks projects reflect the passage of Amendment                                                               
     #29 and are not intended to duplicate funding for these                                                                    
     projects.                                                                                                                  
                                                                                                                                
Co-Chair Green,  sponsor of the amendment, amended  the amendment to                                                            
reduce the appropriation  to the Kodiak project from $4.3 million to                                                            
$1 million and  insert a new Otmeloi Way Rehabilitation  project and                                                            
$3.3 million appropriation to that project.                                                                                     
                                                                                                                                
Co-Chair Wilken moved for adoption of the amendment as AMENDED.                                                                 
                                                                                                                                
7:39:09 PM                                                                                                                    
                                                                                                                                
Senator  Hoffman asked whether  the Governor  requested funding  for                                                            
all  the listed  projects  or  whether  some  were included  at  the                                                            
request of the House of Representatives.                                                                                        
                                                                                                                                
7:39:21 PM                                                                                                                    
                                                                                                                                
Ms.  Blaisdell listed  the  Dowling Road,  Glenn  Highway and  Tudor                                                            
Bragaw projects  as included in the  Governor's budget request.  The                                                            
two projects marked with  an asterisk had been amended by an earlier                                                            
amendment.  The   remaining  projects  included  in   the  unamended                                                            
amendment  were proposed  by the  House of Representatives  and  the                                                            
amendment  to the amendment  reflects intent  of the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  pointed  out  that all  the  projects  located  in                                                            
Fairbanks   are  included   in  the  Fairbanks   Metropolitan   Area                                                            
Transportation System (FMATS) "allocation for Fairbanks".                                                                       
                                                                                                                                
Co-Chair Green restated the amendment to the amendment.                                                                         
                                                                                                                                
Co-Chair Green  asked if there was any objection to  Amendment #71A,                                                            
as amended.                                                                                                                     
                                                                                                                                
AT EASE 7:41:28 PM / 7:43:01 PM                                                                                             
                                                                                                                                
Co-Chair Green  directed attention  to Amendment #70 as amended  and                                                            
announced  a "point  of clarification"  that  the Wickersham  Street                                                            
Upgrade  -   Fairbanks  project  and   corresponding  $3.5   million                                                            
appropriation  should be  deleted from that  amendment and  inserted                                                            
into the language of Amendment #71A.                                                                                            
                                                                                                                                
Ms. Blaisdell informed  that such changes would reduce the amount of                                                            
the appropriation  from  the interest  earnings of  the fund  source                                                            
commonly  referred to  as Amerada  Hess  from $62  million to  $58.5                                                            
million.                                                                                                                        
                                                                                                                                
Senator  Hoffman asked  the total  appropriation  made by  Amendment                                                            
#71A.                                                                                                                           
                                                                                                                                
Ms. Blaisdell listed the amount as $95.2 million.                                                                               
                                                                                                                                
AT EASE 7:45:20 PM / 7:45:58 PM                                                                                             
                                                                                                                                
Co-Chair  Wilken offered  a motion  to rescind action  taken  in the                                                            
adoption Amendment #70 as amended.                                                                                              
                                                                                                                                
Without objection  the action adopting the amendment  was RESCINDED.                                                            
                                                                                                                                
Co-Chair  Wilken  offered  a  motion  to  amend  Amendment  #70,  as                                                            
amended,  to  reflect  the  reduction  of  the total  appropriation                                                             
amount. The amended amendment as amended reads as follows.                                                                      
                                                                                                                                
          Sec. 6. DEPARTMENT OF TRANSPORTATION AND PUBLIC                                                                       
     FACILITIES.  Subject  to  Sec.  62  of  this Act,  the  sum  of                                                            
     $58,500,000  is  appropriated from  the Alaska  capital  income                                                            
     fund to the Department  of Transportation and Public Facilities                                                            
     for the  following projects in  the amounts stated,  subject to                                                            
      reallocation among the projects under AS 37.07.080(e):                                                                    
                                                               AMOUNT                                                           
                                               From the General Fund                                                            
                                                                                                                                
          McCarthy Road, major maintenance                  $2,000,000                                                          
          Denali  Borough, Stampede  Road Improvements       5,000,000                                                          
                Chena overflow bridge for gas pipeline                                                                          
          DeLong Mountaion, port expansion EIS               2,000,000                                                          
                Completion                                                                                                      
          North Slope, Foothills West Road EIS               4,000,000                                                          
          North Slope, Bullen Point EIS                      5,000,000                                                          
          Dalton Highway, surfacing upgrades                 9,000,000                                                          
          Dalton Highway, Washington Creek Bridge            3,500,000                                                          
          Richardson Highway, highway passing lanes          7,500,000                                                          
                Mile Post 265-341                                                                                               
          Richardson Highway, Shaw Creek Bridge              2,500,000                                                          
          Kenai Peninsula: Kalifornsky Beach Road           11,000,000                                                          
                Rehabilitation                                                                                                  
          Industrial Roads                                   3,500,000                                                          
                                                                                                                                
7:47:08 PM                                                                                                                    
                                                                                                                                
Senator Hoffman understood  the interest earnings of that account is                                                            
approximately  $30 million annually and asked if the  undertaking of                                                            
the projects would therefore be made over three fiscal years.                                                                   
                                                                                                                                
Ms. Blaisdell affirmed.                                                                                                         
                                                                                                                                
Senator Hoffman asked which projects would be constructed first.                                                                
                                                                                                                                
Mr.  MacKinnon  replied that  a  schedule  was yet  to  be made.  He                                                            
predicted the upgrades  to the Dalton Highway would begin as soon as                                                            
possible.  The majority  of the  projects  would be  started in  the                                                            
summer of 2006.                                                                                                                 
                                                                                                                                
7:48:20 PM                                                                                                                    
                                                                                                                                
Senator  Hoffman remarked  that  the funds  would  not be  available                                                            
until  three fiscal  years had  lapsed.  The projects  could not  be                                                            
undertaken without funding.  He asked the timeframe of the projects.                                                            
                                                                                                                                
Mr. MacKinnon  indicated  that construction  would  be scheduled  to                                                            
"meet the cash flow."                                                                                                           
                                                                                                                                
Senator  Hoffman  again asked  the prioritization   of the  proposed                                                            
projects.                                                                                                                       
                                                                                                                                
Mr. MacKinnon  listed  the Foothills  West Road  EIS and the  Bullen                                                            
Point  EIS as  priorities.  The Department  would  consult with  the                                                            
Murkowski Administration to determine further prioritization.                                                                   
                                                                                                                                
Co-Chair  Green  announced  that Amendment  #71A,  as  amended,  was                                                            
AMENDED.                                                                                                                        
                                                                                                                                
[Note:  It  is assumed  that  the  Committee's  intent is  that  the                                                            
amendment to  the amendment is the  aforementioned insertion  of the                                                            
Wickersham  Street  Upgrade -  Fairbanks  project and  $3.5  million                                                            
general  fund appropriation.  It  is  assumed that  the Committee's                                                             
intent was that Amendment #71A, as twice amended, was ADOPTED.]                                                                 
                                                                                                                                
[Note: It is assumed that  the Committee's intent is that the motion                                                            
to  AMEND  Amendment  #70, as  amended,  was  incorporated.  It  was                                                            
assumed that the Committee's  intent is that Amendment #70, as twice                                                            
amended, was ADOPTED.]                                                                                                          
                                                                                                                                
Amendment   #72:  This  amendment   increases  the  amount   of  the                                                            
appropriation  made in subsection  (a) of Section 28. DEPARTMENT  OF                                                            
NATURAL   RESOURCES.,  on   page  101,  lines   6  through   8  from                                                            
$36,902,700. The amended language reads as follows.                                                                             
                                                                                                                                
          (a) The sum of $43,350,400 is appropriated from the                                                                   
     general  fund  to the  Department  of Natural  Resources,  fire                                                            
     suppression  activity, for operating costs for  the fiscal year                                                            
     ending June 30, 2005.                                                                                                      
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Amendment   #73:  This   amendment   increases   the  general   fund                                                            
appropriation to the Aircraft  and Vessel Repair and Maintenance (HD                                                            
1-40)  component of  the Department  of  Public Safety  on page  43,                                                            
lines 10  and 11  from $1.2 million  to $1.8  million. Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     This  amendment  restores  partial  funding  requested  in  the                                                            
     Governor's  capital budget. This  project allow the  department                                                            
     to overhaul  and repair department aircraft airframes,  landing                                                            
     gear and  engines to ensure that  aircraft are airworthy,  safe                                                            
     and dependable.  This is necessary  so that the department  can                                                            
     carry  out its public safety,  law enforcement, and  search and                                                            
     rescue responsibilities.  This project also allows  for some of                                                            
     the needed repairs,  conversions, servicing and maintenance for                                                            
     the  larger patrol vessels  as well as  the smaller vessels  to                                                            
     ensure  their safe and dependable  operations during  FY 06 and                                                            
     beyond. Vessels  are used for commercial fisheries  enforcement                                                            
     and other trooper  duties including search and rescue missions.                                                            
                                                                                                                                
     Without  adequate  funding  for  repair  and  maintenance,  the                                                            
     department  likely will  not be able  to maintain all  aircraft                                                            
     and  vessels at an appropriate  level,  and would have  to take                                                            
     some  of these out  of serve. This  will significantly  curtail                                                            
     the department's  enforcement, search and rescue,  and incident                                                            
     response capabilities.                                                                                                     
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell overviewed the explanatory statement.                                                                             
                                                                                                                                
7:50:54 PM                                                                                                                    
                                                                                                                                
Senator Olson understood  Ms. Blaisdell to suggest that overhauls to                                                            
airplane engines  at a cost of $600,000  would be undertaken  in one                                                            
year.                                                                                                                           
                                                                                                                                
7:51:38 PM                                                                                                                    
                                                                                                                                
DAN  SPENCER,   Director,  Division   of  Administrative   Services,                                                            
Department  of Public  Safety, testified  that  the entire  $600,000                                                            
would not be utilized  to fund aircraft-related projects.  He listed                                                            
airframe  overhauls of amphibian  vessels,  engine overhauls,  other                                                            
modifications,  as well as funding set aside for emergency  repairs.                                                            
                                                                                                                                
There being no objection, Amendment #73 was ADOPTED.                                                                            
                                                                                                                                
Amendment  #74: This amendment  increases  the appropriation  to the                                                            
manufacturing  extension program made  in subsection (a)  of Section                                                            
14. DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT., on                                                            
page 93, line 30 through  page 94, line 4, from $1.2 million to $1.5                                                            
million  and  designates  the  funding   source  of  the  additional                                                            
$400,000 as  Business License & Corporation  Filing Fees  and Taxes.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Description:  This  amendment  will  provide full  funding  for                                                            
     Alaska participation  in the National Manufacturer's  Extension                                                            
     Program (MEP). The  national program aims to give a competitive                                                            
     edge to small  businesses through overcoming  known barriers to                                                            
     success  for small  manufacturers  including  limited  budgets,                                                            
     lack of  in-house expertise,  and lack of access to  the newest                                                            
     technologies.  The  national  program  has assisted  more  than                                                            
     149,000 firms  through over 400 MEP centers whose  sole purpose                                                            
     is  to  assist  small  manufacturers  in process  improvement,                                                             
     application  of technology and business practices.  Communities                                                            
     are anxious  to participate in this program because  a "virtual                                                            
     store" is  a viable way to expose their products  to market and                                                            
     raise the  local economy. This program opens  those communities                                                            
     to a nationwide  network of expertise  in how to improve  their                                                            
     product,  the  delivery   of  their  product  and  their  other                                                            
     business  practices. The General  Accounting Office  found that                                                            
     the  MEP had  a  positive effect  on  performance  in areas  of                                                            
     profits,   sales,  product   quality,   workplace  technology,                                                             
     productivity,  and customer  satisfaction.  In addition  to the                                                            
     federal  and state funds, the  communities will contribute  "in                                                            
     kind".                                                                                                                     
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green outlined the explanatory statement.                                                                              
                                                                                                                                
There being no objection, Amendment #74 was ADOPTED.                                                                            
                                                                                                                                
7:53:18 PM                                                                                                                    
                                                                                                                                
Amendment   #75:  This   amendment   increases   the  general   fund                                                            
appropriation  to the  Statewide  Facilities Maintenance  (HD  1-40)                                                            
component  of the Department  of Public Safety  on page 44,  lines 7                                                            
and 8 from $200,000  to $500,000. Accompanying explanatory  language                                                            
reads as follows.                                                                                                               
                                                                                                                                
     This amendment restores  funding to the amount requested by the                                                            
     Governor.  The department  has 17 facilities  around the  state                                                            
     that need  repair and maintenance  funding. The department  has                                                            
     only received repair  and maintenance funding twice in the last                                                            
     ten years,  and some of the repairs  for these facilities  have                                                            
     reached the  point where it need[s] to be addressed  as soon as                                                            
     possible.   This  includes  heating  and  electrical   repairs,                                                            
     significant  roof repairs  to the Anchorage  hangar, and  other                                                            
     deferred maintenance issues.                                                                                               
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green  noted the locations  of the proposed projects  would                                                            
be statewide.                                                                                                                   
                                                                                                                                
There being no objection, Amendment #75 was ADOPTED.                                                                            
                                                                                                                                
7:53:52 PM                                                                                                                    
                                                                                                                                
Amendment #76:  This amendment inserts  a new subsection  to Section                                                            
22. OFFICE OF  THE GOVERNOR., on page 98, following  line 18 to read                                                            
as follows.                                                                                                                     
                                                                                                                                
          (d) The sum of $500,000 is appropriated from the general                                                              
     fund to the Office  of the Governor, executive office, for work                                                            
     related to  the state gas pipeline and to bringing  North Slope                                                            
     natural gas  to market, and other oil and gas  projects for the                                                            
     fiscal years ending June 30, 2005 and June 30, 2006.                                                                       
                                                                                                                                
This amendment  also provides for an effective date  of July 1, 2004                                                            
for the provision in the new subsection.                                                                                        
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green gave a brief explanation                                                                                         
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
7:54:23 PM                                                                                                                    
                                                                                                                                
Amendment  #77:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage -  Raspberry Road Extension  - Minnesota Drive  to Rovenna                                                            
Street  component to  the Grants  to Municipalities  (AS  37.05.315)                                                            
BRU, Department  of Commerce, Community and Economic  Development on                                                            
page 8, lines 11 and 12  and appropriates $2.4 million general funds                                                            
to  the  component.  Accompanying  explanatory   language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     MOA  will match the  state funds in  the amount of $1,550,000.                                                             
     This minor  arterial is a missing  transportation link  and the                                                            
     municipality  plans to construct  the Rovenna Street  to Arctic                                                            
     Boulevard  link. Construction  funding  for the State's  larger                                                            
     project to connect  Raspberry Road to Dowling Road in this area                                                            
     is not  expected before 2010.  In 2003, the project  was a high                                                            
     priority   of   the  MOA   70/30   program,  which   has   been                                                            
     discontinued.   The residents   of the  area  of  this  project                                                            
     support  it wholeheartedly but  only if both the State  and the                                                            
     Municipal sections  of the extension are done at the same time.                                                            
     The  Municipal section  is up for design  and construction  and                                                            
     the design and construct  for the State extension should happen                                                            
     at the  same time.  This project serves  to relieve  congestion                                                            
     and  is necessary  to complete  the long-term  plan to  connect                                                            
     Raspberry  and Dowling for a  much needed additional  East-West                                                            
     corridor.                                                                                                                  
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
AT EASE 7:54:35 PM / 8:03:40 PM                                                                                             
                                                                                                                                
There being no objection, Amendment #77 was ADOPTED.                                                                            
                                                                                                                                
Amendment  #78:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage - Pavement  Rehabilitation Projects, 50/50  Matching Grant                                                            
component  in to the  Grants to  Municipalities  BRU, Department  of                                                            
Commerce,  Community and Economic  Development  on page 8,  lines 11                                                            
and 12 and appropriates  $2,275,000 general funds  to the component.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     The MOA will  match the state funds for a total  of $1,000,000.                                                            
     The combined  amounts will fund  approximately 10 MOA  projects                                                            
     area-wide.                                                                                                                 
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Amendment  #79:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage   -   Strawberry   Road/Jewel   Lake   Road  Intersection                                                             
Improvements  component  in to  the  Grants to  Municipalities  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
8, lines 10 and  11, and appropriates $1.3 million  general funds to                                                            
the component.  Accompanying explanatory language  reads as follows.                                                            
                                                                                                                                
     This project will include signalization, channelization, and                                                               
     pedestrian improvements at the intersection of Strawberry Road                                                             
     and Jewel Lake Road.                                                                                                       
     The municipality is providing matching funds for the                                                                       
     Strawberry Road portion, which is municipally owned.                                                                       
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green announced that Amendment #79 was WITHDRAWN.                                                                      
                                                                                                                                
[NOTE: This Amendment was re-considered later.]                                                                                 
                                                                                                                                
Co-Chair Green announced that Amendment #80 was WITHDRAWN.                                                                      
                                                                                                                                
[NOTE: This Amendment was re-considered later.]                                                                                 
                                                                                                                                
Co-Chair Green announced that Amendment #81 was WITHDRAWN.                                                                      
                                                                                                                                
[NOTE: This Amendment was re-considered later.]                                                                                 
                                                                                                                                
Co-Chair Green announced that Amendment #82 was WITHDRAWN.                                                                      
                                                                                                                                
[NOTE: This Amendment was re-considered later.]                                                                                 
                                                                                                                                
AT EASE: 8:04:44 PM / 8:05:23 PM                                                                                            
                                                                                                                                
Amendment  #79:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage   -   Strawberry   Road/Jewel   Lake   Road  Intersection                                                             
Improvements  component  in to  the  Grants to  Municipalities  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
8, lines 10 and  11, and appropriates $1.3 million  general funds to                                                            
the component.  Accompanying explanatory language  reads as follows.                                                            
                                                                                                                                
     This project will include signalization, channelization, and                                                               
     pedestrian improvements at the intersection of Strawberry Road                                                             
     and Jewel Lake Road.                                                                                                       
     The municipality is providing matching funds for the                                                                       
     Strawberry Road portion, which is municipally owned.                                                                       
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green overviewed the explanatory statement.                                                                            
                                                                                                                                
Senator  Hoffman  requested  an  explanation  of  the municipality-                                                             
provided matching funds.                                                                                                        
                                                                                                                                
8:06:40 PM                                                                                                                    
                                                                                                                                
JAMES ARMSTRONG,  Staff to Co-Chair  Wilken, informed of  the recent                                                            
bond issuance  by the Municipality of Anchorage. Revenues  generated                                                            
from  these  bonds   would  be  appropriated  to  match   the  State                                                            
appropriation.                                                                                                                  
                                                                                                                                
8:07:18 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  if the ratio  of municipal  funding to  State                                                            
funding would be equal                                                                                                          
                                                                                                                                
Mr. Armstrong understood this to be so.                                                                                         
                                                                                                                                
Without objection the Amendment #80 was ADOPTED.                                                                                
                                                                                                                                
8:07:41 PM                                                                                                                    
                                                                                                                                
Amendment  #80:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage  - Pintail  Street  at Huffman  Road  Safety Improvements                                                             
component  in to the  Grants to  Municipalities  BRU, Department  of                                                            
Commerce,  Community and Economic  Development  on page 8,  lines 10                                                            
and 11  and appropriates  $490,000 general  funds to the  component.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This   project  will   construct  safety   and  channelization                                                             
     improvements  on Pintail Street.  Improvements are expected  to                                                            
     include  pavement, a  northbound right-turn  lane onto  Huffman                                                            
     Road, and street lighting.  Project design has been funded. The                                                            
     project will improve safety.                                                                                               
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Amendment  #81:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage - Flooding and  Glaciations Projects, 50/50 Matching Grant                                                            
component  in to the  Grants to  Municipalities  BRU, Department  of                                                            
Commerce,  Community and Economic  Development  on page 8,  lines 10                                                            
and 11  and appropriates  $500,000  to the  component. Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     The MOA will  match the state funds for a total  of $1,000,000.                                                            
     The combined  amounts will fund  approximately 18 MOA  projects                                                            
     area-wide.                                                                                                                 
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
There being no objection, the amendment was ADOPTED.                                                                            
                                                                                                                                
8:08:06 PM                                                                                                                    
                                                                                                                                
Amendment  #82:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage  -  Pedestrian  Safety  Projects,   50/50  Matching  Grant                                                            
component  in to the  Grants to  Municipalities  BRU, Department  of                                                            
Commerce,  Community and Economic  Development  on page 8,  lines 10                                                            
and 11  and appropriates  $500,000 general  funds to the  component.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     The MOA will  match the state funds for a total  of $1,000,000.                                                            
     The combined amounts  will fund approximately 13 MOA pedestrian                                                            
     safety projects area-wide.                                                                                                 
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
8:08:24 PM                                                                                                                    
                                                                                                                                
Amendment #83: This amendment  inserts a new bill section to read as                                                            
follows.                                                                                                                        
                                                                                                                                
     Section  X.  DEPARTMENT  OF COMMERCE,  COMMUNITY  AND  ECONOMIC                                                            
     DEVELOPMENT.  The  sum of  $275,000  is appropriated  from  the                                                            
     general  fund  to the  Department  of Commerce,  Community  and                                                            
     Economic  Development for a grant  to the Atwood Foundation  to                                                            
     assist  with the  review  of the  CDQ Program  including  state                                                            
     regulations.                                                                                                               
                                                                                                                                
This amendment  also provides an effective date of  May 10, 2005 for                                                            
FY 05 and FY 06 for the added section.                                                                                          
                                                                                                                                
Senator Hoffman  announced that the amendment would  be NOT OFFERED.                                                            
                                                                                                                                
AT EASE 8:08:55 PM / 8:09:49 PM                                                                                             
                                                                                                                                
Amendment  #84:  This amendment  inserts  a  new  Inuit Circumpolar                                                             
Conference - Alaska component  to the Grants to Named Recipients (AS                                                            
37.05.316  BRU,  Department  of  Commerce,  Community  and  Economic                                                            
Development  on page 3, lines  30 and 31  and appropriates  $150,000                                                            
general funds to the component.                                                                                                 
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
There being no objection the amendment was ADOPTED.                                                                             
                                                                                                                                
Amendment  #84   Part  II:  This  amendment  deletes   the  City  of                                                            
Unalakleet  -  Unalakleet  Equipment  Purchase  and Repair  (HD  40)                                                            
component  from the  Grants  to Municipalities  BRU,  Department  of                                                            
Commerce, Community  and Economic  Development on page 12,  lines 31                                                            
through 33,  and deletes the $75,000  general fund appropriation  to                                                            
the component.                                                                                                                  
                                                                                                                                
This amendment  also inserts  a new Inuit  Circumpolar Conference  -                                                            
Alaska  component  in  to  the  Grants  to  Named   Recipients  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
3, lines 30 and 31, and appropriates $75,000 to the component.                                                                  
                                                                                                                                
Co-Chair Green announced this amendment would be NOT OFFERED.                                                                   
                                                                                                                                
AT EASE 8:10:21 PM / 8:12:26 PM                                                                                             
                                                                                                                                
Amendment   #85:  This  amendment   inserts   a  new  Alaska   Works                                                            
Partnership Pipeline  Training Equipment component  in to the Grants                                                            
to  Named Recipients  BRU,  Department  of Commerce,  Community  and                                                            
Economic Development  on page 3, lines  30 and 31, and appropriates                                                             
$1.5 million to the component.  The funding source is not indicated.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Alaska Works  Partnership desires to participate  in the Alaska                                                            
     Technical   and   Vocational   Education  Program   (TVEP)   by                                                            
     increasing  the contribution  from .10%  to .130% for  pipeline                                                            
     training  and equipment  needs. This  increase should  raise an                                                            
     additional  $1.5  million  per year  for  federally  registered                                                            
     jointly  administered   labor/management  training   trusts  in                                                            
     Alaska.                                                                                                                    
                                                                                                                                
Co-Chair Green announced this amendment would be NOT OFFERED.                                                                   
                                                                                                                                
Amendment  #86: This amendment  increases  the appropriation  to the                                                            
City of Delta  Junction - Road Improvements component  in the Grants                                                            
to  Municipalities  BRU,  Department   of Commerce,   Community  and                                                            
Economic  Development on page  9, lines 14  and 15 from $100,000  to                                                            
$300,000.  The  funding  source  of the  additional  amount  is  not                                                            
specified.                                                                                                                      
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green noted the increase of $200,000 to this project.                                                                  
                                                                                                                                
There being no objection, Amendment #86 was ADOPTED.                                                                            
                                                                                                                                
8:12:38 PM                                                                                                                    
                                                                                                                                
Amendment  #87: This amendment  increases  the appropriation  to the                                                            
Chickaloon  Fire Service Corp.  - Equipment  and Training (HD  7-11)                                                            
component  of  the  Grants  to  Municipalities  BRU,  Department  of                                                            
Commerce, Community  and Economic  Development, on page 5,  lines 13                                                            
through  15 from  $30,000  to $55,000.  The  funding  source of  the                                                            
additional amount is not specified.                                                                                             
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green noted the increase of $25,000 to this project.                                                                   
                                                                                                                                
There being no objection, Amendment #87 was ADOPTED.                                                                            
                                                                                                                                
8:12:53 PM                                                                                                                    
                                                                                                                                
Amendment #88: This amendment reads as follows.                                                                                 
                                                                                                                                
     Department of Commerce, Community and Economic Development                                                                 
     Grants to Municipalities                                                                                                   
     $500,000  is  appropriated   to  the Department   of  Commerce,                                                            
     Community    and   Economic   Development,    Office   of   the                                                            
     Commissioner,   as a  grant  to  the City  of  Galena  for  the                                                            
     engagement of experimental  legal and technical analysis in the                                                            
     preparation  of a series  of required  white papers to  address                                                            
     public  concerns and regulation  requirements for the  proposed                                                            
     mini-nuclear power plant at Galena.                                                                                        
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair  Green noted  a friendly  amendment  to  the amendment,  of                                                            
which  she is  the  sponsor,  to delete  "experimental"  and  insert                                                            
"expert".  No Committee  action is  required and  the amendment  was                                                            
AMENDED.                                                                                                                        
                                                                                                                                
Ms. Blaisdell  furthered  that "Office of  the Commissioner"  should                                                            
also  be deleted  from  the  language  of the  amendment.  She  then                                                            
outlined the amendment.                                                                                                         
                                                                                                                                
Without objection the amended amendment was ADOPTED.                                                                            
                                                                                                                                
[The intent of the Committee  is assumed that the deletion suggested                                                            
by Ms. Blaisdell was made to the language of the amendment.]                                                                    
                                                                                                                                
8:14:12 PM                                                                                                                    
                                                                                                                                
Amendment  #89:  This amendment  inserts  a  new Cook  Inlet  Tribal                                                            
Council - Development of  Delancey Street and Hchanlyut component to                                                            
the  Grants  to  Named  Recipients  BRU,  Department   of  Commerce,                                                            
Community and  Economic Development on page 3, lines  30 and 31, and                                                            
appropriates  $100,000 to the component.  The funding source  is not                                                            
specified.                                                                                                                      
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green announced this amendment would be WITHDRAWN.                                                                     
                                                                                                                                
Amendment #90: This amendment  inserts a new City of Valdez - Harbor                                                            
Improvements   and  Maintenance  component  in   to  the  Grants  to                                                            
Municipalities  BRU, Department of Commerce, Community  and Economic                                                            
Development, on  page 8, lines 10 and 11, and appropriates  $500,000                                                            
to the component. The funding  source is not specified. Accompanying                                                            
explanatory language reads as follows.                                                                                          
                                                                                                                                
     This appropriation will in essence turn over the operation of                                                              
     the Valdez City Harbor to the city.                                                                                        
                                                                                                                                
Co-Chair Green announced this amendment would be NOT OFFERED.                                                                   
                                                                                                                                
8:14:31 PM                                                                                                                    
                                                                                                                                
Amendment  #91:   This  amendment  inserts  a  new  Alaska   Loggers                                                            
Association  Retirement Plan and Trust  (for payment to the  Pension                                                            
Benefit Guaranty  Corporation) component  in to the Grants  to Named                                                            
Recipients  BRU,  Department  of Commerce,  Community  and  Economic                                                            
Development  on page 3, lines 30 and  31, and appropriates  $500,000                                                            
general funds to the component.                                                                                                 
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Amendment   #92:  this   amendment   increases   the  general   fund                                                            
appropriation  to the Facilities Deferred  Maintenance and  Critical                                                            
Repairs (HD 1-40) component  of the Department of Transportation and                                                            
Public Facilities on page  46, lines 7 through 9, from $1.25 million                                                            
to $4 million.                                                                                                                  
                                                                                                                                
This amendment  also  inserts a  new Statewide:  Airport Lease  Lots                                                            
Development  component  to  the  Department  of  Transportation  and                                                            
Public Facilities  on page 45, line 32, and appropriates  $2 million                                                            
general funds to the component.                                                                                                 
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell outlined the amendment.                                                                                           
                                                                                                                                
Senator Hoffman asked what  airports would be involved in the second                                                            
component of the amendment.                                                                                                     
                                                                                                                                
8:15:43 PM                                                                                                                    
                                                                                                                                
NANCY  SLAGLE,  Director,   Division  of  Administrative   Services,                                                            
Department of  Transportation and Public Facilities,  testified that                                                            
several rural  airports would be appropriate for the  development of                                                            
lease  lots, including  those located  at Barrow,  Deadhorse,  Nome,                                                            
Birchwood,  Bethel, Willow, Sitka,  Hoonah, and Haines. Land  in the                                                            
selected locations  would be cleared, graded and otherwise  prepared                                                            
for development by private investments.                                                                                         
                                                                                                                                
8:16:28 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  if  the airports  would  subsequently  become                                                            
income producing.                                                                                                               
                                                                                                                                
Ms. Slagle answered yes.                                                                                                        
                                                                                                                                
Senator Olson  questioned the demand  for the land located  near the                                                            
Haines airport.                                                                                                                 
                                                                                                                                
8:16:56 PM                                                                                                                    
                                                                                                                                
Ms. Slagle  replied that some land  could be developed for  aircraft                                                            
hangers.                                                                                                                        
                                                                                                                                
8:17:22 PM                                                                                                                    
                                                                                                                                
There being no objection, Amendment #92 was ADOPTED.                                                                            
                                                                                                                                
8:17:31 PM                                                                                                                    
                                                                                                                                
Amendment  #93: This amendment  increases  the appropriation  to the                                                            
AHFC  Birch Park  Window  Replacement  (HD  7-11) component  of  the                                                            
Alaska Housing  Finance Corporation  BRU, Department of Revenue,  on                                                            
page 44, lines  25 and 26, from $650,000 to $1,323,000  other funds.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This amendment restores the full funding request for the Birch                                                             
     Park Window Replacement project.                                                                                           
     The project utilized  Corporate (AHFC) funds to replace all the                                                            
     windows  at  Birch  Park I  and  Birch Park  II  in  Fairbanks.                                                            
     Replacement  of  these  windows  will reduce  energy  loss  and                                                            
     increase  comfort for the residents.  These windows  need to be                                                            
     replaced   to  maintain   the  structural   integrity   of  the                                                            
     buildings.  The  new  windows  will be  commercial  grade  with                                                            
     standardized   hardware.  This   project  will  lower   routine                                                            
     maintenance  costs  and provide  for health  and safety  issues                                                            
     i.e. fire egress and security.                                                                                             
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green  clarified the changes  made to the amendment  before                                                            
it was submitted for consideration.                                                                                             
                                                                                                                                
Co-Chair Green announced the amendment was ADOPTED.                                                                             
                                                                                                                                
Amendment #44: This amendment  inserts a new subsection into Section                                                            
22. OFFICE OF THE GOVERNOR.,  on page 98, line 9 to read as follows.                                                            
                                                                                                                                
          (a) Section 8(a), ch. 6, SLA 2005, is amended to read:                                                                
                     (a) The sum of $375,000 is appropriated from                                                               
                the general fund to  the Office of the Governor  for                                                            
                direct  support  of national  efforts  to  open  the                                                            
                coastal  plain  of  the  Arctic  National   Wildlife                                                            
                Refuge for oil and gas exploration  and development,                                                          
                and  other   oil  and  gas   and  natural   resource                                                          
                development projects,  for the  fiscal years  ending                                                          
                June 30, 2005, and June 30, 2006.                                                                               
                                                                                                                                
          New Text Underlined                                                                                                 
                                                                                                                                
This amendment  then renumbers the  existing subsections  of Section                                                            
22   accordingly.    Accompanying   explanatory   language    reads,                                                            
"Description: This extends the purpose of the appropriation."                                                                   
                                                                                                                                
This amendment was tabled at the previous hearing.                                                                              
                                                                                                                                
Co-Chair  Wilken offered a  motion to withdraw  the motion  to adopt                                                            
the amendment.                                                                                                                  
                                                                                                                                
Without objection the amendment was WITHDRAWN.                                                                                  
                                                                                                                                
Amendment   #85:  This  amendment   inserts   a  new  Alaska   Works                                                            
Partnership Pipeline  Training Equipment component  in to the Grants                                                            
to  Named Recipients  BRU,  Department  of Commerce,  Community  and                                                            
Economic Development  on page 3, lines  30 and 31, and appropriates                                                             
$1.5 million to the component.  The funding source is not indicated.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Alaska Works  Partnership desires to participate  in the Alaska                                                            
     Technical   and   Vocational   Education  Program   (TVEP)   by                                                            
     increasing  the contribution  from .10%  to .130% for  pipeline                                                            
     training  and equipment  needs. This  increase should  raise an                                                            
     additional  $1.5  million  per year  for  federally  registered                                                            
     jointly  administered   labor/management  training   trusts  in                                                            
     Alaska.                                                                                                                    
                                                                                                                                
Co-Chair  Green  had announced  earlier  in  the meeting  that  this                                                            
amendment would not be considered.                                                                                              
                                                                                                                                
Senator Hoffman  asked the  reason for this  action and whether  the                                                            
State  appropriation  would  garner  federal  funding to  "bring  in                                                            
substantial training dollars to the State."                                                                                     
                                                                                                                                
Co-Chair  Green   replied  that  she   had  not  received   adequate                                                            
information on the merits of the proposal.                                                                                      
                                                                                                                                
Senator  Hoffman requested  the Department  of  Labor and  Workforce                                                            
Development respond to questions on the amendment.                                                                              
                                                                                                                                
8:19:41 PM                                                                                                                    
                                                                                                                                
GUY BELL, Assistant Commissioner,  Department of Labor and Workforce                                                            
Development,  testified  that  the  Technical  Vocational  Education                                                            
Program  is  a  fund derived  from  employee  contributions.   These                                                            
contributions   are  statutorily  limited  to  .10   percent  of  an                                                            
employee's earnings.  The funds are distributed to  various entities                                                            
and would be insufficient to fund the new component.                                                                            
                                                                                                                                
Senator Hoffman  stressed  that the training  would be necessary  to                                                            
provide jobs constructing the proposed natural gas pipeline.                                                                    
                                                                                                                                
Mr.  Bell reiterated  that  increasing  the  percent  withheld  from                                                            
employee earnings would require statutory changes.                                                                              
                                                                                                                                
Mr.  Bell also  noted the  appropriation  would not  secure  federal                                                            
funding, only State funds would be involved.                                                                                    
                                                                                                                                
Amendment  #45:  This amendment  adds  "and other  oil  and gas  and                                                            
natural resource development  projects" to subsection (a) of Section                                                            
22. OFFICE  OF THE GOVERNOR.,  on page 98,  lines 9 through  12. The                                                            
amended subsection reads as follows.                                                                                            
                                                                                                                                
          (a) The sum of $125,000 is appropriated from the Alaska                                                               
     Permanent  Fund  Corporation  receipts  to  the Office  of  the                                                            
     Governor  for direct  support of national  efforts to  open the                                                            
     coastal  plain of the Arctic  National Wildlife Refuge  for oil                                                            
     and gas exploration  and development, and other oil and gas and                                                            
     natural  resource development  projects,  for the fiscal  years                                                            
     ending June 30, 2005, and June 30, 2006.                                                                                   
                                                                                                                                
Accompanying explanatory  language reads, "Description: This expands                                                            
the purpose of the appropriation."                                                                                              
                                                                                                                                
A motion to adopt the amendment  was tabled at the previous hearing.                                                            
                                                                                                                                
Co-Chair  Wilken reoffered  his  motion for  adoption.  He read  the                                                            
language of the amendment into the record.                                                                                      
                                                                                                                                
8:24:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Green clarified  this language would not duplicate language                                                            
adopted in a separate amendment.                                                                                                
                                                                                                                                
Ms. Blaisdell affirmed.                                                                                                         
                                                                                                                                
There being no objection, Amendment #45 was ADOPTED.                                                                            
                                                                                                                                
Amendment  #52: This  amendment  inserts a  new Fraternal  Order  of                                                            
Alaska   State  Troopers   (FOAST)   Photo/Video   Project   Program                                                            
Implementation  component  to the  Grants to  Named Recipients  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
3, lines 30 and 31 and  appropriates $50,000. The fund source is not                                                            
specified.                                                                                                                      
                                                                                                                                
[Note: A motion  to adopt the amendment  was tabled at the  previous                                                            
hearing.]                                                                                                                       
                                                                                                                                
Co-Chair Wilken  moved for adoption. At Co-Chair Green's  request he                                                            
outlined the amendment.                                                                                                         
                                                                                                                                
There being no objection, Amendment #52 was ADOPTED.                                                                            
                                                                                                                                
8:25:16 PM                                                                                                                    
                                                                                                                                
Amendment  #53: This amendment  inserts  a new City  of Adak  - Adak                                                            
Arctic  Shuttle Pre-Feasibility  Study  component to  the Grants  to                                                            
Municipalities   (AS  37.05.315)   BRU,  Department   of   Commerce,                                                            
Community and  Economic Development  on page 8, lines 11  and 12 and                                                            
appropriates  $50,000  to  the component.  The  fund source  is  not                                                            
specified.                                                                                                                      
                                                                                                                                
[Note: A motion  to adopt the amendment  was tabled at the  previous                                                            
hearing.]                                                                                                                       
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
There being no objection, Amendment #53 was ADOPTED.                                                                            
                                                                                                                                
AT EASE 8:25:42 PM / 8:34:59 PM                                                                                             
                                                                                                                                
Co-Chair  Green announced  that Amendment #63,  which was tabled  at                                                            
the previous hearing, would be reviewed and possibly amended.                                                                   
                                                                                                                                
Amendment #83: This amendment  inserts a new bill section to read as                                                            
follows.                                                                                                                        
                                                                                                                                
     Section  X.  DEPARTMENT  OF COMMERCE,  COMMUNITY  AND  ECONOMIC                                                            
     DEVELOPMENT.  The  sum of  $275,000  is appropriated  from  the                                                            
     general  fund  to the  Department  of Commerce,  Community  and                                                            
     Economic  Development for a grant  to the Atwood Foundation  to                                                            
     assist  with the  review  of the  CDQ Program  including  state                                                            
     regulations.                                                                                                               
                                                                                                                                
This amendment  also provides an effective date of  May 10, 2005 for                                                            
FY 05 and FY 06 for the added section.                                                                                          
                                                                                                                                
[Note: Senator  Hoffman announced  earlier in the meeting  that this                                                            
amendment  would  not be  offered and  no action  was  taken on  the                                                            
amendment.]                                                                                                                     
                                                                                                                                
Senator Olson, at the direction  of Co-Chair Green, offered a motion                                                            
to rescind  Committee  action taken  on Amendment  #83 and moved  to                                                            
adopt the amendment.                                                                                                            
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
Co-Chair  Green understood  that Amendment  #83 would  have a  FY 06                                                            
effective date.                                                                                                                 
                                                                                                                                
Senator Olson affirmed.                                                                                                         
                                                                                                                                
8:36:57 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green directed  attention  to information  distributed  to                                                            
members [copy  not provided.]  She described  the information  as "a                                                            
letter,  a copy of  a packet of  letters that are  the result  of an                                                            
adverse decision."                                                                                                              
                                                                                                                                
ART   CHANCE,    Director,    Labor   Relations,    Department    of                                                            
Administration,  testified  that the  State lost  in arbitration,  a                                                            
dispute  with  the  teachers  unit   at the  Mt.  Edgecumbe   school                                                            
involving compensation  for a preparatory period during the workday.                                                            
The school  schedule  had been  changed to include  this  additional                                                            
period  and  the   arbitrator  ruled  that  the  teachers   must  be                                                            
compensated for  the additional hours they were required  to work. A                                                            
decision was made to maintain  the schedule for the remainder of the                                                            
school  year. As  a result,  approximately  $170,000  in  additional                                                            
funding is needed. The  class schedule would be changed for the next                                                            
school year.                                                                                                                    
                                                                                                                                
Co-Chair  Green remarked  that  the information  was  provided as  a                                                            
proposed  amendment. It was  not her intent  to offer the  amendment                                                            
because such a precedent should not be set.                                                                                     
                                                                                                                                
8:40:30 PM                                                                                                                    
                                                                                                                                
Mr.  Chance   informed  of  the  statutory   requirement   that  the                                                            
Department  report  this  information  to  the  legislature,  as  it                                                            
implicates  monetary terms  for consideration  at the discretion  of                                                            
the legislature.  The possibility that the arbitration  ruling could                                                            
be reversed  in  court was  considered  and deemed  unlikely by  the                                                            
Department  of Law.  He stated,  "Absent  your telling  us that  you                                                            
disapprove  under Section  215 of [indiscernible],  we are  bound by                                                            
the lawful award of the arbitrator."                                                                                            
                                                                                                                                
Co-Chair Green avowed, "We do object to paying this."                                                                           
                                                                                                                                
AT EASE 8:41:40 PM / 8:48:53 PM                                                                                             
                                                                                                                                
Amendment  #45:  This amendment  adds  "and other  oil  and gas  and                                                            
natural resource development  projects" to subsection (a) of Section                                                            
22. OFFICE  OF THE GOVERNOR.,  on page 98,  lines 9 through  12. The                                                            
amended subsection reads as follows.                                                                                            
                                                                                                                                
          (a) The sum of $125,000 is appropriated from the Alaska                                                               
     Permanent  Fund  Corporation  receipts  to  the Office  of  the                                                            
     Governor  for direct  support of national  efforts to  open the                                                            
     coastal  plain of the Arctic  National Wildlife Refuge  for oil                                                            
     and gas exploration  and development, and other oil and gas and                                                            
     natural  resource development  projects,  for the fiscal  years                                                            
     ending June 30, 2005, and June 30, 2006.                                                                                   
                                                                                                                                
Accompanying explanatory  language reads, "Description: This expands                                                            
the purpose of the appropriation."                                                                                              
                                                                                                                                
[Note: This amendment was adopted earlier in the meeting.]                                                                      
                                                                                                                                
Co-Chair Wilken offered  a motion to rescind action previously taken                                                            
in adopting the amendment.                                                                                                      
                                                                                                                                
There being no  objection, the action in adopting  the amendment was                                                            
RESCINDED.                                                                                                                      
                                                                                                                                
Amendment  #95: This amendment  changes the  language of  subsection                                                            
(a) of  Section 22.  OFFICE OF THE  GOVERNOR., on  page 98,  lines 9                                                            
through 12. The amended language reads as follows.                                                                              
                                                                                                                                
     (a) The sum  of $125,000 is appropriated from  the general fund                                                            
     to the  Office of the Governor  for direct support of  national                                                            
     efforts  to  open the  coastal  plain  of the  Arctic  National                                                            
     Wildlife  Refuge for oil and  gas exploration and development,                                                             
     and  other  oil  and  gas  and  natural  resource  development                                                             
     projects,  for the fiscal years ending June 30,  2005, and June                                                            
     30, 2006.                                                                                                                  
                                                                                                                                
Accompanying explanatory  language reads, "This expands  the purpose                                                            
of the appropriation."                                                                                                          
                                                                                                                                
Co-Chair  Green noted this  language would  replace the language  of                                                            
Amendment #45.                                                                                                                  
                                                                                                                                
There being no objection, Amendment #95 was ADOPTED.                                                                            
                                                                                                                                
Amendment  94:  This  amendment  changes   the  funding  sources  of                                                            
appropriations  made in Section 21,  GAS PIPELINE, on page  96, line                                                            
19,  through  page  98,  line  8,  from  general  funds  and  Alaska                                                            
Permanent Fund  Corporation receipts, to general funds  exclusively.                                                            
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green outlined the amendment.                                                                                          
                                                                                                                                
Co-Chair Wilken  noted the appropriation is for activities  intended                                                            
to prepare for a natural gas pipeline.                                                                                          
                                                                                                                                
8:49:55 PM                                                                                                                    
                                                                                                                                
Senator Hoffman asked if the only change is the funding source.                                                                 
                                                                                                                                
Co-Chair  Green  affirmed  the  Alaska  Permanent  Fund Corporation                                                             
receipts would be replaced with general funds.                                                                                  
                                                                                                                                
There being no objection, Amendment #94 was ADOPTED.                                                                            
                                                                                                                                
8:50:30 PM                                                                                                                    
                                                                                                                                
Senator Olson  clarified that  the effective  date of Amendment  #83                                                            
should be May 10, 2005.                                                                                                         
                                                                                                                                
AT EASE 8:51:08 PM / 8:52:40 PM                                                                                             
                                                                                                                                
Senator Olson further reiterated  that the effective date of May 10,                                                            
2005 applies to  the fiscal years ending June 30 2005,  and June 30,                                                            
2006.                                                                                                                           
                                                                                                                                
Co-Chair Green deemed that the clarification was adopted.                                                                       
                                                                                                                                
8:53:11 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green   announced  the  conclusion  of  consideration   of                                                            
amendments to the operating budget.                                                                                             
                                                                                                                                
Ms.  Blaisdell  requested  the  Committee  grant  authority  to  the                                                            
Division  of Legislative   Finance and  the  Division  of Legal  and                                                            
Research  Services to make  any necessary  technical and  conforming                                                            
changes.                                                                                                                        
                                                                                                                                
Co-Chair Green affirmed,  for the record, that this is the intent of                                                            
the Committee.                                                                                                                  
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Green adjourned the meeting at 08:54 PM.                                                                               

Document Name Date/Time Subjects