Legislature(2007 - 2008)SENATE FINANCE 532

04/04/2007 09:00 AM FINANCE


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09:04:09 AM Start
09:04:22 AM HB95 || HB96
10:01:24 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 95 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+ HB 96 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                         April 4, 2007                                                                                        
                           9:04 a.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Lyman Hoffman convened the meeting at approximately                                                                    
9:04:09 AM.                                                                                                                   
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
Senator Fred Dyson                                                                                                              
                                                                                                                                
Also Attending: DAVID TEAL, Director, Division of Legislative                                                                 
Finance.                                                                                                                        
                                                                                                                                
Attending via Teleconference: There were no teleconference                                                                    
participants.                                                                                                                   
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
                                                                                                                                
HB  95-APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                     
                                                                                                                                
HB  96-APPROP: MENTAL HEALTH BUDGET                                                                                             
                                                                                                                                
The Committee heard from the budget subcommittees and the                                                                       
Division of Legislative Finance. The bills were held in                                                                         
Committee.                                                                                                                      
                                                                                                                                
9:04:22 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 95(FIN)                                                                                              
     "An  Act making  appropriations for  the operating  and loan                                                               
     program expenses of state  government, for certain programs,                                                               
     and to  capitalize funds;  making appropriations  under art.                                                               
     IX, sec.  17(c), Constitution  of the  State of  Alaska; and                                                               
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 96(FIN)                                                                                              
     "An Act making appropriations  for the operating and capital                                                               
     expenses  of  the  state's integrated  comprehensive  mental                                                               
     health program; and providing for an effective date."                                                                      
                                                                                                                                
                                                                                                                                
9:07:58 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman introduced the bills and announced that the                                                                    
chairs of the Operating budget subcommittees would present the                                                                  
FY 08 budget recommendation reports for each department.                                                                        
                                                                                                                                
Office of the Governor                                                                                                        
                                                                                                                                
     Subcommittee  members:  Senator  Hoffman,  Senator  Cowdery,                                                               
     Senator Green, Senator Therriault.                                                                                         
                                                                                                                                
     The  Senate  Finance  Subcommittee  for the  Office  of  the                                                               
     Governor submits  an Operating budget consisting  of numbers                                                               
     and  language and  excluding PERS/TRS  consideration to  the                                                               
     full Senate Finance Committee for FY 08 as follows:                                                                        
                                                                                                                                
          General Funds                                                                                                         
               08 Adj Base: 19,694,000                                                                                          
               Gov Amend:   18,839,800                                                                                          
               Sen Sub:     18,839,800                                                                                          
                                                                                                                                
          Fed Funds                                                                                                             
               08 Adj Base:    178,800                                                                                          
               Gov Amend:      178,800                                                                                          
               Sen Sub:        178,800                                                                                          
                                                                                                                                
          Other Funds                                                                                                           
               08 Adj Base:  1,460,000                                                                                          
               Gov Amend:    1,383,700                                                                                          
               Sen Sub:      1,383,700                                                                                          
                                                                                                                                
          Total                                                                                                                 
               08 Adj Base: 21,332,800                                                                                          
               Gov Amend:   20,402,300                                                                                          
               Sen Sub:     20,402,300                                                                                          
                                                                                                                                
     Budget Action                                                                                                              
         1. Adopted the FY08 Adjusted Base.                                                                                     
         2. Accepted budget amendment relocating Lt. Governor's                                                                 
           budget component within the Executive Operations BRU.                                                                
         3. Increments:                                                                                                         
          Adopted $19,200 for increased  lease costs Human Rights                                                               
          Commission                                                                                                            
          Adopted  $0.0 for  Statehood  Commission transfer  from                                                               
          DCCED                                                                                                                 
          Adopted $73,200 for CIP Receipts for staff position.                                                                  
          Adopted  $78,600   for  increased  funding   for  trade                                                               
          activity.                                                                                                             
          Adopted  $48,000  for  annual  maintenance  for  voting                                                               
          equipment.                                                                                                            
         4. Decrements:                                                                                                         
          Adopted  $-149,500  for  I/A  Denali  Commission  staff                                                               
          position.                                                                                                             
          Adopted  $-771,200 for  internal efficiencies  in Exec.                                                               
          Office.                                                                                                               
          Adopted  $-100,000  for  internal efficiencies  in  Lt.                                                               
          Gov.                                                                                                                  
          Adopted $-128,800 for internal efficiencies in OMB.                                                                   
                                                                                                                                
     Personnel                                                                                                                  
          Reviewed the  personnel count  for the  Department. The                                                               
          Governor's amendments reflect a  reduction of four full                                                               
          time positions.                                                                                                       
                                                                                                                                
Co-Chair Hoffman reviewed this recommendation.                                                                                  
                                                                                                                                
Legislature                                                                                                                   
                                                                                                                                
     Subcommittee members: Senator Hoffman, Senator Cowdery,                                                                    
     Senator Green, Senator Therriault.                                                                                         
                                                                                                                                
     The Senate Finance Subcommittee  for the Legislature submits                                                               
     an Operating  budget consisting of numbers  and language and                                                               
     excluding PERS/TRS consideration to  the full Senate Finance                                                               
     Committee for FY 08 as follows:                                                                                            
                                                                                                                                
          General Funds                                                                                                         
               08 Adj Base: 60,043,100                                                                                          
               Gov Amend:   59,936,200                                                                                          
               Sen Sub:     58,856,100                                                                                          
                                                                                                                                
          Other Funds                                                                                                           
               08 Adj Base:    681,700                                                                                          
               Gov Amend:      788,600                                                                                          
               Sen Sub:        762,900                                                                                          
                                                                                                                                
          Total                                                                                                                 
               08 Adj Base: 60,724,800                                                                                          
               Gov Amend:   60,724,800                                                                                          
               Sen Sub:     59,619,000                                                                                          
                                                                                                                                
     Budget Action                                                                                                              
        1. Accepted the FY08 adjusted base budget.                                                                              
        2. Adopted numerous transfers and adjustments requested                                                                 
          by the Legislative Affairs Agency.                                                                                    
        3. Approved structure change moving the Ombudsman Office                                                                
          under Legislative Council.                                                                                            
        4. Increments (major)                                                                                                   
          $338,000 Increased Funding for 30 thirty day special                                                                  
          session                                                                                                               
          $102,300 for one new position Ombudsman                                                                               
          $26,400 for casual labor Ombudsman                                                                                    
          $81,800 additional personal services for Office of                                                                    
          Victim Rights                                                                                                         
        5. Decrements (major)                                                                                                   
          ($251,200) Legislative Audit Carryforward                                                                             
          ($194,200) Legislative Finance Carryforward                                                                           
          ($51,100) Ombudsman Carryforward                                                                                      
          ($668,200) Senate Finance Carryforward                                                                                
          ($286,300) House Operating Carryforward                                                                               
          ($168,400) Senate Operating Carryforward                                                                              
          ($126,300) Office of Victims Rights Carryforward                                                                      
          ($40,000) Efficiency Reduction Administrative Services                                                                
                                                                                                                                
     Personnel                                                                                                                  
          The subcommittee reviewed the personnel count for the                                                                 
          Legislature. There is one new full-time position and                                                                  
          one less part-time position.                                                                                          
                                                                                                                                
Co-Chair  Hoffman  highlighted  this   report,  adding  that  the                                                               
recommended addition of  $338,000 for a special  session would be                                                               
in  addition  to the  base  of  $100,000  and was  considered  in                                                               
anticipation of a special session to complete efforts on the                                                                    
Alaska Gasline Inducement Act (AGIA).                                                                                           
                                                                                                                                
Co-Chair Hoffman added that the relocation of the Ombudsman                                                                     
allocation was a change made to conform to action taken by the                                                                  
House of Representatives.                                                                                                       
                                                                                                                                
9:11:07 AM                                                                                                                    
                                                                                                                                
Department of Administration                                                                                                  
                                                                                                                                
     Subcommittee members: Senator Hoffman, Senator McGuire,                                                                    
     Senator Dyson.                                                                                                             
                                                                                                                                
     The  Senate  Finance  Subcommittee  for  the  Department  of                                                               
     Administration  submits an  Operating  budget consisting  of                                                               
     numbers  and language  and excluding  PERS/TRS consideration                                                               
     to the full Senate Finance Committee for FY 08 as follows:                                                                 
                                                                                                                                
          General Funds                                                                                                         
               08 Adj Base:  65,342,400                                                                                         
               Gov Amend:    68,386,600                                                                                         
               Hse-PERS:     67,819,100                                                                                         
               Sen Sub:      64,569,100                                                                                         
                                                                                                                                
          Fed Funds                                                                                                             
               08 Adj Base:   2,876,300                                                                                         
               Gov Amend:     2,857,100                                                                                         
               Hse-PERS:      2,876,300                                                                                         
               Sen Sub:       2,844,500                                                                                         
                                                                                                                                
          Other Funds                                                                                                           
               08 Adj Base: 202,603,600                                                                                         
               Gov Amend:   206,692,200                                                                                         
               Hse-PERS:    206,356,700                                                                                         
               Sen Sub:     199,184,700                                                                                         
                                                                                                                                
          Total                                                                                                                 
               08 Adj Base: 270,822,300                                                                                         
               Gov Amend:   277,935,900                                                                                         
               Hse-PERS:    277,052,100                                                                                         
               Sen Sub:     266,598,300                                                                                         
                                                                                                                                
     Budget Action                                                                                                              
        1. Accepted the FY08 adjusted base budget.                                                                              
        2. Accepted FY08  request  for health  cost  fund  source                                                               
          changes of $1,600.                                                                                                    
        3. Accepted the Governor's amended budget.                                                                              
        4. Denied FY08 request for  fuel cost  increases totaling                                                               
          $44,400. All fuel increases are deferred to the full                                                                  
          Senate Finance Committee for consideration                                                                            
        5. Denied FY08  request  for  PERS  fund  source  changes                                                               
          totaling $208,900. All retirement related changes are                                                                 
          deferred to the full Senate Finance Committee for                                                                     
          consideration in the statewide retirement proposal.                                                                   
        6. Removed non-GF  excess  funds due  to  the  PERS  rate                                                               
          reduction of $7,003,800.                                                                                              
                                                                                                                                
     Amendment Action                                                                                                           
     Reviewed amendments submitted by the Governor.                                                                             
                                                                                                                                
     1. Accepted the following Governor's proposed amendments:                                                                  
                                                                                                                                
        Amendment #3: (19,200)GF  in AOGCC, replaced  with 19,200                                                               
         AOGCC RSS                                                                                                              
        Amendment #4: 4,900 AOGCC RSS for lease costs                                                                           
        Amendment #5: (327,000) GF in ETS chargeback receipts                                                                   
        Amendment #6: (1,600,000) GF in DOA Leases                                                                              
        Amendment #7: (100,000) GF EPORS cost estimate reductions                                                               
        Amendment #8: 154,500 RSS to ETS                                                                                        
        Amendment #10: (2,049,000) RSS Group Health Contract cost                                                               
         estimate reduction                                                                                                     
        Amendment  #11:  (150,000)   GF  Labor   Relations  staff                                                               
         consolidation/efficiencies                                                                                             
        Amendment #12: (10,500) RSS to DMV                                                                                      
        Amendment #13: 1,440,600 RSS to DMV for leases                                                                          
        Amendment   #18:    (160,400)    GF    Personnel    staff                                                               
         consolidations/efficiencies                                                                                            
        Amendment #20: 319,500 RSS to Retirement & Benefits for 3                                                               
          PFT  in personal  services  support and  1  PFT for  an                                                               
         internal auditor                                                                                                       
        Amendment #21: net zero to Retirement & Benefits for fund                                                               
         source reallocations                                                                                                   
        Amendment #31 (1,000,000) I/A RSS to  Risk Management for                                                               
         Marine Insurance Premium reductions (ADFG, DPS, DOTPF)                                                                 
        Amendment #32:  25,000  GF  to  Satellite  Infrastructure                                                               
         lease increase                                                                                                         
        Amendment #33:  (25,000) GF  to  UVPARP annuity  purchase                                                               
         cost estimate reduction                                                                                                
                                                                                                                                
     2. The subcommittee reviewed and partially accepted the                                                                    
        following Governor's amendment:                                                                                         
                                                                                                                                
     Amendment #19: Accepted 3 positions @ $300,000 to Public                                                                   
          Defender Agency; Governor requested 8 positions @                                                                     
          $800,000                                                                                                              
                                                                                                                                
     3. The subcommittee reviewed but did not accept the                                                                        
        following Governor's amendments:                                                                                        
                                                                                                                                
        Amendment #9: 2,250,000 GF operation/maintenance costs to                                                               
         ALMR                                                                                                                   
        Amendment #14:  7000,000  to OPA  (500,000  GF &  200,000                                                               
         SDPR) for 5 PFT                                                                                                        
        Amendment #22-30:  are in  the Language  section and  are                                                               
        related to PERS/TRS.  All retirement related  changes are                                                               
        deferred  to  the  full  Senate   Finance  Committee  for                                                               
      consideration in the statewide retirement proposal.                                                                       
                                                                                                                                
     4. The subcommittee reviewed the Language section of the                                                                   
        budget.   The   subcommittee   accepted   the   following                                                               
        amendments:                                                                                                             
                                                                                                                                
        Amendment #15: (1,500,000)  GF to  Commissioner's Office,                                                               
          reduction  in  distribution   to  departments  for  ETS                                                               
          chargeback  rates   and  non-covered   employee  health                                                               
          insurance. Additional  efficiencies were  identified in                                                               
          the  amount  of  (559,000)  for a  total  reduction  of                                                               
         (2,059,000)                                                                                                            
        Amendment #16:  250,000 GF  to Commissioner's  Office for                                                               
         security and anti-virus software                                                                                       
        Amendment #17:  825,000 GF  to Commissioner's  Office for                                                               
          Exchange   and   Active   Directory  funding   to   all                                                               
          departments. Accepting  all three amendments  yielded a                                                               
         net savings of $984,000                                                                                                
                                                                                                                                
     5. The subcommittee reviewed the Office of Public Advocacy                                                                 
        (OPA)  budget  and  amended  the  budget  to  include  an                                                               
        increment for the Office  of Elder Fraud  and Assistance.                                                               
        The subcommittee finds that the current funding level for                                                               
        this office  is  insufficient  to  meet  the  demand  for                                                               
        advocacy. An increment of $231,199 is  accepted and three                                                               
        new positions to  properly address  this new  function of                                                               
        OPA created by statute in 2006 are approved.                                                                            
                                                                                                                                
     Personnel                                                                                                                  
          The subcommittee  reviewed the personnel count  for the                                                               
          Department.  The  authorized  position count  for  FY08                                                               
          Adjusted   Base  is   1,028  permanent   full-time,  27                                                               
          permanent   part-time  and   27  temporary.   The  FY08                                                               
          Governor  requested   25  new  PFT.   The  subcommittee                                                               
          accepted  8 requested  positions plus  an additional  3                                                               
          for the Elder  Fraud unit in OPA for a  total of 11 new                                                               
          PFT positions:                                                                                                        
               4 - Retirement & Benefits                                                                                        
               1 - APOC (Anc)                                                                                                   
               3 - Office Public Advocacy (Anc/Elder Fraud,                                                                     
                    Attorney II, Investigator, Clerk II)                                                                        
               3 - Public Defenders Agency (Anc)                                                                                
                                                                                                                                
               11 (1,039 PFT total Department position count)                                                                   
                                                                                                                                
Co-Chair Hoffman overviewed the subcommittee recommendations.                                                                   
                                                                                                                                
9:14:10 AM                                                                                                                    
                                                                                                                                
Department of Fish and Game                                                                                                   
                                                                                                                                
     Subcommittee members: Senator Hoffman, Senator Stedman,                                                                    
    Senator Stevens, Senator Wielechowski, Senator Wagoner.                                                                     
                                                                                                                                
     The Senate Finance Subcommittee for the Department of Fish                                                                 
     and Game submits an Operating Budget to the full Senate                                                                    
     Finance Committee for FY 08 as follows:                                                                                    
                                                                                                                                
          General Funds                                                                                                         
               07 Adj Base: 42,760,700                                                                                          
               Gov Amend: 52,080,500                                                                                            
               House: 43,671,300                                                                                                
               Sen. Sub: 43,671,300                                                                                             
                                                                                                                                
          Fed Funds                                                                                                             
               07 Adj Base: 68,018,200                                                                                          
               Gov Amend: 62,137,900                                                                                            
               House: 66,723,200                                                                                                
               Sen. Sub: 66,723,200                                                                                             
                                                                                                                                
          Other Funds                                                                                                           
               07 Adj Base: 69,852,400                                                                                          
               Gov Amend: 65,626,200                                                                                            
               House: 69,332,400                                                                                                
               Sen. Sub: 68,704,700                                                                                             
                                                                                                                                
     Position changes                                                                                                           
          PFT                                                                                                                   
               FY 07: 862                                                                                                       
               FY 08: 858                                                                                                       
          PPT                                                                                                                   
               FY 07: 800                                                                                                       
               FY 08: 800                                                                                                       
          Temp                                                                                                                  
               FY 07: 102                                                                                                       
               FY 08: 99                                                                                                        
                                                                                                                                
     Budget Action                                                                                                              
        1. The Sub Committee removed all items related to the                                                                   
          retirement costs and fuel increases. These items will                                                                 
          be considered by the full Finance Committee.                                                                          
        2. Reviewed and accepted all of the amendments submitted                                                                
          by the Governor.                                                                                                      
                                                                                                                                
               Amendment #110:  (149,000) GF for  Admin Services,                                                               
                    eliminates 1 PFT, 2 temp                                                                                    
               Amendment #112:  (342,800) fund source  switch for                                                               
                    CFEC, covers CFEC with RSS and moves 342,800                                                                
                    in GF to Comm Fish                                                                                          
               Amendment   #113:  GF   for   Comm  Fish   Special                                                               
                    Projects, eliminates 2 PFT (Publications                                                                    
                    Specialist & Analyst/ Programmer)                                                                           
               Amendment  #114:  (85,000) GF  for  Commissioner's                                                               
                    office, eliminates one PFT, Oceans Policy                                                                   
                    Coordinator                                                                                                 
               Amendment  #115: (100,000)  other funds  for EVOSS                                                               
                    (see Am#111)                                                                                                
               Amendment   #116:   (13,100)  for   HQ   Fisheries                                                               
                    Management, insurance premium reduction                                                                     
               Amendment   #117:   342,800   for   HQ   Fisheries                                                               
                    Management, switch with CFEC (see amendment                                                                 
                    #112)                                                                                                       
               Amendment  #118:  (63,000)  for  Southeast  Region                                                               
                    Fisheries Management Eliminates publications                                                                
                    specialist accounted for in Amendment #113.                                                                 
               Amendment  #119:  (700)  Fish and  Game  Fund  for                                                               
                    Sport    Fish   Marine    Insurance   Premium                                                               
                    reduction                                                                                                   
               Amendment  #120: GF  for Sport  Fish, restructures                                                               
                    Aquatic Resources Coordination Project                                                                      
               Amendment  #121:  (97,100)   GF  for  Sport  Fish,                                                               
                    restructure    educational    and    outreach                                                               
                    projects                                                                                                    
               Amendment  #122:  (11,700)   GF  for  Sport  Fish,                                                               
                 eliminate temp intern position                                                                                 
               Amendment  #123:  (700)  Fish and  Game  Fund  for                                                               
                    Wildlife   Conservation    Marine   Insurance                                                               
                    Premium reduction                                                                                           
               Amendment   #124:   (22,700)   GF   for   Wildlife                                                               
                    Conservation, reduced fuel costs                                                                            
               Amendment   #125:   100,000  EVOS   receipts   for                                                               
                    Wildlife Conservation Special Projects                                                                      
                                                                                                                                
        3. The Sub-Committee added intent language to the                                                                       
          Wildlife Conservation, Public  Shooting Range Component                                                               
          as follows:  It is the  intent of the  legislature that                                                               
          the  Department  of F&G  develop  a  plan to  make  the                                                               
          shooting ranges completely self-supporting by FY 2009.                                                                
                                                                                                                                
     Items of Concerns                                                                                                          
        1. Maximizing harvest opportunities. The Constitution of                                                                
          the  State   of  Alaska  mandates  the   management  of                                                               
          resources for  the maximum benefit  of the  people. Yet                                                               
          anecdotally,  the department  has cited  lack of  funds                                                               
          for  stock  assessments  as  cause  to  manage  certain                                                               
          fisheries conservatively.  Because it is  important for                                                               
          the  legislature to  know  to what  extent  if any  the                                                               
          state   is   missing    opportunities   for   fisheries                                                               
          development,  the   sub-committee  requests   that  the                                                               
          department perform  a review of managed  fisheries that                                                               
          are currently  limited by insufficient  scientific data                                                               
          to  allow  maximum  harvest  opportunities.  Individual                                                               
          fisheries  managers should  be  required  to study  the                                                               
          potential for increased  harvest opportunities in their                                                               
          respective  areas, and  summarize  ways,  if any,  that                                                               
          their budgets limit their ability  to expand the use of                                                               
          fisheries resources.  In the FY 09  budget request, the                                                               
          department should  include cost estimates of  any stock                                                               
          assessments  necessary  to   better  understand  target                                                               
          species  abundance  and  distribution.  The  department                                                               
          should  also  report  on   ways  in  which  cooperative                                                               
          studies with  industry can help to  expand fisheries in                                                               
          a cost-effective  manner. This  item of concern  is not                                                               
          meant  to  impugn  the management  of  the  department,                                                               
          which  is   world  renowned   for  its   effective  and                                                               
          sustainable  management of  our fisheries.  However, it                                                               
          is the intent of the  subcommittee to encourage ADFG to                                                               
          look  at what  it could  be doing  with better  funding                                                               
          directed  at expanding  harvest opportunities  for both                                                               
          existing fisheries and potential new fisheries.                                                                       
                                                                                                                                
        2. The Department has indicated for several years that                                                                  
          retaining   key  fisheries   management  personnel   is                                                               
          becoming  more and  more  difficult  because the  state                                                               
          salaries are not competitive with  the salaries paid to                                                               
          equivalent  positions in  the  federal government.  The                                                               
          departure  of  experienced   biologists  with  critical                                                               
          knowledge   of  the   Alaskan   fishing  industry   and                                                               
          fisheries  resources  will  leave the  department  with                                                               
          deficiencies  in its  core functions.  The subcommittee                                                               
          respectfully  requests  that   the  administration  pay                                                               
          close  attention  to this  problem  and  report to  the                                                               
          legislature   during  the   next   budget  cycle   with                                                               
          solutions.                                                                                                            
                                                                                                                                
        3. Operation of shooting ranges fall outside the scope of                                                               
          this Department and it is  the intent that the existing                                                               
          shooting ranges  become self supporting  by FY  09. The                                                               
          FY 06 shortfall was $375k  for the 3 state run shooting                                                               
          ranges.                                                                                                               
                                                                                                                                
Co-Chair Hoffman summarized this budget recommendation, and read                                                                
the intent language relating to public shooting ranges.                                                                         
                                                                                                                                
9:16:32 AM                                                                                                                    
                                                                                                                                
Department of Law                                                                                                             
                                                                                                                                
     Subcommittee members: Senator Stedman, Senator McGuire,                                                                    
     Senator French, Senator Therriault                                                                                         
                                                                                                                                
     The Senate Finance Subcommittee for the Department of Law                                                                  
     submits an operating budget proposal to the full Seante                                                                    
     Finance Committee for FY 08 as follows:                                                                                    
                                                                                                                                
          General Funds                                                                                                         
               06 Actual:   $55,719,700                                                                                         
               07 Adj Base: $43,037,200                                                                                         
               Gov Amend:   $45,484,200                                                                                         
               Sen. Sub:    $43,251,600                                                                                         
                                                                                                                                
          Fed Funds                                                                                                             
               06 Actual:     1,147,400                                                                                         
               07 Adj Base:   3,013,900                                                                                         
               Gov Amend:     3,113,900                                                                                         
               Sen. Sub:      3,133,900                                                                                         
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual:    21,180,400                                                                                         
               07 Adj Base:  26,066,400                                                                                         
               Gov Amend:    24,059,800                                                                                         
               Sen. Sub:     26,173,500                                                                                         
                                                                                                                                
          Total                                                                                                                 
               06 Actual:   $78,047,500                                                                                         
               07 Adj Base: $72,117,500                                                                                         
               Gov Amend:   $72,657,900                                                                                         
               Sen. Sub:    $72,539,000                                                                                         
                                                                                                                                
     Position changes                                                                                                           
          FT                                                                                                                    
               FY 07:           535                                                                                             
               FY 08 Sen. Sub.: 535                                                                                             
                                                                                                                                
          PT                                                                                                                    
               FY 07:            11                                                                                             
               FY 08 Sen. Sub.:  12                                                                                             
                                                                                                                                
     Budget Action                                                                                                              
          The Senate Subcommittee  FY08 operating budget proposal                                                               
          for  the Department  of Law  excludes funding  for PERS                                                               
          cost increases as directed  by the operating Co-chair's                                                               
          office.  Funding  for  the PERS  employer  contribution                                                               
          rates will be handled by  the full Finance Committee in                                                               
          accordance with anticipated adjustments to the rates.                                                                 
                                                                                                                                
          The  Senate Finance  Subcommittee recommendation  fully                                                               
          funds  the Governor's  amended budget  request for  the                                                               
          Department of  Law with the exception  of one permanent                                                               
          full time  position and $118,900 in  associated funding                                                               
          in  the Criminal  Justice  Litigation allocation.  This                                                               
          Public Information Officer  position was identified for                                                               
          deletion   by   the   department   in   view   of   the                                                               
          subcommittee's intention to allow  no net increase over                                                               
          the FY07 adjusted base in  the number of permanent full                                                               
          time positions in the department.                                                                                     
                                                                                                                                
          The following  FY08 Governor's Amended  increments have                                                               
          been incorporated into  the Senate Finance Subcommittee                                                               
          recommendation:                                                                                                       
                                                                                                                                
               Attorney  V  position  and support  costs  in  the                                                               
               Commercial  and  Fair  Business  section  for  the                                                               
               implementation of the cruise ship initiative                                                                     
                                                       $167,400                                                                 
                                                                                                                                
               Two paralegal positions  and one part-time support                                                               
               staff position for the Child Protection section                                                                  
                                                       $250,800                                                                 
                                                                                                                                
               Funding  for increased  office  space lease  costs                                                               
               for the  Criminal Division  in the  Third Judicial                                                               
               District   outside   Anchorage  and   the   Fourth                                                               
               Judicial  District  and  for the  Collections  and                                                               
               Support section of the Civil Division                                                                            
                                                       $293,000                                                                 
                                                                                                                                
               Dimond Courthouse Building maintenance costs                                                                     
                                                       $203,200                                                                 
                                                                                                                                
          The Governor's Amended  budget reverses increments that                                                               
          were  included in  the Governor's  original budget  for                                                               
          Criminal  Division  travel  costs   in  the  amount  of                                                               
          $195,800 and  Anchorage employee parking in  the amount                                                               
          of  $199,300.   Other  decrements  in   the  Governor's                                                               
          Amended  budget request  reverse increments  for a  new                                                               
          attorney   position  in   the  Criminal   Division  for                                                               
          prosecution  of   fish  and  game  violations   and  an                                                               
          attorney position  in the Civil  Division Environmental                                                               
          Law  section  for  implementation of  the  cruise  ship                                                               
          initiative.   The  Governor's   Amended  request   also                                                               
          deletes  an attorney  position  in  the Civil  Division                                                               
          Labor   and   State   Affairs  section   that   handles                                                               
          procurement   and  employment   cases  and   eliminates                                                               
          funding for an attorney  position in the Civil Division                                                               
          Statehood Defense section.                                                                                            
                                                                                                                                
          The House version  of the FY08 budget for  the Dept. of                                                               
          Law  funds the  agency at  the FY08  Governor's Amended                                                               
          level  and  also  restores half,  or  $99,700,  of  the                                                               
          funding for Anchorage staff  parking and restores half,                                                               
          or     $80,000,    of     the    funding     for    the                                                               
          procurement/employment  law  attorney position  in  the                                                               
          Civil Division Labor and State Affairs section.                                                                       
                                                                                                                                
     Items of Concern                                                                                                           
          The  Alaska   Court  System  expressed   concern  about                                                               
          deletion  of  the  Labor   and  State  Affairs  section                                                               
          attorney  position in  the Governor's  Amended request.                                                               
          Labor and State Affairs  section staff attorneys defend                                                               
          Court System  officers and employees in  non-tort cases                                                               
          without reimbursement for the  cost of the defense. The                                                               
          Subcommittee's  FY08  budget proposal  includes  intent                                                               
          language directing  the Department  of Law  to continue                                                               
          to provide  representation for  non-tort claims  to the                                                               
          Court System,  the Judicial Council, the  Commission on                                                               
          Judicial Conduct, and the Legislature.                                                                                
                                                                                                                                
Co-Chair Stedman spoke to this request.                                                                                         
                                                                                                                                
9:18:14 AM                                                                                                                    
                                                                                                                                
University of Alaska                                                                                                          
                                                                                                                                
     Subcommittee members: Senator Stedman, Senator Hoffman,                                                                    
     Senator Huggins, Senator Olson, Senator Thomas, Senator                                                                    
     Elton, Senator Dyson.                                                                                                      
                                                                                                                                
     Committee is recommending an FY08 Operating Budget for the                                                                 
     University of Alaska of $796.8 million:                                                                                    
                                                                                                                                
          Funding Summary                                                                                                       
                                                                                                                                
          GF:         $287,437,300                                                                                              
          Increase over FY07: 2.3%                                                                                              
                                                                                                                                
          Federal:    $152,660,900                                                                                              
          Increase over FY07: 2.1%                                                                                              
                                                                                                                                
          Other:      $356,693,300                                                                                              
          Increase over FY07: 3.4%                                                                                              
                                                                                                                                
          Total:      $796,791,500                                                                                              
          Increase over FY07: 2.8%                                                                                              
                                                                                                                                
     Report #1 Agency Totals: indicates the total dollars and                                                                   
     fund sources recommended by the committee. These are the                                                                   
     same totals and fund sources passed by the House.                                                                          
                                                                                                                                
     Report #2 Allocation Summary: indicates the appropriation                                                                  
     structure recommended by the committee. This is the same                                                                   
     appropriation structure passed by the House.                                                                               
                                                                                                                                
     Report #3 Transaction Comparison (Adj Base to SenSub):                                                                     
     compares the subcommittee's budget and the FY08 Adjusted                                                                   
     Base. The committee:                                                                                                       
                                                                                                                                
          · Adopted the FY08 Adjusted Base.                                                                                     
          · Accepts the Regent's full $18,772,000 request for FY                                                                
             08 Salary and Health Care  increases. $12,989,000 of                                                               
             this increment is GF.                                                                                              
          · Assumes a FY08 Teachers Retirement System (TRS)                                                                     
             contribution   rate   of   12.56%,   and   transfers                                                               
             $5,800,000  from  the  University's  budget  to  the                                                               
             Department of Administration  for direct  payment to                                                               
             the system. The Governor's amended  budget assumed a                                                               
             rate of 26%.                                                                                                       
          · Assumes an FY08 Optional Retirement Plan (ORP)                                                                      
             contribution rate equal to 19.85% (a  3 year rolling                                                               
             average of the consolidated TRS rate).  This rate is                                                               
             significantly lower than  the budgeted FY08  rate of                                                               
             33.68%. This  rate  reduction  resulted  in  a  $7.4                                                               
             million GF savings.                                                                                                
          · Shares $2.5 million GF in ORP savings with the                                                                      
             University to help off-set increased fix cost needs.                                                               
          · Assumes an FY08 Public Employees Retirement System                                                                  
             (PERS) contribution rate of 22%  and transfers $18.8                                                               
             million GF  from  the  University's  budget  to  the                                                               
             Department of Administration  for direct  payment to                                                               
             the system.                                                                                                        
          · Recommends that the full Finance Committee accept                                                                   
             the contingent fuel & utility cost increase language                                                               
             adopted by the  House. If the  average price  of oil                                                               
             exceeds  $35  a  barrel,  the   University  has  the                                                               
             potential to  receive  additional  funding up  to  a                                                               
             maximum amount of $2.64 million (See attached                                                                      
             sheet).                                                                                                            
                                                                                                                                
Co-Chair Stedman overviewed this request, noting that the                                                                       
subcommittee recommendation "lined up" with the House of                                                                        
Representatives' proposal.                                                                                                      
                                                                                                                                
9:18:56 AM                                                                                                                    
                                                                                                                                
Department of Revenue                                                                                                         
                                                                                                                                
     Subcommittee members: Senator Stedman, Senator French,                                                                     
     Senator Bunde.                                                                                                             
                                                                                                                                
     The Senate Finance Operating Budget Sub-committee for the                                                                  
     Department of Revenue submits an operating budget to the                                                                   
     full Senate Finance Committee for FY08 as follows:                                                                         
                                                                                                                                
          Gen Funds                                                                                                             
               06 Actual:    16,100,300                                                                                         
               07 Adj Base:  13,779,100                                                                                         
               Gov Amend:    41,642,900                                                                                         
               Sen. Sub:     41,096,500                                                                                         
                                                                                                                                
          Fed Funds                                                                                                             
               06 Actual:    13,927,100                                                                                         
               07 Adj Base:  43,857,700                                                                                         
               Gov Amend:    37,095,800                                                                                         
               Sen. Sub:     38,391,500                                                                                         
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual:   133,243,900                                                                                         
               07 Adj Base: 163,693,700                                                                                         
               Gov Amend:   187,792,300                                                                                         
               Sen. Sub:    188,201,500                                                                                         
                                                                                                                                
          Total                                                                                                                 
               06 Actual:   187,271,300                                                                                         
               07 Adj Base: 221,330,500                                                                                         
               Gov Amend:   266,531,000                                                                                         
               Sen. Sub:    267,689,500                                                                                         
                                                                                                                                
     Position changes                                                                                                           
          FT                                                                                                                    
               FY 07:           866                                                                                             
               FY 08:           855                                                                                             
                                                                                                                                
          PT                                                                                                                    
               FY 07:            53                                                                                             
               FY 08:            53                                                                                             
                                                                                                                                
          PPT                                                                                                                   
               FY 07:            17                                                                                             
               FY 08:            17                                                                                             
                                                                                                                                
          There   were    increases   in   personnel    for   the                                                               
          implementation  of  the  Petroleum Production  Tax  (9)                                                               
          These   positions   were  approved   through   previous                                                               
          legislation and  are not reflected as  increases in the                                                               
          FT  totals. There  were also  increases  in the  Cruise                                                               
          Ship   initiative  (6).   There   were  decreases   for                                                               
          deletions of vacant gasline  project positions (13), IT                                                               
          positions  (1),  and  tax auditor  positions  (2).  One                                                               
          additional Stranded  Gas Act position was  also deleted                                                               
          (total 17  deleted). The net  result is a  reduction of                                                               
          11 positions.                                                                                                         
                                                                                                                                
     Budget Action                                                                                                              
        1. The subcommittee adopted the Governor's amended budget                                                               
          with the following changes:                                                                                           
        2. All retirement related changes are deferred to the                                                                   
          Finance  Committee for  consideration in  the statewide                                                               
          retirement proposal.                                                                                                  
                                                                                                                                
     Language Recommendation                                                                                                    
          The  subcommittee  set a  cap  of  $25 million  on  the                                                               
          amount  necessary to  issue refunds  for capital  lease                                                               
          bids  as provided  in AS  43.55.023(f).  The amount  is                                                               
          appropriated from  the general  fund to  the Department                                                               
          of  Revenue, tax  division, for  the purpose  of making                                                               
          the refunds under AS 43.55.023(f).                                                                                    
                                                                                                                                
     Items of Concern                                                                                                           
          The  subcommittee   recognized  that  an   increase  in                                                               
          appropriation  personnel  was  necessary  for  the  Tax                                                               
          Division  to  meet  its  obligation  to  implement  the                                                               
          Petroleum   Production   Tax   and  the   Cruise   Ship                                                               
          initiative. The  subcommittee also adopted  an increase                                                               
          for Tax Auditor salaries  to support the Tax Division's                                                               
          effort to fill all  positions. It is the subcommittee's                                                               
          expectation that  the Tax Division  will report  on the                                                               
          success  of their  efforts to  fill  all positions  and                                                               
          will supply an accounting  of the funds appropriated in                                                               
          support of their effort.                                                                                              
                                                                                                                                
Co-Chair  Stedman   reviewed  this   request,  noting   that  the                                                               
"apparent  large   increments"  were  due  to   the  $25  million                                                               
allocation  for the  Petroleum Production  Tax (PPT)  credits and                                                               
additional  personnel  to  implement  the  PPT  and  Cruise  Ship                                                               
initiative.                                                                                                                     
                                                                                                                                
9:22:00 AM                                                                                                                    
                                                                                                                                
Department of Transportation and Public Facilities                                                                            
                                                                                                                                
     Subcommittee members: Senator Olson, Senator Cowdery,                                                                      
     Senator Kookesh, Senator Stevens, Senator Stedman, Senator                                                                 
     Wielechowski, Senator Bunde.                                                                                               
                                                                                                                                
     The  Senate  Finance  Sub-committee for  the  Department  of                                                               
     Transportation  and Public  Facilities submits  an operating                                                               
     budget to  the full  Senate Finance Committee  for FY  08 as                                                               
     follows:                                                                                                                   
                                                                                                                                
          Gen. Funds                                                                                                            
               06 Actual:    $194,925,100                                                                                       
               07 Adj. Base: $209,062,400                                                                                       
               Gov. Amd:     $225,650,200                                                                                       
               Sen. Sub:     $208,880,400                                                                                       
                                                                                                                                
          Fed. Funds                                                                                                            
               06 Actual:       1,882,300                                                                                       
               07 Adj. Base:    4,003,400                                                                                       
               Gov. Amd:        3,773,000                                                                                       
               Sen. Sub:        4,003,400                                                                                       
                                                                                                                                
          Other                                                                                                                 
               06 Actual:     263,294,900                                                                                       
               07 Adj. Base:  309,405,300                                                                                       
               Gov. Amd:      307,989,300                                                                                       
               Sen. Sub:      312,986,600                                                                                       
                                                                                                                                
          Total                                                                                                                 
               06 Actual:    $460,102,300                                                                                       
               07 Adj. Base: $522,471,100                                                                                       
               Gov. Amd:     $537,412,500                                                                                       
               Sen. Sub:     $525,870,400                                                                                       
                                                                                                                                
     Position Changes                                                                                                           
          FT                                                                                                                    
               FY 07:           3,011                                                                                           
               FY 08 (Sen Sub): 3,010                                                                                           
                                                                                                                                
          PPT                                                                                                                   
               FY 07:             541                                                                                           
               FY 08(Sen Sub):    540                                                                                           
          PT                                                                                                                    
               FY 07:               1                                                                                           
               FY 08 (Sen Sub):     1                                                                                           
                                                                                                                                
     The   Senate   FY   08  budget   for   the   Department   of                                                               
     Transportation  and  Public  Facilities  presented  here  is                                                               
     without  increased retirement  and benefit  contributions in                                                               
     the  personal services  lines and  without additional  costs                                                               
     associated with estimated fuel  price increases. These costs                                                               
     will  be addressed  by the  full finance  committee for  all                                                               
     state agencies.                                                                                                            
                                                                                                                                
     The  sub committee  reviewed the  governor's proposed  FY 08                                                               
     budget  and budget  amendments. Of  the 84  recommendations,                                                               
     the  most   significant  that   are  accepted   include  the                                                               
     following:                                                                                                                 
                                                                                                                                
          Salary increases from market based pay adjustments                                                                    
                                                  $4,009,300                                                                    
          Operational costs of 28 new facilities                                                                                
                                                     551,500                                                                    
          Required airport security at 16 locations                                                                             
                                                   1,216,100                                                                    
          State equipment fleet cost increases                                                                                  
                                                   2,000,000                                                                    
                                                                                                                                
     Specific  recommendations   that  are  denied   include  the                                                               
     following:                                                                                                                 
                                                                                                                                
          Environmental position for Sitka and mid region access                                                                
                                                     115,600                                                                    
          Four engineering positions for Juneau access                                                                          
                                                     474,300                                                                    
          Central region engineer position for contract close-                                                                  
          outs                                                                                                                  
                                                     102,000                                                                    
          Fox Spring maintenance decrement                                                                                      
                                                     (30,000)                                                                   
          Commodity price increases in Northern and Central                                                                     
          Regions                                                                                                               
                                                   1,185,000                                                                    
          Anchorage International Airport janitorial conract                                                                    
          Heating fuel reductions at 97 rural airports                                                                          
                                                    (500,000)                                                                   
     Finally,  the proposed  $6,600,000 decrement  to the  Marine                                                               
     Highway System vessel operations  is reduce by $2,000,000 in                                                               
     order  to  maintain  winter service  to  Kodiak  and  Prince                                                               
     William Sound.                                                                                                             
                                                                                                                                
Senator  Olson  summarized  this   budget  proposal,  noting  the                                                               
"biggest difference" between the  Governor's requested budget and                                                               
the subcommittee  recommendation was the reduction  in the Marine                                                               
Highway System decrement.                                                                                                       
                                                                                                                                
9:24:36 AM                                                                                                                    
                                                                                                                                
Department of Public Safety                                                                                                   
                                                                                                                                
     Subcommittee members: Senator Olson, Senator Wielechowski,                                                                 
     Senator McGuire, Senator Ellis, Senator Bunde.                                                                             
                                                                                                                                
     The Senate Finance Subcommittee for the Department of                                                                      
     Public Safety submits an operating budget to the full                                                                      
     Senate Finance Committee for FY 08 as follows:                                                                             
                                                                                                                                
          General Funds                                                                                                         
               06 Actual:    $93,869,200                                                                                        
               07 Adj Base: $114,781,600                                                                                        
               Gov. Amd:    $117,468,500                                                                                        
               Sen Sub:     $114,499,600                                                                                        
                                                                                                                                
          Fed Funds                                                                                                             
               06 Actual:      7,652,400                                                                                        
               07 Adj Base:   12,708,500                                                                                        
               Gov. Amd:      12,671,300                                                                                        
               Sen Sub:       12,703,300                                                                                        
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual:     16,653,200                                                                                        
               07 Adj Base:   21,415,000                                                                                        
               Gov. Amd:      21,365,900                                                                                        
               Sen Sub:       21,906,500                                                                                        
                                                                                                                                
          Total                                                                                                                 
               06 Actual:    118,174,800                                                                                        
               07 Adj Base:  148,905,100                                                                                        
               Gov. Amd:     151,505,700                                                                                        
               Sen Sub:      149,109,400                                                                                        
                                                                                                                                
          Position Changes                                                                                                      
               FT                                                                                                               
                    FY 07: 822                                                                                                  
                    FY 08 (Sen Sub): 823                                                                                        
                                                                                                                                
               PT                                                                                                               
                    FY 07: 17                                                                                                   
                    FY 08 (Sen Sub): 17                                                                                         
                                                                                                                                
               PPT                                                                                                              
                    FY 07: 12                                                                                                   
                    FY 08 (Sen Sub): 11                                                                                         
                                                                                                                                
     Budget Action                                                                                                              
          The  Senate  Finance  Sub-Committee  budget  authorizes                                                               
          $2,396,300 less  in total  than the  Governor's Amended                                                               
          Budget Request.  The differences  are shown  in summary                                                               
          and  in detail  in the  attached reports.  Most of  the                                                               
          Governor's recommendations were accepted.                                                                             
                                                                                                                                
          Per  your direction,  the  PERS  fund source  switches,                                                               
          which  would  have increased  GF  by  $572,600 and  cut                                                               
          other funding  sources by a corresponding  amount, were                                                               
          removed form this  budget request, to be  dealt with by                                                               
          the full Finance Committee.                                                                                           
                                                                                                                                
          The  other  main  differences  between  the  Governor's                                                               
          Amended budget  request and  that of  the sub-committee                                                               
          proposal are:                                                                                                         
                                                                                                                                
             · The Governor offered a reduction of $145,000 to                                                                  
               reduce  aircraft operations  for the  department's                                                               
               most  expensive   aircraft.  That   reduction  was                                                               
               accepted  and  further  reduced   to  a  total  of                                                               
               $500,000. The Department  has been lapsing several                                                               
               hundred thousand  of GF (even after  excluding the                                                               
               carryforward addressed in  the next paragraph) due                                                               
               to  a  high  rate  of  vacancies.  They  have  the                                                               
               ability  to  transfer those  anticipated  balances                                                               
               within  the  appropriation  should  they  need  in                                                               
               order to  cover this  additional reduction,  so by                                                               
               doing  so we  do  not anticipate  the  need for  a                                                               
               reduction  in services  beyond  what the  Governor                                                               
               proposed.                                                                                                        
                                                                                                                                
             · The Governor proposed carryforward language with                                                                 
               a  corresponding  decrease   of  $563,400  to  the                                                               
               Village  Public  Safety  Officer  Program  (VPSO).                                                               
               Since  their  actual  carryforward last  year  was                                                               
               $780,000, we  accepted the  carryforward language,                                                               
               but  changed the  reduction to  $750,000 which  we                                                               
               feel  is a  more  realistic  expectation of  their                                                               
               probable GF lapse.                                                                                               
                                                                                                                                
             · This proposal includes an increase of $300,000 to                                                                
               the  Council  on   Domestic  Violence  and  Sexual                                                               
               Assault  (CDVSA).  $100,000  was  offered  by  the                                                               
               Governor  and later  withdrawn  in the  Governor's                                                               
               Amendments. The  remaining $200,000 was  added for                                                               
               the  Barrow   shelter,  Arctic  Women   in  Crisis                                                               
               (AWIC).                                                                                                          
                                                                                                                                
             · Finally, the Governor's budget split the State                                                                   
               Troopers  and created  a  new  division of  Alaska                                                               
               Wildlife  Troopers which  is  composed of  several                                                               
               components/allocations.      The     sub-committee                                                               
               accepted the structure changes  as detailed on the                                                               
               attachment     called     "FY    2008     Proposed                                                               
               Structure/Dept  of  Public Safety",  and  accepted                                                               
               all transfers  of existing funds and  positions to                                                               
               create  the division.  However, the  sub-committee                                                               
               did  not accept  the request  for 5  new positions                                                               
               and approximately $650,000.                                                                                      
                                                                                                                                
          The Sub-Committee  reviewed the Governor's  request for                                                               
          the  following language  in  the  language section  and                                                               
          recommends  it  be  included   in  the  Senate  Finance                                                               
          Committee  Substitute  (CS)   for  the  Village  Public                                                               
          Safety   Officer   Allocation:  "The   unexpended   and                                                               
          unobligated general  fund balance of  the appropriation                                                               
          made  in sec.  1, CH  33, SLA  2006, page  32, line  30                                                               
          (Village  Public Safety  Officer Program  - $5,274,100)                                                               
          is reappropriated  to the  Department of  Public Safety                                                               
          for the  Village Public Safety Officer  Program for the                                                               
          fiscal year ending June 30, 2008."                                                                                    
                                                                                                                                
          Additional recommendations for  language to be included                                                               
          in the  "numbers section"  of the CS  are shown  in the                                                               
          attached "Wordage" report.                                                                                            
                                                                                                                                
     Items of Concern                                                                                                           
          Perhaps  the biggest  concern for  this  budget is  the                                                               
          continuing problem  with vacant State Trooper  and VPSO                                                               
          positions. With the  vacancy rate as high as  it is and                                                               
          has  been,  it is  difficult  to  protect Alaskans  and                                                               
          provide public  safety. The Commissioner has  ideas for                                                               
          implementing  a  new  tiered  approach  to  all  public                                                               
          safety  officer positions  in the  hopes of  attracting                                                               
          and retaining people  in these positions; and  as a new                                                               
          way  of providing  the needed  coverage in  a different                                                               
          way.  He asked  for this  year to  develop those  ideas                                                               
          into a recommendation to the Legislature next year.                                                                   
                                                                                                                                
          The other concern that remains  with this budget is the                                                               
          possible loss of funding for  the Narcotics Task Force.                                                               
          The   Governor's   budget   included  a   request   for                                                               
          $1,393,200 of  funding contingent on a  similar loss of                                                               
          federal funding for the  Task Force. Our recommendation                                                               
          does not  include that  funding as it  is too  early to                                                               
          know  whether  or  not  they have  a  problem.  If  the                                                               
          funding  is not  received, the  Department should  come                                                               
          forth  with  a recommendation  at  that  time when  the                                                               
          details are known.                                                                                                    
                                                                                                                                
Senator  Olson overviewed  the  recommendation,  noting that  the                                                               
subcommittee  did  not  include   funding  for  five  new  Alaska                                                               
Wildlife enforcement positions. The  subcommittee also proposed a                                                               
reappropriation of  the remaining FY  07 general fund  dollars in                                                               
the  Village  Public Safety  Officer  component,  but due  to  an                                                               
oversight the language was not  "carried forward." He would offer                                                               
an amendment at a later date to address that issue.                                                                             
                                                                                                                                
9:27:06 AM                                                                                                                    
                                                                                                                                
Department of Health and Social Services                                                                                      
                                                                                                                                
     Subcommittee members: Senator Olson, Senator Green, Senator                                                                
     Davis, Senator Dyson.                                                                                                      
                                                                                                                                
     The Senate Finance Sub-committee for the Department of                                                                     
     Health and Social Services submits an operating budget to                                                                  
    the full Senate Finance Committee for FY 08 as follows:                                                                     
                                                                                                                                
          Gen Funds                                                                                                             
               06 Actual:                     $677,788,300                                                                      
               07 Adj Base:                   $762,678,600                                                                      
               Gov Amd:                       $861,305,500                                                                      
               Sen Sub (includes language):   $811,373,000                                                                      
                                                                                                                                
          Fed Funds                                                                                                             
               06 Actual:                      906,049,400                                                                      
               07 Adj Base:                  1,080,783,500                                                                      
               Gov Amd:                      1,022,296,800                                                                      
               Sen Sub (includes language):  1,023,922,300                                                                      
                                                                                                                                
          Oth Funds                                                                                                             
               06 Actual:                      159,321,200                                                                      
               07 Adj Base:                    157,473,800                                                                      
               Gov Amd:                        158,584,200                                                                      
               Sen Sub (includes language):    159,617,700                                                                      
                                                                                                                                
          Total                                                                                                                 
               06 Actual:                   $1,743,158,900                                                                      
               07 Adj Base:                 $2,000,935,900                                                                      
               Gov Amd:                     $2,042,186,500                                                                      
               Sen Sub (includes language): $1,994,913,000                                                                      
                                                                                                                                
          Position Changes                                                                                                      
               FT                                                                                                               
                    FY 07: 3,307                                                                                                
                    FY 08 (Sen Sub): 3,299                                                                                      
                                                                                                                                
               PT                                                                                                               
                    FY 07: 107                                                                                                  
                    FY 08 (Sen Sub): 106                                                                                        
                                                                                                                                
               PPT                                                                                                              
                    FY 07: 226                                                                                                  
                    FY 08 (Sen Sub): 203                                                                                        
                                                                                                                                
     Budget Action                                                                                                              
          The  Senate  Finance  Sub-Committee  budget  authorizes                                                               
          $47,273,500 less  in total than the  Governor's Amended                                                               
          Budget Request.  The differences  are shown  in summary                                                               
          and in detail in the  attached reports. The approach to                                                               
          our budget recommendations was to accept:                                                                             
             · changes that resulted from revised projected                                                                     
               costs,                                                                                                           
             · most rate changes,                                                                                               
             · changes due to legislation passed in a prior                                                                     
               session,                                                                                                         
             · most increases that were due to various changes                                                                  
               in    requirements   such    as   Veterans    Home                                                               
               requirements, staffing for safety concerns in the                                                                
               Youth Centers,                                                                                                   
             · funding changes that increase General Funds (GF)                                                                 
               required due to the Deficit Reduction Act and a                                                                  
               decline in the upper payment limit (Proshare),                                                                   
               and                                                                                                              
             · changes to restore funding to important programs                                                                 
               that serve the needy directly or through various                                                                 
               grants programs and which have lost other funding                                                                
               to support them.                                                                                                 
                                                                                                                                
          We  believe  that  funding these  items  is  basic  and                                                               
          integral to  the services provided by  this budget, and                                                               
          consider   them   to   essentially   be   part   of   a                                                               
          "continuation"  budget.  To   do  otherwise  might  not                                                               
          provide the  basic support to children,  the frail, and                                                               
          other Alaskans who cannot provide for themselves.                                                                     
                                                                                                                                
          Very  little  growth  in   programs  or  positions  was                                                               
          accepted  in this  budget. The  two that  were accepted                                                               
          and that  are most significant  given a budget  of this                                                               
          size are: 1) to fund  most of the department's requests                                                               
          related to  the Bring the Kids  Home Initiative (BTKH);                                                               
          and  2)  to  partially  implement  the  workload  study                                                               
          regarding the Office of  Children's Services Front Line                                                               
          Social Workers.  Both of these provide  direct services                                                               
          to  Alaskan  children  who  are most  in  need  of  the                                                               
          state's protection and support.                                                                                       
                                                                                                                                
          Most changes to non-GF sources were also accepted.                                                                    
                                                                                                                                
          We have to commend the  Governor and the department for                                                               
          offering  a lot  of  reductions  for cost  containment,                                                               
          efficiencies, and long term  vacancies in positions. We                                                               
          accepted all  of those offered  that did not  require a                                                               
          change in  services or regulations;  and most  of those                                                               
          that  did require  such a  change. However,  three that                                                               
          were offered were not accepted  because they would have                                                               
          increased   the   Residential   Psychiatric   Treatment                                                               
          Centers  (RPTC)  Medicaid  eligibility from  30  to  60                                                               
          days, limited  RPTC stays to  180 days,  and eliminated                                                               
          the Medicaid Exceptional  Relief provided to distressed                                                               
          hospitals,  nursing facilities,  rural health  clinics,                                                               
          and federally qualified health centers.                                                                               
                                                                                                                                
          The  Governor offered  a reduction  to GF  funding that                                                               
          supports the  core infrastructure and operation  of the                                                               
          chronic   disease  prevention   and  health   promotion                                                               
          programs   by  replacing   it  with   Tobacco  funding;                                                               
          however, that change  was also not accepted  and is not                                                               
          included in this budget.                                                                                              
                                                                                                                                
          With so many essential  services to our most vulnerable                                                               
          Alaskans funded by this budget,  there were many worthy                                                               
          and important requests  that we were not  able to fund.                                                               
          An example is a request  for $2.3 million of funding to                                                               
          strengthen  and  expand  the Community  Health  Centers                                                               
          (CHCs).  Although  they  are  an  alternative  to  more                                                               
          expensive   care  provided   in  hospitals,   and  have                                                               
          received the  highest rating possible from  the federal                                                               
          Office  of Management  and  Budget  for efficiency  and                                                               
          quality, unfortunately  it was not possible  to include                                                               
          an   expansion   such   as    this   in   this   budget                                                               
          recommendation.                                                                                                       
                                                                                                                                
          Another significant  change in this budget  proposal is                                                               
          related  to  the  Office of  Faith  Based  &  Community                                                               
          Initiatives (FBCI).  The Governor requested  funding to                                                               
          re-establish the Faith Based  Council; and to eliminate                                                               
          the Human  Services Community Matching Grants  (HSC) by                                                               
          moving its funding to this  program. The HSC grants can                                                               
          only  go to  3 communities  in the  State; whereas  the                                                               
          FBCI grants  can go  to any  community. We  support the                                                               
          concept  offered by  the Governor  through this  change                                                               
          and agree that  other areas of the State  should have a                                                               
          chance to  receive this funding  in support  of various                                                               
          community  services.  Our  proposal  is  to  leave  the                                                               
          existing grant  funding where it  currently is,  and to                                                               
          add funding to the FBCI  for grants to communities that                                                               
          are  ineligible  to  receive  HSC  grants.  We  do  not                                                               
          believe  the additional  funds requested  for the  FCBI                                                               
          Office and Council, as opposed  to grants, is necessary                                                               
          if the existing grant  funding stays where it currently                                                               
          is; and so  we did not accept that request  to fund the                                                               
          office in this budget.                                                                                                
                                                                                                                                
          Finally,  the Longevity  Bonus Program  and the  Senior                                                               
          Care funding  were removed  from the  Governor's budget                                                               
          and are not included in  this proposed budget. This was                                                               
          a technical adjustment and in  no way indicates lack of                                                               
          support  for either  of  these  important programs.  In                                                               
          fact I have submitted a  bill to reauthorize the Senior                                                               
          Care  program   because  I  believe  this   program  is                                                               
          important  to the  elderly of  our  state. Rather,  the                                                               
          funding  was  removed  solely  because  each  of  these                                                               
          programs require  some form of legislation  to pass the                                                               
          Legislature,   and  with   so   many  different   bills                                                               
          proposed,  it  is  indeterminate how  much  funding  is                                                               
          needed  until  it  is known  what  legislation  passes.                                                               
          Because of that, the funding  should be included in the                                                               
          Fiscal  Note that  accompanies  the legislation  rather                                                               
         than in the operating budget (the first year).                                                                         
                                                                                                                                
     Items of Concern                                                                                                           
          Clearly,  the biggest  concern for  this budget  is the                                                               
          potential  change  to  the Federal  Medical  Assistance                                                               
          Percentage  (FMAP).   The  State  currently   enjoys  a                                                               
          favorable  57.58% (which  means the  federal government                                                               
          pays  for  $57.58  of  every $100  spent);  but  it  is                                                               
          projected to drop to as  low as 52.48% at the beginning                                                               
          of  the  next  federal  year,  October  1,  2007.  This                                                               
          reduction  of 5.1%  in the  rate, for  9 months  of the                                                               
          fiscal year, would mean the  State would need to pay an                                                               
          additional  $37,142,500 of  GF  to  compensate for  the                                                               
          lower federal share of the cost.                                                                                      
                                                                                                                                
          This   budget   funds   that  potential   increase   by                                                               
          conditional  language which  will  be  triggered by  an                                                               
          actual  change in  the  federal  legislation and  would                                                               
          then fund the actual change  on a sliding scale. Should                                                               
          the change  in FMAP  occur as  projected on  October 1,                                                               
          all of the GF would  be appropriated to the department;                                                               
          however, if the  change does not occur on  October 1 or                                                               
          if  the change  is less  than 5.1%,  then only  the pro                                                               
          rata  share  would  be  funded.  This  way,  vulnerable                                                               
          Alaskans are protected should the  state be required to                                                               
          pay  a larger  share, but  we are  also protecting  the                                                               
          state's  resources  by   not  authorizing  the  funding                                                               
          unless it is truly required.                                                                                          
                                                                                                                                
Senator Olson summarized this budget proposal, attributing the                                                                  
largest increase to the adjusted Federal Medical Assistance                                                                     
Percentage (FMAP) funding.                                                                                                      
                                                                                                                                
9:29:24 AM                                                                                                                    
                                                                                                                                
Department of Military and Veterans Affairs                                                                                   
                                                                                                                                
     Subcommittee members: Senator Huggins, Senator Dyson,                                                                      
     Senator Wielechowski.                                                                                                      
                                                                                                                                
     The Senate Finance Subcommittee for the Department of                                                                      
     Military and Veterans Affairs submits an operating budget                                                                  
     to the full Senate Finance Committee for FY 08 as follows:                                                                 
                                                                                                                                
          General Funds                                                                                                         
               06 Actual:   13,431,000                                                                                          
               08 Adj Base: 13,448,400                                                                                          
               Gov Amend:   13,625,700                                                                                          
               Sen Sub:     11,988,800                                                                                          
                                                                                                                                
          Federal Funds                                                                                                         
               06 Actual:   16,720,400                                                                                          
               08 Adj Base: 21,211,300                                                                                          
               Gov Amend:   20,291,300                                                                                          
               Sen Sub:     21,320,700                                                                                          
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual:    9,888,100                                                                                          
               08 Adj Base: 10,295,700                                                                                          
               Gov Amend:   11,678,800                                                                                          
               Sen Sub:     11,853,800                                                                                          
                                                                                                                                
     The FY 08 Adjusted Base to the Senate Subcommittee is a                                                                    
     10.9% reduction.                                                                                                           
                                                                                                                                
     Position Changes                                                                                                           
          FT                                                                                                                    
               FY 08 (Adj Base):    294                                                                                         
               FY 08 (Gov amended):285 (Reduced FT positions by                                                                 
                                        9)                                                                                      
                                                                                                                                
          PPT                                                                                                                   
               FY 08 (Adj Base):     4                                                                                          
               FY 08 (Gov amended):  2                                                                                          
                                                                                                                                
          Temp                                                                                                                  
               FY 08 (Adj Base):     2                                                                                          
               FY 08 (Gov amended):  1                                                                                          
                                                                                                                                
     Budget Action                                                                                                              
        · As instructed the Subcommittee adopted the FY 08                                                                      
          adjusted base and worked from there.                                                                                  
        · The Subcommittee denied all FY08 PERS fund source                                                                     
          changes.                                                                                                              
        · The Subcommittee denied increments for fuel increases.                                                                
        · The Subcommittee accepted amendments proposed by the                                                                  
          Governor  for   a  total  General  Fund   reduction  of                                                               
          $1,099,200 from the Governor's original budget.                                                                       
        · The Senate Subcommittee added $30,000 of General Funds                                                                
          for  the  Alaska  National  Guard's  education  tuition                                                               
          assistance program.                                                                                                   
        · The Senate Subcommittee added $50,000 of General funds                                                                
          for the Alaska Territorial Guard.                                                                                     
        · The Subcommittee accepted Section 13 of the Governor's                                                                
          budget language section appropriating  5% of the market                                                               
          value  of   average  ending  balances  in   the  Alaska                                                               
          veterans' memorial  endowment fund to DMVA  as outlined                                                               
          in statute.                                                                                                           
                                                                                                                                
     Amendment Action                                                                                                           
                                                                                                                                
     Items of Concern                                                                                                           
          The   House   CS   replaces   all   of   the   agency's                                                               
          Oil/Hazardous  funding with  General  Funds -  totaling                                                               
          515,600.  The  Senate Subcommittee's  budget  maintains                                                               
          the  Oil/Hazardous funding  at the  FY08 Adjusted  Base                                                               
          level.                                                                                                                
                                                                                                                                
          Senator Huggins  spoke to  this report,  informing that                                                               
          the  recommended  funding  for the  Alaska  Territorial                                                               
          National  Guard would  identify World  War II  veterans                                                               
          eligible to receive benefits.                                                                                         
                                                                                                                                
9:30:53 AM                                                                                                                    
                                                                                                                                
Department of Education and Early Development                                                                                 
                                                                                                                                
     Subcommittee members: Senator Huggins, Senator Kookesh,                                                                    
     Senator Davis, Senator Stevens, Senator Wilken.                                                                            
                                                                                                                                
     The Senate Finance Subcommittee for the Department of                                                                      
     Education and Early Development submits an operating budget                                                                
     to the full Senate Finance Committee for FY 08 as follows:                                                                 
                                                                                                                                
          General Funds                                                                                                         
               06 Actual (Numbers & lang): 886,554,400                                                                          
               08 Adj Base (Numbers only):  46,715,300                                                                          
               Gov Amend (Numbers only):    51,374,400                                                                          
               Sen Sub (Numbers only):      46,779,800                                                                          
                                                                                                                                
          Federal Funds                                                                                                         
               06 Actual (Numbers & lang): 194,784,800                                                                          
               08 Adj Base (Numbers only): 215,168,600                                                                          
               Gov Amend (Numbers only):   193,591,100                                                                          
               Sen Sub (Numbers only):     215,168,600                                                                          
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual (Numbers & lang): 32,008,400                                                                           
               08 Adj Base (Numbers only): 36,984,600                                                                           
               Gov Amend (Numbers only):   23,882,000                                                                           
               Sen Sub (Numbers only):     35,264,800                                                                           
                                                                                                                                
          Total                                                                                                                 
               Sen Sub (Numbers only):    297,213,200                                                                           
                                                                                                                                
     Position Changes                                                                                                           
          FT                                                                                                                    
               FY 08 (Adj Base):       306                                                                                      
               FY 08 (Gov amended):    303                                                                                      
               FY 08 Sen Subcommittee: 302                                                                                      
                                                                                                                                
          PPT                                                                                                                   
               FY 08 (Adj Base):        39                                                                                      
               FY 08 (Gov amended):     39                                                                                      
               FY 08 Sen Subcommittee:  39                                                                                      
                                                                                                                                
          Temp                                                                                                                  
               FY 08 (Adj Base):         0                                                                                      
               FY 08 (Gov amended):      0                                                                                      
               FY 08 Sen Subcommittee:   0                                                                                      
                                                                                                                                
     Budget Action                                                                                                              
        · As instructed the Subcommittee adopted the FY 08                                                                      
          adjusted base and worked from there.                                                                                  
        · The Subcommittee accepted the Governor's Amended FY 08                                                                
          General  Fund Budget  (minus PERS  and TRS  fund source                                                               
          changes which  will be addressed with  other retirement                                                               
          funding issues at full senate finance).                                                                               
        · Language section of the budget will be dealt with in                                                                  
          full   finance.   K-12   appropriation  to   fund   the                                                               
          foundation   formula   was   not  considered   by   the                                                               
          Subcommittee. The  full Finance Committee  will address                                                               
          the K-12 funding level and fund sources.                                                                              
        · Intent Language approved relating to the Alaska                                                                       
          Statewide Mentoring Program.                                                                                          
        · Conditional     Language    approved     for    Teacher                                                               
          Certification so  that receipts generated  from teacher                                                               
          certification fees in FY 07  can be allocated for FY 08                                                               
          spending.                                                                                                             
                                                                                                                                
     Highlighted Changes (not proposed by the Governor)                                                                         
          School   Performance  Incentive   -  $3.3   million  GF                                                               
          decrement  (leaving $2.5  million). The  correct dollar                                                               
          amount  needed for  the program  is unknown.  Incentive                                                               
          grants will not be paid  until August or September. The                                                               
          Subcommittee  would  like  to re-evaluate  the  program                                                               
          during the FY 09 budget cycle.                                                                                        
                                                                                                                                
          Alaska  Challenge Youth  Academy -  $259,700 increment.                                                               
          Approving this  increment reduces  the GF  generated by                                                               
          the AMYA funding formula by $2 million.                                                                               
                                                                                                                                
          Charter  School Grants  - $200,000  GF is  appropriated                                                               
          for Charter School Grants.                                                                                            
                                                                                                                                
          AK Mineral and Energy  Resource Education Fund - 25,000                                                               
          GF is added for AMEREF.                                                                                               
                                                                                                                                
Senator Huggins reviewed the subcommittee recommendation.                                                                       
                                                                                                                                
9:32:58 AM                                                                                                                    
                                                                                                                                
Department of Natural Resources                                                                                               
                                                                                                                                
     Subcommittee members: Senator Huggins, Senator Green,                                                                      
     Senator Wagoner.                                                                                                           
                                                                                                                                
     The Senate Finance Budget Subcommittee for the Department                                                                  
     of Natural Resources submits an operating budget to the                                                                    
     full Senate Finance Committee for FY 08 as follows:                                                                        
                                                                                                                                
          General Funds                                                                                                         
               06 Actual: 65,618,500                                                                                            
               08 Adj Base: 63,651,800                                                                                          
               Gov Amend: 69,525,000                                                                                            
               Sen Sub: 67,780,900                                                                                              
                                                                                                                                
          Federal Funds                                                                                                         
               06 Actual: 24,212,500                                                                                            
               08 Adj Base: 17,014,700                                                                                          
               Gov Amend: 16,392,200                                                                                            
               Sen Sub: 17,015,100                                                                                              
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual: 36,667,800                                                                                            
               08 Adj Base: 48,405,900                                                                                          
               Gov Amend: 47,766,800                                                                                            
               Sen Sub: 47,240,200                                                                                              
                                                                                                                                
     Position Changes                                                                                                           
          FT                                                                                                                    
               FY 08 (Adj Base):    775                                                                                         
               FY 08 (Gov Amended): 778                                                                                         
               FY 08 Sen Sub:       778                                                                                         
                                                                                                                                
          PPT                                                                                                                   
               FY 08 (Adj Base):    252                                                                                         
               FY 08 (Gov Amended): 252                                                                                         
               FY 08 Sen Sub:       252                                                                                         
                                                                                                                                
          Temp                                                                                                                  
               FY 08 (Adj Base):     79                                                                                         
               FY 08 (Gov Amended):  77                                                                                         
               FY 08 Sen Sub:        77                                                                                         
                                                                                                                                
     Budget Action                                                                                                              
          Because  the PERS  rate is  being reduced  from 44%  to                                                               
          22%, the  House's budget removed  the general  funds in                                                               
          the   salary   adjustments.   However,  due   to   time                                                               
          constraints, most of the  "other" fund sources remained                                                               
          in the budget. The  Senate Subcommittee is now reducing                                                               
          the "other"  funds increases that are  no longer needed                                                               
          to pay for the increased PERS costs.                                                                                  
                                                                                                                                
             · As instructed the Subcommittee adopted the FY 08                                                                 
              adjusted base and worked from there.                                                                              
             · The Subcommittee denied all FY08 PERS fund source                                                                
               changes.                                                                                                         
             · The   Subcommittee   denied   all   FY   08   fuel                                                               
               increments.                                                                                                      
             · The Subcommittee accepted the Governor's Amended                                                                 
               FY  08 General  Fund  Budget (minus  PERS and  TRS                                                               
               fund source  changes which will be  addressed with                                                               
               other  retirement funding  issues  at full  senate                                                               
               finance).                                                                                                        
                                                                                                                                
     Highlighted Changes (not proposed by the Governor)                                                                         
        1. Did not accept Governor's GF decrement of 100,000 for                                                                
          Economic Timber MOU with US Forest Service.                                                                           
        2. Fund Source switch of all Agricultural Revolving Loan                                                                
          Funds  (except  for  the  Agricultural  Revolving  Loan                                                               
          Program  Administration allocation)  to General  Fund -                                                               
          total of 943,900.                                                                                                     
        3. 50,000 GF increment for the Board of Agriculture and                                                                 
          Conservation  to conduct  current market  appraisals on                                                               
          properties owned by the State  and under the purview of                                                               
          the  Board. Intent  language  inserted  in the  wordage                                                               
          report.                                                                                                               
        4. Deny transfer of one position from part time to full                                                                 
          time in Forest Management and Development.                                                                            
                                                                                                                                
Senator Huggins summarized this subcommittee recommendation.                                                                    
                                                                                                                                
9:34:04 AM                                                                                                                    
                                                                                                                                
Alaska Court System                                                                                                           
                                                                                                                                
     Subcommittee members: Senator Elton, Senator Ellis, Senator                                                                
     Therriault.                                                                                                                
                                                                                                                                
     The Senate Finance Subcommittee for the Court System Budget                                                                
     submits an Operating budget to the full Senate Finance                                                                     
     Committee for FY 08 as follows:                                                                                            
                                                                                                                                
     06 Actual:           $66,519,400                                                                                           
     07 Adj Base:         $85,772,500                                                                                           
     Gov Amend:           $87,349,700                                                                                           
     Senate Subcommittee: $84,938,400                                                                                           
                                                                                                                                
     General Funds:       $82,519,000                                                                                           
     Fed Funds:            $1,675,600                                                                                           
     Other Funds:            $743,800                                                                                           
     Total:               $84,938,400                                                                                           
                                                                                                                                
     Position Changes                                                                                                           
          PFT                                                                                                                   
               FY 07 Adjusted Base: 724                                                                                         
               FY 08: 726                                                                                                       
                                                                                                                                
          PPT                                                                                                                   
               FY 07 Adjusted Base: 61                                                                                          
               FY 08: 61                                                                                                        
                                                                                                                                
          Temp                                                                                                                  
               FY 07 Adjusted Base: 33                                                                                          
               FY 08: 31                                                                                                        
                                                                                                                                
     Budget Action                                                                                                              
          The  Subcommittee   accepted  the   governor's  amended                                                               
          request for the Judicial Retirement System.                                                                           
                                                                                                                                
          The  Subcommittee accepted  the Court  System's request                                                               
          for  $69,000  to improve  juror  pay.  While the  House                                                               
          funded   this   as   a  one-time   item,   the   Senate                                                               
          Subcommittee   recognizes   juror  pay   expenses   are                                                               
          recurring  and  belong  in   the  Court  System's  base                                                               
          budget.                                                                                                               
                                                                                                                                
          The  Subcommittee accepted  the Court  System's request                                                               
          for  $59,500 to  equalize  the hourly  rate for  court-                                                               
          appointed attorneys. This amount will pay private-                                                                    
          sector attorneys  appointed by  the courts at  the same                                                               
          rate  as  private  attorneys hired  by  the  Office  of                                                               
          Public Advocacy.                                                                                                      
                                                                                                                                
          The  Subcommittee accepted  the Court  System's request                                                               
          for  $75,000 to  fund  new travel  per  diem rates  for                                                               
          state employees.                                                                                                      
                                                                                                                                
          The  Subcommittee accepted  the Court  System's request                                                               
          for $75,000 to fully fund  security costs at the Bethel                                                               
          courts.   In   recent   years   all   courts   received                                                               
          legislative  funding to  improve  security, but  Bethel                                                               
          was  only partially  funded. This  increment annualizes                                                               
          the needed amount.                                                                                                    
                                                                                                                                
          The  Subcommittee accepted  the Court  System's request                                                               
          for $362,100  to fund  Therapeutic Courts.  This amount                                                               
          included  $227,500  to   replace  Mental  Health  Trust                                                               
          Authority  Authorized Receipts  for  the Palmer  Mental                                                               
          Health  Court and  the Therapeutic  Courts Coordinator,                                                               
          as well as  $134,600 to fund targeted  expansion of the                                                               
          highly successful therapeutic courts model.                                                                           
                                                                                                                                
          The  Subcommittee accepted  the Court  System's request                                                               
          for $332,800 to fund  Juneau and Palmer building needs.                                                               
          $260,800 will  pay the courts'  portion of the  cost of                                                               
          placing the  Dimond Courthouse  in the  Public Building                                                               
          Fund,  while $72,000  will fund  the additional  Palmer                                                               
          space required to  house new judges and  staff added by                                                               
          the Legislature last year.                                                                                            
                                                                                                                                
          The  Alaska Commission  on  Judicial Conduct  requested                                                               
          two   increments,  both   of  which   the  Subcommittee                                                               
          accepts. The first is $3,800  to accurately reflect its                                                               
          lease  costs.  The  second  is  $9,000  to  reduce  the                                                               
          vacancy  rate of  this two-person  office  to the  OMB-                                                               
          recommended level.                                                                                                    
                                                                                                                                
          The Alaska Judicial Council  requested $50,000 to staff                                                               
          an  interagency  Criminal  Justice Working  Group.  The                                                               
          Subcommittee  acknowledged   the  value  of   the  work                                                               
          previous  working groups  have done,  and accepted  the                                                               
          increment.                                                                                                            
                                                                                                                                
          While  fuel and  energy  cost  increases for  executive                                                               
          branch  agencies will  be handled  at the  full Finance                                                               
          Committee, the  Subcommittee provided the  Court System                                                               
          its   requested  $100,000   increment  for   fuel  cost                                                               
          increases, in acknowledgement of  the courts' status as                                                               
          a separate branch of government.                                                                                      
                                                                                                                                
          The Subcommittee  also accepted technical  revisions to                                                               
          the  fiscal note  funding for  SB 237,  adopted by  the                                                               
          24th Legislature.                                                                                                     
                                                                                                                                
     Items of Concern                                                                                                           
          The  Subcommittee did  not  accept  the Court  System's                                                               
          request  for   $192,000  to   fund  juror   parking  in                                                               
          Anchorage. Other  large municipalities  provide parking                                                               
          at no  cost to  the State  of Alaska.  The Subcommittee                                                               
          encourages  the  Court  System   to  partner  with  the                                                               
          Municipality  of  Anchorage  to find  a  solution  that                                                               
          reflects the  significant costs the Court  System bears                                                               
          in handling municipal offences.                                                                                       
                                                                                                                                
Senator Elton overviewed the subcommittee's recommendation.                                                                     
                                                                                                                                
9:35:42 AM                                                                                                                    
                                                                                                                                
Department of Corrections                                                                                                     
                                                                                                                                
     Subcommittee members: Senator Elton, Senator French,                                                                       
     Senator Wagoner.                                                                                                           
                                                                                                                                
     The Senate Finance Subcommittee for the Department of                                                                      
     Corrections Budget submits an Operating budget to the full                                                                 
     Senate Finance Committee for FY 08 as follows:                                                                             
                                                                                                                                
     06 Actual:           $195,184,200                                                                                          
     07 Adj Base:         $231,856,500                                                                                          
     Gov Amend:           $243,348,800                                                                                          
     Senate Subcommittee: $242,500,200                                                                                          
                                                                                                                                
     General Funds:       $213,609,100                                                                                          
     Fed Funds:             $4,278,600                                                                                          
     Other Funds:          $24,612,500                                                                                          
     Total:               $242,500,200                                                                                          
                                                                                                                                
     Position Changes                                                                                                           
          PFT                                                                                                                   
               FY 07 Adjusted Base: 1502                                                                                        
               FY 08: 1514                                                                                                      
                                                                                                                                
          PPT                                                                                                                   
               FY 07 Adjusted Base: 8                                                                                           
               FY 08: 8                                                                                                         
                                                                                                                                
          Temp                                                                                                                  
               FY 07 Adjusted Base: 3                                                                                           
               FY 08: 0                                                                                                         
                                                                                                                                
     Budget Action                                                                                                              
          The  Subcommittee  accepted   the  department's  FY  07                                                               
          adjusted base,  and the changes  outlined in  this memo                                                               
          operate  from   that  funding  level,   with  structure                                                               
          changes as requested by the governor.                                                                                 
                                                                                                                                
          The  Subcommittee  removed  PERS fund  source  changes.                                                               
          These will be addressed in the full Finance Committee.                                                                
                                                                                                                                
          The  Subcommittee also  removed  fuel  and energy  cost                                                               
          increases.  These will  also be  addressed in  the full                                                               
          Finance Committee.                                                                                                    
                                                                                                                                
          The   Subcommittee    accepted   the   administration's                                                               
          requested  decrement of  $162,000  for three  temporary                                                               
          positions in  the file imaging program,  to be replaced                                                               
          by  a one-time  increment  of $180,000  for three  full                                                               
          time positions.                                                                                                       
                                                                                                                                
          The Subcommittee accepted  the administration's request                                                               
          for $235,400 to establish  two positions to oversee the                                                               
          design  and  construction  of  the  new  Mat-su  prison                                                               
          facility. Having  the superintendent and  plant manager                                                               
          on  staff  before  construction will  help  ensure  the                                                               
          facility  is  well-managed,  and   built  to  meet  the                                                               
          program needs of the state.                                                                                           
                                                                                                                                
          The  Subcommittee accepted  the second  year increments                                                               
          contained in the fiscal note  to SB 218, enacted by the                                                               
          24th  Legislature. Increments  in two  components total                                                               
          $786,800,  and will  increase the  department's ability                                                               
          to conduct  polygraph monitoring of sex  offenders, and                                                               
          will  ramp up  to  full implementation  with a  further                                                               
          increment in FY 2009.                                                                                                 
                                                                                                                                
          The  Subcommittee  replaced  $46,000 in  Mental  Health                                                               
          Trust  funds   for  the  Residential   Substance  Abuse                                                               
          Treatment program,  and $25,000 in Mental  Health Trust                                                               
          funds for  the Sub-Acute  Medical Unit at  Spring Creek                                                               
          Correctional Center with general funds.                                                                               
                                                                                                                                
          The Subcommittee approved  the administration's request                                                               
          for  $881,100 to  increase electronic  monitoring. This                                                               
          amount   includes  increased   contract  expenses   for                                                               
          monitoring  equipment   and  services  as  well   as  a                                                               
          facilities  rent component  for  the Corrections  staff                                                               
          directly  responsible  for supervising  offenders  with                                                               
          ankle bracelets.                                                                                                      
                                                                                                                                
          The Subcommittee accepted  the administration's request                                                               
          for  an increment  of $100,100  to relocate  the Palmer                                                               
          probation  &  parole  office   into  the  new  Criminal                                                               
          Justice Center in Palmer.                                                                                             
                                                                                                                                
          The  Subcommittee   accepted  the   governor's  amended                                                               
          request   for  changes   in  Arizona   contract  prison                                                               
          contract. The net effect of  the governor's proposal is                                                               
          to  maintain the  number of  Arizona beds  at 900,  and                                                               
          increase the bed rate in  accordance with the contract,                                                               
          for a net increment of $432,200.                                                                                      
                                                                                                                                
          The   Subcommittee    approved   the   administration's                                                               
          decrement of  $1,000,000 and three permanent  full time                                                               
          positions  in  connection  with the  prison  employment                                                               
          program.                                                                                                              
                                                                                                                                
          The  Subcommittee also  approved  replacing $68,800  in                                                               
          uncollectible  receipts  for   federal  prisoners  with                                                               
          general funds.                                                                                                        
                                                                                                                                
          In acknowledgement  of the  added strain  on facilities                                                               
          caused by  reducing out-of-state  prisoner populations,                                                               
          the   Subcommittee  approves   a  total   increment  of                                                               
          $939,900 in commodities  for 24-hour facilities, spread                                                               
          according   to  the   administration's  proposal.   The                                                               
          Subcommittee did  not approve the request  for $250,200                                                               
          in the  institutions director's office.  The department                                                               
          should carefully  monitor and  control the  added costs                                                               
          of  crowded  facilities. If  it  is  unable to  operate                                                               
          without  this  funding,  the department  should  return                                                               
          with a supplemental request based on actual costs.                                                                    
                                                                                                                                
          The  Subcommittee   approved  the   governor's  amended                                                               
          request for a  total increment of $168,000  for the new                                                               
          water and sewer system  at Hiland Mountain Correctional                                                               
          Center.                                                                                                               
                                                                                                                                
          The  Subcommittee approved  an increment  of $1,225,500                                                               
          to  fund 19  new  positions  at Fairbanks  Correctional                                                               
          Center  to address  dangerously overcrowded  conditions                                                               
          and   maintain   security   and  programming   as   the                                                               
          department  adapts the  former Correctional  Industries                                                               
         building on the FCC campus for inmate housing.                                                                         
                                                                                                                                
          The Subcommittee  granted the  administration's request                                                               
          for funding  to erect  temporary housing units  at both                                                               
          Lemon  Creek  and   Palmer  Correctional  Centers.  The                                                               
          Subcommittee split  the start-up costs  associated with                                                               
          these increments from the  ongoing costs of operations,                                                               
          funding  $619,700  in  ongoing  costs as  part  of  the                                                               
          department's base, but $295,500 as one-time items.                                                                    
                                                                                                                                
          The   Subcommittee  allowed   two  decrements   in  the                                                               
          Probation  and Parole  office  to remove  uncollectible                                                               
          funds from  an expired  RSA in  the amount  of $128,400                                                               
          and a federal grant that  is no longer available in the                                                               
          amount of $777,400.                                                                                                   
                                                                                                                                
          The  Subcommittee accepted  the  second year  increment                                                               
          contained in the fiscal note  to SB 237, enacted by the                                                               
          24th  Legislature, which  added new  judges around  the                                                               
          state.  The $275,400  funds three  permanent full  time                                                               
          positions,   dedicated    primarily   to   pre-sentence                                                               
          investigations and reports.                                                                                           
                                                                                                                                
          The Subcommittee approved an  increment of $125,000 for                                                               
          increased workload  at the  Parole Board.  This funding                                                               
          is  an  important  part of  the  department's  laudable                                                               
          efforts  to  better  manage its  inmate  population  in                                                               
          state.                                                                                                                
                                                                                                                                
          The Subcommittee accepted  two increments for increased                                                               
          funding  to  pay  health  care  providers  following  a                                                               
          market-based   pay   study   by   the   Department   of                                                               
          Administration. These increments total $777,400.                                                                      
                                                                                                                                
          The  Subcommittee allowed  an  increase  of $57,100  in                                                               
          receipt  supported  services authorization  for  inmate                                                               
          health care  co-pays. This increment brings  RSS inline                                                               
          with  the department's  actual expectation  of what  it                                                               
          will collect, based on past experience.                                                                               
                                                                                                                                
          The Subcommittee  did not approve  the administration's                                                               
          authorization  in the  language section  for open-ended                                                               
          expenditure  authority  on   inmate  health  care.  The                                                               
          Subcommittee   instead   granted    an   increment   of                                                               
          $1,900,000  based   on  Legislative   Finance  Division                                                               
          estimates of growth in inmate health care costs.                                                                      
                                                                                                                                
          The  Subcommittee  approved  a  fund-source  change  of                                                               
          $1,619,900 from  General Funds to  offenders' Permanent                                                               
          Fund Dividend checks collected by the state.                                                                          
                                                                                                                                
          The  Subcommittee  also  approved  two  increments  for                                                               
          Community   Residential   Centers.   $1,000,000   funds                                                               
          contract rate increases, while  $2,520,700 will pay for                                                               
          an additional 100 beds.                                                                                               
                                                                                                                                
     Items of Concern                                                                                                           
          The   Subcommittee    is   concerned    that   Alaska's                                                               
          correctional  system  has  become a  warehouse  with  a                                                               
          revolving  door  on  the front.  Even  with  a  captive                                                               
          audience,  little is  done to  get  inmates off  drugs,                                                               
          break their  addictions to alcohol, keep  sex criminals                                                               
          from  reoffending,  treat   mental  illness,  or  build                                                               
          skills  to reintegrate  them  into Alaska  communities.                                                               
          The  Department of  Corrections must  take the  lead in                                                               
          addressing these issues. To  that end, the Subcommittee                                                               
          included   intent   language    from   the   House   of                                                               
          Representatives  directing the  department  to work  on                                                               
          inmate rehabilitation  in the fiscal year  2008, and to                                                               
          identify  and seek  authorization  to spend  additional                                                               
          funds.                                                                                                                
                                                                                                                                
          The   Subcommittee  also   added  intent   language  as                                                               
          follows:                                                                                                              
                                                                                                                                
          "It  is   the  intent  of  the   legislature  that  the                                                               
          Department  of  Corrections work  collaboratively  with                                                               
          the  Alaska  Mental  Health  Trust  Authority  and  the                                                               
          Department  of  Health  and   Social  Services  in  the                                                               
          development and  sustainable implementation of  new and                                                               
          existing  treatment  services  and  programs  to  serve                                                               
          Trust  beneficiaries  and  other inmates,  as  well  as                                                               
          programs  that connect  inmates  to treatment  services                                                               
          and    programs    outside    Corrections,    including                                                               
          therapeutic courts;  Assess, Plan  Identify, Coordinate                                                               
          Discharge   program;    Residential   Substance   Abuse                                                               
          Treatment programs; and planning  for mental health and                                                               
          treatment services within  new correctional facilities,                                                               
          among others.  The goals of this  work include reducing                                                               
          recidivism,  improving  public safety,  increasing  the                                                               
          safety   of    correctional   officers,   reintegrating                                                               
          offenders  into  society,  and reducing  costs  to  the                                                               
          state."                                                                                                               
                                                                                                                                
Senator Elton  highlighted this budget proposal,  noting that the                                                               
subcommittee recommendation  was $30,000  greater than  the House                                                               
of  Representations version  for  increases in  the Parole  Board                                                               
workload.                                                                                                                       
                                                                                                                                
9:37:39 AM                                                                                                                    
                                                                                                                                
Department of Environmental Conservation                                                                                      
                                                                                                                                
     Subcommittee members: Senator Elton, Senator Ellis, Senator                                                                
     Wilken.                                                                                                                    
                                                                                                                                
     The Senate Finance Subcommittee for the Department of                                                                      
     Environmental Conservation submits an Operating budget to                                                                  
    the full Senate Finance Committee for FY 08 as follows:                                                                     
                                                                                                                                
          06 Actual:           $54,137,400                                                                                      
          08 Adj Base:         $67,074,500                                                                                      
          Gov Amend:           $75,832,900                                                                                      
          Senate Subcommittee: $71,426,700                                                                                      
                                                                                                                                
          General Funds:       $16,746,900                                                                                      
          Fed Funds:           $21,146,400                                                                                      
          Other Funds:         $33,533,400                                                                                      
          Total:               $71,426,700                                                                                      
                                                                                                                                
     Position Changes                                                                                                           
          PFT                                                                                                                   
               FY 08 Adjusted Base: 511                                                                                         
               FY 08:               509                                                                                         
                                                                                                                                
          PPT                                                                                                                   
               FY 08 Adjusted Base:   1                                                                                         
               FY 08:                 1                                                                                         
                                                                                                                                
          Temp                                                                                                                  
               FY 08 Adjusted Base:   4                                                                                         
               FY 08:                 4                                                                                         
                                                                                                                                
     Budget Action                                                                                                              
          The  Subcommittee  accepted   the  department's  FY  08                                                               
          adjusted base,  and the changes  outlined in  this memo                                                               
          are based upon that funding level.                                                                                    
                                                                                                                                
          The  Subcommittee  removed  PERS fund  source  changes.                                                               
          These will be addressed in the full Finance Committee.                                                                
                                                                                                                                
          The  Subcommittee  also  removed fuel  cost  increases.                                                               
          These,  too,  will be  addressed  in  the full  Finance                                                               
          Committee.                                                                                                            
                                                                                                                                
          The  Subcommittee   approved  the   governor's  amended                                                               
          request  to  annualize  an RPL  putting  an  additional                                                               
          $38,900 in  Exxon Valdez Oil Spill  Trust receipts into                                                               
          the commissioner's office.                                                                                            
                                                                                                                                
          The Subcommittee  approved the  governor's dramatically                                                               
          amended  increments for  compliance oversight  of North                                                               
          Slope oil flow lines.  These increments net to $707,000                                                               
          in general funds instead of $2,237,700.                                                                               
                                                                                                                                
          The Subcommittee allowed a net  increase of $152,400 in                                                               
          general  funds for  increased  lease  costs around  the                                                               
          state.                                                                                                                
                                                                                                                                
          The   Subcommittee   accepted  eight   increments   for                                                               
          increased  funding to  pay  DEC professional  employees                                                               
          following a  market-based pay  study by  the Department                                                               
          of Administration. These increments total to $503,300.                                                                
                                                                                                                                
          The  Subcommittee  added  an increment  of  $80,000  in                                                               
          general   funds  for   paralytic  shellfish   poisoning                                                               
          testing required by the state.  These funds will help a                                                               
          growing  industry continue  to provide  jobs to  Alaska                                                               
          families and  seafood for export  to both  domestic and                                                               
          international markets.                                                                                                
                                                                                                                                
          The  Subcommittee granted  the governor's  for $605,900                                                               
          to maintain  the drinking  water permit  primacy Alaska                                                               
          has  administered for  many years.  Half these  dollars                                                               
         are federal, and half are general fund match.                                                                          
                                                                                                                                
          The Subcommittee  approved the  decrement of  $6,400 in                                                               
          the Solid Waste  Program as part of  the ongoing fiscal                                                               
          note  implementation for  HB 19,  enacted  by the  24th                                                               
          Legislature.                                                                                                          
                                                                                                                                
          The  Subcommittee approved  an increment  of $1,069,000                                                               
          for  implementation  of  air permit  reforms  and  fees                                                               
          adjustment. $978,100  of this increment comes  from the                                                               
          Clean  Air Protection  fund, while  $90,900 is  receipt                                                               
          supported services.                                                                                                   
                                                                                                                                
          The Subcommittee approved  replacing $92,500 in federal                                                               
          funds  for  the  operator  certification  program  with                                                               
          general funds.                                                                                                        
                                                                                                                                
          The  Subcommittee granted  an  increment of  $2,500,000                                                               
          and  two  positions  for implementation  of  the  Ocean                                                               
          Ranger  program, enacted  by the  voters in  the August                                                               
          2006  primary election.  This funds  option one  in the                                                               
          department's  contractor report  on  the program.  This                                                               
          level of funding  should be adequate on  a yearly basis                                                               
          to  fund  one contract  Ocean  Ranger  per cruise  ship                                                               
          throughout  the  fiscal  year. The  Subcommittee  added                                                               
          intent  language  stating: "It  is  the  intent of  the                                                               
          legislature  that   the  Department   of  Environmental                                                               
          Conservation   implement  the   Ocean  Ranger   program                                                               
          enacted by  the people  of the State  of Alaska.  It is                                                               
          also the intent of  the legislature that the Department                                                               
          of  Environmental Conservation  pay  no  more than  the                                                               
          lowest  commercially  available  berth rate  for  Ocean                                                               
         Rangers aboard commercial passenger vessels."                                                                          
                                                                                                                                
          The Subcommittee  replaced $1,000,000 in  general funds                                                               
          for operation of the DEC  lab with Commercial Passenger                                                               
          Vessel Environmental Compliance  (CPVEC) funds. The DEC                                                               
          lab  tests  for food  borne  outbreaks  of Norwalk  and                                                               
          Norwalk-like illnesses, shares  responsibility for food                                                               
          safety  in the  Alaska  restaurants  where cruise  ship                                                               
          passengers and  crews eat,  and has  significant duties                                                               
          in the  licensure of  processing facilities  in Alaska.                                                               
          As cruise companies  begin to make an  effort at buying                                                               
          Alaska  seafood  for  their passengers,  this  function                                                               
          will become more  important to the industry,  and it is                                                               
          reasonable  that   a  portion  of  CPVEC   fees  go  to                                                               
          supporting the  lab's operations.  The DEC lab  is also                                                               
          capable  of  testing   discharge  samples  from  cruise                                                               
          vessels in the  event one of the  current contract labs                                                               
          is temporarily unable to receive or test samples.                                                                     
                                                                                                                                
          The  Subcommittee decremented  $1,547,900 to  eliminate                                                               
          funding  for  state  assumption of  National  Pollutant                                                               
          Discharge  Elimination  System   (NPDES)  primacy.  The                                                               
          state  does  not  have  NPDES  primacy,  and  statutory                                                               
          changes will be  required if the state  chooses to take                                                               
          on  the burden  of enforcing  federal rules.  With this                                                               
          decrement, the  federal government  will pay  all costs                                                               
          associated   with   this  permitting   system.   Unlike                                                               
          drinking water primacy, the  federal government has not                                                               
          and will  not share in  the ongoing costs to  the state                                                               
          of  pursuing  or   implementing  primacy,  even  though                                                               
          federal rules  set the standards 'floor'.  Also, unlike                                                               
          air quality permitting,  regulated industries would not                                                               
          support  NPDES primacy  through fees.  The Subcommittee                                                               
          eliminates the attendant 13 positions.                                                                                
                                                                                                                                
          The  Subcommittee   is  concerned  that  the   Oil  and                                                               
          Hazardous  Substance  Release Prevention  and  Response                                                               
          Fund  is  depleting.   The  Subcommittee  added  intent                                                               
          language stating: "It is the  intent of the legislature                                                               
          that  the  Department   of  Environmental  Conservation                                                               
          recover  from responsible  state  agencies or  entities                                                               
          the costs accrued responding to  or cleaning up oil and                                                               
          hazardous  substance  spills   caused  by  those  state                                                               
          agencies or entities."                                                                                                
                                                                                                                                
          The  Subcommittee added  a  one-time  increment in  the                                                               
          commissioner's office of $250,000  in federal funds for                                                               
          contractual  expenses. These  funds are  available from                                                               
          the  United  States  Department  of  Agriculture  Rural                                                               
          Development programs.  This provides  receipt authority                                                               
          to  hire  a  contractor  to provide  the  planning  and                                                               
          accountability   documents  needed   for  the   federal                                                               
          government  to  release  more   than  $100  million  in                                                               
          Village Safe Water funds. Some  of this funding remains                                                               
          outstanding from  Federal Fiscal Year 2000  and must be                                                               
          used at  the earliest  possible opportunity  to improve                                                               
          basic   sanitation  for   Alaskans.  These   funds  are                                                               
          appropriated  to  the  Office of  the  Commissioner  in                                                               
          order to provide clear accountability for the work.                                                                   
                                                                                                                                
     Items of Concern                                                                                                           
          The Subcommittee is concerned  at the extent and nature                                                               
          of  the problems  the department  is experiencing  with                                                               
          its  Anchorage  laboratory.   While  issues  like  non-                                                               
          functioning fume  hoods and propylene glycol  leaks may                                                               
          have been  resolved, properly  constructed two-year-old                                                               
          buildings should  not experience  frequent condensation                                                               
          on  the windows,  billowing roof  membranes, or  faulty                                                               
          boiler and air conditioning  systems. The department is                                                               
          encouraged  to  pursue   all  options  including  legal                                                               
          action to make this state asset whole.                                                                                
                                                                                                                                
Senator Elton outlined this report,  highlighting funding for the                                                               
Ocean  Ranger contained  in the  recommendation, as  well as  the                                                               
"lack   of  primacy"   in   the   National  Pollutant   Discharge                                                               
Elimination  System  (NPDES).  He   further  explained  that  the                                                               
increment  of   $250,000  federal   dollars  suggested   for  the                                                               
commissioner's  office  was  intended   to  be  used  to  resolve                                                               
discrepancies  between  the  State  Department  of  Environmental                                                               
Conservation  and the  United  States  Department of  Agriculture                                                               
(USDA)  regarding grant  oversight. Without  this oversight,  the                                                               
USDA  threatened  to  discontinue approximately  $23  million  in                                                               
funding for the Village Safe Water project.                                                                                     
                                                                                                                                
9:41:17 AM                                                                                                                    
                                                                                                                                
Department of Commerce, Community and Economic Development                                                                    
                                                                                                                                
     Subcommittee members: Senator Thomas, Senator Green,                                                                       
     Senator Cowdery, Senator Wilken.                                                                                           
                                                                                                                                
     The  Senate  Finance  Subcommittee  for  the  Department  of                                                               
     Commerce,  Community  and  Economic Development  submits  an                                                               
     Operating budget  to the full  Senate Finance  Committee for                                                               
     FY 08 as follows:                                                                                                          
                                                                                                                                
          General Funds                                                                                                         
               06 Actual:    14,518,300                                                                                         
               08 Adj Base:   5,704,700                                                                                         
               Gov Amend:    53,948,300                                                                                         
               Sen. Sub:     54,005,800                                                                                         
                                                                                                                                
          Fed Funds                                                                                                             
               06 Actual:    22,913,100                                                                                         
               08 Adj Base:  28,433,500                                                                                         
               Gov Amend:    27,536,700                                                                                         
               Sen. Sub:     50,266,300                                                                                         
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual:    95,932,300                                                                                         
               08 Adj Base: 124,387,200                                                                                         
               Gov Amend:   128,524,500                                                                                         
               Sen. Sub:    100,880,600                                                                                         
                                                                                                                                
          Total                                                                                                                 
               06 Actual:   133,363,700                                                                                         
               08 Adj Base: 158,525,400                                                                                         
               Gov Amend:   210,009,500                                                                                         
               Sen. Sub:    205,452,700                                                                                         
                                                                                                                                
     Position Changes                                                                                                           
          FT                                                                                                                    
               FY 07: 511                                                                                                       
               FY 08: 505                                                                                                       
                                                                                                                                
          TEMP                                                                                                                  
               FY 07:   2                                                                                                       
               FY 08:   1                                                                                                       
                                                                                                                                
          PPT                                                                                                                   
               FY 07:   3                                                                                                       
               FY 08:   3                                                                                                       
                                                                                                                                
     Budget Action                                                                                                              
          Adopted the FY08 Adjusted Base with the following                                                                     
          significant items:                                                                                                    
                                                                                                                                
             · Because the  PERS rate is  being reduced  from 44%                                                               
               to  22%, the  House's budget  removed the  general                                                               
               funds in  the salary adjustments. However,  due to                                                               
               time  constraints,   most  of  the   "other"  fund                                                               
               sources  remained   in  the  budget.   The  Senate                                                               
               Subcommittee  reduced  "other" funds  because  the                                                               
               agency  no  longer  needs to  pay  increased  PERS                                                               
               costs.                                                                                                           
             · Accepted  the  Governor's  $48.1  million  general                                                               
               fund request for Local Government Support.                                                                       
             · Removed  $500,000   (of  the  $1   million  total)                                                               
               general  funds   from  Alaska   Seafood  Marketing                                                               
               Institute.                                                                                                       
             · Added  Bering  Sea Fisherman's  Association  grant                                                               
               for $500,000 of general funds.                                                                                   
             · Added $300,000 general  funds increment for Alaska                                                               
               Legal Services.                                                                                                  
             · Fully funded  the PCE program using  the statutory                                                               
               funding  method  (i.e.,  removing 7%  of  the  PCE                                                               
               Endowment  vs.   the  Governor's   Amended  budget                                                               
               removing the full amount from the PCE Endowment).                                                                
             · Added  $399,100   of  non-general  funds   to  QTA                                                               
               Independent Traveler Grants.                                                                                     
                                                                                                                                
Senator  Thomas spoke  to this  budget proposal,  commenting that                                                               
the  general  funds  included  for  the  Bering  Sea  Fishermen's                                                               
Association  would replace  federal  funding that  was no  longer                                                               
available.                                                                                                                      
                                                                                                                                
9:43:48 AM                                                                                                                    
                                                                                                                                
Department of Labor and Workforce Development                                                                                 
                                                                                                                                
     Senator Thomas, Senator Davis, Senator Bunde.                                                                              
                                                                                                                                
     The Senate Finance Subcommittee for the Department of Labor                                                                
     and Workforce Development submits an Operating budget to                                                                   
    the full Senate Finance Committee for FY 08 as follows:                                                                     
                                                                                                                                
          General Funds                                                                                                         
               06 Actual:    16,018,500                                                                                         
               08 Adj Base:  20,987,500                                                                                         
               Gov Amend:    28,797,100                                                                                         
               Sen. Sub:     23,054,100                                                                                         
                                                                                                                                
          Fed Funds                                                                                                             
               06 Actual:    79,278,800                                                                                         
               08 Adj Base: 104,688,800                                                                                         
               Gov Amend:    86,256,200                                                                                         
               Sen. Sub:     90,788,600                                                                                         
                                                                                                                                
          Other Funds                                                                                                           
               06 Actual:    44,927,200                                                                                         
               08 Adj Base:  54,612,700                                                                                         
               Gov Amend:    52,842,000                                                                                         
               Sen. Sub:     52,860,600                                                                                         
                                                                                                                                
          Total                                                                                                                 
               06 Actual:   140,224,500                                                                                         
               08 Adj Base: 180,289,000                                                                                         
               Gov Amend:   167,895,300                                                                                         
               Sen. Sub:    166,703,300                                                                                         
                                                                                                                                
     Position changes                                                                                                           
          FT                                                                                                                    
               FY 07: 906                                                                                                       
               FY08:  844                                                                                                       
                                                                                                                                
          TEMP                                                                                                                  
               FY 07:  23                                                                                                       
               FY08:    7                                                                                                       
                                                                                                                                
          PPT                                                                                                                   
               FY 07: 108                                                                                                       
               FY08:  108                                                                                                       
                                                                                                                                
     Budget Action                                                                                                              
          Adopted  the  FY08  Adjusted Base  with  the  following                                                               
          changes:                                                                                                              
                                                                                                                                
          Because  the PERS  rate is  being reduced  from 44%  to                                                               
          22%, the  House's budget removed  the general  funds in                                                               
          the   salary   adjustments.   However,  due   to   time                                                               
          constraints, most of the  "other" fund sources remained                                                               
          in the budget. The  Senate Subcommittee reduced "other"                                                               
          funds  because  the  agency  no  longer  needs  to  pay                                                               
          increased PERS costs.                                                                                                 
                                                                                                                                
          Office of Citizenship Assistance line item adjustment                                                                 
          from personal services to contractual to achieve the                                                                  
          goal in the intent language.                                                                                          
                                                                                                                                
          Occupational Safety and Health                                                                                        
          Denied two positions, but provided the funding for a                                                                  
          youth safety and health program and seafood processing                                                                
          safety program.                                                                                                       
                                                                                                                                
          Alaska Vocational Technical Center                                                                                    
          Fund source adjustment for TRS increase 1,900 GF                                                                      
                                                                                                                                
          Special Projects                                                                                                      
          Rural Outreach Grant for the Alaska Center for the                                                                    
          Blind and Visually Impaired 110,000 (GF)                                                                              
                                                                                                                                
Senator Thomas  reviewed this report,  noting that  the reduction                                                               
in  positions was  due primarily  to a  "clearing out"  of vacant                                                               
positions.                                                                                                                      
                                                                                                                                
9:46:15 AM                                                                                                                    
                                                                                                                                
Senator  Elton  remarked  that  the  decision  to  deny  $190,000                                                               
requested to pay for juror  parking in Anchorage "difficult", but                                                               
pointed  out that  all other  municipal governments  provide free                                                               
parking for jurors.                                                                                                             
                                                                                                                                
9:47:10 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  summarized  that   the  overall  reduction  in                                                               
positions  was  an  indication  of  containment  of  governmental                                                               
growth.  He recalled  reports from  the  Division of  Legislative                                                               
Finance that the  State would likely face a deficit  by 2009. The                                                               
State  had initially  anticipated $940  million from  a "true-up"                                                               
related to  the Petroleum Production  Tax (PPT), but  that figure                                                               
had   been  reduced   by   approximately   $140  million,   which                                                               
contributed to the probability of a deficit in the near future.                                                                 
                                                                                                                                
Co-Chair Hoffman continued  that the State must  "live within its                                                               
means"  while  providing  necessary   services  to  Alaskans.  He                                                               
stated, "It  does not make  sense to me  to add positions  to the                                                               
budget today, and tomorrow have to eliminate them."                                                                             
                                                                                                                                
9:49:26 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  asked  for  an  explanation  of  the  language                                                               
section of the budget.                                                                                                          
                                                                                                                                
AT EASE 9:50:48 AM/9:51:19 AM                                                                                               
                                                                                                                                
DAVID   TEAL,   Director,   Division  of   Legislative   Finance,                                                               
identified six changes from the  House of Representatives version                                                               
of  the bill.  He testified  that the  first language  change was                                                               
located in Section 13  of the bill on page 57,  line 23. This was                                                               
a   change  within   the  Department   of  Education   and  Early                                                               
Development that  removed $24 million  for implementation  of the                                                               
District  Cost Factor  increases.  He  anticipated a  forthcoming                                                               
appropriation  bill relating  to  education  would address  these                                                               
costs,  and  therefore  funding   in  the  operating  budget  was                                                               
unnecessary.                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman commented  that the  $11 million  allocated for                                                               
learning opportunity  grants (LOGS) would likely  also be removed                                                               
and addressed in an "education bill" at a later date.                                                                           
                                                                                                                                
Mr. Teal spoke to a deletion  of funding within the Department of                                                               
Environmental  Conservation   in  the   amount  of   $80,000  for                                                               
Paralytic Shellfish Poisoning (PSP) testing.  In Section 1 of the                                                               
current  committee substitute,  the subcommittee  recommended the                                                               
funding be included as general funds.                                                                                           
                                                                                                                                
9:53:06 AM                                                                                                                    
                                                                                                                                
Mr.  Teal referred  to a  deletion  in the  Department of  Public                                                               
Safety of  $1.4 million in  general funds for the  Narcotics Task                                                               
Force. That deletion was due to the absence of federal funding.                                                                 
                                                                                                                                
Mr.  Teal  located  the  deletion  of  reference  to  the  Alaska                                                               
Retirement Management Board in Section  19, at the recommendation                                                               
of  the  Department  of Revenue  subcommittee.  The  $25  million                                                               
appropriation was  to be paid  directly to oil companies  for tax                                                               
refunds.                                                                                                                        
                                                                                                                                
9:54:13 AM                                                                                                                    
                                                                                                                                
Mr. Teal  informed that the change  in Section 23 (c)  related to                                                               
Power Cost Equalization (PCE). The  previous version of this bill                                                               
contained a  $25 million appropriation for  PCE, sourced entirely                                                               
from  the PCE  endowment.  The current  Senate Finance  Committee                                                               
substitute changed the funding scheme  to direct 7 percent of the                                                               
endowment  to PCE,  and  funded the  remaining  $13 million  with                                                               
general funds.                                                                                                                  
                                                                                                                                
9:55:00 AM                                                                                                                    
                                                                                                                                
Mr. Teal  set forth that  there were  no language changes  to the                                                               
mental health  appropriation bill, HB  96. He explained  that the                                                               
changes to that bill would be  made in the Capital budget. As had                                                               
been  "traditional"   practice,  the  House   of  Representatives                                                               
deleted one  project in its version  of the bill, and  the Senate                                                               
deleted all  but that project,  making all portions of  that bill                                                               
subject to conference between the two bodies.                                                                                   
                                                                                                                                
AT EASE 9:55:48 AM/9:56:36 AM                                                                                               
                                                                                                                                
Co-Chair Hoffman  asked regarding  the retirement  system funding                                                               
changes in the operating budget.                                                                                                
                                                                                                                                
Mr. Teal  informed that the  Senate Finance  Committee Substitute                                                               
included all  the changes the  House of Representatives  had made                                                               
to the Governor's requested budget.  The Senate Finance committee                                                               
substitute also  provided for  additional reductions  in funding,                                                               
with  the   intent  of  reducing  the   State's  contribution  to                                                               
retirement  costs  to 22  percent.  The  House Finance  Committee                                                               
reduced the  amount of  general fund  dollars allocated,  but did                                                               
not  reduce   federal  or  other  funds.   The  Senate  committee                                                               
substitute contained  approximately $38 million in  reductions of                                                               
other funds,  as those  monies were not  required for  payment of                                                               
retirement  and benefits.  Transaction  reports  prepared by  the                                                               
Division were incorporated into the bill.                                                                                       
                                                                                                                                
9:58:39 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman explained  that subcommittee  reports would  be                                                               
adopted and made available on  the Internet prior to commencement                                                               
of public testimony.                                                                                                            
                                                                                                                                
9:59:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  moved to adopt  SCS CSHB 95, 25-GH1013\T,  as a                                                               
working document.                                                                                                               
                                                                                                                                
10:00:09 AM                                                                                                                   
                                                                                                                                
There was no objection, and committee substitute Version "T" was                                                                
ADOPTED.                                                                                                                        
                                                                                                                                
10:00:16 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman moved to adopt SCS CSHB 96, 25-GH1015\K, as a                                                                  
working document.                                                                                                               
                                                                                                                                
10:00:33 AM                                                                                                                   
                                                                                                                                
There was no objection, and committee substitute Version "K" was                                                                
ADOPTED.                                                                                                                        
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyman Hoffman adjourned the meeting at 10:01:24 AM                                                                   

Document Name Date/Time Subjects