Legislature(2005 - 2006)SENATE FINANCE 532
04/11/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB366 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 365 | TELECONFERENCED | |
| += | HB 366 | TELECONFERENCED | |
| + | TELECONFERENCED |
MINUTES
SENATE FINANCE COMMITTEE
April 11, 2006
9:05 a.m.
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately
9:05:39 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice-Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: ART CHANCE, Director, Labor Relations,
Department of Administration; MATT ROBUS, Director, Division of
Wildlife Conservation, Department of Fish and Game; BOB
BARTHOLOMEW, Chief Operating Officer, Alaska Permanent Fund
Corporation, Department of Revenue; JAMES ARMSTRONG, Staff to
Co-Chair Wilken; PETE KELLY, Director, Government Relations,
University of Alaska; PAT PITNEY, Director of Budget Development
and Institutional Planning, University of Alaska; SARA FISHER-
GOAD, Alaska Energy Authority, Department of Commerce, Community
and Economic Development;
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
HB 365-APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 366-APPROP: MENTAL HEALTH BUDGET
The Committee heard from the Department of Administration, the
Department of Fish and Game, the Alaska Permanent Fund
Corporation, the University of Alaska, and the Alaska Energy
Authority. Amendments to the committee substitute were
considered and the bill was reported from Committee.
9:07:29 AM
CS FOR HOUSE BILL NO. 365(FIN) am(brf sup maj fld)
"An Act making appropriations for the operating and loan
program expenses of state government, for certain programs,
and to capitalize funds; making appropriations for state
aid to public schools, centralized correspondence study,
and transportation of pupils; and providing for an
effective date."
CS FOR HOUSE BILL NO. 366(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."
This was the fifth hearing for these bills in the Senate Finance
Committee.
The Committee had adopted SCS CS HB 365 (FIN), 24-GH2033\P, as a
working document at a previous hearing. Unless otherwise noted,
amendments are to this version.
9:07:33 AM
Co-Chair Wilken informed that this budget would fund K-12
education at $90 million, as proposed by Governor Frank
Murkowski.
9:09:32 AM
Department of Administration
DOA #1: This amendment inserts a new subsection to Section 27.
SALARY AND BENEFIT ADJUSTMENTS., on page 68, following line 23
to read as follows.
(d) It is the intent of the legislature that the
appropriations made in sec. 1 of this Act and in sec. 1 of
the Act making appropriations for the state's integrated
comprehensive mental health program, include the
arbitration award increasing the employers health insurance
contribution amount for employees in the Alaska State
Employees Health Trust.
Accompanying explanatory language reads as follows.
The recent arbitration award determined that the employer
health insurance contribution amount for employees in the
Alaska State Employees Health Trust should be increased
$4.45 per employee per month in FY 06; FY 07 will also
reflect that increase. This amendment is offered in order
for the legislature to express its approval of the award as
a monetary term under AS 23.40.215(b). No additional
funding is being requested.
Co-Chair Wilken moved for adoption of the amendment and objected
to obtain an explanation.
ART CHANCE, Director, Labor Relations, Department of
Administration, testified that this amendment relates to an
arbitration ruling between the State and a bargaining unit,
which he explained. The arbitrator ruled against both parties in
this instance and the amendment represents the direction of the
arbitrator. The Department is not requesting additional funding,
but requires legislative authority to make a deposit to the
Trust account.
Co-Chair Wilken removed his objection to the adoption of the
amendment.
Without further objection the amendment was ADOPTED.
9:12:00 AM
Department of Corrections
COR #1: This amendment inserts a new subparagraph to Section
27(a) on page 69, following line 6 to read as follows.
(9) Alaska Correctional Officers Association,
representing correctional officers;
This amendment also adds $3,430,200 general funds to the
Administration and Support Budget Request Unit (BRU) on page 8,
line 30 and the Institutional Facilities BRU on page 9, line 16,
to be allocated in the following amounts to the following
components.
Administration and Support:
Correctional Academy $21,300
Classification and Furlough 21,300
Institutional Facilities:
Inmate Transportation 28,100
Anchorage Correctional Complex 152,800
Anvil Mountain Correctional Complex 117,600
Combined Hiland Mountain Correctional Center 226,800
Fairbanks Correctional Center 224,400
Ketchikan Correctional Center 245,400
Lemon Creek Correctional Center 393,800
Mat-Su Correctional Center 95,300
Palmer Correctional Center 254,600
Spring Creek Correctional Center 838,700
Wildwood Correctional Center 247,800
Yukon-Kuskokwim Correctional Center 130,000
Pt. Mackenzie Correctional Farm 72,300
Accompanying explanatory language reads as follows.
Due to the recent Interest Arbitration award affecting the
Alaska Correctional Officers Association, the bargaining
unit reference is added to sec. 27, Salary and Benefit
Adjustments and the funding is added to sec. 1.
The department cannot absorb these cost increases. It is
already facing difficulties in managing a growing prison
population. Reductions in any area would require the
department to reduce non-security-related areas to maintain
sufficient staff for public safety, including reductions in
inmate education and job training programs.
Co-Chair Green moved for adoption of the amendment.
Co-Chair Wilken objected for discussion purposes.
Mr. Chance relayed that the Alaska Correctional Officers
Association bargaining unit contract expires June 31, 2006. A
new contract could not be agreed upon and this amendment
reflects a three-year extension of the current contract. The
employees represented by this bargaining unit are subject to a
no-strike provision. Funding appropriated through this amendment
would be utilized for continued arbitration.
Co-Chair Wilken removed his objection.
There was no further objection and the amendment was ADOPTED.
AT EASE 9:13:33 AM / 9:16:28 AM
9:16:40 AM
Department of Administration (continued)
DOA #2: This amendment increases the appropriation made in
subsection (d) of Section 11. DEPARTMENT OF ADMINISTRATION., on
page 9, lines 9 through 11, by adding funding sources in
addition to the general funds. The amended language reads as
follows.
(d) The sum of $2,847,900 is appropriated to the
Department of Administration, commissioner's office, for
distribution to state agencies to offset the increased
chargeback rates for enterprise technology services for the
fiscal year ending June 30, 2007, from the following
sources in the amounts stated.
Federal Receipts $159,200
General Fund 2,306,800
FICA Administration Fund Account 600
Benefits Systems Receipts 12,100
Agricultural Revolving Loan Fund 2,200
International Airports Revenue Fund 74,000
Public Employees Retirement System Fund 22,300
Second Injury Fund Reserve Account 800
Fishermen's Fund 800
Teachers Retirement System Fund 8,900
Commercial Fishing Loan Fund 1,300
Real Estate Surety Fund 200
National Guard & Naval Militia
Retirement System 400
Permanent Fund Dividend Fund 55,200
Capital Improvement Project Receipts 3,800
Fisheries Enhancement Revolving Loan Fund 100
Mental Health Trust Authority
Authorized Receipts 1,900
Alaska Aerospace Development Corporation
Receipts 1,400
Alaska Industrial Development & Export
Authority Receipts 2,500
Alaska Permanent Fund Corporation
Receipts 4,500
Alaska Post-Secondary Education
Commission Receipts 41,500
Statutory Designated Program Receipts 800
RCA Receipts 4,000
State Land Disposal Income Fund 6,200
Timber Sale Receipts 700
Receipt Supported Services 87,800
Workers Safety and Compensation
Administration Account 24,600
Alaska Oil & Gas Conservation
Commission Receipts 13,200
Building Safety Account 9,400
Business License and Corporation
Filing Fees and Taxes 700
Accompanying explanatory language reads as follows.
This amendment is needed to enable agencies to use $541,100
of non-general fund funding sources to pay the increased
chargeback rates anticipated by Enterprise Technology
Services (ETS).
Co-Chair Wilken offered a motion to adopt the amendment and
objected for discussion purposes.
Co-Chair Green offered a motion to amend the amendment to
correctly reflect the provision pertains to the fiscal year
ending June 30, 2007, rather than June 30, 1997, as stated in
the original wording of the amendment.
There was no objection and the amendment was AMENDED.
Co-Chair Wilken spoke of attempts to restore funding for public
broadcasting. This amendment would provide funding for agencies
to contribute to the costs of Enterprise Technology Services
through various funding sources. Subsequently, additional
funding would be available to appropriate for public
broadcasting.
9:17:49 AM
Co-Chair Wilken removed his objection to the adoption of the
amendment.
The amendment was ADOPTED without further objection.
9:17:54 AM
DOA #3: This amendment appropriates an additional $156,700
general funds to the Public Communications Services BRU, Public
Broadcasting - T.V. component, on page 4, line 7. Accompanying
explanatory language reads, "This amendment added to the $470.3k
(75%) funds Public TV at Governor's request."
Senator Hoffman moved for adoption.
Co-Chair Wilken objected.
Senator Hoffman spoke to the numerous public testimonials to the
importance of public television.
Co-Chair Wilken expressed "growing concern" that public
television is not a program that government should support. The
reduced funding level is intended to "wean" the program from
government support and convey a message to public television
supporters to secure other funding sources.
9:20:48 AM
Senator Stedman asserted that public television, along with
public radio, is advantageous to certain areas of state,
particularly to rural areas of Southeast Alaska.
9:21:22 AM
Senator Olson furthered that public broadcasting would always be
important to address a need. Many communities have access to
only public broadcasting. Weather information is vital for
hunters and other travelers. He is an "ardent supporter" of
public television.
9:23:27 AM
Senator Hoffman acknowledged Co-Chair Wilken's comments about
encouraging the securitization of additional financial support;
however, many public broadcasting stations hold at least one
fundraiser annually.
9:24:25 AM
Senator Olson added that public television affects people in
addition to Alaskans. Russians and Canadians also listen to
broadcasts.
9:24:47 AM
A roll call was taken on the motion.
IN FAVOR: Senator Hoffman, Senator Olson and Senator Stedman
OPPOSED: Senator Dyson, Co-Chair Green and Co-Chair Wilken
ABSENT: Senator Bunde
The motion FAILED (3-3-1)
The amendment FAILED to be adopted.
9:25:31 AM
Department of Commerce, Community and Economic Development
CC&ED #1: This amendment appropriates an additional $600,000 in
Vehicle Rental Tax Receipts to the Qualified Trade Association
Contract BRU and component on page 6, lines 11 through 14.
Accompanying explanatory language reads as follows.
This amendment increases the appropriation to the QTA
contract to $5.6 million. The VRTR fund source is earmarked
for tourism marketing and development.
Fundamental changes in both the worldwide and Alaska travel
markets over the past decade have resulted in a situation
where growth in the visitation-level of independent
travelers to Alaska has stagnated. Many Alaska-based
businesses exist primarily to serve travelers visiting
Alaska independently. Alaska-based businesses that are
small, highway-based, and/or rural-based have been
particularly hard hit by the stagnating growth of Alaska's
independent travel market.
On January 1, 2004 the State of Alaska began assessing and
collecting a 10% tax on all passenger vehicle rentals and a
3% tax on all recreational vehicle rentals. This new
vehicle rental tax results in economic hardship for all
independent-traveler reliant businesses when increased
vehicle rental prices make the cost of an independent
Alaska travel experience less price-competitive with
alternate non-Alaskan independent travel destinations and
with other Alaska travel modes.
The Alaska Statute authorizing the vehicle rental tax (AS
43.52) directs the [Department] of Revenue to deposit all
revenue from the vehicle rental tax into a special vehicle
rental account in the General Fund. Statute further states
that "the legislature may appropriate the actual balance of
the vehicle rental tax account for tourism development and
marketing."
The Department of Revenue estimates that approximately 80%
of the rental car tax receipts are generated from
independent travelers and generated during the tourism
season, May through September.
This amendment was NOT OFFERED, due to a technical error.
CC&ED #2: This amendment inserts a new subsection to Section 12.
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT., on
page 58, following line 3 to read as follows.
(c) the sum of $5,000,000 is appropriated to the
Department of Commerce, Community and Economic Development
for payment as a grant under AS 37.05.316 to the Denali
Commission for energy projects for the fiscal year ending
June 30, 2007.
Senator Hoffman moved for adoption of the amendment.
Co-Chair Green objected.
Senator Hoffman stressed the importance of the Denali
Commission. The State must assist in addressing the issues
undertaken by the Commission.
9:27:36 AM
Co-Chair Green reiterated that at the time of the creation of
the Denali Commission, representatives testified to its
establishment and intentions and asserted that the Commission
would never request State funding. She agreed the Commission was
beneficial.
9:28:25 AM
Senator Olson contended that no projects in the state
facilitated greater changes than new "tank farms", new health
clinics and the other worthwhile projects undertaken by the
Commission. While he did not recall Commission representatives
stating it would request State funds for its activities, the
funding provided in this amendment is at the recommendation of
US Senator Ted Stevens. Lack of funding would delay projects.
Senator Olson supported the amendment.
9:29:45 AM
Senator Stedman opined that the submission of this amendment is
timely in relation to the recent address by Alaska's senior
congressman to the Alaska State Legislature. However the policy
decision of whether to allocate State funding to the Denali
Commission is significant and better addressed during the next
legislative session. This is part of a larger issue of the
reduced federal funding that the State would be receiving in the
future and should be considered in the context of longer range
policy decisions.
9:30:31 AM
Senator Hoffman agreed with Senator Stedman. However, this
funding is requested at a time in which the State has a budget
surplus. The passage of legislation to enact a Petroleum
Production Tax (PPT) would result in at least $1 billion in
additional revenue.
Senator Hoffman WITHDREW his motion to adopt the amendment.
9:31:45 AM
Co-Chair Wilken commented that with regard to reduced federal
funding in future years, US Senator Ted Stevens "rang the bell
and we all heard it". This matter should be addressed during the
legislative interim with forethought.
9:32:15 AM
Alaska Court System
CRT #1: This amendment adds $75,000 general funds to the Alaska
Court System BRU, Trial Courts component on page 38, line 30.
Accompanying explanatory language reads as follows.
The court system believes it is necessary to provide
security screening services in court locations throughout
the state. Screening services are available in Anchorage,
Palmer, Kenai, Juneau and Fairbanks courts. The Bethel
court is the next location at which the court desires to
implement security screening.
The Bethel court is one of the busiest court locations in
the state and serves as the hub for the communities in the
Yukon-Kuskokwim Delta. The Court believes that high felony
rates and high domestic violence rates require the court to
pursue security screening to insure the on-going safety of
the public, jurors, witnesses, victims, and court staff.
Senator Hoffman moved for adoption.
Co-Chair Wilken overviewed the explanatory statement.
The amendment was ADOPTED without objection.
9:32:52 AM
Department of Education and Early Development
E&ED #1: This amendment inserts language to the K-12 Support
BRU, Foundation Program component on page 10, line 32 to read as
follows.
A school district may not receive state education aid for
K-12 support appropriated under sec. 1 of this Act and
distributed by the Department of Education and Early
Development under AS 14.17 if the school district:
(1) has a policy refusing to allow recruiters for
the military, Reserve Officer Training Corps, Central
Intelligence Agency, or Federal Bureau of Investigation to
contact students on a school campus if the school district
allows college, vocational school, or other job recruiters
on a campus to contact students;
(2) refuses to allow the Boy Scouts of America to
use school facilities for meetings or contact with students
if the school makes the facility available to other non-
school groups in the community; or
(3) has a policy of refusing to have an in-school
Reserve Officer Training Corps program or a Junior Reserve
Officers' Training Corps program.
Senator Dyson moved for adoption of the amendment.
Co-Chair Wilken objected.
Senator Dyson outlined the intent language.
9:33:50 AM
Senator Olson asked if this provision would impact private
schools in any manner.
Senator Dyson answered it would not.
Co-Chair Wilken removed his objection.
Co-Chair Green pointed out that the intent language would not be
legally enforceable. It appears to replicate existing policy.
She asked if the provision would pertain to only the foundation
funding or to other funding programs as well.
Senator Dyson replied he would research the question.
AT EASE 9:34:55 AM / 9:36:00 AM
Co-Chair Wilken announced that the Division of Legislative
Finance has advised that the language of the amendment is
conditional language rather than intent language and therefore
carries the "force of law".
Co-Chair Green objected to the adoption of the amendment. She
supported the intentions of the sponsor; however the provision
should have statutory backing and should undergo the legislative
process as legislation.
9:36:42 AM
Senator Stedman understood that if this amendment were adopted,
a school campus would forfeit the formula funding it would
otherwise receive if that school denied access to recruiters for
the Boy Scouts of America. This appeared to be a drastic
consequence.
9:37:04 AM
Senator Dyson assured the loss of funding would only be for the
year in which the school held the policy. Once the policy was
changed to allow access, the school would be eligible to
receiving foundation funding in future years.
AT EASE 9:37:27 AM / 9:41:16 AM
Co-Chair Wilken noted that an amendment to this amendment would
be forthcoming. He ordered the motion to adopt the amendment
WITHDRAWN and the amendment be HELD.
9:41:30 AM
Senator Dyson pointed out that the federal government has
already adopted similar measures.
9:42:10 AM
E&ED #2: This amendment adds $1 million general funds to the
Teaching and Learning Support BRU, Statewide Mentoring Program
component on page 11, line 13. Accompanying explanatory language
reads as follows.
This amendment will bring the total for the mentoring
program for teachers to $3.5 million. This program is key
to teacher retention and performance by providing a
voluntary support system.
Co-Chair Wilken requested to Senator Hoffman that this amendment
be HELD for later consideration.
[NOTE: This amendment was subsequently NOT OFFERED due to action
taken in the adoption of E&ED #3.]
9:42:31 AM
Department of Fish and Game
F&G #1: This amendment was HELD to await the arrival of Senator
Bunde. It was considered later in the hearing.
9:42:57 AM
Office of the Governor
GOV #1: This amendment inserts a new subsection to Section 20.
OFFICE OF THE GOVERNOR., on page 61, following line 9 to read as
follows.
(g) The sum of $51,600 is appropriated from the
Investment Loss Trust Fund to the Office of the Governor,
division of elections, for the costs of consolidation
elections for the City of Ketchikan and the Ketchikan
Gateway Borough in the fiscal year ending June 30, 2007.
Accompanying explanatory language reads as follows.
The Local Boundary Commission is reviewing a consolidation
petition and is expected to make a decision in late July.
If the petition is approved, then the Division will conduct
two elections by mail. The first will determine the
consolation and the second will determine the initial
officers of the consolidated borough.
Co-Chair Wilken moved for adoption and objected to explain the
amendment. He overviewed the explanatory statement.
9:43:40 AM
Senator Stedman objected to the motion to comment that it would
be easier to represent a single entity than two separate
governments of the same community. His objection was removed.
Without further objection the amendment was ADOPTED.
9:44:26 AM
GOV #2: This amendment changes the funding source from general
fund to Investment Loss Trust Fund of the $2,756,500
appropriation to the Division of Elections "for costs associated
with conducting the statewide primary and general elections in
the fiscal year ending June 30, 2007" as provided in Section
20(a) on page 59, lines 26 through 29.
Co-Chair Wilken overviewed the amendment and moved for its
adoption.
There was no objection and the amendment was ADOPTED.
9:44:58 AM
Department of Health and Social Services
H&SS #1: This amendment inserts intent language to the Public
Assistance BRU, Public Assistance Administration component on
page 20, following line 15 to read as follows.
It is the intent of the legislature that the available
balance of Temporary Assistance for Needy Families (TANF)
bonuses be retained for use after FY 07.
Accompanying explanatory language reads as follows.
On February 8, 2006, the President [George W. Bush] signed
the Deficit Reduction Act of 2005, reauthorizing Temporary
Assistance for Needy Families (TANF). The bill revised the
caseload reduction credit (i.e. the TANF bonus) provisions
so that Alaska is unlikely to receive bonuses and may be
subject to penalties. The HSS Subcommittee Chairs in both
bodies would like to reserve unused TANF bonuses for future
uses, including potential payment of penalties.
Co-Chair Green offered a motion to adopt the amendment.
Co-Chair Wilken objected to receive an explanation.
Co-Chair Green informed that TANF bonus funds would no longer be
appropriated. Additionally, if the State failed to maintain the
existing level of service, it would be penalized and owe the
federal government money.
9:46:05 AM
Co-Chair Wilken surmised this amendment would provide that the
bonus funds received in FY 07 would be saved to address future
needs.
Co-Chair Green affirmed.
Co-Chair Wilken removed his objection.
The amendment was ADOPTED without further objection.
9:46:20 AM
H&SS #2: This amendment adds $220,400 Investment Loss Trust Fund
funds to the Children's Services BRU, Children's Services
Training component on page 18, line 14. Accompanying explanatory
language reads as follows.
Continued base funding for Children's Service Training.
This amount was identified by Legislative Finance in FY 06
as a one-time item and was subsequently removed from the
base in FY 07. The department disagrees with this
classification as these costs are for on-going costs as
slated in the FY 06 increment narrative. Funds are for on-
going staff training and staff development for existing
front-line and management staff, as well as providing
training to new social workers as they are hired.
Approximately 200 social workers will receive initial and
on-going training with these funds.
This funding is an integral part of meeting our federal
requirements as well as ensuring Office of Children's
Services staff is adequately trained to perform their
functions in protecting children at risk.
Co-Chair Green moved for adoption.
Co-Chair Wilken objected.
Co-Chair Wilken ascertained this was a priority item.
Co-Chair Green affirmed.
Co-Chair Wilken removed his objection.
There was no further objection and the amendment was ADOPTED.
9:46:56 AM
H&SS #3: This amendment adds $126,900 General Fund/Mental Health
funds and $137,100 Federal Receipts to the Behavioral Health
BRU, Behavioral Health Administration component on page 17,
lines 26 and 27.
This amendment also deletes $40,000 General Fund/Mental Health
funds and $40,000 Federal Receipts from the Children's Services
BRU, Children's Services Management component on page 18, lines
12 and 13.
This amendment also adds $60,000 General Fund/Mental Health
funds and $60,000 Federal Receipts to the Juvenile Justice BRU,
Probation Services component on page 19, line 23.
Accompanying explanatory language reads as follows.
Bring the Kids Home Gate-Keeping
The staffing supported with these funds is an integral part
of bring[ing], or keeping, children in-state rather than in
out-of-state treatment. This group will work as a placement
committee to ensure that a standardized approach is used
for custody and non-custody children in need of treatment
placement. In addition, the Division of Behavioral Health
requires utilization review staff to support these efforts.
A group has been working with the Alaska Mental Health
Trust Authority to determine the appropriate staff level
for gate-keeping. They have determined that, rather than
the seven positions initially requested, staff can be
reduced to four plus one project manager.
Co-Chair Green offered a motion to adopt the amendment.
Co-Chair Wilken objected.
Co-Chair Green overviewed the explanatory statement.
Co-Chair Wilken noted the amendment would add $146,900 to the
Bring the Kids Home project.
Co-Chair Wilken removed his objection.
Without further objection, the amendment was ADOPTED.
9:47:33 AM
H&SS #4: This amendment adds $300,000 general funds to the
Alaska Pioneer Homes BRU, Pioneer Homes component on page 17,
line 12. Accompanying explanatory language reads, "This
amendment will increase general fund funding available to Alaska
Pioneer Homes by $300,000.
Co-Chair Green moved for adoption.
Co-Chair Wilken objected.
Co-Chair Green explained this amendment would provide funding
for salaries of employees newly hired during the fiscal year.
9:48:11 AM
Co-Chair Wilken had been "surprised" by the testimony about the
need for additional staff at the Homes. He supported this
amendment, which he co-sponsored.
Co-Chair Wilken removed his objection.
The amendment was ADOPTED without further objection.
9:48:33 AM
H&SS #5: This amendment adds $250,000 general funds to the Human
Services Community Matching Grant BRU and component on page 23,
line 33 through page 24, line 5. Accompanying explanatory
language reads, "Provides partial funding of the Governor's FY
07 request.
Co-Chair Green moved for adoption.
Co-Chair Wilken objected for an explanation.
Co-Chair Green remarked that the funding appropriated in this
amendment would be a "good investment".
Co-Chair Wilken summarized that Governor Murkowski had requested
$2.7 million for this program. With the adoption of this
amendment, the appropriation would be $1,475,300.
Co-Chair Wilken removed his objection.
There was no further objection and the amendment was ADOPTED.
AT EASE 9:49:25 AM / 9:54:19 AM
9:54:24 AM
H&SS #6: This amendment adds $51,850 general funds to the Public
Health BRU, Community Health/Emergency Medical Services
component on page 21, lines 7 and 8. Accompanying explanatory
language reads, "This amendment will increase GF funding
available to community EMS by $51,850 for FY 07."
Senator Stedman moved for adoption.
Co-Chair Wilken objected for discussion purposes.
Senator Stedman deferred to Senator Olson, co-sponsor of the
amendment.
Senator Olson relayed his personal experience early in his
medical career in which he was a "health aid". He witnessed the
training that was necessary but that was beyond his expertise to
provide. Since that time, training has advanced significantly.
9:55:52 AM
Co-Chair Wilken remarked upon the significant public testimony
on this issue and of his realization that this program had
received no funding increases since 1991. He removed his
objection to the adoption of the amendment.
Without further objection the amendment was ADOPTED.
9:56:23 AM
H&SS #7: This amendment adds $176,000 general funds to the
Public Health BRU, Emergency Medical Services Grants component
on page 21, lines 10 and 11. Accompanying explanatory language
reads, "This amendment will increase funding for Emergency
Medical Services Grants by $176,000."
Senator Stedman offered a motion to adopt the amendment.
Co-Chair Wilken objected for an explanation.
Senator Stedman stated that this amendment would increase
funding by ten percent. This item differs from the previous
amendment in that the funding would be directed to different
emergency medical services providers. These programs are
necessary across the state due to the harsh environment and high
accident rates.
Co-Chair Wilken removed his objection, noting the combined
allocation would be $457,000 higher than the amount requested by
the Governor. Co-Chair Wilken intended that the amount approved
by the House of Representatives would receive favorable
consideration by the conference committee appointed to resolve
differences between the versions of this legislation adopted by
each body.
The amendment was ADOPTED with no further objection.
9:57:55 AM
H&SS #8: This amendment adds $352,000 general funds to the
Public Health BRU, Emergency Medical Services Grants component,
and adds $103,700 general funds to the Community
Health/Emergency Medical Services component.
Senator Olson stated this amendment would be NOT OFFERED based
on actions taken on H&SS #6 and H&SS #7.
Co-Chair Wilken pointed out this amendment would have funded the
request at 100 percent, while the previous amendments provided
half of the amount.
9:58:35 AM
H&SS #9: this amendment adds $103,700 general funds to the
Public Health BRU, Community Health/Emergency Medical Services
component. Accompanying explanatory language reads as follows.
This amendment will increase GF funding available to
community EMS by $103.7k to $947.6k for FY 07. This will
bring the total appropriation with all funds to $5275.2k
which is the same funding passed by the House.
FY GF Funding
06 810.4
05 732.1
04 857.5
03 816.0
02 1,353.7
01 849.8
00 777.5
99 695.5
98 680.2
Senator Stedman announced that this amendment would be NOT
OFFERED.
9:58:46 AM
Department of Labor and Workforce Development
LWD 1: this amendment inserts $300,000 Investment Loss Trust
Fund receipts to the Workforce Development BRU, Kotzebue
Technical Center Operations Grant component on page 25, lines 22
and 23. Accompanying explanatory language reads as follows.
This one-time funding source increment replaces federal
training grants from the Workforce Investment Act (WIA).
Senator Olson offered a motion to adopt the amendment.
Co-Chair Wilken objected for an explanation.
Senator Olson emphasized the broad support of this facility
expressed during public testimony on this budget. He spoke to
the success rate of students completing programs at the Center.
Co-Chair Wilken removed his objection.
With no further objection the amendment was ADOPTED.
9:59:54 AM
LWD #2: This amendment adds $300,000 general funds to the
Workforce Development BRU, Kotzebue Technical Center Operations
Grant component. Accompanying explanatory language reads, "This
increment replaces federal training grants from the Workforce
Investment Act (WIA)."
Senator Olson announced this amendment would be NOT OFFERED.
AT EASE 10:00:08 AM
10:00:58 AM
LWD #3: This amendment deletes $300,000 general funds from the
Workforce Development BRU, Business Services component on page
25, line 18. Accompanying explanatory language reads as follows.
This amendment corrects an error made by the Legislative
Finance Division in preparing the Committee Substitute
bill. Legislative Finance was directed to remove partial
funding of a Governor's increment but the increment
remained in the bill.
Co-Chair Wilken moved for adoption and explained the error.
The amendment was ADOPTED without objection.
10:01:39 AM
Department of Law
LAW #1: This amendment adds $290,000 general funds to the
Criminal Division BRU, Third Judicial District: Outside
Anchorage component on page 26, lines 24 and 25. Accompanying
explanatory language reads as follows.
Currently the Palmer District Attorney's Office provides
service to the communities of Valdez, Glennallen, and
Cordova. In 2005, the Palmer Office handled 4524 case
referrals with eight attorneys. Almost six hundred of these
referrals are attributable to the communities of Valdez,
Glennallen, and Cordova.
Establishing a new District Attorney's Office in Valdez
would relieve the caseload in Palmer and also improve the
quality of service, interaction and working relationships
with local law enforcement entities in these communities.
The cost estimate [copy on file] from the Department of Law
to establish this office totals $387,900. This request is
reduced to 75% of that amount to reflect less than a year's
operating due to time lag in hiring, remodeling facilities,
etc. The eventual establishment of a Grand Jury in Valdez
would substantially reduce the amount of travel depicted in
this estimate.
Co-Chair Wilken moved for adoption and objected to provide an
explanation.
Co-Chair Wilken stated this funding would provide for a new
prosecutor position to be located in Valdez. He objected to the
adoption of the amendment primarily because of its late
submission and failure to follow normal appropriation decisions
procedure.
10:02:22 AM
Co-Chair Green clarified that this request was made earlier in
the legislative session. However, when the Department was asked
to review the proposal, officials determined it not appropriate
for the upcoming fiscal year. She supported the eventual
creation of a District Attorney Office to serve the three
communities because it would reduce the workload of the Palmer
Office.
Co-Chair Wilken predicted it would be considered for inclusion
in the FY 08 Governor's proposed budget.
10:03:03 AM
Senator Stedman remarked that this issue was not presented in
the budget subcommittee process. Attempts are underway to
address salaries for prosecutors. He did not support the
amendment.
10:03:26 AM
Co-Chair Wilken maintained his objection to the adoption of the
amendment.
The amendment was WITHDRAWN.
10:04:06 AM
Department of Military and Veterans Affairs
M&VA #1: This amendment deletes $289,200 I/A Receipts from the
Military and Veterans' Affairs BRU, Alaska Military Youth
Academy component, on page 28, lines 9 and 10. Accompanying
explanatory language reads as follows.
The Department of Military and Veterans Affairs submitted a
revised student count for the Alaska Military Youth
Academy. The reduced count reduces the need for funding
from the Department of Education and Early Development.
This amendment reduces Interagency Receipt authority from
DEED so that funding levels in both agencies match.
Co-Chair Wilken moved for adoption and objected to read the
explanatory statement into the record.
The amendment was ADOPTED without further objection.
10:04:33 AM
Department of Natural Resources
DNR #1:
Action on this amendment was HELD to await the arrival of
Senator Bunde. The amendment was considered later in the
hearing.
DNR #2: This amendment adds $267,700 Receipt Supported Services
(RSS) to the Resource Development BRU, Parks Management
component on page 29, line 24. Accompanying explanatory language
reads as follows.
During the subcommittee process, we deleted all $409,300 in
possibly uncollectible receipt supported services in Parks
Management. This amendment is an attempt to help the Parks
system by giving them back the option to use the RSS in the
event they do collect more than they had anticipated.
This amendment was NOT OFFERED to defer to anticipated actions
on DNR #1.
10:04:52 AM
DNR #3: This amendment adds $50,000 general funds to the Fire
Suppression BRU, Fire Suppression Preparedness component on page
30, lines 14 and 15. Accompanying explanatory language reads as
follows.
Residents in Homer are at high risk of loss from wildfires
due to the thousands of acres of beetle-killed spruce
remaining in the area. As the population grows on the
southern Kenai Peninsula and climate change produces
warmer, drier summers, it is especially important that we
maintain firefighting readiness. Without an office in
Homer, DNR firefighters will not be able to respond quickly
enough when fires are reported.
Co-Chair Wilken moved for adoption of this amendment on behalf
of Senator Bunde and objected for discussion purposes.
Co-Chair Wilken outlined the explanatory statement. This
allocation appeared to be appropriate, given the circumstances.
He removed his objection.
Without further objection the amendment was ADOPTED.
10:05:43 AM
DNR #4: This amendment adds $120,000 Investment Loss Trust Fund
(ILTF) to the Resource Development BRU, Forest Management and
Development component on page 29, lines 13 - 16. Accompanying
explanatory language reads as follows.
Forest Inventory Program
The Division of Forestry is working to simultaneously
sustain local mills in southeast Alaska, help support
chipping operations and local mills in southcentral, and
increase timber processing in interior Alaska. The success
of these efforts requires that we can provide the industry
with sufficient information on timber quality and quantity
for them to determine the viability of harvest. Timber
industry development and sound forest management require an
ongoing timber inventory program to collect, analyze, and
disseminate timber supply data. Existing inventory
information is limited throughout the state, nonexistent in
some areas and outdated at best.
The State has an opportunity to secure the development of a
new wood processing facility in the interior and create a
significant new employment opportunity for residents, but
the project won't move forward without a detailed forest
inventory of the resource to ensure the log volume is
present to support a large private sector investment.
Senator Stedman moved for adoption of the amendment.
Co-Chair Wilken objected to request an explanation.
Senator Stedman detailed the explanatory statement.
Co-Chair Wilken removed his objection.
The amendment was ADOPTED with no further objection.
10:06:27 AM
DNR 5: This amendment adds $858,700 ILTF to the Resource
Development BRU, Oil & Gas Development component on page 28,
line 26. Accompanying explanatory language reads as follows.
Continuation of Oil & Gas and Gasline Increased Workload
Without additional funding the division will see a slowdown
in many functions of the division that could adversely
affect the state's oil and gas development. These include:
· Administration of royalty settlements. Arbitration and
potential settlements will slow down. Could delay or
lose potential revenue based on arbitration and
settlement.
· Action on royalty modification agreements will slow
down. Could delay or lose potential revenue based on
arbitration or settlement.
· Development in the field could be delayed because
producers won't develop until agreement in place.
· Unable to quickly respond to gasline questions or
implementation issues.
Co-Chair Wilken moved for adoption and overviewed the
information in the explanatory statement. He noted the priority
of Governor Murkowski was to focus attention of the Division of
Oil and Gas on the bulleted items.
Co-Chair Wilken removed his objection.
There being no further objection the amendment was ADOPTED.
10:07:00 AM
Department of Public Safety
DPS #1: This amendment adds $1,664,600 federal receipts and
deletes $1,393,200 general funds from the Alaska State Troopers
BRU, Narcotics Task Force component on page 31, line 9.
Accompanying explanatory language reads as follows.
This amendment corrects a technical error. The Senate DPS
Sub-Committee replaced unrealizable federal receipts with
general funds in Section 1 of the operating budget.
However, the Committee Substitute bill incorporated
language appropriating $1.4 million for the same purpose.
This amendment eliminates the duplication of funding
requests and leaves the language intact.
Co-Chair Wilken moved for adoption, and objected to read the
explanatory statement into the record. He removed his objection.
The amendment was ADOPTED without further objection.
10:07:47 AM
DPS #2: This amendment adds $500,000 ILTF and $500,000 general
funds, and deletes $1 million Interagency Receipts (I/A
Receipts) from the Council on Domestic Violence and Sexual
Assault BRU and component on page 32, lines 11 through 17.
Accompanying explanatory language reads as follows.
Replace TANF funding
The Governor's Amended FY 2007 Budget included $1 million
in federal TANF funds for the Department of Health and
Social Services (DHSS) for CDVSA shelter grants. The Senate
Finance Subcommittee deleted the federal TANF funds in the
DHSS budget so the funds are not available to transfer to
CDVSA. This amendment replaces the unrealizable TANF funds
with general funds and investment loss trust funds.
Co-Chair Green moved for adoption.
Co-Chair Wilken objected to request an explanation.
Co-Chair Green noted this item relates to the federal Temporary
Assistance for Needy Families (TANF) program.
Co-Chair Wilken surmised that this amendment would provide
funding for the Council on Domestic Violence and Sexual Assault,
a priority of the budget subcommittee, although utilizing
different funding sources. He removed his objection to the
adoption of the amendment.
Without further objection the amendment was ADOPTED.
10:08:45 AM
DPS #3: This amendment adds $350,000 general funds to the
Council on Domestic Violence and Sexual Assault BRU on page 32,
lines 11 and 12, for operating costs of the Maniilaq
Association-Family Crisis Center in Kotzebue.
Senator Olson moved for adoption.
Co-Chair Wilken objected.
Senator Olson remarked on the effectiveness of the Kotzebue
facility in addressing the needs of victims of abuse and their
dependants. The incidences of women and families who have been
victimized by someone of greater strength occur in all areas of
the state. This is an issue that has great awareness. These
victims are viewed with pity; however, legislators must provide
for their needs. Emergency housing and other services are
important also as a prevention to stop abused children from
becoming abusers in the future.
10:11:02 AM
Senator Dyson identified with the previous remarks. When the
issue of funding the Maniilaq Association-Family Crisis Center
was discussed in the budget subcommittee, the Governor's request
was for $250,000. The funding would be allocated by the
Department of Public Safety and categorized as a new item with
the anticipation that a different agency would assume oversight
the following year. The commissioner of the Department of Public
Safety had testified that federal funds would be available for
this program. Senator Dyson therefore would not vote for the
adoption of this amendment.
10:12:41 AM
Senator Stedman told of several domestic violence shelters
located in the election district he represents. He questioned
the funding mechanism proposed for the Kotzebue facility and why
it should be different from the structures governing all other
shelters in the state. With the closures of pulp mills, domestic
violence has become a significant issue in the Southeastern
region. Improvements in the economy would hopefully alleviate
this problem somewhat.
10:13:48 AM
Senator Olson responded that the Maniilaq center has been
eligible to receive federal funding in the past and was
therefore categorized separately from other domestic violence
shelters. The commissioner of the Department of Public Safety
supports this amendment. After FY 07, this center would be
included in the budgetary process with the other shelters.
10:15:31 AM
Co-Chair Green shared that when first contacted with this
request for a special appropriation during the FY 06 budgetary
process, the intent was to allow this exception for one year
only, because the Kotzebue facility had not been included with
the funding allocation for the other shelters. She was unsure
why the Center was not included in the process for FY 07 and she
did not intend to fund it as a separate line item. The Kotzebue
facility should participate in the regular grant process
required of the other shelters.
10:16:23 AM
Senator Hoffman indicated he favored adoption of the amendment.
A roll call was taken on the motion.
IN FAVOR: Senator Hoffman and Senator Olson
OPPOSED: Senator Bunde, Senator Dyson, Senator Stedman, Co-Chair
Wilken and Co-Chair Green
The motion FAILED (2-5)
The amendment FAILED to be adopted.
10:17:36 AM
DPS #4: This amendment adds $763,400 general funds to the
Village Public Safety Officer Program BRU, VPSO Contracts
component on page 31, line 32. Accompanying explanatory language
reads as follows.
This amendment restores $200,000 for VPSO recruitment, and
returns the lapsed funds of $563,400 to VPSO contracts to
enable DPS to full the vacant positions.
Senator Hoffman moved for adoption.
Co-Chair Wilken objected.
Senator Hoffman explained that this amendment would reverse
earlier actions. He recognized that the lapse of funds had
occurred in the past, but stressed this was due to position
vacancies. The vacancies are justification for the argument that
the Department must make a greater effort in training and
hiring. Many improvements could be made. These funds could be
utilized to recruit local high school graduates. Salaries for
Village Public Safety Officers (VPSO) should be increased from
the current rate of $16 per hour to improve retention.
Senator Hoffman emphasized that these actions would be
preferable to "returning millions to the federal government" and
preferable to the creation of a new program involving
designating some positions at a lower salary. He questioned the
logic of expecting to retain employees at a lower salary, given
the difficulty in retaining them at the current salary. This
idea is "ill conceived" and public safety problems would
continue.
Senator Hoffman reported he had discussed the issue with Co-
Chair Wilken to no avail. Senator Hoffman therefore offered this
amendment.
10:21:08 AM
Senator Dyson supported the VPSO program, although it has
problems. An average amount of $600,000 appropriated to this
program has lapsed for the past several years. He therefore
concluded that the problem is not a lack of funding. The program
should be reorganized and he understood that the commissioner
intended to do so. An open discussion was held on how a
separation would be executed.
10:22:18 AM
Senator Bunde agreed to the importance of salaries; however,
recruitment was an issue for some areas as well.
10:22:54 AM
Senator Olson agreed, but stressed that the VPSO program has
been successful in the past. The primary mission of maintaining
law and order must be retained. He had heard of no support from
residents and officials in rural communities for the proposed
new program. Increased salaries and benefits that are
commensurate with the job would assist in recruitment and
retention. Local residents holding VPSO positions are aware of
the "troublemakers" and are able to determine whether assistance
from outside the community is required.
10:25:21 AM
A roll call was taken on the motion.
IN FAVOR: Senator Hoffman and Senator Olson
OPPOSED: Senator Stedman, Senator Bunde, Senator Dyson, Co-Chair
Wilken and Co-Chair Green
The motion FAILED (2-5)
The amendment FAILED to be adopted.
10:25:50 AM
Department of Natural Resources (continued)
DNR #1: This amendment adds $513,400 Vehicle Rental Tax Receipts
to the Resource Development BRU, Parks Management component on
page 29, line 24. Accompanying explanatory language reads as
follows.
This amendment increases the appropriation to Parks
Management to $7,355,000. Because of heavy tourism use in
Alaska's parks, a portion of the VRTR (a newly-created fund
source earmarked for tourism and marketing and development)
is being used for Park's development and maintenance.
Senator Bunde moved for adoption.
Co-Chair Wilken objected for discussion purposes.
Senator Bunde relayed that during the budget subcommittee
meetings, it was learned that although efforts were made by the
Division of Parks to generate sufficient revenue to allow the
program to be self-supportive, this goal was not achieved.
Utilizing a portion of revenues generated from tourism to
supplant the Park's operations would be a "wise investment" and
appropriate use of the funds.
Co-Chair Wilken removed his objection.
The amendment was ADOPTED with no further objection.
10:27:47 AM
Department of Fish and Game
F&G #1: This amendment adds $1,330,700 ILTF to the Wildlife
Conservation BRU and component on page 14, line 9. Accompanying
explanatory language reads as follows.
This amendment restores funding for Wildlife Conservation
to the level in the Fish and Game subcommittee report.
Co-Chair Wilken moved for adoption and objected for discussion
purposes. He noted this funding would be utilized to implement a
new program.
MATT ROBUS, Director, Division of Wildlife Conservation,
Department of Fish and Game, testified that the Board of Game
identified areas of the state in which intensive game management
would be appropriate for consideration. In the past year, the
Division began an analysis of the wildlife populations and
conditions in these areas and allocated all capital improvement
project funding for this purpose for the current year. Most
programs would require multiple years to complete.
Mr. Robus remarked that the funding requested in this amendment
would allow the Division to continue these efforts in existing
survey areas as well as begin analysis in at least one new area.
The Board of Game requires sufficient information to make
decisions pertaining to hunting and trapping.
Mr. Robus reported that hunting and trapping license fees have
not increased since 1993. The stagnant revenue has hampered the
Division's efforts, especially in the past four to five years.
The funding that adoption of this amendment would provide would
allow the Division to focus on areas with higher demand on moose
and caribou populations with the goal of providing for maximum
hunting opportunity.
10:31:11 AM
Senator Bunde spoke in favor of the amendment. Lawsuits
sponsored by those who oppose intensive game management would
continue without sufficient data to support the Board of Game's
decisions. The State would lose these lawsuits and be vulnerable
to additional suits. Effective game management does not only
benefit hunters and trappers, as many tourists visit Alaska to
see wildlife. He supported legislation to allow tourists to
contribute funding for game management activities.
10:33:08 AM
Co-Chair Wilken asked if the intent would be to secure
additional funding.
10:33:13 AM
Mr. Robus responded that the program must be expanded and that
additional funding options were under consideration. Whether
license fee increases would be appropriate has yet to be
determined. The goal of the program is to achieve "full
capability for standard wildlife management" in addition to
addressing predator control issues. The program has experienced
some success, which would benefit the future of the game
populations.
Senator Bunde commented that the membership of the Senate
Finance Committee the following legislative session could be
comprised of Senators who do not support hunting. Therefore,
this program should be supported at this time.
Co-Chair Wilken withdrew his objection to the adoption of the
amendment.
There being no further objection, the amendment was ADOPTED.
10:33:50 AM
Department of Revenue
REV #1: This amendment adds $300,500 Permanent Fund Corporate
Receipts to the Alaska Permanent Fund Corporation BRU, APFC
Operations component on page 34, line 17. Accompanying
explanatory language reads as follows.
This amendment will provide funding for 2 permanent full-
time positions, an investment officer and senior
accountant.
APFC requires these new positions for the following
reasons:
· The Fund's movement into absolute return and private
equity has created additional work for the investment
and finance staff.
· The Board has placed greater responsibility on APFC
staff for due diligence on new and existing managers
over the last few years.
· Changes in strategy have lead to a 75% increase in the
number of equities managers over the last two years.
This requires additional due diligence and almost
doubles the number of equity portfolios that the
finance staff must track.
· The real estate portfolio is in an acquisition phase,
creating additional due diligence and increasing the
number of properties that must be accounted for.
These are the first new PCN's that the APFC has asked for
in seven years.
Co-Chair Wilken moved for adoption and read the explanatory
statement into the record.
10:34:47 AM
Senator Stedman announced that he would oppose this amendment.
10:35:17 AM
BOB BARTHOLOMEW, Chief Operating Officer, Alaska Permanent Fund
Corporation, Department of Revenue, testified that as the size
of the Fund has grown, the Corporation made efforts to continue
to manage the fund with the existing staffing level. However,
activities of the Corporation have expanded into the new asset
classes of private equity and absolute return or hedge funds,
which require additional oversight. Also, the size of the Alaska
Permanent Fund is continuing to grow overall, thus increasing
workload.
AT EASE 10:37:12 AM / 10:40:47 AM
10:40:52 AM
Senator Dyson relayed conversations he had with Mike Burns,
Executive Director of the Corporation, in which he learned that
in addition to expanded investment, a major petroleum project
would create new investment opportunities. Those recruited for
the requested positions would have the expertise necessary for
the new types of investment.
10:41:51 AM
Senator Stedman did not support adoption of the amendment. The
budget subcommittee recommended approval of a one-time
appropriation of $376,000 to increase the Corporation's "due
diligence in response to the more complex investments scenarios
presented … in the alternative investment classes." The intent
was to consider a request of funding for FY 08 if funding were
still needed the following year. The legislature has the
responsibility to govern the assets of the Permanent Fund in a
manner that is in the best interest of the state.
10:44:13 AM
Senator Bunde qualified that if general funds were proposed as
the funding source he would oppose the amendment. However, the
Corporation has benefited Alaskans in achieving high earnings.
This increase in success has necessitated the need for the
additional positions. He supported adoption of the amendment.
10:44:47 AM
Senator Stedman asked the last time new positions were added.
10:45:11 AM
Mr. Bartholomew replied that the Corporation added a new
position in July 1999. Efficiencies were maximized and the
growth of the Fund has been managed with existing staff;
however, staff is currently working at full capacity.
10:46:07 AM
Senator Olson, citing the success of the Corporation and its
high investment returns, deemed the amount of this funding
request inconsequential.
10:47:34 AM
Senator Stedman reminded that during the legislative process of
the previous session to amend statute to expand the investment
classes, the Corporation submitted a zero fiscal note indicating
that implementation would be done with existing staffing levels.
A roll call was taken on the motion to adopt the amendment.
IN FAVOR: Senator Olson, Senator Bunde, Senator Dyson, Co-Chair
Wilken and Co-Chair Green
OPPOSED: Senator Stedman and Senator Hoffman
The motion PASSED (5-2)
The amendment was ADOPTED.
10:48:22 AM
Department of Transportation and Public Facilities
DOT #1: This amendment adds funds to the Highways, Aviation and
Facilities BRU on page 36, following line 14, in the following
amounts to the following components.
$58,700 ILTF - Central Region Highways and Aviation
$85,000 ILTF and
$10,000 Capital Improvement Project (CIP) Receipts
- Northern Region Highways and Aviation
$91,300 ILTF - Southeast Region Highways and Aviation
Accompanying explanatory language reads as follows.
Air carriers including Alaska Airlines, Northern Air Cargo,
ERA, and Frontier have repeatedly asked for extended hours
of operations at several of the State's rural airports. Air
carriers are increasing hours of operations into these
airports, and need to be assured that the runways are free
of ice and snow, and that emergency services are available.
Last year we received an increment to provide this service
in Bethel and Dillingham, but did not receive the full
amount needed for both airports so Dillingham was not
funded. This year we would like to accommodate the requests
at Dillingham, Unalaska, Nome, Kotzebue, Petersburg and
Wrangell.
To effectively extend the hours of operations for the air
carrier's requested increased service levels at these
airports, full funding is needed for each location.
Currently these airports are staffed an average of 12 hours
per day. This amendment will cover payroll costs and some
additional utility and commodity costs. Customer
satisfaction will improve for those people traveling to and
from these communities or receiving goods that arrive via
aircraft.
Senator Olson moved for adoption.
Co-Chair Wilken objected for discussion purposes.
Senator Olson stressed this funding is necessary for aviation
safety.
10:49:39 AM
Senator Bunde pointed out that these carriers serve other
airports, such as those in Fairbanks and Anchorage, and pay
landing fees at those locations. He asked whether the carriers
pay landing fees to offset operation and other costs at the
rural airports listed in this amendment.
Co-Chair Wilken answered that landing fees are not levied for
the rural airports.
10:50:17 AM
Senator Stedman supported adoption of the amendment.
10:51:26 AM
Senator Bunde protested that if landing fees are required at
some airports, such fees should be assessed for all airports.
10:51:51 AM
Co-Chair Green reported that Alaska Airlines had contributed
funding to assist in the costs of extended hours of operation at
these airports. However, other airlines did not contribute and
would utilize the airport facilities for longer time periods
than did Alaska Airlines. As a result, Alaska Airlines stopped
paying. The intent should be implementation in the following
year of a system to allow all commercial and recreational
carriers to pay landing fees.
10:52:58 AM
Co-Chair Wilken reminded that this was attempted six years prior
unsuccessfully. Such a system would require statutory change.
10:53:12 AM
Senator Stedman commented that the matter was worthy of
discussion. He would review the issue over the legislative
interim.
10:53:31 AM
Senator Olson informed that the contributions of Alaska Airlines
occurred before the airline industry was federally deregulated.
Since that occurrence, many airlines have gone bankrupt and
ceased operations. He cautioned against imposing a system that
would cause hardship for Alaska Airlines and other carriers.
10:54:23 AM
A roll call was taken on the motion.
IN FAVOR: Senator Dyson, Senator Hoffman, Senator Olson, Senator
Stedman, and Co-Chair Wilken
OPPOSED: Senator Bunde and Co-Chair Green
The motion PASSED (5-2)
The amendment was ADOPTED.
10:54:56 AM
DOT #2: This amendment changes the funding source of $95,000
allocated to the Highways, Aviation and Facilities BRU, Northern
Region Highways and Aviation component on page 36, lines 23 and
24, from federal receipts to ILTF. Accompanying explanatory
language reads as follows.
Maintenance of the Galena Airport has long been partially
funded by the U.S. Air Force because of its strategic
location as a Forward Operating Location to deploy fighter
aircraft. Due to the Base Realignment and Closure (BRAC)
recommendations and potential savings to the federal
government, the existing contract with the U.S. Air Force
was terminated on March 31, 2006.
Negotiations with the U.S. Air Force and the Governor's
Office have resulted in a new contract with reduced
services and funding. The U.S. Air Force will continue to
provide funding for two maintenance workers, maintenance
equipment and utilities to operate and maintain the Galena
Airport. The State will need to provide fuel, commodities
(such as sand and equipment parts), and travel associated
with ongoing supervision of employees and negotiations with
the U.S. Air Force on the eventual transition to a complete
state responsibility. The agreement is anticipated to
continue through October of 2008. The additional funds are
necessary to assure safe airport operations that serve the
surrounding villages and commercial activities.
Senator Olson moved for adoption.
Co-Chair Wilken objected for discussion purposes.
Senator Olson read the explanatory statement into the record.
AT EASE 10:56:04 AM / 10:58:43 AM
Senator Bunde asked about a local contribution to assist in
keeping the airport operational.
10:59:14 AM
Co-Chair Wilken responded that the intent of the agreement would
be to combine efforts with the federal government.
10:59:21 AM
Senator Dyson added that maintenance and operation of this is
important to the viability of the village and to the local
vocational institution.
10:59:41 AM
A roll call was taken on the motion.
IN FAVOR: Senator Stedman, Senator Dyson, Senator Hoffman,
Senator Olson and Co-Chair Wilken
OPPOSED: Senator Bunde and Co-Chair Green
The motion PASSED (5-2)
The amendment was ADOPTED.
11:00:16 AM
University of Alaska
UNIV #1: This amendment deletes the appropriations to the
University of Alaska BRU and the allocation to every component
within that BRU, on page 37, line 29, through page 38, line 23,
and adds new appropriations and allocations as follows.
University of Alaska BRU
Appropriation Items: $767,011,100
General Funds $276,385,400
Other Funds 490,625,700
Budget Reductions/Additions $9,245,900
- Systemwide
Statewide Services 42,027,500
Statewide Networks (ITS) 16,468,900
Anchorage Campus 213,898,700
Kenai Peninsula College 10,796,500
Kodiak College 3,865,300
Matanuska-Susitna College 8,621,800
Prince William Sound 6,223,200
Community College
Cooperative Extension Service 7,958,300
Bristol Bay Campus 3,131,600
Chukchi Campus 1,820,200
Fairbanks Campus 208,122,700
Fairbanks Organized Research 105,661,300
Interior - Aleutians Campus 3,823,700
Kuskokwim Campus 5,993,500
Northwest Campus 2,901,800
College of Rural and 11,720,200
Community Development
Tanana Valley Campus 9,308,000
Juneau Campus 38,543,000
Ketchikan Campus 4,503,100
Sitka Campus 7,375,900
Accompanying explanatory language reads as follows.
· At the funding level currently contained in SCS CSHB
365(FIN), the University of Alaska's budget is a 14.0%
general fund increase over FY 06.
· This amendment reduces the University of Alaska's
budget by $3063.8k in general funds bringing it inline
with the number passed by the House.
· This new budget number will be a 12.7% increase over
the University's FY 06 operating base, will cover all
of the University's fixed costs ($19,052k) and still
include $12,168k to pay for the costs of new programs
and other operating expenses.
· This will be the largest GF increment the University
of Alaska has ever had.
Senator Stedman moved for adoption.
Co-Chair Wilken objected.
Senator Stedman stated that this amendment would appropriate the
same amount as approved by the House of Representatives, which
is $4 million less than would be appropriated in the Senate
Finance Committee substitute that was adopted as a working
document. Fixed increases would be addressed as well as some
increase would be provided for in this amendment.
Senator Stedman recounted that the University of Alaska received
an increase of $8 million general funds two years prior. This
amendment would provide an additional $12.7 million increase,
which would be the largest increase provided to the University
in its history.
Senator Stedman acknowledged the consensus as to the direction
of the University's activities to prepare a workforce for the
forthcoming natural gas pipeline project. The issue is therefore
the "magnitude" of the funding increase rather than the
direction of the increase. The rate of student enrollment has
remained unchanged, garnering "flat production" from
"historically high funding".
11:04:27 AM
Senator Dyson requested clarification of the funding totals.
11:04:57 AM
JAMES ARMSTRONG, Staff to Co-Chair Wilken, outlined that the
$276,385,400 general funds and $490,625,700 other funds totals
$767,011,100.
11:05:15 AM
Senator Dyson asked if the total general fund reduction of 1.3
percent is calculated to the committee substitute version or the
Governor's proposed budget amount.
11:05:47 AM
Senator Stedman responded that Governor Murkowski requested an
increase of 17 percent; the Board of Regents requested a 17.8
percent increase; the Senate Finance Committee substitute
proposed a 14.7 percent increase; and this amendment would
provide a 12.7 percent increase.
11:06:22 AM
Senator Stedman noted that although reductions are proposed for
specified components, sufficient flexibility would remain to
allow funding transfers between campuses.
11:07:06 AM
Senator Bunde declared for the record that his son-in-law is a
University of Alaska Regent. He sent a communiqué indicating
that the amount requested by the University was "reasonable".
11:07:33 AM
Co-Chair Wilken disagreed with Senator Stedman's opinion on the
need for this amendment. The direction Co-Chair Wilken provided
to Senator Stedman as chair of the budget subcommittee was the
same as given for all other agencies. This included a
prohibition against creating new programs, no "automatic
backfill" of State funds to offset the loss of federal funds
received in previous years, and no significant expansions. This
budget goal was required of all subcommittees. However, Senator
Stedman did not agree with the amount of the funding increase to
the University. Co-Chair Wilken deemed the increase appropriate.
Co-Chair Wilken informed that Senate Leadership, primarily
through the efforts of Senator Gary Stevens, created an
oversight committee of the University of Alaska. An outcome of
the activities of that committee was a determination that the
University of Alaska is different from other institutes of
higher learning in that it "reaches out" to the needs of the
state. President Mark Hamilton made significant changes to
accomplish this. He focused efforts on education of nurses,
engineers, and other professionals for which the state had a
need. Thousands of skilled workers would be needed for the
proposed natural gas pipeline project and the University is
addressing this as well. The funding appropriated in the Senate
Finance Committee substitute would continue these efforts.
Co-Chair Wilken continued that President Hamilton also expanded
research activities when he assumed his position. In 1997,
research programs were "primed" with general funds. Since that
year $130 million in additional funding from other sources has
been generated for these programs. Each dollar of State general
funds has realized a return of six dollars. Therefore the
approximate $3 million general funds requested for FY 07 is
appropriate because it would allow the University to continue to
"reach out" and to "train Alaskans".
Co-Chair Wilken admitted the amount of the increase is
significant and unforeseen in previous years. However, other
programs would receive "extraordinary increases"; the Department
of Health and Social Services budget would increase 21 percent;
the Department of Revenue budget would increase 19 percent; the
Department of Transportation and Public Facilities budget would
increase 15 percent; the Department of Fish and Game budget
would increase 14 percent; and the Department of Labor and
Workforce Development budget would increase 12 percent. The
proposed increase for the University of Alaska would be ranked
as average in comparison.
Co-Chair Wilken shared a publication of accountability measures
[copy not provided] presented by President Hamilton at a recent
legislative committee. Such a report was "unheard of eight years
ago." The legislature is constitutionally prohibited from
"micromanaging" the activities of the University of Alaska, and
past University administrators submitted a budget request with
little explanation or indication of efforts to meet the needs of
the State. This accountability report assures legislators that
continued support of the University is warranted.
Co-Chair Wilken opposed adoption of this amendment.
11:13:00 AM
Senator Olson asked the detrimental impacts of this amendment.
He realized that the University of Alaska would not close, but
asked if reduction of services and programs would be
significant.
11:13:46 AM
PETE KELLY, Director, Government Relations, University of
Alaska, told of the "red book" prepared each year and
distributed to legislators that details the University's budget
request. The costs and the anticipated programs that would be
funded after the costs are paid are listed in the publication.
The appropriation proposed in this amendment would cover the
fixed costs and provide "a little bit beyond that". A category
of the budget titled, "Continuing Programs and State Needs"
contains several programs, many of which are rural programs.
These include programs providing education for "high-demand
jobs", distance learning, and vocational training. He continued
to outline programs and their associated costs that would be
funded after fixed costs were paid. However, these programs
would have insufficient funding under the provisions of the
amendment. The overall impact would be to programs that would
provide training for "immediate jobs" in the fields of nursing,
engineering, mining, construction and other fields associated
with the anticipated needs for the gas pipeline.
11:16:35 AM
Senator Olson acknowledged the adverse affect on rural programs,
but asked why these programs were not given first priority.
11:16:55 AM
Co-Chair Kelly corrected that they would have first priority
after fixed costs were funded.
11:17:06 AM
Senator Stedman identified $26.7 million in fixed costs. This
amendment would appropriate $31 million, which would provide
$5.5 million in addition to funding for the fixed costs.
Although the University of Alaska administration calculates the
fixed costs to be higher, he utilized figures provided by the
Division of Legislative Finance. The University would have
flexibility in the allocation of the funds and he hoped
reductions would not be made to rural programs.
11:19:02 AM
Senator Bunde asked about the multiple components for rural
campuses in addition to the College of Rural and Community
Development component.
11:19:10 AM
PAT PITNEY, Director of Budget Development and Institutional
Planning, University of Alaska, testified that the College of
Rural and Community Development encompasses all of the smaller
rural campuses, including the Bristol Bay Campus, the Chukchi
Campus and the Northwest Campus. Distance education and other
programs, such as rural development, are delivered from these
rural campuses and administered from the College of Rural and
Community Development.
11:20:03 AM
Senator Bunde surmised that the $11.7 million allocation to the
College of Rural and Community Development component would be
for administrative and overhead costs. He asked therefore the
purpose of the $3 million allocation to the Bristol Bay Campus.
11:20:17 AM
Ms. Pitney replied that the components are complimentary and
represent the structure of the combination of the rural campuses
and the College of Rural and Community Development.
11:20:33 AM
Senator Bunde asserted that too much funding would be allocated
to administration and not enough would be allocated to
"classrooms".
Senator Bunde asked the cost per student.
11:21:01 AM
Ms. Pitney responded that recent findings from a Division of
Legislative Audit study determined that the costs vary in the
rural campuses from $7,000 to $40,000 per student. In the early
1990s, the cost per student at the Chukchi Campus was
approximately $50,000; the amount is currently less than
$25,000. However, the distribution of fund sources for those
costs is now over 50 percent non-general funds versus the
previous ratio of 70 percent non-general funds. This represents
a significant improvement. Although the costs are higher, the
"price of education is much less than the price of the
alternative."
11:21:58 AM
Senator Bunde disagreed with the assertion that because a person
attends college, he or she would not be incarcerated.
11:22:23 AM
Senator Stedman stated that the "breakeven point" of the FY 07
budget would be achieved with revenues generated from oil at a
price of $49 per barrel. With the proposed funding increases,
the price of oil necessary to balance the budget would be $50
per barrel. The State could not sustain funding increases of
this magnitude.
Senator Stedman emphasized that he supports the University of
Alaska.
11:23:38 AM
A roll call was taken on the motion.
IN FAVOR: Senator Stedman and Co-Chair Green
OPPOSED: Senator Hoffman, Senator Olson, Senator Bunde, Senator
Dyson and Co-Chair Green
The motion FAILED (2-5)
The amendment FAILED to be adopted.
AT EASE 11:24:11 AM / 1:07:30 PM
1:08:07 PM
Language Section
LANG #1: This amendment reduces the amount of the dividend
anticipated by the board of directors of the Alaska Housing
Finance Corporation (AHFC) from $86,616,678. The amended
language of Section 7(a) on page 54, following line 11, reads as
follows.
Sec. 7. ALASKA HOUSING FINANCE CORPORATION. (a) The
board of directors of the Alaska Housing Finance
Corporation anticipates that the net income from the second
preceding fiscal year will be available in fiscal year
2007. during fiscal year 2007, the board of directors
anticipates that, contingent upon passage by the Twenty-
Fourth Alaska State Legislature in 2006 and enactment into
law of a bill changing the formula for calculating the
amount of the dividend paid to the state by the Alaska
Housing Finance Corporation, $80,616,678 will be available
for payment of debt service, appropriation in this Act,
appropriation for capital projects, and transfer to the
Alaska debt retirement fund (AS 37.15.011).
This amendment also reduces the estimated amount available for
repayment of debt service from $23,441,712. The amended language
of Section 7(c) on page 55, lines 1 through 5 reads as follows.
(c)After deductions for the items set out in (b) of
this section, the remainder of the amount set out in (a) of
this section is used for the following purposes in the
following estimated amounts.
(1) $17,441,712 for debt service;
(2) $31,240,000 for capital projects
This amendment also reduces the amount of the general fund
appropriation to the debt retirement fund (AS 37.15.011) in
subsection (a)(4) of Section 24. FUNDS TRANSFERS., on page 63
line 11, from $61,491,900 to $41,491,900.
This amendment also makes a conforming change to Section
24(a)(7) on page 63, line 17 to reflect the reduction of the
appropriation from the AHFC fiscal year 2007 dividend to the
debt retirement fund from $23,441,712 to $17,441,712.
This amendment also inserts new language to the committee
substitute and specifies a June 30, 2006 effective date of the
provision of that language, which reads as follows.
The sum of $26,000,000 is appropriated from the general
fund to the debt retirement fund (AS 37.15.011).
Accompanying explanatory language reads as follows.
AHFC recently informed the Finance Committee Chairmen [sic]
that the FY 07 AHFC dividend was overstated by $6 million
when the Governor prepared his budget. This amendment:
1. Corrects information regarding the amount of the FY 07
dividend is available;
2. Replaces $6 million in the FY 07 AHFC dividend
appropriated to the Debt Retirement Fund with $6
million general funds;
3. Replaces $20 million of FY 07 general funds
appropriated to the Debt Retirement Fund with $20
million of FY 06 general funds.
Co-Chair Wilken moved for adoption and objected to provide an
explanation.
Co-Chair Wilken outlined the explanatory statement.
AT EASE 1:08:56 PM
Co-Chair Wilken removed his objection.
Without further objection the amendment was ADOPTED.
1:10:07 PM
Department of Education and Early Development (continued)
E&ED #3: This amendment adds $2 million ILTF to the Teaching and
Learning Support BRU, Statewide Mentoring Program, on page 11,
line 13. Accompanying explanatory language reads as follows.
This additional money would restore the successful
Mentoring Program back to the $4,500,000 level. An
additional $500,000 is being requested from the University
of Alaska through intent language.
Co-Chair Green moved for adoption.
Co-Chair Wilken reminded that the mentoring project has been
discussed extensively and received significant public testimony.
This amendment would provide "one-time money" and therefore the
issue would be before the Committee again the following
legislative session. The funding provided in this amendment
would enable the teacher mentoring portion of the program to be
funded at the entire amount requested, and the principal
mentoring portion of the program to be funded at one-half the
requested amount. The Department could chose to expand the
teacher mentoring portion of the program with the funding
provided for the principal portion of the program.
The amendment was ADOPTED with no objection.
1:11:08 PM
University of Alaska (continued)
UNIV #2: This amendment inserts intent language to read as
follows.
It is the intent of the legislature that the University of
Alaska continues its partnership with the Department of
Education and Early Development in support of the Alaska
Statewide Mentor Project.
Accompanying explanatory language reads as follows.
Two years ago the Department of Education and Early
Development created the Alaska Statewide Mentor Project in
partnership with the University of Alaska. The goals of the
program are to increase teacher retention, increase student
achievement, and equip principals with the skills to be
instructional leaders and effective managers.
The Intent Language strongly encourages the continued
partnership.
Co-Chair Wilken moved for adoption and objected to offer an
explanation.
Co-Chair Wilken stressed that the University of Alaska must be
linked with the mentoring program to ensure the program's
success.
Co-Chair Wilken removed his objection.
There being no further objection the amendment was ADOPTED.
1:12:04 PM
Language Section (continued)
LANG #2: This amendment to subsection (d) of Section 20. OFFICE
OF THE GOVERNOR., on page 60, line 26, specifies that $1.2
million would be distributed to State agencies to offset the
increased fuel and utility costs under the provisions of
subsections (b) and (c) if the year-to-date average price of
Alaska North Slope Crude Oil is $54. The committee substitute
provides that the price be "$54 or less".
This amendment also deletes "September 30" and inserts "July 1"
to subsection (a) of Section 21. POWER COST EQUALIZATION., on
page 61, lines 10 through 16. The amended language reads as
follows.
(a) If the fiscal year-to-date average price of Alaska
North Slope crude oil exceeds the Department of Revenue's
spring 2006 projected fiscal year 2007 price of $53.60 a
barrel on July 1, 2006, the amount of money corresponding
to the year-to-date average price, rounded to the nearest
one-half dollar, as set out in the table in (c) of this
section is appropriated form the general fund to the power
cost equalization and rural electric capitalization fund
(AS 42.45.100) to make grants under the power cost
equalization program.
This amendment also deletes "March 31" and inserts "January 1"
to Section 21(b) on page 61, lines 17 through 22. The amended
language reads as follows.
If the fiscal year-to-date average price of Alaska North
Slope crude oil exceeds the Department of Revenue's spring
2006 projected fiscal year 2007 price of $53.60 a barrel on
January 1, 2007, the amount of money corresponding to the
year-to-date average price, rounded to the nearest one-half
dollar, as set out in the table in (c) of this section is
appropriated from the general fund to the power cost
equalization and rural electric capitalization fund (AS
42.45.100) to make grants under the power cost equalization
program.
Additionally, this amendment specifies to Section 21(c) on page
62 line 7 that $325,000 general funds would be appropriated to
the power cost equalization and rural electric capitalization
fund under subsections (a) and (b) of the section if the year-
to-date average price of Alaska North Slope crude oil is $54.00.
The committee substitute provides that the price be "$54.00 or
less".
This amendment also deletes "October 1" and inserts "July 1" and
deletes "April 1" and inserts "January 1" to Section 21(d) on
page 62, lines 8 through 11. The amended language reads as
follows.
(d) It is the intent of the legislature that payment
under (a) of this section on July 1, 2006, be used to
offset the effects of higher fuel and utility costs for the
first half of fiscal year 2007 and a payment under (b) of
this section on January 1, 2007, be used to offset the
effects of higher fuel and utility costs for the second
half of the fiscal year 2007.
This amendment also provides that the effective date of Section
20(a) is July 1, 2006, and that the effective date of Section
21(b) is January 1, 2007.
Accompanying explanatory language reads as follows.
This amendment shifts the conditional PCE appropriations to
the beginning of each half of the fiscal year (July and
January) in order to simplify administration of the
program.
The three month shift allows AEA to avoid prorating
payments for three months and then increasing payments
retroactively if and when additional money is appropriated.
This amendment also clarifies that the conditional
appropriations in sections 20 (fuel) and 21 (PCE) are zero
unless the price of oil exceeds the official forecast of
$53.60.
Co-Chair Wilken moved for adoption and objected to provide an
explanation.
Co-Chair Wilken informed that the Alaska Energy Authority
requested the date changes.
1:12:40 PM
SARA FISHER-GOAD, Alaska Energy Authority, Department of
Commerce, Community and Economic Development, testified to the
benefits of changing the dates in which additional
appropriations would be calculated and possibly provided.
Co-Chair Wilken surmised this method would be more efficient for
utilities and the Department.
Ms. Fisher-Goad affirmed.
Co-Chair Wilken's objection was withdrawn.
The amendment was ADOPTED without further objection.
1:13:24 PM
Department of Education and Early Development (continued)
E&ED #2: This amendment adds $1 million general funds to the
Teaching and Learning Support BRU, Statewide Mentoring Program
component on page 11, line 13. Accompanying explanatory language
reads as follows.
This amendment will bring the total for the mentoring
program for teachers to $3.5 million. This program is key
to teacher retention and performance by providing a
voluntary support system.
Senator Hoffman announced due to action taken in the adoption of
E&ED #3, this amendment would be NOT OFFERED.
1:13:59 PM
E&ED #1A: This amendment inserts language to the K-12 Support
BRU, Foundation Program component on page 10, line 32 to read as
follows.
It is the intent of the legislature that no school
district:
(1) has a policy refusing to allow recruiters for
the military, Reserve Officer Training Corps, Central
Intelligence Agency, or Federal Bureau of Investigation to
contact students on a school campus if the school district
allows college, vocational school, or other job recruiters
on a campus to contact students;
(2) refuses to allow the Boy Scouts of America to
use school facilities for meetings or contact with students
if the school makes the facility available to other non-
school groups in the community; or
(3) has a policy of refusing to have an in-school
Reserve Officer Training Corps program or a Junior Reserve
Officers' Training Corps program.
Co-Chair Wilken explained that the conditional language of the
original version of the amendment has been changed to intent
language.
1:14:16 PM
Senator Dyson moved for adoption. The original conditional
language would require a statutory change to implement.
There was no objection and the amendment was ADOPTED.
1:15:51 PM
Department of Commerce, Community and Economic Development
(continued)
CC&ED #1B: This amendment creates a new Qualified Trade
Association Grant component in the Qualified Trade Association
Contract BRU on page 6, lines 11 and 12 and appropriates
$600,000 in Vehicle Rental Tax Receipts to the new component.
Accompanying explanatory language reads as follows.
This amendment creates a separate allocation for a $600,000
unmatched grant for the purpose of increasing independent
marketing efforts. The VRTR fund source is earmarked for
tourism marketing and development.
Fundamental changes in both the worldwide and Alaska travel
markets over the past decade have resulted in a situation
where growth in the visitation-level of independent
travelers to Alaska has stagnated. Many Alaska-based
businesses exist primarily to serve travelers visiting
Alaska independently. Alaska-based businesses that are
small, highway-based, and/or rural-based have been
particularly hard hit by the stagnating growth of Alaska's
independent travel market.
On January 1, 2004 the State of Alaska began assessing and
collecting a 10% tax on all passenger vehicle rentals and a
3% tax on all recreational vehicle rentals. This new
vehicle rental tax results in economic hardship for all
independent-traveler reliant businesses when increased
vehicle rental prices make the cost of an independent
Alaska travel experience less price-competitive with
alternate non-Alaskan independent travel destinations and
with other Alaska travel modes.
The Alaska Statute authorizing the vehicle rental tax (AS
43.52) directs the [Department] of Revenue to deposit all
revenue from the vehicle rental tax into a special vehicle
rental account in the General Fund. Statute further states
that "the legislature may appropriate the actual balance of
the vehicle rental tax account for tourism development and
marketing."
The Department of Revenue estimates that approximately 80%
of the rental car tax receipts are generated from
independent travelers and generated during the tourism
season, May through September.
This amendment was NOT OFFERED.
CC&ED #1B: This amendment creates a new appropriation for
$600,000 unmatched grant for the purpose of increasing
independent tourism marketing efforts. Accompanying explanatory
language reads as follows.
This amendment creates a separate allocation for a $600,000
unmatched grant for the purpose of increasing independent
marketing efforts. The VRTR fund source is earmarked for
tourism marketing and development.
Fundamental changes in both the worldwide and Alaska travel
markets over the past decade have resulted in a situation
where growth in the visitation-level of independent
travelers to Alaska has stagnated. Many Alaska-based
businesses exist primarily to serve travelers visiting
Alaska independently. Alaska-based businesses that are
small, highway-based, and/or rural-based have been
particularly hard hit by the stagnating growth of Alaska's
independent travel market.
On January 1, 2004 the State of Alaska began assessing and
collecting a 10% tax on all passenger vehicle rentals and a
3% tax on all recreational vehicle rentals. This new
vehicle rental tax results in economic hardship for all
independent-traveler reliant businesses when increased
vehicle rental prices make the cost of an independent
Alaska travel experience less price-competitive with
alternate non-Alaskan independent travel destinations and
with other Alaska travel modes.
The Alaska Statute authorizing the vehicle rental tax (AS
43.52) directs the [Department] of Revenue to deposit all
revenue from the vehicle rental tax into a special vehicle
rental account in the General Fund. Statute further states
that "the legislature may appropriate the actual balance of
the vehicle rental tax account for tourism development and
marketing."
The Department of Revenue estimates that approximately 80%
of the rental car tax receipts are generated from
independent travelers and generated during the tourism
season, May through September.
Mr. Armstrong explained the changes to earlier versions of this
amendment in that the appropriation would be made to Independent
Traveler Grants. The intent of the amendment is unchanged, only
technically corrected.
1:16:23 PM
Co-Chair Wilken stated that this grant would benefit small
business operators who are dependent on independent travelers.
[Note: No formal motion was made to adopt this amendment,
although it was assumed that the motion made to adopt CC&ED #1,
which was earlier withdrawn, applied to this amendment as well.]
Co-Chair Wilken declared the amendment ADOPTED, as no objection
was raised.
AT EASE 1:16:54 PM / 1:18:00 PM
Co-Chair Green moved offered a motion to adopt CS HB 366, 24-
GH2035\Y, as amended through actions taken in the adoption of
amendments to HB 365, as a working document.
1:19:14 PM
Co-Chair Green offered a motion to report CS HB 365, 24-
GH2033\P, as amended, from Committee with individual
recommendations.
Co-Chair Wilken objected for the purposes of thanking the
Members, staff and department representatives for their
cooperation and efforts.
Co-Chair Wilken informed that this budget represents an increase
of approximately 13.4 percent from the FY 06 budget. This
increase is less than the increase of the previous year. A
reduction of approximately $154 million was made to the
Governor's proposed budget, due to concerns with establishing
unsustainable budgets. Some worthwhile programs were not funded
to avoid a situation in which oil prices dropped and sustainable
revenues were not generated.
Co-Chair Wilken removed his objection to the motion.
Without further objection CS HB 365 (FIN) was MOVED from
Committee.
1:21:09 PM
Co-Chair Green offered a motion to report CS HB 366, 24-
GH2035\Y, as amended, from Committee with individual
recommendations.
There was no objection and CS HB 366 (FIN) was MOVED from
Committee.
1:21:34 PM
Co-Chair Wilken offered a motion to authorize the Division of
Legislative Finance and the Division of Legal and Research
Services to make conforming changes as necessary.
The motion was ADOPTED without objection.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 1:22:17 PM
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