HOUSE FINANCE COMMITTEE May 4, 1994 1:50 P.M. TAPE HFC 94 - 156, Side 2, #000 - end. TAPE HFC 94 - 157, Side 1, #000 - end. TAPE HFC 94 - 157, Side 2, #000 - end. TAPE HFC 94 - 158, Side 1, #000 - #675. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 1:50 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Representative David Finkelstein; Representative John Davies; Representative Jeanette James; Senator Fred Zharoff; Richard Pegues, Director, Administrative Services Division, Department of Law; James Baldwin, Assistant Attorney General, General Civil Division, Department of Law; Wendy Redman, Vice President for University Relations, University of Alaska; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Bruce Geraghty, Deputy Commissioner, Department of Community and Regional Affairs; Bob Poe, Director, Division of Administrative Services, Department of Environmental Conservation; Ginny Fay, Prince William Sound Regional Citizens Advisory Council, Juneau; Jay Hogan, Staff, Representative Ron Larson; Bryce Edgmon, Staff, Senator George Jacko; Greg Winegar, Manager, Juneau Lending Branch, Division of Investments, Department of Commerce & Economic Development; Russel Heath, Executive Director, Alaska Environmental Lobby, Juneau. SUMMARY HB 455 An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date. HB 455 was HELD in Committee for further 1 consideration. SB 92 An Act relating to an advisory vote during regional educational attendance area school board elections; and providing for an effective date. CS SB 92 (CRA) efd am was reported out of Committee with a "do pass" recommendation and a fiscal note by the Office of the Lt. Governor dated 3/24/94 and a zero fiscal note by the Department of Education dated 3/24/94. SB 132 An Act relating to loans for the purchase of individual fishery quota shares. CS SB 132 (RES) am was reported out of Committee with "no recommendations" and with a fiscal note by the Department of Commerce and Economic Development dated 2/04/94 and a Letter of Intent provided by the House Resources Committee. SB 215 An Act relating to and redesignating the oil and hazardous substance release response fund and to its use in the event of a disaster emergency; repealing the authority in law by which marine highway vessels may be designed and constructed to aid in oil and hazardous substance spill cleanup in state marine water using money in the oil and hazardous substance release response fund; amending requirements relating to the revision of state and regional master prevention and contingency plans; altering requirements applicable to liens for recovery of state expenditures related to oil or hazardous substances; amending the authority to contract to provide personnel to respond to a release or threatened release of oil or a hazardous substance and to contract to conduct spill related research; reassigning responsibility for the oil and hazardous substance response corps and for the emergency response depots to the Department of Environmental Conservation, and for the operation of the state emergency response commission and its attendant responsibilities for the local emergency planning commissions to the Department of Military and Veterans' Affairs; and modifying definitions of terms relating to the preceding provisions; terminating the nickel-per-barrel oil conservation surcharge; levying and collecting two new oil surcharges; and providing for the suspension and reimposition of one of the new surcharges; and providing for an effective date. 2 CS SB 215 (FIN)am (efd fld) was HELD in Committee for further consideration. HOUSE BILL NO. 455 "An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date." Representative Brown MOVED TO WITHDRAW the pending motion on Amendment #16 - the Department of Transportation and Public Facilities' request for the road connecting the Seward Highway and the Port of Whittier. There being NO OBJECTION, it was withdrawn. REPRESENTATIVE JEANNETTE JAMES spoke in support of Amendment earnings of the Alaska Science and Technology endowment to the University of Alaska, Fairbanks, agricultural and forestry experiment station for the virus-free seed potato project. Representative Foster MOVED to adopt Amendment #1. There being NO OBJECTION, it was adopted. RICHARD PEGUES, DIRECTOR, ADMINISTRATIVE SERVICES DIVISION, DEPARTMENT OF LAW, spoke in support of Amendment #2 which would provide the sum of $100 thousand dollars from the general fund to the Department of Law for attorney fees related to Weiss versus the State of Alaska for the fiscal year ending June 30, 1994. Co-Chair Larson MOVED to adopt Amendment #2. There being NO OBJECTION, it was adopted. JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, GENERAL CIVIL DIVISION, DEPARTMENT OF LAW, spoke in support of Amendment appropriated to the Department of Law for costs relating to legal proceedings involving oil and gas revenue due or paid to the State or state title to oil and gas land for the fiscal year ending June 30, 1995. Co-Chair Larson MOVED to adopt Amendment #3. Co-Chair MacLean OBJECTED suggesting that the Department of Law should return each year to request additional funding. Representative Brown spoke in support of Amendment #3 declaring that funding the amendment would indicate legislative support to the Department's effort. A roll call vote was taken on the MOTION. 3 IN FAVOR: Navarre, Brown, Foster, Grussendorf, Hoffman, Larson. OPPOSED: Parnell, Therriault, Hanley, Martin, MacLean. The MOTION PASSED (6-5). Representative Brown MOVED to adopt Amendment #4, a recommendation of the Alaska Judicial Council as instructed by the Legislature in order to implement a plan for integration of Alaska's criminal justice computer system. She added that information systems within each department warrant major work. The requested funding would cover costs for preparation of a system within the Department of Corrections and the Department of Law. Representative Parnell understood that the Department of Public Safety currently was working on coordinating a statewide plan. Co- Chair MacLean OBJECTED to adopting Amendment #4. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre. OPPOSED: Parnell, Therriault, Foster, Martin, MacLean, Larson. Representative Hanley was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED to adopt Amendment #5. REPRESENTATIVE JOHN DAVIES explained the $3 million dollars request would provide for an appropriation from the general fund to the University of Alaska for the completion of the Natural Sciences Classroom building in Fairbanks. Representative Navarre MOVED TO AMEND Amendment #5 by deleting "Natural Sciences" and "Fairbanks" and inserting "Kenai". He expressed discontent with continual capital improvement requests by the University for campuses in Fairbanks, Anchorage and Juneau. Representative Davies stated he would not support the amended language as requested by Representative Navarre. Representative Navarre WITHDREW THE MOTION to amend. There being NO OBJECTION, the amended language was withdrawn. Co-Chair MacLean OBJECTED to adopting Amendment #5 pointing out that no construction money had been allocated to schools K-12 this year. Representative Davies stressed that the proposed request has 4 been a priority project of the University for twenty years. The project is currently under construction and nearing completion and that without the appropriation the building would be closed. The University would then be forced to spend $500 thousand dollars to just maintain the building with no students. He added that the initial construction costs had been deliberately under-funded and that the Legislature knew at that time that there would be additional financial need to finish construction. He emphasized that each year the project is delayed will waste the State money to maintain an empty building. (Tape Change, HFC 94-157, Side 1). A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Brown, Grussendorf, Hoffman. OPPOSED: Foster, Martin, Navarre, Parnell, Therriault, Larson, MacLean. Representative Hanley was not present for the vote. The MOTION FAILED (3-7). NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, explained Amendment #6, a request for a supplemental appropriation increase from the Department of Law to pay a FY94 judgments. She added that the $19,832 increase was created by one new judgement received since the Department's last request which was submitted on April 30, 1994. Representative Brown MOVED to adopt Amendment #6 explaining that judgments are the State's obligation. Co-Chair MacLean OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Martin, Navarre, Parnell. OPPOSED: Therriault, Foster, Larson, MacLean. Representative Hanley was not present for the vote. The MOTION PASSED (6-4). Co-Chair Larson MOVED that the lapse date for the Sitka School District and the appropriation for seed potatoes be extended until June 30, 1995. There being NO OBJECTIONS, it was adopted. 5 Reappropriation Budget BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, requested that the Committee extend the Department's lapse on last years appropriations to June 30, 1995. Co-Chair MacLean MOVED to adopt Amendment #1, which would state "the unexpended and unobligated balance of the appropriation made in Sec. 6, Ch.19, SLA1993, Page 4, Line 22 [Operating costs for the Department of Community and Regional Affairs to carry out its power and duties under AS42.45 and AS44.47.050] and lapses into the general fund June 30, 1995". Representative Navarre OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Hoffman, MacLean, Larson. OPPOSED: Parnell, Therriault, Brown, Hanley, Martin, Navarre. The MOTION FAILED (5-6). Representative Brown WITHDREW Amendment #4. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to adopt Amendment #3 which would provide funding for the Cambridge Way/Tudor Road traffic signal and Cambridge Way improvements. There being NO OBJECTIONS, Amendment #3 was adopted. Co-Chair MacLean MOVED to adopt Amendment #4 which would provide funding for the Municipality of Anchorage - signalization at 36th Avenue and Cottonwood Street and Locarno Street in the amount of $214 thousand dollars. There being NO OBJECTIONS, it was adopted. HB 455 was HELD in Committee for further consideration. SENATE BILL 92 "An Act relating to an advisory vote during regional educational attendance area school board elections; and providing for an effective date." SENATOR FRED ZHAROFF stated that SB 92 would add a provision whereby communities in REAA school areas would be able to voice their positions on education via an advisory vote on the regular school ballot. He pointed out that REAA schools are spread over a wide area, and that it is often difficult for members of those communities to attend board meetings in 6 order to make their feelings known. The bill would allow the school board to adopt a resolution requesting that the advisory question be on the next ballot. He concluded that the Department of Education supports the legislation. Representative Hanley MOVED to report CS SB 92 (CRA)(efd am) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. CS SB 92 (CRA)(efd am) out of Committee with a "do pass" recommendation and with a fiscal note by the Office of the Governor dated 3/24/94 and a zero fiscal note by the Department of Education dated 3/24/94. SENATE BILL 132 "An Act relating to loans for the purchase of individual fishery quota shares." BRYCE EDGMON, STAFF, SENATOR GEORGE JACKO, explained that CS SB 132 would expand the Commercial Fisheries Revolving Loan Fund Program to allow Alaskan fishermen to obtain loans to purchase Individual Fisheries Quotas (IFQs). The Commercial Fisheries Revolving Loan Fund Program would service the debt to purchase limited entry permits, purchase or upgrade vessels, and purchase fisheries related gear. Co-Chair MacLean MOVED to report CS SB 132 (RES) am out of Committee with individual recommendations and with the accompanying fiscal notes. She explained that the IFQs are transferrable, which creates a fear that fishermen from out of state will purchase the Alaskan fishing permits. The Division of Investments would provide loan money through the Revolving Loan Fund, whereas Alaskan commercial banks are reluctant to help Alaskan fishermen who do not have sufficient collateral. The legislation would keep Alaskan fishermen in business in Alaskan waters. Representative Brown asked the total amount of money which the State would be distributing. Mr. Edgmon replied that $5 million dollars would be loaned in FY95 and then between $4 and $5 million dollars appropriated in FY96. He pointed out that the qualification requirements are stringent. The Division of Investments does have a regulation priority listing. Representative Brown deliberated on the different loan funding resources available in the State. She spoke against providing commercial opportunity to fishmen over another class of requestors. Mr. Edgmon responded that when the program was established, it was the intent of the State to 7 keep as many limited entry permits in residence ownership. The loan program was established in order to offer that arrangement to as many fishermen as possible. The program allows resident fishermen to compete with nonresident fishermen who have better access to capital. (Tape Change, HFC 94-157, Side 2). Representative Grussendorf commented that the IFQ's would provide collateral for the small fisherman. The program would keep the limited entry permits in the State. Representative Hoffman added that the fishing industry is a renewable resource and will continue to provide jobs to many small rural areas within Alaska. GREG WINEGAR, MANAGER, JUNEAU LENDING BRANCH, DIVISION OF INVESTMENTS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, responded to Representative Navarre's questions regarding the loan requirements for State resident's. He advised that the residency requirement was the same for all eligibility requirements, pointing out that law states in Section #A that a person would have to actively participate for the past five years which would have to include the preceding season. The current legislation would change that to indicate participation for two of the past five years and that it would be necessary to include the preceding season. The borrowing interpretation would be more liberal than that of the past. There being NO OBJECTIONS, to reporting the bill from Committee, it was so ordered. Representative Foster MOVED to adopt the House Resources Committee Letter of Intent. There being NO OBJECTIONS, it was so ordered. CS SB 132 (RES) am was reported out of Committee with "no recommendations", with the House Resources Committee Letter of Intent and with a fiscal note by the Department of Commerce and Economic Development dated 2/04/94. SENATE BILL 215 "An Act relating to and redesignating the oil and hazardous substance release response fund and to its use in the event of a disaster emergency; repealing the authority in law by which marine highway vessels may be designed and constructed to aid in oil and hazardous substance spill cleanup in state marine water using money in the oil and hazardous substance release response fund; amending requirements relating to the revision of state and regional master prevention and contingency plans; altering requirements applicable to liens for recovery of state expenditures related to oil or hazardous substances; amending the authority to 8 contract to provide personnel to respond to a release or threatened release of oil or a hazardous substance and to contract to conduct spill related research; reassigning responsibility for the oil and hazardous substance response corps and for the emergency response depots to the Department of Environmental Conservation, and for the operation of the state emergency response commission and its attendant responsibilities for the local emergency planning commissions to the Department of Military and Veterans' Affairs; and modifying definitions of terms relating to the preceding provisions; terminating the nickel-per-barrel oil conservation surcharge; levying and collecting two new oil surcharges; and providing for the suspension and reimposition of one of the new surcharges; and providing for an effective date." Representative Therriault MOVED to adopt 8-LS1107\T, Chenoweth, 5/02/94, as the version before the Committee. Co-Chair MacLean OBJECTED stating that the Governor's Office would not support that version. Representative Therriault advised that he would be offering two amendments to the draft which would remedy the concerns of the Administration. He distributed and explained a spread sheet "Summary of Changes - CSSB 215 (FIN) am, HCS CS SB 215 (RES), HCS CS SB 215 (STA), and the proposed work draft". [Copy on file]. BOB POE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, addressed concerns of the Department resulting from the work draft. He pointed out that there are a number of changes made to that version which warrant concern. He clarified that there exists only one situation in which DEC could spend money from the current response fund or the future response account within the response fund. This would occur when a spill is eminent. Over the entire history of that fund, only $1.9 million dollars of the total $122 million dollars has been spent. The remaining portion of the fund was appropriated by the Legislature. The original intention of the prevention account was to provide funds to DEC and other state agencies to both prevent spills and to be better prepared to respond to spills. The response account, as passed by the Senate and the House Resources Committee, is intended to deal with all spills, including the small spills. Mr. Poe pointed out that most of the spills which DEC responds to are well under 2,500 barrels. Under the bills passed from the Senate and House Resources Committees, there is no threshold used to determine when the response money could be used in order to respond to a spill. He added that the work draft version 9 would establish an artificial threshold which would be of great concern to the Department. Mr. Poe continued that the work draft would establish a special account in the prevention account which would be used for the smaller spills. He explained that the problem is that a large fund would be necessary in order to address those times when a responsible party creates a spill. The party would then be forced to clean it up appropriately or the fund money would be used for litigation. Mr. Poe stressed that the State does not know what future spills will occur. The work draft also would require that the Governor be informed of a spill within 72 hours of the spill at which time he would provide specific instruction regarding action to take to address that spill. Mr. Poe emphasized that requiring the Governor's approval to act could be harmful timing for the State. Representative Therriault interjected that a proposed amendment would address that concern. (Tape Change, HFC 94-158, Side 1). GINNY FAY, PRINCE WILLIAM SOUND REGIONAL CITIZENS ADVISORY COUNCIL, JUNEAU, briefed the Committee on the development of the legislation. The bill was originally drafted from a research analysis completed in 1992, which erroneously stated that the response fund was empty. At that time, there remained $27 million dollars in that account. Ms. Fay emphasized that the bill gained momentum based on incorrect information. She added that the bill would not protect the coastal communities nor public interest. SB 215 is an industry bill, emphasizing that based on a Department of Revenue's fiscal note, the legislation would be worth $50 million dollars over the next six years in lower surcharge payments. Ms. Fay concluded that the legislation as passed through the Senate and the House Resources Committees continued to allow the response account to be used for spill response. The proposed work draft would make the prevention account also serve for the response fund and would also lower the surcharge payment from five cents to three cents. She stressed that the work draft was unacceptable. RUSSEL HEATH, EXECUTIVE DIRECTOR, ALASKA ENVIRONMENTAL LOBBY, JUNEAU, encouraged the Committee to adopt the House Resources version of the bill. He pointed out that the Resources committee substitute places the entire $37 million dollars into the response account. The Alaska Environmental 10 Lobby (AEL) would recommend that balance to be split 60/40 percent between prevention and response accounts. He noted concern in adding the underground storage tanks to the prevention account. He thought that action would encourage money to be taken from the prevention account program and would drain money from other necessary prevention accounts. REPRESENTATIVE DAVID FINKELSTEIN reiterated that the tax levied should be used for the concerns which created that tax. He spoke against splitting the fund. Currently enough money does not exist to address the needs of the original program, whereas, the proposed legislation would add more obligations from that fund. Representative Finkelstein encouraged implementing an increased gas tax in order to make the programs balance. A roll call vote was taken on the MOTION. IN FAVOR: Hanley, Martin, Parnell, Therriault, Foster, Larson. OPPOSED: Hoffman, Navarre, Brown, Grussendorf, MacLean. The MOTION PASSED (6-5). Representative Therriault MOVED to adopt Amendment #1 which would eliminate the 72 hour notice and approval requirement. There being NO OBJECTION, it was adopted. Representative Therriault MOVED to adopt Amendment #2 which would delete "threatened release". Representative Martin OBJECTED. Mr. Poe noted that the Department would support Amendment A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Navarre, Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Larson, MacLean. OPPOSED: Martin. The MOTION PASSED (10-1). CS SB 215 (FIN) am (efd fld) was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 5:10 P.M. 11 HOUSE FINANCE COMMITTEE May 4, 1994 1:50 P.M. TAPE HFC 94 - 156, Side 2, #000 - end. TAPE HFC 94 - 157, Side 1, #000 - end. TAPE HFC 94 - 157, Side 2, #000 - end. TAPE HFC 94 - 158, Side 1, #000 - #675. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 1:50 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Representative David Finkelstein; Representative John Davies; Representative Jeanette James; Senator Fred Zharoff; Richard Pegues, Director, Administrative Services Division, Department of Law; James Baldwin, Assistant Attorney General, General Civil Division, Department of Law; Wendy Redman, Vice President for University Relations, University of Alaska; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Bruce Geraghty, Deputy Commissioner, Department of Community and Regional Affairs; Bob Poe, Director, Division of Administrative Services, Department of Environmental Conservation; Ginny Fay, Prince William Sound Regional Citizens Advisory Council, Juneau; Jay Hogan, Staff, Representative Ron Larson; Bryce Edgmon, Staff, Senator George Jacko; Greg Winegar, Manager, Juneau Lending Branch, Division of Investments, Department of Commerce & Economic Development; Russel Heath, Executive Director, Alaska Environmental Lobby, Juneau. SUMMARY HB 455 An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date. HB 455 was HELD in Committee for further 12 consideration. SB 92 An Act relating to an advisory vote during regional educational attendance area school board elections; and providing for an effective date. CS SB 92 (CRA) efd am was reported out of Committee with a "do pass" recommendation and a fiscal note by the Office of the Lt. Governor dated 3/24/94 and a zero fiscal note by the Department of Education dated 3/24/94. SB 132 An Act relating to loans for the purchase of individual fishery quota shares. CS SB 132 (RES) am was reported out of Committee with "no recommendations" and with a fiscal note by the Department of Commerce and Economic Development dated 2/04/94 and a Letter of Intent provided by the House Resources Committee. SB 215 An Act relating to and redesignating the oil and hazardous substance release response fund and to its use in the event of a disaster emergency; repealing the authority in law by which marine highway vessels may be designed and constructed to aid in oil and hazardous substance spill cleanup in state marine water using money in the oil and hazardous substance release response fund; amending requirements relating to the revision of state and regional master prevention and contingency plans; altering requirements applicable to liens for recovery of state expenditures related to oil or hazardous substances; amending the authority to contract to provide personnel to respond to a release or threatened release of oil or a hazardous substance and to contract to conduct spill related research; reassigning responsibility for the oil and hazardous substance response corps and for the emergency response depots to the Department of Environmental Conservation, and for the operation of the state emergency response commission and its attendant responsibilities for the local emergency planning commissions to the Department of Military and Veterans' Affairs; and modifying definitions of terms relating to the preceding provisions; terminating the nickel-per-barrel oil conservation surcharge; levying and collecting two new oil surcharges; and providing for the suspension and reimposition of one of the new surcharges; and providing for an effective date. 13 CS SB 215 (FIN)am (efd fld) was HELD in Committee for further consideration. HOUSE BILL NO. 455 "An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date." Representative Brown MOVED TO WITHDRAW the pending motion on Amendment #16 - the Department of Transportation and Public Facilities' request for the road connecting the Seward Highway and the Port of Whittier. There being NO OBJECTION, it was withdrawn. REPRESENTATIVE JEANNETTE JAMES spoke in support of Amendment earnings of the Alaska Science and Technology endowment to the University of Alaska, Fairbanks, agricultural and forestry experiment station for the virus-free seed potato project. Representative Foster MOVED to adopt Amendment #1. There being NO OBJECTION, it was adopted. RICHARD PEGUES, DIRECTOR, ADMINISTRATIVE SERVICES DIVISION, DEPARTMENT OF LAW, spoke in support of Amendment #2 which would provide the sum of $100 thousand dollars from the general fund to the Department of Law for attorney fees related to Weiss versus the State of Alaska for the fiscal year ending June 30, 1994. Co-Chair Larson MOVED to adopt Amendment #2. There being NO OBJECTION, it was adopted. JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, GENERAL CIVIL DIVISION, DEPARTMENT OF LAW, spoke in support of Amendment appropriated to the Department of Law for costs relating to legal proceedings involving oil and gas revenue due or paid to the State or state title to oil and gas land for the fiscal year ending June 30, 1995. Co-Chair Larson MOVED to adopt Amendment #3. Co-Chair MacLean OBJECTED suggesting that the Department of Law should return each year to request additional funding. Representative Brown spoke in support of Amendment #3 declaring that funding the amendment would indicate legislative support to the Department's effort. A roll call vote was taken on the MOTION. 14 IN FAVOR: Navarre, Brown, Foster, Grussendorf, Hoffman, Larson. OPPOSED: Parnell, Therriault, Hanley, Martin, MacLean. The MOTION PASSED (6-5). Representative Brown MOVED to adopt Amendment #4, a recommendation of the Alaska Judicial Council as instructed by the Legislature in order to implement a plan for integration of Alaska's criminal justice computer system. She added that information systems within each department warrant major work. The requested funding would cover costs for preparation of a system within the Department of Corrections and the Department of Law. Representative Parnell understood that the Department of Public Safety currently was working on coordinating a statewide plan. Co- Chair MacLean OBJECTED to adopting Amendment #4. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre. OPPOSED: Parnell, Therriault, Foster, Martin, MacLean, Larson. Representative Hanley was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED to adopt Amendment #5. REPRESENTATIVE JOHN DAVIES explained the $3 million dollars request would provide for an appropriation from the general fund to the University of Alaska for the completion of the Natural Sciences Classroom building in Fairbanks. Representative Navarre MOVED TO AMEND Amendment #5 by deleting "Natural Sciences" and "Fairbanks" and inserting "Kenai". He expressed discontent with continual capital improvement requests by the University for campuses in Fairbanks, Anchorage and Juneau. Representative Davies stated he would not support the amended language as requested by Representative Navarre. Representative Navarre WITHDREW THE MOTION to amend. There being NO OBJECTION, the amended language was withdrawn. Co-Chair MacLean OBJECTED to adopting Amendment #5 pointing out that no construction money had been allocated to schools K-12 this year. Representative Davies stressed that the proposed request has 15 been a priority project of the University for twenty years. The project is currently under construction and nearing completion and that without the appropriation the building would be closed. The University would then be forced to spend $500 thousand dollars to just maintain the building with no students. He added that the initial construction costs had been deliberately under-funded and that the Legislature knew at that time that there would be additional financial need to finish construction. He emphasized that each year the project is delayed will waste the State money to maintain an empty building. (Tape Change, HFC 94-157, Side 1). A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Brown, Grussendorf, Hoffman. OPPOSED: Foster, Martin, Navarre, Parnell, Therriault, Larson, MacLean. Representative Hanley was not present for the vote. The MOTION FAILED (3-7). NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, explained Amendment #6, a request for a supplemental appropriation increase from the Department of Law to pay a FY94 judgments. She added that the $19,832 increase was created by one new judgement received since the Department's last request which was submitted on April 30, 1994. Representative Brown MOVED to adopt Amendment #6 explaining that judgments are the State's obligation. Co-Chair MacLean OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Martin, Navarre, Parnell. OPPOSED: Therriault, Foster, Larson, MacLean. Representative Hanley was not present for the vote. The MOTION PASSED (6-4). Co-Chair Larson MOVED that the lapse date for the Sitka School District and the appropriation for seed potatoes be extended until June 30, 1995. There being NO OBJECTIONS, it was adopted. 16 Reappropriation Budget BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, requested that the Committee extend the Department's lapse on last years appropriations to June 30, 1995. Co-Chair MacLean MOVED to adopt Amendment #1, which would state "the unexpended and unobligated balance of the appropriation made in Sec. 6, Ch.19, SLA1993, Page 4, Line 22 [Operating costs for the Department of Community and Regional Affairs to carry out its power and duties under AS42.45 and AS44.47.050] and lapses into the general fund June 30, 1995". Representative Navarre OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Foster, Grussendorf, Hoffman, MacLean, Larson. OPPOSED: Parnell, Therriault, Brown, Hanley, Martin, Navarre. The MOTION FAILED (5-6). Representative Brown WITHDREW Amendment #4. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to adopt Amendment #3 which would provide funding for the Cambridge Way/Tudor Road traffic signal and Cambridge Way improvements. There being NO OBJECTIONS, Amendment #3 was adopted. Co-Chair MacLean MOVED to adopt Amendment #4 which would provide funding for the Municipality of Anchorage - signalization at 36th Avenue and Cottonwood Street and Locarno Street in the amount of $214 thousand dollars. There being NO OBJECTIONS, it was adopted. HB 455 was HELD in Committee for further consideration. SENATE BILL 92 "An Act relating to an advisory vote during regional educational attendance area school board elections; and providing for an effective date." SENATOR FRED ZHAROFF stated that SB 92 would add a provision whereby communities in REAA school areas would be able to voice their positions on education via an advisory vote on the regular school ballot. He pointed out that REAA schools are spread over a wide area, and that it is often difficult for members of those communities to attend board meetings in 17 order to make their feelings known. The bill would allow the school board to adopt a resolution requesting that the advisory question be on the next ballot. He concluded that the Department of Education supports the legislation. Representative Hanley MOVED to report CS SB 92 (CRA)(efd am) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. CS SB 92 (CRA)(efd am) out of Committee with a "do pass" recommendation and with a fiscal note by the Office of the Governor dated 3/24/94 and a zero fiscal note by the Department of Education dated 3/24/94. SENATE BILL 132 "An Act relating to loans for the purchase of individual fishery quota shares." BRYCE EDGMON, STAFF, SENATOR GEORGE JACKO, explained that CS SB 132 would expand the Commercial Fisheries Revolving Loan Fund Program to allow Alaskan fishermen to obtain loans to purchase Individual Fisheries Quotas (IFQs). The Commercial Fisheries Revolving Loan Fund Program would service the debt to purchase limited entry permits, purchase or upgrade vessels, and purchase fisheries related gear. Co-Chair MacLean MOVED to report CS SB 132 (RES) am out of Committee with individual recommendations and with the accompanying fiscal notes. She explained that the IFQs are transferrable, which creates a fear that fishermen from out of state will purchase the Alaskan fishing permits. The Division of Investments would provide loan money through the Revolving Loan Fund, whereas Alaskan commercial banks are reluctant to help Alaskan fishermen who do not have sufficient collateral. The legislation would keep Alaskan fishermen in business in Alaskan waters. Representative Brown asked the total amount of money which the State would be distributing. Mr. Edgmon replied that $5 million dollars would be loaned in FY95 and then between $4 and $5 million dollars appropriated in FY96. He pointed out that the qualification requirements are stringent. The Division of Investments does have a regulation priority listing. Representative Brown deliberated on the different loan funding resources available in the State. She spoke against providing commercial opportunity to fishmen over another class of requestors. Mr. Edgmon responded that when the program was established, it was the intent of the State to 18 keep as many limited entry permits in residence ownership. The loan program was established in order to offer that arrangement to as many fishermen as possible. The program allows resident fishermen to compete with nonresident fishermen who have better access to capital. (Tape Change, HFC 94-157, Side 2). Representative Grussendorf commented that the IFQ's would provide collateral for the small fisherman. The program would keep the limited entry permits in the State. Representative Hoffman added that the fishing industry is a renewable resource and will continue to provide jobs to many small rural areas within Alaska. GREG WINEGAR, MANAGER, JUNEAU LENDING BRANCH, DIVISION OF INVESTMENTS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, responded to Representative Navarre's questions regarding the loan requirements for State resident's. He advised that the residency requirement was the same for all eligibility requirements, pointing out that law states in Section #A that a person would have to actively participate for the past five years which would have to include the preceding season. The current legislation would change that to indicate participation for two of the past five years and that it would be necessary to include the preceding season. The borrowing interpretation would be more liberal than that of the past. There being NO OBJECTIONS, to reporting the bill from Committee, it was so ordered. Representative Foster MOVED to adopt the House Resources Committee Letter of Intent. There being NO OBJECTIONS, it was so ordered. CS SB 132 (RES) am was reported out of Committee with "no recommendations", with the House Resources Committee Letter of Intent and with a fiscal note by the Department of Commerce and Economic Development dated 2/04/94. SENATE BILL 215 "An Act relating to and redesignating the oil and hazardous substance release response fund and to its use in the event of a disaster emergency; repealing the authority in law by which marine highway vessels may be designed and constructed to aid in oil and hazardous substance spill cleanup in state marine water using money in the oil and hazardous substance release response fund; amending requirements relating to the revision of state and regional master prevention and contingency plans; altering requirements applicable to liens for recovery of state expenditures related to oil or hazardous substances; amending the authority to 19 contract to provide personnel to respond to a release or threatened release of oil or a hazardous substance and to contract to conduct spill related research; reassigning responsibility for the oil and hazardous substance response corps and for the emergency response depots to the Department of Environmental Conservation, and for the operation of the state emergency response commission and its attendant responsibilities for the local emergency planning commissions to the Department of Military and Veterans' Affairs; and modifying definitions of terms relating to the preceding provisions; terminating the nickel-per-barrel oil conservation surcharge; levying and collecting two new oil surcharges; and providing for the suspension and reimposition of one of the new surcharges; and providing for an effective date." Representative Therriault MOVED to adopt 8-LS1107\T, Chenoweth, 5/02/94, as the version before the Committee. Co-Chair MacLean OBJECTED stating that the Governor's Office would not support that version. Representative Therriault advised that he would be offering two amendments to the draft which would remedy the concerns of the Administration. He distributed and explained a spread sheet "Summary of Changes - CSSB 215 (FIN) am, HCS CS SB 215 (RES), HCS CS SB 215 (STA), and the proposed work draft". [Copy on file]. BOB POE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, addressed concerns of the Department resulting from the work draft. He pointed out that there are a number of changes made to that version which warrant concern. He clarified that there exists only one situation in which DEC could spend money from the current response fund or the future response account within the response fund. This would occur when a spill is eminent. Over the entire history of that fund, only $1.9 million dollars of the total $122 million dollars has been spent. The remaining portion of the fund was appropriated by the Legislature. The original intention of the prevention account was to provide funds to DEC and other state agencies to both prevent spills and to be better prepared to respond to spills. The response account, as passed by the Senate and the House Resources Committee, is intended to deal with all spills, including the small spills. Mr. Poe pointed out that most of the spills which DEC responds to are well under 2,500 barrels. Under the bills passed from the Senate and House Resources Committees, there is no threshold used to determine when the response money could be used in order to respond to a spill. He added that the work draft version 20 would establish an artificial threshold which would be of great concern to the Department. Mr. Poe continued that the work draft would establish a special account in the prevention account which would be used for the smaller spills. He explained that the problem is that a large fund would be necessary in order to address those times when a responsible party creates a spill. The party would then be forced to clean it up appropriately or the fund money would be used for litigation. Mr. Poe stressed that the State does not know what future spills will occur. The work draft also would require that the Governor be informed of a spill within 72 hours of the spill at which time he would provide specific instruction regarding action to take to address that spill. Mr. Poe emphasized that requiring the Governor's approval to act could be harmful timing for the State. Representative Therriault interjected that a proposed amendment would address that concern. (Tape Change, HFC 94-158, Side 1). GINNY FAY, PRINCE WILLIAM SOUND REGIONAL CITIZENS ADVISORY COUNCIL, JUNEAU, briefed the Committee on the development of the legislation. The bill was originally drafted from a research analysis completed in 1992, which erroneously stated that the response fund was empty. At that time, there remained $27 million dollars in that account. Ms. Fay emphasized that the bill gained momentum based on incorrect information. She added that the bill would not protect the coastal communities nor public interest. SB 215 is an industry bill, emphasizing that based on a Department of Revenue's fiscal note, the legislation would be worth $50 million dollars over the next six years in lower surcharge payments. Ms. Fay concluded that the legislation as passed through the Senate and the House Resources Committees continued to allow the response account to be used for spill response. The proposed work draft would make the prevention account also serve for the response fund and would also lower the surcharge payment from five cents to three cents. She stressed that the work draft was unacceptable. RUSSEL HEATH, EXECUTIVE DIRECTOR, ALASKA ENVIRONMENTAL LOBBY, JUNEAU, encouraged the Committee to adopt the House Resources version of the bill. He pointed out that the Resources committee substitute places the entire $37 million dollars into the response account. The Alaska Environmental 21 Lobby (AEL) would recommend that balance to be split 60/40 percent between prevention and response accounts. He noted concern in adding the underground storage tanks to the prevention account. He thought that action would encourage money to be taken from the prevention account program and would drain money from other necessary prevention accounts. REPRESENTATIVE DAVID FINKELSTEIN reiterated that the tax levied should be used for the concerns which created that tax. He spoke against splitting the fund. Currently enough money does not exist to address the needs of the original program, whereas, the proposed legislation would add more obligations from that fund. Representative Finkelstein encouraged implementing an increased gas tax in order to make the programs balance. A roll call vote was taken on the MOTION. IN FAVOR: Hanley, Martin, Parnell, Therriault, Foster, Larson. OPPOSED: Hoffman, Navarre, Brown, Grussendorf, MacLean. The MOTION PASSED (6-5). Representative Therriault MOVED to adopt Amendment #1 which would eliminate the 72 hour notice and approval requirement. There being NO OBJECTION, it was adopted. Representative Therriault MOVED to adopt Amendment #2 which would delete "threatened release". Representative Martin OBJECTED. Mr. Poe noted that the Department would support Amendment A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Navarre, Parnell, Therriault, Brown, Foster, Grussendorf, Hanley, Larson, MacLean. OPPOSED: Martin. The MOTION PASSED (10-1). CS SB 215 (FIN) am (efd fld) was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 5:10 P.M. 22