Legislature(1999 - 2000)

1999-01-21 Senate Journal

Full Journal pdf

1999-01-21                     Senate Journal                      Page 0037
                                 SENATE JOURNAL                                
                            ALASKA STATE LEGISLATURE                           
                    TWENTY-FIRST LEGISLATURE - FIRST SESSION                   
                                                                               
Juneau, Alaska                                                                 
                                                                               
                                   Third Day                                   
                                                                               
Pursuant to adjournment the Senate was called to order by President            
Pearce at 11:02 a.m.                                                           
                                                                               
The roll showed nineteen members present. Senator Ward was                     
excused from a call of the Senate.                                             
                                                                               
The prayer was offered by the Chaplain, Pastor Wayne Coggins of                
the Cornerstone Family Ministries. Senator Hoffman moved and                   
asked unanimous consent that the prayer be spread. Without                     
objection, it was so ordered.                                                  
                                                                               
Heavenly Father, the question has been posed that                             
if the worlds one-hundred best worriers were                                   
presented with a serious problem, locked in a room                             
and allowed to do their best worrying, what would                              
be the result?  After all of their wringing of hands                           
and furrowing of brows, the results would be . . .                             
nothing . . . for worry without action produces                                
nothing.                                                                       
                                                                               
We thank You, Lord, that You have a better idea                               
for us in dealing with our problems. Our part is to                            
roll up our sleeves and work hard, both individually                           
and collectively, as though the outcome depends on                             
us, yet all the while humbly and earnestly praying                             
as though the outcome depends on You. Help us,                                 
Lord, to work and pray with equal intensity, and not                           
waste a moment in unproductive worry. In Jesus                                 
Name, Amen.                                                                    
                                                                               
Senator Wilken led the Senate in the Pledge of Allegiance.                     
                                                                               
                                       37                                      

1999-01-21                     Senate Journal                      Page 0038
                                Certification                                
                                                                               
Senator Mackie moved and asked unanimous consent that the journal              
for the second legislative day and Senate and House Joint Journal              
Supplement No. 1 be approved as certified by the Secretary. Without            
objection, it was so ordered.                                                  
                                                                               
                                Communications                               
                                                                               
The following reports are on file in the Office of the Secretary of            
the Senate:                                                                    
                                                                               
Advisory Opinions 98-01 through 98-03 rendered by the Select                   
Committee on Legislative Ethics, Twentieth Alaska Legislature                  
Volume XXI, July 23, 1997 - July 14, 1998                                      
from Shirley McCoy, Chair                                                      
in accordance with AS 24.60.150(a)(2)                                          
                                                                               
Public Decisions 98-02 through 98-04 issued by the Select                      
Committee on Legislative Ethics, Twentieth Alaska Legislature                  
Volume V, February 12, 1997 - December 10, 1998                                
from Shirley McCoy, Chair                                                      
in accordance with AS 24.60.150(a)(2)                                          
                                                                               
State of Colorado, House Joint Resolution 98-1033 regarding title IV           
of the Federal Surface Mining Control and Reclamation Act                      
from Judith M. Rodrigue, Chief Clerk of the Colorado House of                  
Representatives                                                                
                                                                               
State of Alaska Comprehensive Annual Financial Report, Fiscal Year             
ended June 30, 1998                                                            
from Department of Administration, Division of Finance                         
in accordance with AS 37.05.210                                                
                                                                               
Alaska Commercial Fishing and Agriculture Bank, 1998 Annual                    
Report                                                                         
from Edward E. Crane, President                                                
in accordance with AS 44.81.200                                                
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0039
Commercial Fisheries Entry Commission, Synopsis of 1997 Annual                 
Report                                                                         
from Marlene Johnson and Mary McDowell, Commissioners; and                     
Bruce Twomley, Chairman                                                        
in accordance with AS 16.43.980                                                
Report available electronically: www.cfec.state.ak.us                          
                                                                               
Executive Summary, Changes in the Distribution of Alaskas                      
Commercial Fisheries Entry Permits, 1975-1997                                  
CFEC Report Number 98-5N-EXEC, June 1998                                       
from Al Tingley, Research Analyst, Commercial Fisheries Entry                  
Commission                                                                     
                                                                               
Alaska Energy Authority Certification of Capital Reserve Funds                 
Requirement                                                                    
from Wilson Hughes, Chairman and D. Randy Simmons, Executive                   
Director                                                                       
in accordance with AS 44.83.110(f)                                             
                                                                               
Alaska Industrial Development and Export Authority Certification of            
Capital Reserve Funds Requirement                                              
from Wilson Hughes, Chairman and D. Randy Simmons, Executive                   
Director                                                                       
in accordance with AS 44.88.105(d)                                             
                                                                               
Alaska Industrial Development and Export Authority Finance Plan for            
the Acquisition of Snettisham Hydroelectric Project, July 1998                 
from D. Randy Simmons, Executive Director                                      
in accordance with AS 44.88.173                                                
                                                                               
Alaska Industrial Development and Export Authority, Annual Review              
of Assets                                                                      
from D. Randy Simmons, Executive Director                                      
in accordance with AS 44.88.205                                                
                                                                               
Alaska Seafood Marketing Institute, FY 97 Annual Report                        
from Barbara Belknap, Executive Director                                       
in accordance with AS 16.51.100(5)                                             
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0040
National Conference of Commissioners on Uniform State Laws,                    
Annual Report                                                                  
from Deborah E. Behr, Alaska Uniform Law Commissioner,                         
Department of Law                                                              
                                                                               
Terminal Redevelopment Project, International Airport Revenue Bond,            
Construction Fund Report                                                       
from Joseph L. Perkins, P.E., Commissioner, Department of                      
Transportation and Public Facilities                                           
in accordance with AS 37.15.420                                                
                                                                               
Alaska Permanent Fund Corporation 1998 Annual Report                           
from Byron I. Mallott, Executive Director                                      
in accordance with AS 44.88.210                                                
                                                                               
1998 Alaska Hire and Purchasing Report                                         
from Richard Campbell, President, BP Exploration (Alaska), Inc.                
in accordance with Chapter 139, SLA 1996                                       
                                                                               
Alaska Science & Technology Foundation, 1998 Annual Report                     
from Jamie Kenworthy, Executive Director                                       
in accordance with AS 07.17.090                                                
                                                                               
The following Budget and Audit Reports were received from Pat                  
Davidson, Legislative Auditor, in accordance with AS 24.20.311 and             
are on file in the Office of the Secretary of the Senate:                      
                                                                               
The Unabridged and The Condensed 1998 Annual Reports of the                    
Legislative Budget and Audit Committee                                         
                                                                               
State of Alaska Single Audit for the Fiscal Year ended June 30,                
1997                                                                           
                                                                               
Department of Commerce and Economic Development, Alaska                        
Railroad Corporation, Review of Selected Contracts, August 12, 1998            
                                                                               
Department of Commerce and Economic Development, Division of                   
Tourism, Contracting Procedures, August 13, 1998                               
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0041
Department of Commerce and Economic Development, Division of                   
Occupational Licensing, Board of Pharmacy, August 25, 1998                     
                                                                               
Department of Commerce and Economic Development, Division of                   
Occupational Licensing, Real Estate Surety Fund, September 9, 1998             
                                                                               
Department of Education, Alaska Commission on Postsecondary                    
Education, Review of Management Practices, Student Financial Aid               
Division, September 11, 1998                                                   
                                                                               
Department of Health and Social Services, Division of Family and               
Youth Services, Child Protective Services, Custody and Termination             
Decisions for Selected Cases, August 11, 1998                                  
                                                                               
Department of Natural Resources, Division of Agriculture, Matanuska            
Maid, September 30, 1998                                                       
                                                                               
Department of Commerce and Economic Development, Alaska                        
Science and Technology Foundation Grant Procedures, September 30,              
1998                                                                           
                                                                               
Department of Commerce and Economic Development, Division of                   
Occupational Licensing, Board of Marine Pilots, November 18, 1998              
                                                                               
Department of Environmental Conservation, Division of Facility                 
Construction and Operation, Village Safe Water Program, Rural                  
Sanitation 2005 Action Plan, October 2, 1998                                   
                                                                               
Department of Fish and Game, Sport Fish Revenue Review,                        
November 10, 1998                                                              
                                                                               
Department of Labor, Employment Security Division, Reorganization              
and Consolidation of Agency Operations, December 8, 1998                       
                                                                               
                                                                               
                          Standing Committee Reports                         
                                                                               
Judiciary Committee Reports dated January 20 were received stating:            
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0042
In accordance with AS 24.60.130, the Senate Judiciary Committee                
reviewed the following with regard to confirmation of the                      
appointments by the Chief Justice:                                             
                                                                               
		Mr. Curt  D. Wallace                                                         
		Select Committee on Legislative Ethics                                       
                                                                               
		Mr. H. Conner Thomas                                                         
		Select Committee on Legislative Ethics                                       
                                                                               
The reports were signed by Senator Taylor, Chair, Senators Halford,            
Donley, Torgerson, Ellis.                                                      
                                                                               
Senator Mackie moved that Curt D. Wallace be confirmed as a                    
Public Member to the Select Committee on Legislative Ethics.                   
                                                                               
The question being: Shall Curt D. Wallace be confirmed as a Public             
Member to the Select Committee on Legislative Ethics? The roll                 
was taken with the following result:                                           
                                                                               
Shall Curt D. Wallace                                                          
be confirmed as a member to the                                                
Select Committee on Legislative Ethics?                                        
                                                                               
YEAS:  19   NAYS:  0   EXCUSED:  1   ABSENT:  0                              
                                                                               
Yeas:  Adams, Donley, Ellis, Elton, Green, Halford, Hoffman, Kelly Pete,       
Kelly Tim, Leman, Lincoln, Mackie, Miller, Parnell, Pearce,                    
Phillips, Taylor, Torgerson, Wilken                                            
                                                                               
Excused:  Ward                                                                 
                                                                               
and so, Curt D. Wallace was confirmed by the Senate.                           
                                                                               
Senator Mackie moved that H. Conner Thomas be confirmed as a                   
Public Member to the Select Committee on Legislative Ethics.                   
                                                                               
The question being: Shall H. Conner Thomas be confirmed as a                   
Public Member to the Select Committee on Legislative Ethics? The               
roll was taken with the following result:                                      
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0043
Shall H. Conner Thomas                                                         
be confirmed as a member to the                                                
Select Committee on Legislative Ethics                                         
                                                                               
YEAS:  19   NAYS:  0   EXCUSED:  1   ABSENT:  0                              
                                                                               
Yeas:  Adams, Donley, Ellis, Elton, Green, Halford, Hoffman, Kelly Pete,       
Kelly Tim, Leman, Lincoln, Mackie, Miller, Parnell, Pearce,                    
Phillips, Taylor, Torgerson, Wilken                                            
                                                                               
Excused:  Ward                                                                 
                                                                               
and so, H. Conner Thomas was confirmed by the Senate.                          
                                                                               
The Secretary was requested to notify the House.                               
                                                                               
Rules Committee Report dated January 20 was received stating:                  
                                                                               
In Compliance with AS 24.10.030 and Uniform Rule 3(a), the Senate              
Rules Committee hereby reports its nomination of Nancy Quinto to               
serve as Secretary of the Senate for the Twenty-first Legislature and          
recommends election by the Senate.                                             
                                                                               
The report was signed by Senator Tim Kelly, Chair, Senators Leman,             
Miller, Pearce, Ellis.                                                         
                                                                               
Senator Tim Kelly moved and asked unanimous consent that the                   
Rules Committee Report be adopted. Without objection, it was so                
ordered, thereby confirming Nancy Quinto as Secretary of the Senate.           
                                                                               
                                                                               
                         Introduction and Reference of                        
                              Senate Resolutions                              
                                                                               
SJR 3                                                                        
SENATE JOINT RESOLUTION NO. 3 BY SENATOR TAYLOR,                               
                                                                               
Proposing an amendment to the Constitution of the                             
State of Alaska relating to the repeal of regulations                          
by the legislature.                                                            
                                                                               

1999-01-21                     Senate Journal                      Page 0044
SJR 3                                                                        
was read the first time and referred to the State Affairs and Finance          
Committees.                                                                    
                                                                               
SJR 4                                                                        
SENATE JOINT RESOLUTION NO. 4 BY SENATORS TIM                                  
KELLY, Pete Kelly,                                                             
                                                                               
Relating to a national ballistic missile defense                              
system.                                                                        
                                                                               
was read the first time and referred to the State Affairs and Finance          
Committees.                                                                    
                                                                               
                                                                               
                  Introduction and Reference of Senate Bills                 
                                                                               
SB 30                                                                        
SENATE BILL NO. 30 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act making appropriations for the operating                                
and loan program expenses of state government, for                             
certain programs, and to capitalize funds; making                              
appropriations under art. IX, sec. 17(c), Constitution                         
of the State of Alaska, from the constitutional                                
budget reserve fund; and providing for an effective                            
date.                                                                          
                                                                               
was read the first time and referred to the Finance Committee.                 
                                                                               
Governors transmittal letter dated January 20:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
The reality of current record-low oil prices dictates decisive action          
to balance Alaska's budget.  But we learned from the oil price crash           
of the mid-1980s that it is also essential to maintain economic                
stability. I believe a responsible FY 2000 budget must:                        
                                                                               

1999-01-21                     Senate Journal                      Page 0045
SB 30                                                                        
Strengthen, build and diversify our economy;                                  
Reduce costs through efficiencies, consolidations, new                        
technology, user pay, and, where appropriate, service                          
reductions; and                                                                
Continue progress in improving our schools and the well                       
being of our children.                                                         
                                                                               
My proposed $2.3 billion FY2000 budget cuts $13.5 million from                 
FY1999 -- absorbing critical increases such as $23.6 million for               
schools and the University, $15 million for corrections and public             
safety, and millions in inflation costs.                                       
                                                                               
The operating budget uses welfare reform savings and a new,                    
sustainable source of revenue to continue commitments we jointly               
made last year in child health and protection.  The recent settlement          
with the tobacco industry will bring in $22 million next year and              
$23-28 million each year until at least 2025, avoiding an additional           
draw on the Constitutional Budget Reserve.                                     
                                                                               
In the long term, these initiatives will help balance Alaska's budget          
by strengthening our economy and averting costly social problems.              
It is therefore consistent with my proposal for Alaskas Balanced               
Budget Plan.                                                                   
                                                                               
As we look at ways to reduce state spending, it's important to                 
remember that even with a $1,500 dividend, spending in FY2000                  
would be $186 less per person than in FY1979. And according to                 
figures released last month by the National Association of State               
Budget Officers, Alaska is alone in all the states in cutting its              
general fund budget over the past four years.  In fact, the average            
four-year increase among the states is 21.7%, while we cut our                 
budget 2.8%.                                                                   
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0046
SB 30                                                                        
We must ensure the FY2000 budget is consistent with a plan that                
balances the general fund budget before our Constitutional Budget              
Reserve is depleted.  I pledge to work cooperatively with you and              
local government officials to involve the public in the hard decisions         
ahead.                                                                         
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor                                                                  
                                                                               
SB 31                                                                        
SENATE BILL NO. 31 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act making appropriations for the operating                                
and capital expenses of the states integrated                                  
comprehensive mental health program; and providing                             
for an effective date.                                                         
                                                                               
was read the first time and referred to the Health, Education and              
Social Services and Finance Committees.                                        
                                                                               
Governors transmittal letter dated January 20:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
As part of the budget package I present to the Legislature today, I            
am transmitting this separate appropriation bill for the states                
integrated, comprehensive mental health program.  This bill includes           
both operating and capital appropriations.  As required by statute, I          
have attached a report of the differences between my proposed                  
budget and the recommendations of the Alaska Mental Health Trust               
Authority.                                                                     
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0047
SB 31                                                                        
Alaska has made great progress in serving mental health settlement             
beneficiaries and emphasizing community-based services.  This                  
proposed FY2000 mental health bill continues that progress with                
state general funds and Trust Authority receipts.  In addition, Alaska         
Housing Finance Corporation receipts are used for housing-related              
capital projects.                                                              
                                                                               
This bill is a comprehensive package that has been developed                   
through a positive and productive working relationship between my              
Administration, members of the Board of Trustees, and their staff.             
We look forward to working with the Legislature to support these               
proposed investments for Trust beneficiaries.                                  
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor                                                                  
                                                                               
Attachment                                                                     
                                                                               
In accordance with AS 37.14.003(b) a report of the differences                 
between the Governors proposed budget and the recommendations                  
of the Alaska Mental Health Trust Authority was attached.                      
                                                                               
SB 32                                                                        
SENATE BILL NO. 32 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act making and amending capital                                            
appropriations and reappropriations and capitalizing                           
funds; and providing for an effective date.                                    
                                                                               
was read the first time and referred to the Finance Committee.                 
                                                                               
Governors transmittal letter dated January 20:                                 
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0048
SB 32                                                                        
Dear President Pearce:                                                         
                                                                               
Whether oil prices are high or low, Alaska has very basic capital              
construction needs which cannot be ignored.  In fact, we have every            
reason to ensure that our states economy is strengthened with wise             
investments in our public infrastructure.  The capital budget I am             
proposing for FY2000 focuses on transportation, public safety,                 
education, economic development, and health.                                   
                                                                               
Fortunately for us in these times of low oil prices, $641 million of           
the total $921 million proposal would be paid with federal funds, a            
$55 million increase over what we are receiving this year.  In                 
acknowledgement of our current fiscal situation, I reduced the                 
general fund portion of the budget from $85.4 million to $81.5                 
million.  Alaska Housing Finance Corporation's (AHFCs) share of                
the capital budget remains at $52 million.                                     
                                                                               
Last year, the Legislature appropriated AHFCs dividend to the                  
education formula and bond debt.  Similarly, I recommend that we               
use Alaska Industrial Development and Export Authority's FY2000                
dividend of $18.8 million to fund the community capital matching               
grants program and economic development projects such as matching              
federal funds for harbor improvements.                                         
                                                                               
Alaska's good fortune in getting significantly higher federal funding          
for highways can be secured only if the required state matching                
funds are raised.  I have already announced my proposal for an                 
aggressive investment in transportation to be funded with a moderate           
increase in the highway motor fuel tax.  Even with the increase,               
Alaska's tax rate (which has remained 8 cents since 1961) would still          
be lower than in forty-five other states.                                      
                                                                               
Although considerable progress was made last session in funding                
deferred maintenance and K-12 construction and major maintenance               
projects with AHFC bonds, we still need to fund the remaining                  
projects on the statewide priority lists.  We could consider another           
bond package to accomplish this if, and only if, we are able to                
implement a balanced budget plan that will assure ourselves and                
bond investors our state finances are on solid ground.                         

1999-01-21                     Senate Journal                      Page 0049
SB 32                                                                        
I look forward to working with you on a capital program for                    
FY2000 that is fiscally responsible and works toward further                   
economic growth throughout Alaska.                                             
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor                                                                  
                                                                               
SB 33                                                                        
SENATE BILL NO. 33 BY SENATOR WARD, entitled:                                  
                                                                               
An Act relating to the Task Force on Privatization;                           
and providing for an effective date.                                           
                                                                               
was read the first time and referred to the State Affairs and Finance          
Committees.                                                                    
                                                                               
SB 34                                                                        
SENATE BILL NO. 34 BY SENATOR ELLIS, entitled:                                 
                                                                               
An Act relating to tattooing and body piercing; and                           
providing for an effective date.                                               
                                                                               
was read the first time and referred to the Labor and Commerce and             
Finance Committees.                                                            
                                                                               
SB 35                                                                        
SENATE BILL NO. 35 BY SENATOR PEARCE, entitled:                                
                                                                               
An Act extending the termination date of the Board                            
of Marine Pilots.                                                              
                                                                               
was read the first time and referred to the Labor and Commerce and             
Finance Committees.                                                            
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0050
SB 36                                                                        
SENATE BILL NO. 36 BY SENATOR WARD, entitled:                                  
                                                                               
An Act relating to state procurement of certain                               
computer-related contracts.                                                    
                                                                               
was read the first time and referred to the State Affairs and Finance          
Committees.                                                                    
                                                                               
SB 37                                                                        
SENATE BILL NO. 37 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act relating to immunity for certain claims                                
against the state, a municipality, or agents, officers,                        
or employees of either, arising out of or in                                   
connection with the year 2000 date change; and                                 
providing for an effective date.                                               
                                                                               
was read the first time and referred to the Judiciary and Finance              
Committees.                                                                    
                                                                               
Zero fiscal note published today from Department of Administration.            
                                                                               
Governors transmittal letter dated January 20:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
As part of the state's thorough efforts to prepare for the transition          
into a new millennium, I am transmitting this bill to protect the state        
and municipalities from liability claims for damages in connection             
with year 2000 (Y2K) computer software and processor failures.                 
                                                                               
This bill is not meant to interfere with an individual's right to              
receive statutorily mandated services or entitlements.  In the event of        
an error associated with the Y2K date change, that individual will             
continue to have recourse through administrative procedures to rectify         
the error.  However, as explained in the findings, the magnitude of            
preparations for Y2K is unprecedented in the relatively young world            
of  computer  technology.  Although the state and local governments            

1999-01-21                     Senate Journal                      Page 0051
SB 37                                                                        
are  working diligently to smoothly transition their computer systems          
into the year 2000, it may be expected that, despite these best                
efforts, some failures might occur.  Under this bill, the state,               
municipalities, and their agents would be immune from liability for            
certain damages arising before the year 2006.                                  
                                                                               
Meanwhile, I can assure the Legislature and the public the state of            
Alaska is taking extensive efforts to attempt to make our move into            
the twenty-first century one without interruptions in public services.         
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor                                                                  
                                                                               
SB 38                                                                        
SENATE BILL NO. 38 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act relating to certain audits regarding oil and                           
gas royalty and net profits and to audits regarding                            
costs relating to exploration incentive credits and oil                        
and gas exploration licenses; and providing for an                             
effective date.                                                                
                                                                               
was read the first time and referred to the Resources and Finance              
Committees.                                                                    
                                                                               
Fiscal notes published today from Department of Revenue,                       
Department of Natural Resources.                                               
                                                                               
Governors transmittal letter dated January 20                                  
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0052
SB 38                                                                        
Dear President Pearce:                                                         
                                                                               
In the interest of improving efficiency within our state government,           
as well as between government and industry, I am transmitting this             
bill to transfer oil and gas royalty audit functions from the                  
Department of Revenue (DOR) to the Department of Natural                       
Resources (DNR).  It makes sense to put the audit duties in the                
same department that administers, enforces, and is therefore most              
knowledgeable with, the oil and gas leasing program.                           
                                                                               
Ironically, the audit functions used to rest with DNR, but were                
switched to DOR in 1980 based on a legislative audit report.  The              
recommendation stated cost savings would be achieved by having                 
one staff of auditors review both tax and royalty compliance                   
information.  Since 1980, however, the state has entered into royalty          
settlements with the major North Slope producers and has made                  
changes to its tax regulations.  As a result, there is no longer as            
much overlap between royalty and tax audits.  In addition, separating          
DNR's duty to administer and enforce oil and gas contracts,                    
agreements, and leases from the department's ability to conduct audits         
leading to possible enforcement actions, has resulted in inefficiencies        
and other problems.                                                            
                                                                               
The bill specifically authorizes DNR to audit reports and costs                
relating to exploration incentive credits and oil and gas licenses.  It        
also grants DNR audit powers commensurate to those of DOR                      
currently, including the right to subpoena information for audit               
purposes. The two departments would be allowed to exchange                     
confidential information obtained in the course of their respective            
audits; a breach of confidentiality by any agency employee would be            
a felony offense.                                                              
                                                                               
This bill takes a sensible step in how the state does business with            
the oil and gas industry.                                                      
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor                                                                  

1999-01-21                     Senate Journal                      Page 0053
SB 39                                                                        
SENATE BILL NO. 39 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act relating to the motor fuel tax; and                                    
providing for an effective date.                                               
                                                                               
was read the first time and referred to the Transportation and                 
Finance Committees.                                                            
                                                                               
Fiscal notes published today from Department of Transportation and             
Public Facilities, Department of Revenue.                                      
                                                                               
Governors transmittal letter dated January 20:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
In order for Alaska's economy to grow and diversify, we must                   
improve our transportation infrastructure.  With additional funds              
available under the new federal transportation law, the state can              
secure $400 million in federal highway construction dollars each year          
for the next five years by meeting the required $50.6 million state            
match.  We can meet the state match for this enormous opportunity              
with a reasonable user-pays motor fuels tax increase of nine cents             
per gallon, as proposed in this bill I transmit today.                         
                                                                               
At the current eight cents per gallon, Alaska's gas taxes are now the          
lowest in the nation.  Even after the proposed increase, forty-five            
states would have higher rates.  We would still be well below the              
23.4 cent average for large western states.  In fact, had the tax rate         
been indexed for inflation when it was last raised in 1961, it would           
currently be 43 cents per gallon.                                              
                                                                               
Under existing law, revenue from the motor fuel tax used on roads              
and highways is deposited in a highway fuel tax account in the                 
general fund.  Under the bill, that account is renamed the highway             
construction and maintenance account.  Its recommended use is, first,          
for  planning,  design,  and construction of highway projects, ferries,        
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0054
SB 39                                                                        
and ferry terminals and, second, for secondary road paving and                 
deferred maintenance projects.  This bill would not affect taxes on            
aviation or marine fuel nor the current seasonal tax reduction allowed         
for gasohol users.                                                             
                                                                               
This proposal represents a modest, user-pays approach to leveraging            
valuable federal highway dollars.  The benefit to Alaska would be              
multiplied many times over.                                                    
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor                                                                  
                                                                               
SB 40                                                                        
SENATE BILL NO. 40 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act relating to eligibility for the longevity                              
bonus; and providing for an effective date.                                    
                                                                               
was read the first time and referred to the State Affairs, Health,             
Education and Social Services, Judiciary and Finance Committees.               
                                                                               
Fiscal notes published today from Department of Administration,                
Department of Health and Social Services. Zero fiscal note published           
today from Department of Health and Social Services.                           
                                                                               
Governors transmittal letter dated January 20:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
As part of my Administration's effort to reduce state spending and             
address our budget gap, I am reintroducing a bill that would set               
income limits on eligibility for the longevity bonus.  These limits            
would be set so that only those senior citizens in upper income                
brackets who least rely on the bonus would no longer be eligible for           
the program.  I asked the Twentieth Alaska Legislature to consider             
this proposal, and still believe it is a responsible approach to our           
need to cut state spending.                                                    

1999-01-21                     Senate Journal                      Page 0055
SB 40                                                                        
This bill would limit the longevity bonus to those senior citizens             
with gross incomes of less than $60,000 a year or, for married                 
seniors, a combined annual gross income of $80,000.                            
                                                                               
Although the 1993 amendments to the bonus statutes closed the                  
program to any new applicants as of January 1, 1997, the savings               
over the next few years produced by this change are relatively small.          
By contrast, the plan presented in this bill would reduce program              
costs by about eight percent annually, equating to some $4.6 million           
in FY00.  Another $1.6 million would be saved annually in                      
accompanying "hold harmless" provisions of the Adult Public                    
Assistance budget because the federal government will not count the            
longevity bonus against public assistance payments if the bonus                
carries an income restriction -- such as that contained in this bill.          
                                                                               
This proposal does not "needs base" the bonus program, which some              
seniors oppose believing that equates to welfare.  Approximately               
ninety-two percent of seniors currently on the program, or more than           
20,000 people, would see no change in their bonuses.  The relatively           
high income level of $60,000 means the bonus would not be limited              
to just those seniors with lower incomes, but would continue to                
recognize the contributions of our Alaska seniors.                             
                                                                               
This bill considers only income, not assets, so recipients with                
moderate incomes would continue to receive the bonus even if they              
own valuable but non-liquid assets, such as homestead property or              
a residence that has greatly increased in value over the years.  Also,         
a senior made ineligible for the bonus by this law would be                    
reinstated to the program if his or her income later dropped below             
the cutoff levels.                                                             
                                                                               
This proposal is a logical approach to trimming our budget gap                 
without terminating essential programs and services to our residents.          
I urge your consideration of this measure.                                     
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor                                                                  

1999-01-21                     Senate Journal                      Page 0056
                             Unfinished Business                             
                                                                               
Senator Leman moved and asked unanimous consent that he be                     
excused from a call of the Senate on January 22. Without objection,            
Senator Leman was excused.                                                     
                                                                               
Senator Miller moved and asked unanimous consent that he be                    
excused from a call of the Senate from 12:00 noon on January 22                
through morning plane time January 25. Without objection, Senator              
Miller was excused.                                                            
                                                                               
Senator Mackie moved and asked unanimous consent that he be                    
excused from a call of the Senate on January 29. Without objection,            
Senator Mackie was excused.                                                    
                                                                               
Senator Tim Kelly, Rules Committee Chair, introduced the 1999                  
Chamber Staff as follows:                                                      
                                                                               
	Sergeant at Arms                                                            
	Ian Fisk                                                                      
                                                                               
	Assistant Sergeant at Arms                                                  
	Chris Blalock                                                                 
                                                                               
	Senate Pages                                                                
	Kristen Moen                                                                  
	Tammy Davis                                                                   
	Amber Kiesel                                                                  
	Ken Divelbess                                                                 
	Angela Robinson                                                               
                                                                               
                                                                               
                                Announcements                                
                                                                               
Announcements are at the end of the journal.                                   
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0057
                                 Adjournment                                 
                                                                               
Senator Mackie moved and asked unanimous consent that the Senate               
stand in adjournment until 11:00 a.m., January 22, 1999. Without               
objection, the Senate adjourned at 11:33 a.m.                                  
                                                                               
                                                          Nancy Quinto         
                                               Secretary of the Senate         
                                                                               
                                                          January 1999         

1999-01-21                     Senate Journal                      Page 0058
                                Announcements                                
                                                                               
Americans with Disabilities Act Notice - Persons with disabilities who         
require special accommodation or alternative communication formats to          
access committee meetings may contact the appropriate committee office or      
the Legislative Information Office in their community. Reasonable advance      
notice is needed to accommodate the request. For further information, call     
the ADA Coordinator at 465-3854 Voice/465-4980 TDD.                            
                                                                               
                                                                               
                          SENATE STANDING COMMITTEES                         
+ indicates teleconference                                                     
                                                                               
                         COMMUNITY & REGIONAL AFFAIRS                        
                               FAHRENKAMP RM 203                               
Jan 25                          Monday 01:30 PM                                
	ORGANIZATIONAL MEETING                                                       
                                                                               
Jan 27                         Wednesday 01:30 PM                              
	NO MEETING SCHEDULED                                                         
                                                                               
Jan 29                          Friday 01:30 PM                                
	NO MEETING SCHEDULED                                                         
                    ----------------------------------------                   
                                                                               
                                   FINANCE                                   
                               SENATE FINANCE 532                              
Jan 21                         Thursday 09:00 AM                               
	OVERVIEW OF GOVERNORS PROPOSED FY 2000                                       
	OPERATING BUDGET, ANNALEE MCCONNELL,                                         
	DIRECTOR OMB                                                                 
                                                                               
Jan 21                         Thursday 04:00 PM                               
	PRESENTATION BY ALASKA PERMANENT FUND                                        
	CORPPORATION CAPITAL MARKETS OUTLOOK                                         
	JOINT (S) & (H) FINANCE COMMITTEE                                            
                                                                               
Jan 22                          Friday 09:00 AM                                
	SB  28INCREASE IN PROGRAM RECEIPTS                                           
                                                                               
Jan 25                          Monday 09:00 AM                                
	OVERVIEW OF THE GOVERNORS FY 2000 PROPOSED                                   
	BUDGET                                                                       
                                                                               

1999-01-21                     Senate Journal                      Page 0059
                                   FINANCE                                   
Jan 26                          Tuesday 09:00 AM                               
	SB  28INCREASE IN PROGRAM RECEIPTS                                           
	-SB 31 & SB 32 CAPITAL BUDGET OVERVIEWS,                                     
	MANAGEMENT AND BUDGET, ANNALEE MCCONNEL                                      
	-WATER AND SANITATION CAPITAL PROJECTS, DEPT                                 
	OF ENVIRONMENTAL CONSERVATION, DAN EASTON                                    
                                                                               
Jan 27                         Wednesday 09:00 AM                              
	OVERVIEW BY DIVISION OF LEGISLATIVE AUDIT                                    
	PAT DAVIDSON, LEGISLATIVE AUDITOR                                            
                                                                               
Jan 28                         Thursday 09:00 AM                               
	SB 31 & SB 32 CAPITAL BUDGET OVERVIEWS                                       
	DEPT OF TRANSPORTATION OVERVIEW                                              
	JOSEPH PERKINS, COMMISSIONER                                                 
                                                                               
Jan 29                          Friday 09:00 AM                                
	SB 31 & SB 32 CAPITAL BUDGET OVERVIEWS                                       
	DEPT OF TRANSPORTATION STATEWIDE TRANSPOR-                                   
	TATION IMPROVEMENT PROGRAM                                                   
	JOSEPH PERKINS, COMMISSIONER                                                 
	ALASKA HOUSING FINANCE CORPORATION                                           
OVERVIEW                                                                       
	DANIEL FAUSKE, EXECUTIVE DIRECTOR                                            
                    ----------------------------------------                   
                                                                               
                     HEALTH, EDUCATION & SOCIAL SERVICES                     
                               FAHRENKAMP RM 203                               
Jan 21                         Thursday 03:30 PM                               
	-- MEETING CANCELLED --                                                      
                                                                               
Jan 26                          Tuesday 03:30 PM                               
	HESS ORGANIZATIONAL MEETING                                                  
                                                                               
Jan 28                         Thursday 03:30 PM                               
	TO BE ANNOUNCED                                                              
                    ----------------------------------------                   
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0060
                                  JUDICIARY                                  
                                 BELTZ ROOM 211                                
Jan 22                          Friday 01:30 PM                                
+	SB   3CRIMES OF MURDER & CHILD MURDERS                                      
+	SB   4OFFICE OF VICTIMS ADVOCACY                                            
                                                                               
Jan 25                          Monday 01:30 PM                                
	SB   2CIVIL COMMITMENT OF SEXUAL PREDATORS                                   
	SJR  2CONST. AM: PRISONERS RIGHTS                                            
	BILLS PREVIOUSLY SCHEDULED                                                   
                                                                               
Jan 27                         Wednesday 01:30 PM                              
	NO MEETING SCHEDULED                                                         
                                                                               
Jan 29                          Friday 01:30 PM                                
	SB  24REGULATIONS: ADOPTION & JUDICIAL REVIEW                                
	BILLS PREVIOUSLY SCHEDULED                                                   
                    ----------------------------------------                   
                                                                               
                               LABOR & COMMERCE                              
                               FAHRENKAMP RM 203                               
Jan 26                          Tuesday 01:30 PM                               
	NO MEETING SCHEDULED                                                         
                                                                               
Jan 28                         Thursday 01:30 PM                               
	NO MEETING SCHEDULED                                                         
                    ----------------------------------------                   
                                                                               
                                  RESOURCES                                  
                               BUTROVICH ROOM 205                              
Jan 25                          Monday 03:00 PM                                
	SB   6DISPOSALS OF STATE LAND                                                
	SB   7INCREASE LAND GRANT TO UNIV. OF ALASKA                                 
                                                                               
Jan 27                         Wednesday 03:00 PM                              
+	BRIEFING: GLACIER BAY NATIONAL PARK AND                                     
	PROPOSED FEDERAL RULES                                                       
	BILLS PREVIOUSLY SCHEDULED                                                   
                                                                               
Jan 29                          Friday 03:00 PM                                
	SB  12FOREST PRACTICES: STREAMS/TRIBUTARIES                                  
	BILLS PREVIOUSLY SCHEDULED                                                   
                    ----------------------------------------                   
                                                                               

1999-01-21                     Senate Journal                      Page 0061
                                STATE AFFAIRS                                
                                 BELTZ ROOM 211                                
Jan 26                          Tuesday 03:30 PM                               
	NO MEETING SCHEDULED                                                         
                                                                               
Jan 28                         Thursday 03:30 PM                               
	SB  33TASK FORCE ON PRIVATIZATION                                            
	SB  36YEAR 2000 COMPLIANCE REQUIREMENT                                       
	SJR  3REPEAL OF REGULATIONS BY LEGISLATURE                                   
                    ----------------------------------------                   
                                                                               
                                TRANSPORTATION                               
                               BUTROVICH ROOM 205                              
Jan 26                          Tuesday 01:30 PM                               
	NO MEETING SCHEDULED                                                         
                                                                               
Jan 28                         Thursday 01:30 PM                               
	OVERVIEW: DEPT OF TRANSPORTATION                                             
	                                                                             
                                                                               
                                OTHER MEETINGS                               
                                                                               
                               ANCHORAGE CAUCUS                              
                               SENATE FINANCE 532                              
Jan 28                         Thursday 12:00 PM                               
	ORGANIZATIONAL DISCUSSION, ELECTION OF                                       
	CO-CHAIRS. IF (S) OR (H) FLOOR SESSIONS                                      
	CONTINUE PAST 12:15 PM, THE MEETING TIME                                     
	CHANGES TO 5 PM THAT AFTERNOON