Legislature(2005 - 2006)HOUSE FINANCE 519

03/15/2005 01:30 PM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 5:00 --
HB 19 PESTICIDE & BROADCAST CHEMICALS
Heard & Held
HB 107 ATTY FEES: HUNTING/FISHING INTERFERENCE
Moved CSHB 107(FIN) Out of Committee
Bills Previously Heard/Scheduled
= HB 155 USE CRIMINAL FINES FOR YOUTH COURTS
Moved CSHB 155(JUD) Out of Committee
= SB 98 FAST TRACK SUPPLEMENTAL APPROPS/CBRF
Moved HCS CSSB 98(FIN) Out of Committee
= HB 66 APPROP: MENTAL HEALTH BUDGET
Heard & Held
= HB 67 APPROP: OPERATING BUDGET/LOANS/FUNDS/CBR
Heard & Held
6:20:35 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 98(FIN)                                                                                                
                                                                                                                                
     An  Act  making  supplemental   appropriations,  capital                                                                   
     appropriations,   and  other  appropriations;   amending                                                                   
     appropriations;  making   appropriations  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.                                                                                                         
                                                                                                                                
Section 14(a) Marine Vessel Operations                                                                                          
     $12,000.0 AMHS Fund                                                                                                        
                                                                                                                                
NANCY SLAGLE, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT OF  TRANSPORTATION AND PUBLIC  FACILITIES observed                                                                   
that   there   were  no   changes   to  the   Department   of                                                                   
Transportation  and Public Facilities  requests as  submitted                                                                   
by the Governor. She reviewed  Section 14 (a). Section 14 (a)                                                                   
would cover fuel  cost increases associated with  new vessels                                                                   
Fairweather  and Lituya,  training  for bringing  on the  new                                                                   
vessel Chenega,  overhauls for  the LeConte and  Fairweather,                                                                   
increased risk management premiums  and costs associated with                                                                   
grounding of the LeConte, which cost $1.2 million.                                                                              
                                                                                                                                
Section 14 (b) Central Region Highways and Aviation                                                                             
     $44.5 general funds                                                                                                        
                                                                                                                                
Ms. Slagle noted  that Section 14 (b) would  fund King Salmon                                                                   
air traffic control services.                                                                                                   
                                                                                                                                
6:24:42 PM                                                                                                                    
                                                                                                                                
Section 14(c)       Program Development                                                                                         
       $85.0 general funds                                                                                                      
                                                                                                                                
Ms. Slagle  explained that Section  14 (c) would  cover legal                                                                   
costs for  defense of  SB 260,  which changed the  membership                                                                   
make  up  of  the  policy  board  for  metropolitan  planning                                                                   
organizations.                                                                                                                  
                                                                                                                                
6:26:28 PM                                                                                                                    
                                                                                                                                
Section 15(a)       Capital                                                                                                     
                                                                                                                                
     Airport Improvement Program increase of $14,550.0  in                                                                      
     federal funds                                                                                                              
                                                                                                                                
Ms.  Slagle observed  that the  request would  cover work  at                                                                   
five rural  airports. The funds  are either discretionary  or                                                                   
Federal Aviation  Administration (FAA)  funds that  came late                                                                   
in the year. The projects are  ready to go forward within the                                                                   
next two months.                                                                                                                
                                                                                                                                
Co-Chair  Chenault asked  how the projects  were chosen.  Ms.                                                                   
Slagle  observed that  the  FAA looked  at  needs and  safety                                                                   
issues related to the airports for selection and review.                                                                        
                                                                                                                                
6:28:31 PM                                                                                                                    
                                                                                                                                
Sections 15 (1)-(11)                                                                                                            
                                                                                                                                
Ms. Slagle  explained that these  Sections relate  to federal                                                                   
highway  fund  projects  and  would  cover  capital  requests                                                                   
specific  to  safety.  They  address   emergency  and  safety                                                                   
issues. Two projects  are needed due to timing:  Coffman Cove                                                                   
Terminal and South Mitkof Island Terminal.                                                                                      
                                                                                                                                
6:30:16 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  MOVED  to  ADOPT  work  draft  #24-GS1133\L,                                                                   
Utermohle,  3/15/05, as the  version of  the bill before  the                                                                   
Committee.  There being NO OBJECTION, it was adopted.                                                                           
                                                                                                                                
6:32:02 PM                                                                                                                    
                                                                                                                                
SHARON KELLY, STAFF, CO-CHAIR  CHENAULT provided members with                                                                   
spreadsheet demonstrating  the changes made in  the committee                                                                   
substitute  (copy on  file). She  observed  that the  funding                                                                   
year is not indicated.                                                                                                          
                                                                                                                                
Section 1                                                                                                                       
                                                                                                                                
Ms. Kelly observed  that intent language relating  to charge-                                                                   
backs to agencies for information  services capital costs was                                                                   
added.                                                                                                                          
                                                                                                                                
6:33:01 PM                                                                                                                    
                                                                                                                                
Section 2                                                                                                                       
                                                                                                                                
Ms.  Kelly  noted  that  the funding  for  the  Small  Energy                                                                   
Assistance  Program remained  the  same,  but the  population                                                                   
cutoff was changed to 2,499, which  adds two new communities.                                                                   
The amount was prorated among the communities.                                                                                  
                                                                                                                                
6:33:23 PM                                                                                                                    
                                                                                                                                
Section 2 (b)                                                                                                                   
                                                                                                                                
Ms. Kelly observed  that Section 2 (b) contained  a technical                                                                   
change to statutory designated program receipts.                                                                                
                                                                                                                                
6:33:30 PM                                                                                                                    
Section 3 (a)                                                                                                                   
                                                                                                                                
Ms. Kelly  observed that $50  thousand for the  Department of                                                                   
Corrections, recruitment effort was removed.                                                                                    
                                                                                                                                
6:33:41 PM                                                                                                                    
                                                                                                                                
Section (3)(e)                                                                                                                  
                                                                                                                                
Ms. Kelly  noted that  the lapse amount  of $65 thousand  was                                                                   
changed to  a lapse amount  of $450 thousand.  The Department                                                                   
of Corrections  confirmed that the  lapse amount could  be as                                                                   
high as $698 thousand. Some money  was left for a transfer to                                                                   
the Department of Law, Therapeutic Courts.                                                                                      
                                                                                                                                
6:34:00 PM                                                                                                                    
                                                                                                                                
Section 4 (a) - (g)                                                                                                             
                                                                                                                                
Ms. Kelly explained that Section  4 (a) addresses funding for                                                                   
education. There  are three Sections. In Section  4 (f), $400                                                                   
million from the  FY05 windfall was used. Section  4 (d) uses                                                                   
$440,429,365  from FY06.  Section  4 (e)  contains  $14,145.6                                                                   
million  from FY05.  Section  4  (g) was  added  to take  any                                                                   
surplus FY05 funds into the Public Education Fund.                                                                              
                                                                                                                                
6:34:50 PM                                                                                                                    
                                                                                                                                
Section 6 (c)                                                                                                                   
                                                                                                                                
Ms. Kelly noted that the funding  source was changed from the                                                                   
master lease  line of credit to  the General Fund.  The state                                                                   
cannot charge interest on a line of credit.                                                                                     
                                                                                                                                
6:35:10 PM                                                                                                                    
                                                                                                                                
Section 9                                                                                                                       
                                                                                                                                
Ms. Kelly  observed  that Section  9 (b) was  moved from  the                                                                   
fast  track to  the regular  supplemental. Medicaid  services                                                                   
spend  about $10 million  a month.  The money  is needed  for                                                                   
June.                                                                                                                           
                                                                                                                                
6:35:25 PM                                                                                                                    
                                                                                                                                
Section 12                                                                                                                      
                                                                                                                                
Ms.  Kelly noted  that  Section  12 was  added  to allow  the                                                                   
Fairbanks    detoxification     unit    expansion    to    be                                                                   
reappropriated.                                                                                                                 
                                                                                                                                
6:35:49 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault   MOVED  to   ADOPT  Amendment   #1,  #24-                                                                   
GS1133\L.1, Utermohle, 3/15/05.                                                                                                 
                                                                                                                                
     Page 8, line 11:                                                                                                           
      Delete "$400,00"                                                                                                          
      Insert  "$600,00"                                                                                                         
                                                                                                                                
     Page 9, following line 16:                                                                                                 
     Insert a new subsection to read:                                                                                           
                                                                                                                                
     (h)  The unexpended and unobligated balance of the                                                                         
     appropriation made by sec. 52(a), ch. 159, SLA 2004                                                                        
     (Office  of  the Governor  -  operating  costs), not  to                                                                   
     exceed $200,000, is reappropriated  to the Department of                                                                   
     Education and Early Development,  Mt. Edgecumbe boarding                                                                   
     school,  for increased residential  operating  costs for                                                                   
     the fiscal year ending June 30, 2005.                                                                                      
                                                                                                                                
Co-Chair Meyer OBJECTED for the purpose of discussion.                                                                          
                                                                                                                                
Co-Chair Chenault explained that  Mt. Edgecumb has incurred a                                                                   
debt  of  $800  thousand.   The  other  body  added  in  $400                                                                   
thousand.  He observed  that $200 thousand  would be  general                                                                   
funds  and there  was an  understanding that  the other  $200                                                                   
thousand would come from the Office of the Governor.                                                                            
                                                                                                                                
CHERYL  FRASCA, DIRECTOR,  DIVISION OF  MANAGEMENT &  BUDGET,                                                                   
OFFICE  OF  THE GOVERNOR,  acknowledged  that  $200  thousand                                                                   
would come out  of the Contingency fund in the  Office of the                                                                   
Governor.                                                                                                                       
                                                                                                                                
Co-Chair  Chenault  noted  that  this would  fully  fund  the                                                                   
increase in students at Mt. Edgecumbe.                                                                                          
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
6:39:53 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment #2(a):                                                                                  
                                                                                                                              
     Sec. 6.  FUND TRANSFERS.  (a) The sum of $11,522,000 is                                                                  
     appropriated from the general fund to the Alaska marine                                                                    
     highway system fund (AS 19.65.060(a)).                                                                                     
                                                                                                                                
Ms.  Kelly   explained  that  the  amendment   represents  an                                                                   
increase of  $1,517,800 for cost  of the recently  negotiated                                                                   
collective  bargaining  unit   agreements  for  International                                                                   
Organization  of  Master, Mates  and  Pilots  and the  Marine                                                                   
Engineers   Beneficial  Association.   She  noted   that  the                                                                   
negotiations  were concluded  after the  Sensate version  was                                                                   
received.                                                                                                                       
                                                                                                                                
ART  CHANCE,  LABOR RELATIONS  DIRECTOR,  DIVISION  OF  LABOR                                                                   
RELATIONS,  DEPARTMENT OF ADMINISTRATION,  observed  that the                                                                   
contracts were concluded March 8, 2005.                                                                                         
                                                                                                                                
6:41:01 PM                                                                                                                    
                                                                                                                                
PETE ECKLUND,  STAFF, REPRESENTATIVE  KEVIN MEYER,  suggested                                                                   
that Amendments 2(a), (b) and  (c) be considered together. He                                                                   
noted  that  Amendment  2(a)   appropriates  money  into  the                                                                   
General  Fund   for  Alaska  Marine  Highway   System  costs.                                                                   
Amendment 2(b) and (c) appropriate  the money out of the Fund                                                                   
to pay  the cost. Amendment 2  (d) is a technical  correction                                                                   
of $900.                                                                                                                        
                                                                                                                                
Co-Chair Meyer WITHDREW his OBJECTION.                                                                                          
                                                                                                                                
Representative Chenault MOVED to ADOPT Amendments 2(a), (b)                                                                     
and (c)                                                                                                                         
                                                                                                                                
     Amendment 2(b):                                                                                                            
     (f)  Contingent upon the  ratification of the collective                                                                   
     bargaining agreement  described in this  subsection, the                                                                   
     sum of $889,300  is appropriated from the  Alaska marine                                                                   
     highway system fund (AS 19.65.060(a))  to the Department                                                                   
     of Transportation  and Public Facilities,  marine vessel                                                                   
     operations, in order to implement  the monetary terms of                                                                   
     the  collective  bargaining  agreement  for  the  Marine                                                                   
     Engineers Beneficial Association,  representing licensed                                                                   
     engineers employed by the  Alaska marine highway system,                                                                   
     for the fiscal year ending June 30, 2005.                                                                                  
                                                                                                                                
     Amendment 2 (c)                                                                                                            
     (e)  Contingent upon the  ratification of the collective                                                                   
     bargaining agreement  described in this  subsection, the                                                                   
     sum of $628,500  is appropriated from the  Alaska marine                                                                   
     highway system fund (AS 19.65.060(a))  to the Department                                                                   
     of Transportation  and Public Facilities,  marine vessel                                                                   
     operations, in order to implement  the monetary terms of                                                                   
     the    collective   bargaining    agreement   for    the                                                                   
     International   Organization  of  Masters,   Mates,  and                                                                   
     Pilots,  for the  masters, mates,  and pilots unit,  for                                                                   
     the fiscal year ending June 30, 2005.                                                                                      
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
6:42:29 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment #2(d):                                                                                  
                                                                                                                                
     (d)  Contingent upon the  ratification of the collective                                                                   
     bargaining agreement described   in this subsection, the                                                                   
     sum of $3,190,900 is appropriated from the Alaska                                                                          
     marine highway system fund  (AS 19.65.060(a)) to the                                                                       
     Department of Transportation  and Public Facilities,                                                                       
     marine vessel operations,  in order to implement the                                                                       
     monetary terms of the collective bargaining agreement                                                                      
     for the Inlandboatmen's Union of the Pacific,                                                                              
     representing the unlicensed  marine unit, for the fiscal                                                                   
     year ending June 30, 2005.                                                                                                 
                                                                                                                                
Mr. Ecklund explained that Amendment 2 (d) is a technical                                                                       
correction of $900.                                                                                                             
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
6:43:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault MOVED to ADOPT Amendment #3:                                                                                  
                                                                                                                                
     The amendment would remove "the Legislative Budget and                                                                     
     Audit Committee for contracts with."                                                                                       
                                                                                                                                
Representative   Hawker   OBJECTED   for   the   purpose   of                                                                   
discussion.                                                                                                                     
                                                                                                                                
Ms.  Frasca  explained  that   the  amendment  requests  that                                                                   
appropriations  for  the  natural  gas  pipeline  go  to  the                                                                   
departments that  have the responsibility  and accountability                                                                   
to do the work. She stressed that  the Stranded Gas Act gives                                                                   
the   executive   branch   tremendous    responsibility   for                                                                   
negotiating  contracts. She maintained  that the  Legislature                                                                   
is  involved and  is kept  informed  through the  Legislative                                                                   
Budget  and Audit  Committee: Senator  Therriault, Chair  and                                                                   
Representative  Samuels, Vice-Chair.  She  asserted that  the                                                                   
dollars   ought   to  go   to   the  departments   with   the                                                                   
responsibility and accountability  so that the Administration                                                                   
can follow the appropriation.                                                                                                   
                                                                                                                                
Representative Croft  noted that the request  is $28 million.                                                                   
He felt that the backup was insufficient  and questioned what                                                                   
problems  would   occur  by  having   a  check   through  the                                                                   
Legislative Budget and Audit Committee.                                                                                         
                                                                                                                                
Ms.  Frasca   observed  that   the  Committee  has   had  the                                                                   
opportunity to  ask questions  about the appropriations.  The                                                                   
Legislative   Budget   and   Audit   Committee   Chair   have                                                                   
participated  in  the  negotiations  and  have  been  briefed                                                                   
weekly.  She   emphasized  the  separation  of   powers:  the                                                                   
legislature has  the power to  appropriate and  the executive                                                                   
branch has  the responsibility  to manage.  She did  not feel                                                                   
that  an   intermediary  was   necessary.  She   acknowledged                                                                   
concerns,  but   pointed  out   that  the  negotiations   are                                                                   
confidential.                                                                                                                   
                                                                                                                                
6:47:01 PM                                                                                                                    
                                                                                                                                
Representative Croft recognized the importance of the gas-                                                                      
line, but questioned if all $28  million would go to the gas-                                                                   
line associated work.  Ms. Frasca noted that  some other work                                                                   
would be done regarding TAPS and other issues.                                                                                  
                                                                                                                                
Representative  Croft spoke  in opposition  to the  amendment                                                                   
and in support of a legislative  check. He maintained that an                                                                   
appropriation  of this  size, with  little documentation  and                                                                   
importance should have a legislative check.                                                                                     
                                                                                                                                
6:48:26 PM.                                                                                                                   
                                                                                                                                
Representative  Hawker stressed  that the Administration  has                                                                   
stated  its  desire  to  be guided  by  the  Legislature.  He                                                                   
questioned if  failure of the amendment would  compromise the                                                                   
Administration's  ability  to   do  the  work  and  move  the                                                                   
pipeline forward. Ms. Frasca recalled  that requests from the                                                                   
Legislature have  been in terms  of policy guidance  and have                                                                   
centered around  statutes on  eligibility for formula  driven                                                                   
programs. The  Administration has asked for  clarification on                                                                   
how the  statutes would be amended  or the practice  in place                                                                   
changed, when  the Legislature has indicated  its desire that                                                                   
the  Administration   discontinue   the  delivery   of  these                                                                   
services. She stated that the  current Administration has not                                                                   
been held  to this type  of surveillance by the  Legislature.                                                                   
She pointed out that the Administration  administers about $7                                                                   
billion  dollars   in  the  budget  and  questioned   if  the                                                                   
Legislature  wanted  to assert  itself  over  $28 million  on                                                                   
"probably the most  important project we are going  to see in                                                                   
our lifetime."                                                                                                                  
                                                                                                                                
Representative Hawker  again questioned whether  the exercise                                                                   
of  the  legislative  prerogative would  interfere  with  the                                                                   
Administration's  ability  to  go  forward  and  conduct  the                                                                   
necessary work needed to move gas pipeline forward.                                                                             
                                                                                                                                
Ms.  Frasca responded  that there  is a  potential [that  the                                                                   
Administration  would  not  have  the  ability  to  move  the                                                                   
project forward].  She observed that the  Administration does                                                                   
not  know what  documentation  would  be required,  what  the                                                                   
process would  be for LBA  approval, what the  repeal process                                                                   
would   be   [for   rejected    requests],   the   level   of                                                                   
confidentiality   in  the  billings,   and  to   what  degree                                                                   
appropriations  would be  subject to  the Legislative  Budget                                                                   
and Audit Committee or other legislators.                                                                                       
                                                                                                                                
Ms. Frasca stated  that she had talked to  Senator Therriault                                                                   
and  had  been  told  that  the   confidentiality  under  the                                                                   
Stranded Gas  Act would apply  to the Legislative  Budget and                                                                   
Audit Committee's review. She reiterated concerns.                                                                              
                                                                                                                                
6:51:24 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch  wondered if  there  was a  certain                                                                   
amount  of economy  in providing  LBA  as a  conduit for  the                                                                   
funds and instilling  the trust through the  process, so that                                                                   
the  [Legislature]  is not  suspect  about the  end  product.                                                                   
There  would be  full  involvement  and participation  by  at                                                                   
least some  committee of the  Legislature that can  help ease                                                                   
any  issues,  such  as  mistrust  or  bad  communication.  He                                                                   
pointed out  that the Legislature  wants the gas  pipeline as                                                                   
much or more than the Administration,  and wants to make sure                                                                   
that it is  done as fast as  is reasonably possible  and in a                                                                   
prudent  manner.   He  did  not   anticipate  a   "bunch"  of                                                                   
loggerheads.  He maintained  that there  would be a  rational                                                                   
basis of  appropriations for the  type of works  contained in                                                                   
the bill. He  did not think the Legislative  Budget and Audit                                                                   
Committee would be an impediment.                                                                                               
                                                                                                                                
Ms.  Frasca stated  that  the  dilemma is  that  it has  been                                                                   
suggestion  that  the  Committee  would be  involved  in  the                                                                   
process.   She   noted  that   Senator   Therriault,   Chair,                                                                   
Legislative  Budget and  Audit  Committee  indicated that  it                                                                   
would  just   be  him  and/or  Representative   Samuels.  She                                                                   
expressed concern that, if it  is going to go before the full                                                                   
committee, that  there would be issues of  confidentiality of                                                                   
the documentation. There is concern  that the Committee would                                                                   
have to meet and pointed out that  the Committee doesn't meet                                                                   
frequently,  or at least  it hasn't  to date. She  reiterated                                                                   
that there  are four legislators  involved in  the briefings:                                                                   
Senator Therriault,  Representative Samuels,  Senator Stevens                                                                   
and   Speaker  Harris.   She  expressed   concern  that   the                                                                   
Administration doesn't  know how well the process  would work                                                                   
and  that  they  are concerned  that  participation  [of  the                                                                   
Legislative  Budget and  Audit  Committee]  might bog  things                                                                   
down. The negotiations are intense and important.                                                                               
                                                                                                                                
6:54:02 PM                                                                                                                    
                                                                                                                                
Representative  Croft recalled  testimony  before the  Senate                                                                   
Finance Committee  that [the Administration]  did not  have a                                                                   
particular problem with the provisions [for LBA approval].                                                                      
                                                                                                                                
Ms. Frasca didn't recall if she  testified on this section of                                                                   
the bill.  She stated  that the  Administration did  not know                                                                   
what the section  would mean at that time. She  noted that as                                                                   
"we've asked questions, we haven't  gotten any more answers."                                                                   
They  are therefore  concerned  with uncertainty  surrounding                                                                   
the  process.   She  stressed   that   it  is  a   tremendous                                                                   
responsibility and serious undertaking.  She noted that it is                                                                   
"not like  an invoice you get  for staples at the end  of the                                                                   
month."  She   reiterated  that   the  Administration   would                                                                   
answered the  questions of the  four legislators  involved at                                                                   
any time  about anything  the Administration  does and  would                                                                   
encourage  other   legislators  to   speak  with   them.  She                                                                   
emphasized   that   the  Administration   doesn't   want   to                                                                   
jeopardize the ability to act as quickly as necessary.                                                                          
                                                                                                                                
6:55:27 PM                                                                                                                    
                                                                                                                                
Representative Croft  stated that he would not  insist on the                                                                   
language if  it were a requisition  for staples.  He stressed                                                                   
that the difference in size is  the very reason the amendment                                                                   
should be there.                                                                                                                
                                                                                                                                
A roll call vote  was taken on the motion to  adopt Amendment                                                                   
3.                                                                                                                              
                                                                                                                                
IN FAVOR: Kelly, Chenault, Meyer                                                                                                
OPPOSED: Hawker, Moses, Stoltze, Weyrauch, Croft, Foster                                                                        
                                                                                                                                
Representatives Holm and Joule were absent from the vote.                                                                       
                                                                                                                                
The MOTION FAILED (3-6).                                                                                                        
                                                                                                                                
6:56:45 PM                                                                                                                    
                                                                                                                                
Representative  Croft MOVED  to ADOPT  New Amendment  #4. Co-                                                                   
Chair Chenault OBJECTED.                                                                                                        
                                                                                                                                
Representative  Croft  explained  that  the  amendment  would                                                                   
remove all  permanent fund revenues  as a funding  source and                                                                   
another  $4  million  in  general funds  to  reduce  the  $28                                                                   
million   proposed  appropriation   [for   the  natural   gas                                                                   
pipeline] in the  fast track supplemental by  $11 million. He                                                                   
acknowledged  that  the state  would  have  to write  "a  big                                                                   
check", but  argued against a  "blank check". He  pointed out                                                                   
that there  would be  appropriate times for  the rest  of the                                                                   
money to  be brought up. There  would still be a  $17 million                                                                   
appropriation.  The amendment  deletes the  $1.2 million  for                                                                   
the AOGCC,  which they chose not  to do as a charge  out. The                                                                   
intent would  be for the work to  be done as a charge  out to                                                                   
the appropriate  individual companies. The Department  of Law                                                                   
has  asked for  $9 million  dollars. He  maintained that  the                                                                   
"fast track" should not contain  appropriations for FY06. The                                                                   
Department of  Law needs  at least $5  million for  FY05. The                                                                   
rest can be discussed later.                                                                                                    
                                                                                                                                
Representative  Croft noted that  the amendment  also removes                                                                   
the right  away permitting for  Bullen Point Road. This  is a                                                                   
connection to Point Thompson.  He felt that it may eventually                                                                   
be important, but the primary  source of gas would be Prudhoe                                                                   
Bay at the  beginning. He stated  that he had not  been shown                                                                   
enough  to  know  if the  Bullen  Point  Road  right-away  is                                                                   
appropriate  in the "fast  track" and  whether the  amount is                                                                   
justified.                                                                                                                      
                                                                                                                                
Representative   Croft   noted   that  there   were   partial                                                                   
reductions to the allocation to  the Department of Revenue to                                                                   
equal $11 million.                                                                                                              
                                                                                                                                
Representative  Croft noted  that  Amendment #4  appropriates                                                                   
the  same   amount  to  the   Alaska  Natural   Gas  Pipeline                                                                   
Development Authority (ANGDA).  Under the amendment the money                                                                   
would go directly  to ANGDA. He stressed the  independence of                                                                   
the Alaska  Natural Gas  Pipeline Development Authority.  The                                                                   
current  proposal would  spend a  total of  $28 million:  $21                                                                   
million  GF  and  $7  million  in  permanent  fund  receipts.                                                                   
Amendment #4  would save  $11 million. There  would be  a $17                                                                   
million  in General Fund  and no  Permanent Fund  Corporation                                                                   
appropriations.  He  felt  the  reductions  would  allow  the                                                                   
departments  to  finish FY05  without  funding  FY06 or  FY07                                                                   
appropriations or items without sufficient documentation.                                                                       
                                                                                                                                
7:01:10 PM                                                                                                                    
                                                                                                                                
Representative  Hawker noted that  the legislature  maintains                                                                   
significant  control with  the rejection  of Amendment  3. He                                                                   
questioned  if  the  concerns  remain.  Representative  Croft                                                                   
noted that  it was appropriate  to maintain oversight  by the                                                                   
Legislative  Budget and  Audit Committee.  He noted  that the                                                                   
amendment  would  reduce the  oversight  to  $17 million.  He                                                                   
questioned whether the appropriation  should stay in the fast                                                                   
track. He  noted that oversight  does not justify  items that                                                                   
are unnecessary  or don't  have sufficient documentation.  He                                                                   
noted that  some items  have five-year  capital lapse  dates,                                                                   
which would  be more  appropriate in  a capital or  operating                                                                   
budget. He  did not think it  was appropriate to  spend money                                                                   
five years in the future in fast track legislation.                                                                             
                                                                                                                                
7:03:40 PM                                                                                                                    
                                                                                                                                
Representative  Hawker spoke against  the amendment.  He felt                                                                   
that the additional  oversight is an appropriate  arbitration                                                                   
of the question  on amounts and the need for  the legislature                                                                   
to be  concerned with how  the money  is spent. He  felt that                                                                   
the best balance had been reached.                                                                                              
                                                                                                                                
Vice-Chair  Stoltze  questioned  if the  amendment  could  be                                                                   
divided.                                                                                                                        
                                                                                                                                
7:04:40 PM                                                                                                                    
                                                                                                                                
Representative Croft concluded  that it would be difficult to                                                                   
divide the amendment.                                                                                                           
                                                                                                                                
A  roll call  vote  was  taken on  the  motion  to adopt  New                                                                   
Amendment #4.                                                                                                                   
                                                                                                                                
IN FAVOR: Croft,                                                                                                                
OPPOSED:  Kelly,  Hawker, Moses,  Stoltze, Weyrauch,  Foster,                                                                   
          Meyer, Chenault                                                                                                       
                                                                                                                                
7:05:55 PM                                                                                                                    
                                                                                                                                
Representative  Croft MOVED to  ADOPT Amendment  #5. Co-Chair                                                                   
Chenault OBJECTED.                                                                                                              
                                                                                                                                
     Delete lines 26 - 28 on page 22.                                                                                           
                                                                                                                                
Representative  Croft  explained  that  the  amendment  would                                                                   
delete the $85  thousand in legal fees for  the Department of                                                                   
Transportation  and Public  Facilities.  The Municipality  of                                                                   
Anchorage  is  handling the  issue  without an  increase  and                                                                   
Representative Croft  felt that the  state could as  well. He                                                                   
maintained that it is not an emergency.                                                                                         
                                                                                                                                
Ms.  Slagle spoke  to  Amendment 5.  She  explained that  the                                                                   
Department  of  Law,  Civil Section  receives  all  of  their                                                                   
funding from the agencies that  receive services. The request                                                                   
is for Division's  program development, which  is a federally                                                                   
funded portion of the agency, with no general funds.                                                                            
                                                                                                                                
Representative  Croft  clarified  that  the agency  is  being                                                                   
charged  for the amount  and there  are no  general funds  to                                                                   
cover it.                                                                                                                       
                                                                                                                                
Representative Croft WITHDREW Amendment 5.                                                                                      
                                                                                                                                
7:08:53 PM                                                                                                                    
                                                                                                                                
Representative  Croft MOVED to  ADOPT Amendment #6.  He noted                                                                   
that Amendment  6 would appropriate $500 thousand  in general                                                                   
funds for breast and cervical  cancer prevention. He stressed                                                                   
the importance  of the appropriation  and maintained  that it                                                                   
would  save money  in the long  run. The  fund source  change                                                                   
would allow services  to 1,600 enrolled women  that otherwise                                                                   
would not be served due to federal  funding reductions. Funds                                                                   
would be  required by late March  or early April  to continue                                                                   
the program.                                                                                                                    
                                                                                                                                
7:10:16 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault expressed  support for  the services,  but                                                                   
questioned  where  the  line should  be  drawn.  He  stressed                                                                   
fiscal accountability.                                                                                                          
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Moses, Weyrauch, Croft                                                                                                
OPPOSED: Stoltze, Foster, Hawker, Kelly, Chenault, Meyer                                                                        
                                                                                                                                
Representatives Holm and Joule were absent from the vote.                                                                       
                                                                                                                                
The MOTION FAILED (3-6).                                                                                                        
                                                                                                                                
7:12:26 PM                                                                                                                    
                                                                                                                                
Representative  Croft  MOVED   to  ADOPT  Amendment  #7.  The                                                                   
amendment  would  add $108,377  for  the Yukon  Flats  School                                                                   
District.  He  requested  that  the  leadership  address  the                                                                   
amendment before the floor decision.                                                                                            
                                                                                                                                
Representative Croft WITHDREW Amendment #7.                                                                                     
                                                                                                                                
AT EASE:       7:18:07 PM                                                                                                     
RECONVENE:     7:22:41 PM                                                                                                     
                                                                                                                                
Representative Chenault  noted that the committee  substitute                                                                   
as amended was before the Committee.                                                                                            
                                                                                                                                
Representative Kelly spoke against  the use of permanent fund                                                                   
expenditures  in items  7 a  - f.  He indicated  that he  was                                                                   
uncomfortable with  the use of permanent fund.  He maintained                                                                   
that the use of permanent fund  receipts for capital projects                                                                   
should have a "higher test than  it has in this document". He                                                                   
spoke against the $6 million appropriation  for energy grants                                                                   
to small  communities. He  noted that he  would not  hold the                                                                   
bill.                                                                                                                           
                                                                                                                                
7:25:31 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer spoke in support  of the committee substitute.                                                                   
He explained that the committee  substitute would appropriate                                                                   
$400 million  of the $500  million estimated windfall  to the                                                                   
Education Fund.  He noted that  $854 million, which is  a $70                                                                   
million  increase, would  go to  education. The  rest of  the                                                                   
funding  needed  to fund  education  would consist  of:  $440                                                                   
million FY06 general  funds and $14 million  in lapsed funds.                                                                   
The amount could change. He observed  that the windfall would                                                                   
go the number one priority of  education. If the surplus were                                                                   
greater,  the  additional  amount   would  be  swept  to  the                                                                   
Education Fund.                                                                                                                 
                                                                                                                                
7:27:25 PM                                                                                                                    
                                                                                                                                
Representative  Croft  spoke on  the  use of  permanent  fund                                                                   
earnings.  He  noted  that the  Permanent  Fund  receives  15                                                                   
percent of the  oil lease funding. He expressed  concern with                                                                   
the use  of permanent  fund earnings  without  a vote of  the                                                                   
people. He referred  to the 1989 vote [to use  permanent fund                                                                   
earnings].                                                                                                                      
                                                                                                                                
Representative Croft spoke to  education funding, which would                                                                   
park some of the FY05 money in  the Education Fund. He stated                                                                   
that  he supports  getting the  money to  the classrooms  and                                                                   
noted  that it  needs to  move from  the sub  account to  the                                                                   
schools. He questioned if the  bill provides adequate funding                                                                   
for education.                                                                                                                  
                                                                                                                                
7:30:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  acknowledged that education is  one of the                                                                   
biggest  issues  before the  Legislature.  The  intent is  to                                                                   
early  fund  and  to attempt  to  fully  fund  education.  He                                                                   
observed that the legislation  is the first step toward those                                                                   
goals.                                                                                                                          
                                                                                                                                
7:31:41 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  noted that permanent fund earnings  have been                                                                   
used since  1989. The justification  has been that  they have                                                                   
only been used for natural resource  projects, which is where                                                                   
the money  comes from.  He stressed that  there is  no better                                                                   
natural resource  project than  the natural gas  pipeline. He                                                                   
observed  that the  precedent  has been  set and  that he  is                                                                   
comfortable with the appropriation.                                                                                             
                                                                                                                                
7:32:39 PM                                                                                                                    
                                                                                                                                
Representative  Hawker endorsed  the  sentiments of  Co-Chair                                                                   
Meyer. He  pointed out  that the  Permanent Fund was  created                                                                   
for  a time  when  oil and  gas  revenues have  declined.  He                                                                   
questioned  if  there was  a  more  appropriate use  than  to                                                                   
reinvest  in the  development  of the  resource, which  would                                                                   
continue to perpetuate the fund.                                                                                                
                                                                                                                                
7:33:45 PM                                                                                                                    
                                                                                                                                
Representative Foster MOVED to report HCS CSSB 98 (FIN) out                                                                     
of Committee. There being NO OBJECTION, it was so ordered.                                                                      

Document Name Date/Time Subjects