Legislature(2013 - 2014)

03/21/2013 10:03 AM FIN


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10:03:55 AM Start
10:05:14 AM HB65 || HB66
10:30:17 AM Subcommittee Reports to Full Committee
10:59:51 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 65(FIN)                                                                                                 
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain  programs,   capitalizing  funds,   and  making                                                                    
     reappropriations;  and   providing  for   an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
CS FOR HOUSE BILL NO. 66(FIN)                                                                                                 
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive  mental  health   program  and  making  a                                                                    
     reappropriation; and providing for an effective date."                                                                     
                                                                                                                                
10:05:14 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT  committee substitute for CSHB
65(FIN),  work draft  28-GH1799\I  (Bailey, 3/20/13).  There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT  committee substitute for CSHB
66(FIN),  work draft  28-GH1797\P  (Bailey, 3/20/13).  There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
JAMES ARMSTRONG,  STAFF, SENATOR  PETE KELLY,  explained the                                                                    
changes  in the  committee  substitute. He  referred to  the                                                                    
three  spreadsheets from  the  Legislative Finance  Division                                                                    
(LFD):   "1.  2013   Legislature-Operating  Budget,   Agency                                                                    
Summary-House  Structure; Numbers  and  Language"; "2.  2013                                                                    
Legislature-Operating    Budget,     Agency    Summary-House                                                                    
Structure; Numbers  and Language; Numbers and  Language Fund                                                                    
Groups: General  Funds"; and "3.  2013 Legislature-Operating                                                                    
Budget, Statewide Totals-House  Structure" (copies on file).                                                                    
He  explained that  the CS  would  spend a  total of  $9.851                                                                    
billion  including $5.798  billion  of Unrestricted  General                                                                    
Funds  (UGF), $746.69  million of  Designated General  Funds                                                                    
(DGF),  $1.277  billion  in other  state  funds,  and  $2.29                                                                    
billion in  federal funds. He announced  that the difference                                                                    
between the  CS and  the governor's proposed  amended budget                                                                    
was less than $62.659 million.                                                                                                  
                                                                                                                                
10:09:24 AM                                                                                                                   
                                                                                                                                
Co-Chair Kelly  wondered if Mr. Armstrong  had mentioned the                                                                    
amount of  UGF. Mr. Armstrong  responded that he  had shared                                                                    
the UGF number.                                                                                                                 
                                                                                                                                
Co-Chair Kelly  wondered where that  number could  be found.                                                                    
Mr.  Armstrong looked  at page  2, and  stated that  the UGF                                                                    
number was $5.798 billion.                                                                                                      
                                                                                                                                
Co-Chair Kelly felt  that the UGF number  was imperative for                                                                    
the record  in order to point  out that $9 billion  of state                                                                    
funds were not being spent.                                                                                                     
                                                                                                                                
Mr. Armstrong  stated that there was  Department of Military                                                                    
and  Veterans Affairs  (DMVA) language  that dealt  with the                                                                    
Alaska  Aerospace  Corporation  related to  a  deadline  for                                                                    
multi-year contracts  that was removed from  the bill. There                                                                    
was  a provision  in the  governor's  budget that  collected                                                                    
fees from the  Bulk Fuel Revolving Loan Fund,  but that fund                                                                    
will  be  eliminated  the  following  year.  Therefore,  the                                                                    
$45,000  that was  dedicated to  that fund  would go  to the                                                                    
general  fund. He  explained that  there was  a $10  million                                                                    
capitalization  to the  Alaska Energy  Authority (AEA)  that                                                                    
was removed  from the budget,  and would be  a conferencable                                                                    
item. He shared  that the House version of the  bill added a                                                                    
mining  professor  at  the University  of  Alaska  Southeast                                                                    
(UAS), but the funding was  contained in the numbers section                                                                    
of  the  committee  substitute, so  the  language  for  that                                                                    
request was removed.                                                                                                            
                                                                                                                                
Mr.   Armstrong  looked   at  page   58  of   the  committee                                                                    
substitute,  lines  26  through  31 and  page  59,  lines  1                                                                    
through  4.  He  explained  that  the  governor's  submitted                                                                    
budget  showed  that  $33.091 million  for  the  Power  Cost                                                                    
Equalization (PCE)  endowment gained interest each  year. He                                                                    
announced that  $7.26 million would supplement  the program,                                                                    
for a  total of $40.351  million. He explained that  a large                                                                    
deposit was made  to the endowment in FY 11,  so the general                                                                    
fund  subsidies were  getting lower  based on  a three  year                                                                    
average  calculation of  fund balance.  In FY  15, the  fund                                                                    
balance on the GF subsidy was  supposed to be removed as the                                                                    
$400 million  hits the three  rolling average.  The proposal                                                                    
was  a removal  of $7  million  of GF,  and utilized  $7.260                                                                    
million from the PCE.                                                                                                           
                                                                                                                                
Senator  Hoffman  requested a  copy  of  the impact  of  the                                                                    
change to  the PCE. Co-Chair Kelly  requested an explanation                                                                    
of the impact of the PCE change.                                                                                                
                                                                                                                                
10:15:52 AM                                                                                                                   
                                                                                                                                
DAVID TEAL,  DIRECTOR, LEGISLATIVE FINANCE  DIVISION, looked                                                                    
at  "Power Cost  Equalization Endowment  Fund -  History and                                                                    
Projections  (in Millions)"  (copy  on  file). He  explained                                                                    
that  the  long-term  showed  very  little  difference.  The                                                                    
amount  of the  PCE was  sufficient so  the payout  from the                                                                    
endowment would  drop to  below 6  percent once  the balance                                                                    
was  fully  phased  into  average  balance  computation.  He                                                                    
stated that  the balance  was expected to  begin to  grow in                                                                    
the endowment, which  would fully fund the  PCE. He remarked                                                                    
that  subsection (g),  page 58  contained backstop  language                                                                    
stating that  if the  $40 million  was insufficient  for the                                                                    
current year;  addition money  would come  from GF  to fully                                                                    
fund the PCE.                                                                                                                   
                                                                                                                                
Senator Olson  looked at page  58, subsection (g).  He noted                                                                    
the $40 million increment from  the PCE Fund was included on                                                                    
line 26, subsection (f).                                                                                                        
                                                                                                                                
Co-Chair Kelly remarked  that the impact of  the PCE payment                                                                    
would  not  change, and  the  impact  of the  endowment  was                                                                    
minimal. It would continue to  grow under scenarios outlined                                                                    
in the spreadsheets. Mr. Teal agreed.                                                                                           
                                                                                                                                
Senator  Hoffman  wondered  if  the  backstop  language  was                                                                    
currently  included. Mr.  Teal looked  at subsection  (g) on                                                                    
page 58:                                                                                                                        
                                                                                                                                
     (g) If the  amount appropriated in (f)  of this section                                                                    
     is  not  sufficient  to  pay  power  cost  equalization                                                                    
     program costs  without proration, the  amount necessary                                                                    
     to pay  power cost  equalization program  costs without                                                                    
     proration, estimated  to be zero, is  appropriated from                                                                    
     the  general  fund  to   the  Department  of  Commerce,                                                                    
     Community  and  Economic   Development,  Alaska  Energy                                                                    
     Authority, power cost  equalization allocation, for the                                                                    
     fiscal year ending June 30, 2014.                                                                                          
                                                                                                                                
Mr. Armstrong looked at page  60, lines 19 through 23, which                                                                    
was a reappropriation of a  multi-year appropriation made in                                                                    
FY 13  in Department of  Health and Social  Services (DHSS).                                                                    
The funds  in the  prior year  were $9  million, and  it was                                                                    
estimated  that $6  million  remained  to be  reappropriated                                                                    
into  the  Behavior  and  Medicaid  component  of  the  DHSS                                                                    
budget.                                                                                                                         
                                                                                                                                
Mr.  Armstrong highlighted  page  60, lines  10 through  18,                                                                    
which  was related  to  the Low  Income  Heating and  Energy                                                                    
Assistance  Program. The  section was  a backstop  provision                                                                    
that  LFD and  the subcommittees  worked on,  and it  stated                                                                    
that  if  there  were  insufficient  federal  funds  in  the                                                                    
current year, then  GF would fund the program.  He looked at                                                                    
page 62,  line 23, which was  a change to the  Department of                                                                    
Natural  Resources (DNR)  Division  of Oil  and Gas  request                                                                    
that fully  funds the project.  He looked at page  72, lines                                                                    
12 through  13, which  dealt with the  Trauma Care  Fund. He                                                                    
stated  that  the governor  had  requested  $2 million,  the                                                                    
House  denied that  request,  and  the committee  substitute                                                                    
added that request back into the bill.                                                                                          
                                                                                                                                
10:21:24 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:27:52 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
^SUBCOMMITTEE REPORTS TO FULL COMMITTEE                                                                                       
                                                                                                                                
Co-Chair  Meyer explained  the Department  of Transportation                                                                    
and Public  Facilities (DOT/PF) and Department  of Commerce,                                                                    
Community  and  Economic  Development  (DCCED)  subcommittee                                                                    
reports.  He explained  that there  were some  reductions in                                                                    
the DOT/PF  budget totaling  approximately $7.1  million. He                                                                    
stated that most  of the reductions were made  to the Alaska                                                                    
Marine  Highway System  budget, related  to vessel  fuel and                                                                    
vessel  operations. He  remarked  that  the commissioner  of                                                                    
DOT/PF  had shared  that  the reductions  would  not have  a                                                                    
major impact  on service. He  shared that there was  a fleet                                                                    
reduction of  $2.7 million  spread throughout  the Northern,                                                                    
Central, and Southeast regions  equally. The DCCED reduction                                                                    
was approximately  $3.9 million  related to grants  to named                                                                    
recipients in the Operating Budget,  which were typically in                                                                    
the Capital Budget. He shared  that there were reductions to                                                                    
the Alcohol  Beverage and Control (ABC)  Board. He explained                                                                    
that there were unexpected  costs related to recently moving                                                                    
the ABC Board from the  Department of Public Safety (DPS) to                                                                    
DCCED, so those costs were addressed in the DCCED budget.                                                                       
                                                                                                                                
10:30:17 AM                                                                                                                   
                                                                                                                                
Senator Olson invited his staff  to explain the DHSS and DPS                                                                    
budgets.                                                                                                                        
                                                                                                                                
DENISE LICCIOLI, STAFF, SENATOR  DONNIE OLSON, explained the                                                                    
DHSS  budget.  She  stated  that  the  budget  authorization                                                                    
consisted of  almost $2.7 billion including  $1.2 billion in                                                                    
UGF, $74.1  million DGF, $94.7  million in other  funds, and                                                                    
$1.2  billion  in federal  funds.  The  budget proposal  was                                                                    
approximately $1.2  million in  GF less than  the governor's                                                                    
proposed budget.  She shared that  the subcommittee  did not                                                                    
accept the  requested increase in Medicaid  for the woodwork                                                                    
effect for $7.385 million. She  stated that the subcommittee                                                                    
added  $1.1  million  for  the  Alaska  Medicare  Clinic;  a                                                                    
$450,000  one-time   item  for  the  the   Complex  Behavior                                                                    
Collaborative;  $565,000 of  GF  to  increase the  Emergency                                                                    
Medical Services  grants; and $6  million to  the Behavioral                                                                    
Health  Medicaid  Services  component.  She  explained  that                                                                    
there  was  intent added  to  the  budget that  allowed  the                                                                    
commissioner  of  DHSS  the  authority to  move  up  to  $50                                                                    
million  of funds  within the  budget between  appropriation                                                                    
lines. She  remarked that the  intent language  was unusual,                                                                    
but  necessary  to  allow  DHSS  to  react  to  the  federal                                                                    
sequester, and  prevent the need  for a  supplemental budget                                                                    
request.                                                                                                                        
                                                                                                                                
Ms.  Liccioli  explained DPS  budget.  She  stated that  the                                                                    
subcommittee  authorized a  total $208.79  million including                                                                    
$176 million of  UGF, $6.4 million in DGF,  $15.3 million in                                                                    
other funds, and $10.8 million  of federal funds. She stated                                                                    
that  the   proposal  was  $707,200  below   the  governor's                                                                    
request. She  stated that  the subcommittee  disapproved the                                                                    
request for  three new troopers  and $827,000 for a  new sex                                                                    
trafficking  unit. She  also  stated  that the  subcommittee                                                                    
added $120,000  of GF  to increase  the Victims  for Justice                                                                    
funding.  She furthered  that there  was  intent added  that                                                                    
asked DPS to work with  the grantees to determine what other                                                                    
needs  were unmet  for the  Village  Public Safety  Officers                                                                    
(VPSOs); and to use any  anticipated savings from vacancy to                                                                    
be put into the program for housing, equipment, etc.                                                                            
                                                                                                                                
Co-Chair  Kelly  surmised  that  the  rationale  behind  not                                                                    
funding the sex trafficking unit,  was because there were no                                                                    
reported  cases of  sex trafficking.  Senator Olson  replied                                                                    
that there  were no  sex trafficking  cases on  either side,                                                                    
which indicated no activity of recent sex trafficking.                                                                          
                                                                                                                                
10:35:35 AM                                                                                                                   
                                                                                                                                
SHEILA  PETERSON, STAFF,  SENATOR  MIKE DUNLEAVY,  explained                                                                    
the  Department of  Education and  Early Development  (DEED)                                                                    
budget proposal  summary. She stated  that the  proposal had                                                                    
$350  million  including  $66.5   million  in  UGF,  $24.319                                                                    
million  in  DGF,  $26.051  in  other  funds,  and  $233.798                                                                    
million in federal  funds. She noted that  the federal funds                                                                    
in the  DEED were three times  as large as the  GF for DEED.                                                                    
She stressed  that most of  the federal funds  were utilized                                                                    
as grants to the school  districts. She stated that the fund                                                                    
that the Fund the  Digitizing Education in Alaska Initiative                                                                    
had a  reduction of $738,000.  She remarked that  the amount                                                                    
gave DEED  flexibility to fund the  four different programs.                                                                    
She explained  that a new  program, "The Jobs  for America's                                                                    
Graduate" was  eliminated because it  was a new  program, so                                                                    
its startup  date could  occur at a  later date.  She stated                                                                    
that  the early  childhood  education  programs matched  the                                                                    
work  done in  the House;  because  it was  not clear  which                                                                    
early childhood program was giving  the best performance per                                                                    
dollar.                                                                                                                         
                                                                                                                                
Ms.  Peterson  explained  the  Department  of  Environmental                                                                    
Conservation  (DEC)  budget. She  stated  that  there was  a                                                                    
reduction  to  two  programs   that  totaled  $446,500,  for                                                                    
increased staff  time. She  remarked that  the money  in the                                                                    
base could  cover the remaining  half that was  removed. She                                                                    
stated that  there was  change in  the intent  language from                                                                    
the House, which dealt with  the Oil and Hazardous Substance                                                                    
Release  Prevention and  Response Fund.  She noted  that the                                                                    
DEC  proposal contained  $21.784 million  in UGF;  $6.895 in                                                                    
DGF;  $11.199  in other  funds;  $24.938  in federal  funds;                                                                    
totaling $84.817 million.                                                                                                       
                                                                                                                                
10:39:53 AM                                                                                                                   
                                                                                                                                
STEVE RICCI,  STAFF, SENATOR MIKE DUNLEAVY,  highlighted the                                                                    
Department of  Fish and  Game (DFG)  budget. He  stated that                                                                    
the  DFG subcommittee  recommended $79.971  million in  UGF;                                                                    
$8.586 in  DGF; $62.849 million  in other funds;  $63.337 in                                                                    
federal funds;  totaling $214.745 million. He  remarked that                                                                    
the proposal  reduced UGF spending  by 1.1 percent  from the                                                                    
governor's amended  budget. He stated that  the subcommittee                                                                    
approved a  $400,000 of GF  for the Southeast  Port Sampling                                                                    
Program in  the Commercial  Fisheries Division,  which would                                                                    
be used  to examine mixed  stock fisheries in the  area. The                                                                    
subcommittee  approved  $273,000  of   GF  for  mixed  stock                                                                    
sampling  in upper  Cook  Inlet.  The subcommittee  provided                                                                    
funding for  the Kodiak area  in the amount of  $100,000. He                                                                    
explained  that the  subcommittee  approved two  unallocated                                                                    
cuts  to  reduce  GF spending:  $579,000  for  a  three-year                                                                    
average of a lapse balance  that equaled 0.73 percent of the                                                                    
total  GF  request  for  the  FY  14  budget;  and  $315,000                                                                    
reduction  that equaled  5 percent  of  the agency's  travel                                                                    
budget. He  stated that  the subcommittee  approved $436,200                                                                    
of  GF to  leverage  approximately $1.8  million in  federal                                                                    
funds for the Wildlife Conservation Division.                                                                                   
                                                                                                                                
10:42:35 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:43:49 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:43:52 AM                                                                                                                   
                                                                                                                                
Senator  Bishop  explained  the  Department  of  Corrections                                                                    
(DOC)  budget  proposal.  He stated  that  the  subcommittee                                                                    
accepted  the House  changes,  which were  the  same as  the                                                                    
governor's  amended  budget.  The  budget  totaled  $332.191                                                                    
million. He noted the fund  source change of $2 million from                                                                    
UGF  to   federal  receipts  for  the   housing  of  federal                                                                    
prisoners.  He stated  that there  was a  $5.5 million  fund                                                                    
change   from  PFD   criminal  to   UGF  due   to  decreased                                                                    
garnishments. He  remarked that  DOC was concerned  that the                                                                    
prison population  rate was increasing,  and there  may need                                                                    
to  be   a  relevant  focus  on   increased  woman's  prison                                                                    
capacity.  He  noted that  he  was  tentatively planning  to                                                                    
travel to Bethel, to examine  the overcrowding in the Bethel                                                                    
Jail.                                                                                                                           
                                                                                                                                
Senator  Bishop explained  that  DMVA  budget. He  explained                                                                    
that  there  was a  $405,000  decrement  related to  a  fund                                                                    
source change.  He stressed  that the  budget was  below the                                                                    
governor's proposed  amended budget. He remarked  that there                                                                    
was  an addition  of $8  million  to fully  fund the  Alaska                                                                    
Aerospace Corporation  in support of  anticipated contracts.                                                                    
He  announced that  there was  intent  language that  stated                                                                    
that  Alaska Aerospace  Corporation would  not request  more                                                                    
than  $6 million  in FY  15,  $4 million  in FY  16, and  $2                                                                    
million in FY 17.                                                                                                               
                                                                                                                                
Senator  Bishop highlighted  the  DNR  budget. He  announced                                                                    
that  the   subcommittee's  proposal   was  less   than  the                                                                    
governor's amended  budget by $2.76  million for a  total of                                                                    
$159 million. He  stated that the proposal  moved funding of                                                                    
the  arbitration  of  oil  and gas  royalty  in  the  Alaska                                                                    
Gasline  Inducement  Act   (AGIA)  monitoring  and  advising                                                                    
sections to  the language portions  of the bill, due  to the                                                                    
historic   inability  to   accurately  predict   the  actual                                                                    
expenditures.  He stated  that  the subcommittee  maintained                                                                    
the ability  of DNR  to staff  the Guide  Concession Program                                                                    
while  declining any  new money  for  implementation of  the                                                                    
program  until  such  time  that  the  legislature  approved                                                                    
appropriate legislation.                                                                                                        
                                                                                                                                
Senator  Bishop  explained  the   Department  of  Labor  and                                                                    
Workforce Development  (DLWD) budget. He announced  that the                                                                    
subcommittee proposal was $550,000  less than the governor's                                                                    
amended  budget. He  stated that  the  subcommittee did  not                                                                    
accept the $200,000 for the  Alaska Vocational and Technical                                                                    
Education Center  (AVTEC) increment,  because AVTEC  had the                                                                    
ability to  raise tuitions. He stated  that the subcommittee                                                                    
maintained  the ability  of DLWD  to prepare  Alaska workers                                                                    
for what is anticipated to  be a significant increase in oil                                                                    
exploration development related activities.                                                                                     
                                                                                                                                
10:50:07 AM                                                                                                                   
                                                                                                                                
Co-Chair Kelly noted that the  CS restored $1 million in the                                                                    
University  of   Alaska  budget   for  maintenance,   and  a                                                                    
custodial  contract.  AN  increment   of  $130,000  for  the                                                                    
Fairbanks campus aviation program was also included.                                                                            
                                                                                                                                
Vice-Chair   Fairclough   explained    the   Department   of                                                                    
Administration   (DOA)   budget.   She   stated   that   the                                                                    
subcommittee had  changed the structure  of the  Alaska Land                                                                    
Mobile Radio  (ALMR) payments on behalf  the municipalities.                                                                    
Previously, the  ALMR payments  were directed  toward DCCED,                                                                    
and then  transferred to  DOA. She stated  that there  was a                                                                    
reduction  of  the  authorization   to  the  Violent  Crimes                                                                    
Compensation Board  to more  closely align  with anticipated                                                                    
funds  available in  the Violent  Crimes Compensation  Fund.                                                                    
She  announced  that  the  total   allocation  for  DOA  was                                                                    
$336.249 million.                                                                                                               
                                                                                                                                
Vice-Chair  Fairclough explained  the Department  of Revenue                                                                    
(DOR) budget.  She pointed that the  subcommittee funded two                                                                    
positions that  were transferred  from DCCED to  DOR related                                                                    
to the  Film Office move.  She stated that  the subcommittee                                                                    
allocated $350.68  million. She added that  the subcommittee                                                                    
accepted  the governor's  request for  an additional  master                                                                    
auditor for the Division of Oil and Gas.                                                                                        
                                                                                                                                
Vice-Chair Fairclough  explained the  UA budget.  She stated                                                                    
that the  subcommittee reduced the receipt  authority by $36                                                                    
million, which  was a recommendation  from LFD.  She pointed                                                                    
out  that the  university  still had  sufficient funds,  and                                                                    
receipt authority.  The subcommittee funded  a comprehensive                                                                    
student  advising   for  $400,000;  the   Mining  Regulatory                                                                    
Training  Certificate Program  for $200,000;  and the  Small                                                                    
Business Development Center for  $356,000. She stressed that                                                                    
the budget was  made in order to ensure  that the University                                                                    
of Alaska could fund their basic fixed costs.                                                                                   
                                                                                                                                
Co-Chair Kelly  explained the  Governor's Office  budget. He                                                                    
stated  the  UGF was  $28.881  million;  federal funds  were                                                                    
$198,000;  DFG  was  $4,900;   other  funds  were  $521,700;                                                                    
totaling $29.606 million.                                                                                                       
                                                                                                                                
10:54:47 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly  explained  the  Legislature's  budget.  The                                                                    
subcommittee approved $73.527 million  in UGF; $71.4 million                                                                    
in DGF;  $403,000 in  other funds. He  pointed out  that the                                                                    
subcommittee  reduced  expenses  in  LFD  by  $250,000;  and                                                                    
$350,000 in other committee expenses.                                                                                           
                                                                                                                                
Co-Chair Kelly explained the Court  System budget. He stated                                                                    
that  the subcommittee  approved  $110.196  million in  UGF;                                                                    
$518,000  in  DGF; $1.801  million  in  other funds;  $1.675                                                                    
million  in federal  funds;  totaling  $114.191 million.  He                                                                    
pointed out  that the subcommittee used  $689,000 to replace                                                                    
federal pass through funding for  the therapeutic courts. He                                                                    
announced that  the subcommittee allocated $114,300  to fund                                                                    
a security analyst position.  The subcommittee also approved                                                                    
an allocation  of $691,000 for  increased bandwidth  to meet                                                                    
the needs in rural Alaska.                                                                                                      
                                                                                                                                
Co-Chair  Kelly  highlighted  the Department  of  Law  (LAW)                                                                    
budget.  He stated  that the  subcommittee approved  $63.352                                                                    
million in  UGF; $2.698 million  in DGF; $28.432  million in                                                                    
other  funds;  $1.966  million in  federal  funds;  totaling                                                                    
$96.450 million.  He stated that the  subcommittee allocated                                                                    
three  quarters  of  the  requested   funding  for  the  new                                                                    
attorney  positions in  Fairbanks,  Bethel,  and Juneau.  He                                                                    
remarked that the subcommittee added  three new positions in                                                                    
the  Natural Resources  Section  of the  Civil Division  for                                                                    
statehood defense.                                                                                                              
                                                                                                                                
KAREN REHFELD,  DIRECTOR, OFFICE  OF MANAGEMENT  AND BUDGET,                                                                    
OFFICE OF THE  GOVERNOR, thanked the committee  for the time                                                                    
that was spent drafting the budget.                                                                                             
                                                                                                                                
Senator Hoffman  queried the progress of  the contracts. Ms.                                                                    
Rehfeld  responded that  there  was  success in  negotiating                                                                    
agreements   with   the  confidential   employees,   general                                                                    
government,  and supervisory  unit. She  announced that  the                                                                    
finance  committees  had  been  given  the  bargaining  unit                                                                    
agreements and the costs as of March 19.                                                                                        
                                                                                                                                
Co-Chair Kelly  explained that  the non-covered  units match                                                                    
needed  to  be included  in  a  separate bill.  Ms.  Rehfeld                                                                    
agreed.                                                                                                                         
                                                                                                                                
Mr. Armstrong discussed the following days' agendas.                                                                            
                                                                                                                                
CSHB 65(FIN)  was HEARD  and HELD  in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CSHB 66(FIN)  was HEARD  and HELD  in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                

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