Legislature(1997 - 1998)

05/09/1997 03:10 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                      HOUSE FINANCE COMMITTEE                                  
                            May 9, 1997                                        
                             3:10 P.M.                                         
                                                                               
 TAPE HFC 97-133, Side 1, #000 - end.                                          
 TAPE HFC 97-133, Side 2, #000 - end.                                          
 TAPE HFC 97-134, Side 1, #000 - end.                                          
 TAPE HFC 97-134, Side 2, #000 - end.                                          
                                                                               
 CALL TO ORDER                                                                 
                                                                               
 Co-Chair Hanley called the House Finance Committee meeting to order           
 at 3:10 p.m.                                                                  
                                                                               
 PRESENT                                                                       
                                                                               
 Co-Chair Therriault           Representative Kohring                          
 Representative Davies         Representative Martin                           
 Representative Davis          Representative Moses                            
 Representative Foster         Representative Mulder                           
 Representative Grussendorf                                                    
 Representative Kelly                                                          
                                                                               
 Co-Chair Hanley was absent from the meeting.                                  
                                                                               
 ALSO PRESENT                                                                  
                                                                               
 Representative Scott Ogan; Mark Boyer, Commissioner, Department of            
 Administration; Dugan Petty, Director, Division of General                    
 Services, Department of Administration; Sharon Barton, Director,              
 Division of Administrative Services, Department of Administration;            
 Annalee McConnell, Director, Office of Management and Budget,                 
 Office of the Governor; John Bitney, Alaska Housing Finance                   
 Corporation; Mitchell Gravo, Lobbyist, Frontier Building; Bob                 
 Bilden, Legislative Audit Division; Keith Gerken, Architect,                  
 Division of General Services, Department of Administration; Nancy             
 Slagle, Director, Division of Administrative Services, Department             
 of Transportation and Public Facilities; Diane Kaplan, Alaska                 
 Native Heritage Center; Guy Bell, Director, Division of                       
 Administrative Services, Department of Commerce and Economic                  
 Development.                                                                  
                                                                               
 SUMMARY                                                                       
                                                                               
 SB 107    "An Act making and amending capital and other                       
           appropriations and to capitalize funds; and providing for           
           an effective date."                                                 
                                                                               
           SB 107 was HELD in Committee for further consideration.             
                                                                               
 SB 178    "An Act giving notice of and approving a lease-purchase             
           agreement by the Department of Administration for an                
           office building in Anchorage; relating to the financing             
           of the lease-purchase agreement; and providing for an               
           effective date."                                                    
                                                                               
           CSSB 178 (FIN) am was reported out of Committee with a              
           "do pass" recommendation and with three fiscal impact               
           notes, one by the Department of Revenue and two by the              
           Department of Administration, all dated 5/2/97.                     
                                                                               
 SENATE BILL NO. 178                                                           
                                                                               
      "An Act giving notice of and approving a lease-purchase                  
      agreement by the Department of Administration for an office              
      building in Anchorage; relating to the financing of the                  
      lease-purchase agreement; and providing for an effective                 
      date."                                                                   
                                                                               
 DUGAN PETTY, DIRECTOR, DIRECTOR, DIVISION OF ADMINISTRATIVE                   
 SERVICES, DEPARTMENT OF ADMINISTRATION reviewed changes to CSSB 178           
 (FIN)am.  He noted that CSSB 178 (FIN)am:                                     
                                                                               
      *    Does not have certificates of participation involved in             
           the financing of the Bank of America Building;                      
                                                                               
      *    Requires the Alaska Housing Finance Corporation (AHFC) to           
           purchase the building;                                              
                                                                               
      *    Requires that the building be leased to the state of                
           Alaska for offices;                                                 
                                                                               
      *    Establishes a maximum purchase price of $35,700,700                 
           million dollars, which includes costs associated with               
           lease buy-outs;                                                     
                                                                               
      *    Incorporates a municipal property tax amendment; and                
                                                                               
      *    Includes intent language, requiring sufficient public               
           parking be available.                                               
                                                                               
 Mr. Petty compared the Bank of America Center purchase and the                
 lease proposal from the Frontier Building Limited Partnership.  The           
 lease proposal was presented by TRF Pacific for the  Frontier                 
 Building Limited Partnership.  He noted that the proposal by TRF              
 Pacific would provide lease space at $1.92 a square foot.  He                 
 observed that leasing would not be accompanied by a net present               
 value savings.                                                                
                                                                               
 MARK BOYER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION stated that            
 the Governor and Administration support the acquisition of the Bank           
 of America building.  He noted that as long as the purchase occurs            
 within the dividend agreement that there will be no impact to                 
 AHFC's bond rating.                                                           
                                                                               
 Representative Kohring expressed concern that the legislative use             
 of AHFC funds may be beyond the dividend limit.                               
                                                                               
 Commissioner Boyer stressed that broader discussion would be                  
 welcomed regarding the legislation's impact on the AHFC dividend              
 agreement.                                                                    
                                                                               
 BOB BILDEN, DIVISION OF LEGISLATIVE AUDIT stated that the                     
 acquisition of the Bank of America building is in the best interest           
 of the state of Alaska.  He maintained that assumptions use by the            
 Department of Administration are valid and relevant.  He observed             
 that the assumptions are based on the worst case scenario.                    
                                                                               
 Co-Chair Therriault referred to a letter from the Division of                 
 Legislative Audit, dated 5/8/97 (copy on file).                               
                                                                               
 Mr. Bilden stated that it appears that the appropriation from AHFC            
 would be within the dividend limits.                                          
                                                                               
 Co-Chair Therriault pointed out that according to the letter from             
 the Legislative Auditor, that the "amendment to a cash acquisition            
 only further enhances the deal."                                              
                                                                               
 Representative Kohring expressed concern with the legislation's               
 impact on AHFC's bond rating.                                                 
                                                                               
 Representative Grussendorf referred to a memorandum from the Office           
 of Management and Budget, dated 5/9/97 (copy on file).  He observed           
 that the Administration estimates that proposed expenditures from             
 AHFC dividends are $5.7 million dollars over the dividend                     
 agreement.  He added that the Administration's letter indicated               
 that they do not support a plan for AHFC to purchase the building             
 and rent it to the state for $1 dollar.  He noted that the                    
 Administration's preference is for the state to purchase the                  
 building out-right.                                                           
                                                                               
 Commissioner Boyer stated that the additional requirement for the             
 purchase of the Bank of America building would exceed the dividend            
 amount.  He concluded that the legislation could adversely affect             
 AHFC's bond rating.  He questioned if the legislative intent is to            
 place a smaller amount of AHFC receipts into the general fund then            
 is expressed in the operating and capital budgets.  He noted that             
 the Administration has made commitments to rating agencies and the            
 world investment community to not take more than $103 million                 
 dollars in FY 98.                                                             
                                                                               
 MITCH GRAVO, LOBBYIST, FRONTIER BUILDING asserted that the                    
 legislation would blow a $37.5 million dollar hole into AHFC's bond           
 and credit rating or that the state would have to transfer general            
 fund dollars into the capital or operating budgets.  He maintained            
 that the legislation would disrupt the Anchorage rental market.  He           
 asserted that Anchorage property tax payers will have to pay $500             
 thousand dollars more as a result of the purchase.                            
                                                                               
 Mr. Gravo provided the Committee with a firm, noncontingent offer             
 for a long term lease (copy on file).  He maintained that the                 
 proposal would save the state $514 thousand dollars in lease                  
 payments in the next year.  The offer is open until June 15, 1997.            
                                                                               
 Co-Chair Therriault summarized that, according to the Legislative             
 Auditor, the question at hand is do we stop leasing now and buy a             
 building or do we continue to lease for another 25 years and then             
 buy a building.  He added that the Auditor's objections to the                
 proposal from the Frontier building would still be applicable.                
                                                                               
 ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,                 
 OFFICE OF THE GOVERNOR noted that the AHFC dividend available for             
 expenditure is $133.2 million dollars.  She noted that draft                  
 appropriations total $77.6 million dollars in the front section of            
 the operating bill and $61.2 million dollars in various capital and           
 operating budget items.  She spoke in support of the purchase of              
 the Bank of America building.  She cautioned that AHFC dividend               
 expenditures not exceed $133.2 million dollars.  She observed that            
 there are a number of projects that the legislature proposed to               
 fund with AHFC corporate receipts that the Administration has                 
 proposed be funded with Alaska Industrial Development and Export              
 Authority (AIDEA) dividends.  She stated that an additional $25               
 million dollars will be available to the general fund from the                
 settlement of a pipeline tariff case.  She maintained that the draw           
 on the AHFC dividend can be reduced.  She summarized that there               
 would have to be an adjustment somewhere.  She added that oil                 
 prices are higher than anticipated.  She concluded that the                   
 purchase of the Bank of America building can be accomplished.                 
                                                                               
 Representative Martin observed that the purchase would save $3 - $4           
 million general fund dollars annually.                                        
                                                                               
 Ms. McConnell spoke in support of the purchase but reiterated                 
 concerns that AHFC dividends remain within the $133 million dollar            
 limit.                                                                        
                                                                               
 Representative Grussendorf asked for a comparison between an out-             
 right purchase and a lease purchase.  McConnell stated that there             
 would be some advantage to an out-right purchase.                             
                                                                               
 KEITH GERKEN, ARCHITECT, DIVISION OF GENERAL SERVICES, DEPARTMENT             
 OF ADMINISTRATION pointed out that HB 236 was reviewed as a lease             
 purchase.  When compared to the cost of continued leasing over the            
 next 50 years, the cash purchase would save $219 million dollars              
 and a lease purchase would save $154 million dollars.  A 40 year              
 net present value in savings with a lease-purchase would be $36.6             
 million dollars and a cash purchase would be $71.5 million dollars.           
 With the assumption of higher rental rates the net present value of           
 40 years with financing is $54 million dollars and $89 million                
 dollars with cash.                                                            
                                                                               
 Representative Kohring questioned if a bond could be floated                  
 through AHFC for the purchase.                                                
                                                                               
 JOHN BITNEY, ALASKA HOUSING FINANCE CORPORATION summarized that the           
 legislative intent directs AHFC to institute a cash purchase.  He             
 stated that there is no allowance in the legislation to cover the             
 debt service cost.                                                            
                                                                               
 (Tape Change, HFC 97-133, Side 2)                                             
                                                                               
 Mr. Bitney assured the Committee that AHFC would take any action              
 needed to protect the Corporation's credit rating.                            
                                                                               
 Mr. Gerken noted that Mr. Fauske indicated that there will be                 
 sufficient time for negotiation.                                              
                                                                               
 Representative Davies asked if it would be possible for AHFC to               
 purchase the building and transfer ownership to the state of                  
 Alaska.                                                                       
                                                                               
 Mr. Bitney noted that ownership of the building would make a                  
 difference in the financing structure.  If the state retains                  
 ownership, a debt financing arrangement could be issued.                      
                                                                               
 Representative Martin observed that AHFC has the flexibility to               
 restructure the purchase at a later date.                                     
                                                                               
 Representative Martin MOVED to report CSSB 178 (FIN)am out of                 
 Committee with individual recommendations and the accompanying                
 fiscal notes.  Representative Foster OBJECTED for purposes of                 
 discussion.  Representative Foster observed that there is limited             
 parking.  He expressed reservations for the purchase.                         
                                                                               
 Representative Davies responded that the state will save money from           
 the purchase.  Representative Martin pointed out that there will be           
 a $3 - $4 million dollar annual lease cost savings.                           
                                                                               
 Co-Chair Therriault stressed that the Division of Legislative Audit           
 has reviewed the calculations used by the Department of                       
 Administration.                                                               
                                                                               
 Representative Kohring suggested that the legislature be moved to             
 the building in order to justify the purchase.  He stressed that              
 this could be the initiating point, in which the capitol could be             
 moved.  He expressed concern that AHFC's bond rating could be                 
 jeopardized.                                                                  
                                                                               
 Representative Davies pointed out that there has been no suggestion           
 that the purchase was motivated by an intent to move the                      
 legislature.  He stressed that the state is purchasing a large                
 block of space for public employees that are now in spaces that are           
 quite expensive.  He noted that between $1 and $5 million dollars             
 will be saved annually by the purchase.                                       
                                                                               
 A roll call vote was taken on the MOTION to MOVE CSSB 178 (FIN)am             
 from Committee.                                                               
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses, Davis, Kelly, Martin, Mulder,           
           Therriault,  Hanley                                                 
 OPPOSED:  Foster, Kohring                                                     
                                                                               
 The MOTION PASSED (9-2).                                                      
                                                                               
 CSSB 178 (FIN) am was reported out of Committee with a "do pass"              
 recommendation and with three fiscal impact notes, one by the                 
 Department of Revenue and two by the Department of Administration,            
 all dated 5/2/97.                                                             
                                                                               
 Co-Chair Therriault stated that he supported the legislation based            
 on the estimated savings to the state.                                        
                                                                               
 SENATE BILL NO. 107                                                           
                                                                               
      "An Act making and amending capital and other appropriations             
      and to capitalize funds; and providing for an effective date."           
                                                                               
 Co-Chair Hanley provided members with Amendment 1 (copy on file).             
 He explained that the amendment represents changes to the Municipal           
 Capital Matching Grants program.  He emphasized that the amendments           
 have been requested by the communities receiving the projects.  He            
 noted that his staff reviewed the individual requests.                        
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 1.  There being NO                   
 OBJECTION, it was so ordered.                                                 
                                                                               
 Representative Mulder MOVED to adopt Amendment 2 (copy on file).              
 Co-Chair Hanley noted that Amendment 2 is a reappropriation of                
 discretionary money to District 20.                                           
                                                                               
 Representative Martin stated that the appropriation for the Chester           
 Creek project was in excess of the amount needed.  He spoke in                
 support of the amendment.                                                     
                                                                               
 Representative Davies expressed concern with the appropriation.               
 Representative Mulder noted that the Municipality of Anchorage does           
 not object to the reappropriation.  There being NO OBJECTION,                 
 Amendment 2 was so ordered.                                                   
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 3 (copy on file).  He                
 explained that the amendment would add "and pedestrian plaza" to a            
 previous appropriation.  There being NO OBJECTION, it was so                  
 ordered.                                                                      
                                                                               
 Representative Kohring MOVED to adopt Amendment 4 (copy on file).             
 He explained that the amendment would retain the interest on $9               
 million dollars appropriated for development of coal deposits in              
 the Matanuska-Susitna Valley.  Representative Grussendorf spoke in            
 support of the amendment.  There being NO OBJECTION, it was so                
 ordered.                                                                      
                                                                               
 Representative Foster MOVED to adopt Amendment 5 (copy on file).              
 Co-Chair Hanley explained that the amendment is a technical                   
 language change for a municipal matching grant.  There being NO               
 OBJECTION, it was so ordered.                                                 
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 6 (copy on file).  He                
 explained that the amendment would delete section 46, added by the            
 Senate.  Section 46 would repeal previous appropriations.  He                 
 explained that the language would capture projects that have not              
 been completed.  He pointed out the Department of Transportation              
 and Public Facilities has a repealer for a number of capital                  
 projects.  There being NO OBJECTION, it was so ordered.                       
                                                                               
 Representative Martin MOVED to adopt Amendment 7 (copy on file).              
 He explained that the amendment would decrease the authorization              
 for the Anchorage Airport project.  He stated that the                        
 authorization is not necessary due to a lapse in FY 97 funding.               
 In response to a question by Representative Davies, Co-Chair Hanley           
 explained that the amendment pertains to the development of the C             
 concourse at the Anchorage Airport.  He observed that debate is               
 occurring in regards to the connection of adjacent offices.                   
                                                                               
 Representative Mulder observed that the original C concourse                  
 relocation project was approved by the airline carriers in 1996.              
 Subsequently, The Airline Technical Subcommittee recommended that             
 the project not go forward by a vote of 15 of 26.  It takes 18 out            
 of 26 "no" votes for a project to be dismissed.                               
                                                                               
 Representative Davies expressed concern that the decision should be           
 made by the operators.                                                        
                                                                               
 A roll call vote was taken on the MOTION to adopt Amendment 7.                
                                                                               
 IN FAVOR: Davis, Foster, Grussendorf, Kelly, Kohring, Martin,                 
           Mulder, Therriault,  Hanley                                         
 OPPOSED:  Davies                                                              
                                                                               
 Representative Moses was absent from the vote.                                
                                                                               
 The MOTION PASSED (9-1).                                                      
                                                                               
 Representative Foster MOVED to adopt Amendment 8 (copy on file).              
 He explained that the amendment is a reappropriation of funds into            
 the same district.  There being NO OBJECTION, it was so ordered.              
                                                                               
 Representative Martin MOVED to adopt Amendment 9 (copy on file).              
 Representative Mulder OBJECTED.  Amendment 9 would insert a RFP               
 grant of $600 thousand dollars, to be funded by AHFC stripper well            
 receipts for home energy conservation and weatherization programs             
 for energy efficient home building education and technical                    
 assistance.  The amendment would also delete lines 28 - 37 on page            
 45.  Lines 28 0 37 on page 45 contain a $300 thousand dollar grant            
 to the Alaska Craftsman Home Program and a $300 thousand dollar               
 grant to Energy Rate Homes of Alaska.                                         
                                                                               
 Representative Mulder MOVED to AMEND Amendment 9 by deleting the              
 deletion of lines 28 - 37 on page 45.  Representative Martin                  
 OBJECTED.  He stressed that Amendment 9 follows the original intent           
 for use of stripper well funding, without the amendment to the                
 amendment.  He maintained that the amendment to the amendment would           
 take funding from AHFC.  He emphasized that Amendment 9 would allow           
 flexibility for AHFC to maximize dollars through competition.                 
                                                                               
 Representative Mulder pointed out that the Alaska Craftsman Home              
 Program and Energy Rated Homes of Alaska have been in business for            
 many years.                                                                   
                                                                               
 (Tape Change, HFC 97-134, Side 1)                                             
                                                                               
 Representative Martin spoke against the amendment to Amendment 9.             
 He asserted that the Alaska Craftsman Home Program and Energy Rated           
 Homes of Alaska are in trouble for improper use of past grants.               
 Co-Chair Hanley summarized that these groups received grants from             
 a competitive bid released by the Governor.                                   
                                                                               
 Mr. Bitney explained that there were two designated grants approved           
 by the Legislature in FY 97.  One grant was to the Alaska Craftsman           
 Home Program.  The other grant was awarded to Energy Rated Homes of           
 Alaska.  Subsequent to the legislative session, the grants were               
 released through a competitive solicitation.  The Alaska Craftsman            
 Home Program was awarded $300 thousand dollars through competitive            
 bid.  The grant to Energy Rated Homes of Alaska was split into two            
 pieces; $155 was awarded to Energy Rated Homes of Alaska and $145             
 thousand dollars was awarded to Building Science Network.  To date,           
 no funds have been awarded to Energy Rated Homes of Alaska as part            
 of the grant.  The Alaska Craftsman Home Program has signed a grant           
 agreement and was advanced $45 thousand dollars.  He explained that           
 subsequent billings are supplied to charge against the grant.                 
                                                                               
 Co-Chair Therriault maintained that the passage of SB 55 would                
 allow the Governor flexibility to handle the grant.  He asserted              
 that there will be funds for the Governor to go through a                     
 competitive RFP if he feels that either of the designated grantees            
 has not followed through with their FY 97 agreement.                          
                                                                               
 Mr. Bitney clarified that the Building Science Network is                     
 proceeding with their grant and is expected to expend the full                
 amount of the grant.  In response to a question by Co-Chair Hanley,           
 he explained that AHFC has not received a work plan from the Alaska           
 Craftsman Home Program.  He noted that there were no classes on-              
 going through the winter.                                                     
                                                                               
 Representative Mulder stressed that there were subsequent actions             
 that contributed to the delay of the bid.  He asserted that the               
 work program would have been approved if there had not been delays.           
                                                                               
 Mr. Bitney noted that the grants were awarded on September 11,                
 1996.  The work plan was signed before the end of the calendar                
 year.                                                                         
                                                                               
 Representative Mulder stated that the Alaska Home Craftsman Program           
 received authorization for a workshop schedule on May 5, 1997.                
                                                                               
 Mr. Bitney noted that AS 18.56.850 states that the Corporation is             
 required to have an alaska craftsman home program and an energy               
 rated homes of Alaska program.  He noted that two non-profit                  
 organizations have incorporated these names.  He questioned if                
 these two non-profits are the program once they have received a               
 designated grant.  He noted that there is an administrative                   
 question of who is responsible and what the grantees should be                
 doing.                                                                        
                                                                               
 Representative Davies noted that classes were offered at $350                 
 dollars per class.  He stated that there are funds remaining from             
 the combination of the grants and the collection of fees from prior           
 years.  He asked how much of this money is available to the Alaska            
 Craftsman Home Program.                                                       
                                                                               
 Mr. Bitney stated that the class costs move than $400 hundred                 
 dollars per person.  He stated that the Alaska Craftsman Home                 
 Program has accumulated a fairly substantial cash reserve through             
 these activities.                                                             
                                                                               
 Representative Davies expressed concern that these surpluses have             
 not been reappropriated.  He stated that these funds could be used            
 to offer more classes.                                                        
                                                                               
 A roll call vote was taken on the MOTION to adopt the amendment to            
 Amendment 9.                                                                  
                                                                               
 IN FAVOR: Davis, Davies, Foster, Kelly, Kohring, Martin, Mulder,              
           Therriault,  Hanley                                                 
 OPPOSED:  Martin, Grussendorf                                                 
                                                                               
 Representative Moses was absent from the vote.                                
                                                                               
 The MOTION PASSED (8-2).                                                      
                                                                               
 There being NO OBJECTION, Amendment 9 was adopted.                            
                                                                               
 Representative Foster MOVED to adopt Amendment 10 (copy on file).             
 He explained that the amendment would reappropriate money within              
 the same community.  There being NO OBJECTION, it was so ordered.             
                                                                               
 Co-Chair Therriault MOVED to adopt Amendment 11 (copy on file).  He           
 explained that the amendment would consolidate two Mental Health              
 Trust Authority projects for renovation and construction in                   
 Fairbanks and Anchorage in order to increase flexibility.  There              
 being NO OBJECTION, it was so ordered.                                        
                                                                               
 Co-Chair Hanley provided members with Amendment 12 (copy on file).            
 He noted that the amendment was divided into A, B, C, & D.                    
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 12A.  He explained that              
 the amendment would make some technical adjustments and extend some           
 lapse dates in the Department of Community and Regional Affairs.              
 There being NO OBJECTION, it was so ordered.                                  
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 12B.  He noted that the              
 amendment would extend lapse dates on the Education Fund for the              
 Department of Military and Veterans Affairs.  There being NO                  
 OBJECTION, it was so ordered.                                                 
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 12C.  He explained that              
 the amendment would extend approximately $18 thousand dollars for             
 the Fetal Alcohol Syndrome/Fetal Alcohol Effect and Child Abuse               
 Task Force administrative and travel costs.  There being NO                   
 OBJECTION, it was so ordered.                                                 
                                                                               
 Co-Chair Hanley did not move to adopt Amendment 12D.  He noted that           
 the amendment would appropriate additional funding for the Public             
 Defender Agency.                                                              
                                                                               
 ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,                 
 OFFICE OF THE GOVERNOR spoke in support of Amendment 12D.  She                
 emphasized the agency's limited ability to control expenditures due           
 to increased caseloads.  She observed that Amendment 12D would                
 allow an anticipated lapse within Tax Appeals to would allow and              
 increase without additional funding in the supplemental.                      
                                                                               
 SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,                 
 DEPARTMENT OF ADMINISTRATION clarified that the Public Defender               
 Agency is short $89 thousand dollars in FY 97.                                
                                                                               
 Representative Davies MOVED to adopt Amendment 12D.  A roll call              
 vote was taken on the MOTION.                                                 
                                                                               
 IN FAVOR: Davies, Davis, Grussendorf, Moses                                   
 OPPOSED:  Foster, Kelly, Kohring, Martin, Mulder, Therriault,                 
           Hanley                                                              
                                                                               
 The MOTION FAILED (4-7).                                                      
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 13 (copy on file).  He               
 explained that the amendment would correctly identify the                     
 Unincorporated Matching Grant Program in the Department of                    
 Community and Regional Affairs.  The legislation identifies this              
 program under the Department of Administration.  There being NO               
 OBJECTION, it was so ordered.                                                 
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 14 (copy on file).  He               
 explained that the amendment changes language to comply with the              
 Alaska Drinking Water Fund.  There being NO OBJECTION, it was so              
 ordered.                                                                      
                                                                               
 Co-Chair Hanley MOVED to adopt Amendment 15 (copy on file).  He               
 explained that the amendment is a net zero cost.  He stated that              
 the amendment would allow the Department of Transportation and                
 Public Facilities flexibility in the prior year match.  There being           
 NO OBJECTION, it was so ordered.                                              
                                                                               
 NANCY SLAGLE, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF                
 TRANSPORTATION AND PUBLIC FACILITIES explained that the Senate                
 identifies projects by programs.  Within each of these areas there            
 is money for ineligible costs that may occur during a construction            
 project.  She clarified that the distribution of funds was                    
 unequitable.  She stated that the intent is that all projects have            
 a comparable amount for ineligible costs.                                     
                                                                               
 There was no Amendment 16.                                                    
                                                                               
 Representative Grussendorf MOVED to adopt Amendment 17 (copy on               
 file).  Co-Chair Hanley OBJECTED.  Amendment 17 would reappropriate           
 $440 thousand AHFC dollars to the Department of Public Safety for             
 deferred building maintenance at the Department of Public Safety              
 Training Academy.  Representative Grussendorf emphasized that the             
 number of women in law enforcement has increased.  He noted that,             
 due to the lack of accommodations, only 5 - 6 women can attend each           
 class.                                                                        
                                                                               
 Co-Chair Hanley stressed that the AHFC dividend has reached its               
 spending level.                                                               
                                                                               
 A roll call vote was taken on the MOTION to adopt Amendment 17.               
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses                                          
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Mulder,                      
           Therriault,  Hanley                                                 
                                                                               
 The MOTION PASSED (3-8).                                                      
                                                                               
 Representative Grussendorf MOVED to adopt Amendment 18 (copy on               
 file).  Amendment 18 would appropriate $250 thousand dollars from             
 the Commercial Fishing Revolving Loan Fund to the Department of               
 Community and Regional Affairs for the AYK Salmon Marketing                   
 Program.  He explained that the amendment would create economic               
 opportunities and increase employment in areas experiencing a glut            
 of chum salmon.                                                               
                                                                               
 Co-Chair Hanley questioned how the appropriation would affect the             
 Commercial Fishing Revolving Loan Fund.                                       
                                                                               
 GUY BELL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE           
 AND ECONOMIC DEVELOPMENT clarified that a surplus of $377 thousand            
 dollars is projected for the Commercial Fishing Revolving Loan                
 Fund.  If the money is not expended it would be available for                 
 appropriation in FY 99.                                                       
                                                                               
 A roll call vote was taken on the MOTION.                                     
                                                                               
                                                                               
 IN FAVOR: Davies, Grussendorf, Therriault                                     
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Moses, Mulder,               
           Hanley                                                              
                                                                               
 The MOTION PASSED (3-8).                                                      
                                                                               
 Representative Davies MOVED to adopt Amendment 19 (copy on file).             
 He explained that the amendment would appropriate $100 thousand               
 dollars to the Department of Administration for technology                    
 improvement grants.  He spoke in support of the amendment.                    
                                                                               
 A roll call vote was taken on the MOTION.                                     
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses                                          
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Mulder,                      
           Therriault,  Hanley                                                 
                                                                               
 The MOTION FAILED (3-8).                                                      
                                                                               
 Representative Grussendorf MOVED to adopt Amendment 20 (copy on               
 file).  Representative Mulder OBJECTED.  Amendment 20 would                   
 appropriate $350 thousand dollars to the Department of Commerce and           
 Economic Development for economic development matching grants.                
 Representative Grussendorf explained that grants would be used for            
 economic development and leveraging private and other funds for               
 economic activity.  Grants are limited to $50 thousand dollars per            
 individual business.  He clarified that Alaska Industrial                     
 Development and Export Authority (AIDEA) funds would be leveraged.            
                                                                               
 Co-Chair Hanley noted that the AIDEA dividend has been used in the            
 operating budget.                                                             
                                                                               
 A roll call vote was taken on the MOTION to adopt Amendment 20.               
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses                                          
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Mulder,                      
           Therriault,  Hanley                                                 
                                                                               
 The MOTION PASSED (3-8).                                                      
                                                                               
 Representative Davies MOVED to adopt Amendment 21 (copy on file).             
 Amendment 21 would add $966 thousand dollars to the Department of             
 Community and Regional Affairs for Rural Development Grants.  The             
 funding source would be AIDEA dividends.  He emphasized that the              
 program is highly competitive.  There is a $50 thousand dollar                
 grant limit in FY 97.  The Department of Community and Regional               
 Affairs funded 29 grants at $800 thousand dollars.  These grants              
 leveraged $10 million additional dollars.                                     
                                                                               
 A roll call vote was taken on the MOTION to adopt Amendment 21.               
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses                                          
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Mulder,                      
           Therriault,  Hanley                                                 
                                                                               
 The MOTION PASSED (3-8).                                                      
                                                                               
 Representative Davies MOVED to adopt Amendment 22 (copy on file).             
 He explained that the amendment would allow for state participation           
 in the Alaska Native Commission Report Implementation Planning.               
                                                                               
 (Tape Change, HFC 97-134, Side 2)                                             
                                                                               
 Representative Davies spoke in support of Amendment 22.  A roll               
 call vote was taken on the MOTION to adopt Amendment 22.                      
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses                                          
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Mulder,                      
           Therriault,  Hanley                                                 
                                                                               
 The MOTION PASSED (3-8).                                                      
                                                                               
 Representative Davies MOVED to adopt Amendment 23 (copy on file).             
 Co-Chair Hanley OBJECTED.  Representative Davies explained that the           
 amendment would appropriate $800 thousand dollars for a Native                
 Heritage Center in Anchorage.  He noted support from the                      
 municipality of Anchorage.  He emphasized that 11 of 13 Native                
 corporation have contributed $1.7 million dollars.  He spoke in               
 support of the amendment.  The funding source would be through                
 AIDEA dividends.                                                              
                                                                               
 Co-Chair Hanley acknowledged that the amendment would fund a good             
 project.  He emphasized the need to close the fiscal gap.                     
                                                                               
 Representative Grussendorf complained that projects that would aid            
 economic development and opportunity are not being funded.  He                
 stressed that the Native Heritage Center would provide economic               
 potential.                                                                    
                                                                               
 DIANE KAPLAN, ALASKA NATIVE HERITAGE CENTER emphasized the level              
 and extent of participation by the Native community.  She stressed            
 that private companies have committed over $1 million dollars.  She           
 noted that the congressional delegation is working on a $2.8                  
 million dollar federal appropriation.  She asserted that it is                
 critical that the state show some level of support for the project            
 to obtain federal dollars.  She observed that the Center would                
 enhance tourism in Anchorage.                                                 
                                                                               
 Co-Chair Hanley asked if $200 or $300 thousand dollars would show             
 a state effort.  Ms. Kaplan stated that an appropriation of that              
 level would send a message that the state supports the project.               
                                                                               
 Co-Chair Hanley noted that the state appropriated $400 - $500                 
 thousand dollars for planning five years ago.  Ms. Kaplan explained           
 that the funding was spent for site preparation.  A city initiative           
 rejected the site for the Native Heritage Center.                             
 In response to a question by Representative Martin, Ms. Kaplan                
 noted that AIDEA has not been involved in the project.                        
                                                                               
 Ms. Kaplan noted the need for a Native cultural center.                       
                                                                               
 A roll call vote was taken on the MOTION to adopt Amendment 23.               
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses, Mulder                                  
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Therriault,                  
           Hanley                                                              
                                                                               
 The MOTION FAILED (4-7).                                                      
                                                                               
 Representative Davies MOVED to adopt Amendment 24.  He explained              
 that the amendment would delete $50 thousand dollars for the                  
 Circumpolar Agriculture Conference and add $50 thousand dollars for           
 Head Start repairs.  A roll call vote was taken on the MOTION to              
 adopt Amendment 24.                                                           
                                                                               
 IN FAVOR: Davies, Grussendorf, Moses                                          
 OPPOSED:  Davis, Foster, Kelly, Kohring, Martin, Mulder,                      
           Therriault,  Hanley                                                 
                                                                               
 The MOTION FAILED (3-8).                                                      
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 The meeting adjourned at 6:02 p.m.                                            
                                                                               
                                                                               
**FIN130AM                                                                     

Document Name Date/Time Subjects