Legislature(2011 - 2012)

05/13/2011 11:28 AM House FIN


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11:28:27 AM Start
11:28:33 AM SB46
12:59:35 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       May 13, 2011                                                                                             
                        11:28 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
11:28:27 AM                                                                                                                   
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the House Finance Committee meeting                                                                     
to order at 11:28 a.m.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Reggie Joule                                                                                                     
Representative Mark Neuman                                                                                                      
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Bill Thomas Jr., Co-Chair                                                                                        
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Mike Chenault; James Armstrong, Staff,                                                                           
Representative Stoltze; Representative Bob Miller.                                                                              
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 46     BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          HSCSB 46(FIN) was REPORTED out of committee with                                                                      
          a "do pass" recommendation.                                                                                           
                                                                                                                                
CS FOR SENATE BILL NO. 46(FIN)                                                                                                
                                                                                                                                
     "An Act  making and amending  appropriations, including                                                                    
     capital  appropriations, savings  deposits in  the form                                                                    
     of  appropriations  to  the  statutory  budget  reserve                                                                    
     fund, and  other appropriations;  making appropriations                                                                    
     to  capitalize funds;  and providing  for an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
11:28:33 AM                                                                                                                   
                                                                                                                                
Co-Chair   Stoltze  introduced   the   subject  matter.   He                                                                    
explained that  the meeting would address  amendments to the                                                                    
capital budget.                                                                                                                 
                                                                                                                                
Co-Chair   Stoltze  MOVED   to   ADOPT   Amendment  1   (27-                                                                    
LS800\A.130, Kurtz, 5/13/11):                                                                                                   
                                                                                                                                
          *Sec.A DEPARTMENT OF NATURAL RESOURCES. The                                                                           
     unexpended  and unobligated  balance,  estimated to  be                                                                    
     $456,317, of  the appropriation made in  sec.1, ch. 82,                                                                    
     SLA 2006,  page 77,  lines 9-10 (Department  of Natural                                                                    
     Resources,     Bristol    Bay     energy    development                                                                    
     investigations  - $750,000)  is  reappropriated to  the                                                                    
     Department  of Natural  Resources for  Alaska Peninsula                                                                    
     energy development.                                                                                                        
          *Sec. B. LAPSE. the appropriation made in sec. A                                                                      
     of this Act  is for a capital project  and lapses under                                                                    
     AS 37.25.020.                                                                                                              
          *Sec C. This Act takes effect May 17, 2011.                                                                           
                                                                                                                                
Representative   Chenault  OBJECTED   for  the   purpose  of                                                                    
discussion.                                                                                                                     
                                                                                                                                
11:30:26 AM                                                                                                                   
                                                                                                                                
JAMES  ARMSTRONG,  STAFF, REPRESENTATIVE  STOLTZE  explained                                                                    
that his office  was contacted by the  Department of Natural                                                                    
Resources (DNR) following the adoption  of the new CS for SB
46  regarding one  missed  agency reappropriation.  Co-Chair                                                                    
Stoltze added  that the  item is located  in the  errors and                                                                    
omissions category.                                                                                                             
                                                                                                                                
Representative Chenault WITHDREW  his OBJECTION. There being                                                                    
NO further OBJECTION, it was so ordered.                                                                                        
                                                                                                                                
Amendment 1 was ADOPTED.                                                                                                        
                                                                                                                                
11:30:55 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 2:                                                                                    
                                                                                                                                
     Agency: Revenue                                                                                                            
                                                                                                                                
     Project:  AHFC weatherization  and  Home Energy  Rebate                                                                    
     Programs.                                                                                                                  
                                                                                                                                
     Amount: $70,000,000                                                                                                        
                                                                                                                                
     Funding Source: (1004) General Funds                                                                                       
                                                                                                                                
     Explanation:  this amendment  would add  $70,000,000 to                                                                    
     the  existing  general   fund  appropriation  contained                                                                    
     within the  committee substitute, located on  page 138,                                                                    
     lines 5-11,  thereby increasing the general  fund total                                                                    
     to $125,000,000.                                                                                                           
                                                                                                                                
     Total   funding   for   the  programs   would   reflect                                                                    
     $76,500,000   for  AHFC   Weatherization  Program   and                                                                    
     $50,000,000 for AHFC Home Energy Rebate Program.                                                                           
                                                                                                                                
Representative Gara OBJECTED.                                                                                                   
                                                                                                                                
Co-Chair  Stoltze explained  the amendment.  He stated  that                                                                    
$50 million  was funded in  the capital income  account. The                                                                    
funding source  was altered. An  additional $20  million was                                                                    
included for the Home Energy Rebate Program.                                                                                    
                                                                                                                                
Mr. Armstrong  clarified that  the Senate  version of  SB 46                                                                    
allocated   $76,500,000  to   the  Alaska   Housing  Finance                                                                    
Corporation   (AHFC)  weatherization   program.  The   House                                                                    
version  replaced the  funding  with $76.5  million for  the                                                                    
weatherization program  and $50 million for  the Home Energy                                                                    
Rebate Program.                                                                                                                 
                                                                                                                                
Co-Chair  Stoltze  clarified  that the  governor's  proposed                                                                    
capital budget included $26.5 million,  but the Senate added                                                                    
another $50 million.                                                                                                            
                                                                                                                                
Representative  Gara understood  that the  governor proposed                                                                    
$26 million  and the AHFC  testified in Anchorage  that $100                                                                    
million  was  needed  to  maintain  the  programs  at  their                                                                    
current levels.  He asked  if the  purpose of  the amendment                                                                    
was to  include an  additional $20 million  to speed  up the                                                                    
pace.                                                                                                                           
                                                                                                                                
Co-Chair Stoltze replied that  Senator Hoffman requested the                                                                    
funding  go to  areas with  the greatest  needs. He  assumed                                                                    
that  the money  would  continue  to be  spent  at the  same                                                                    
ratio.                                                                                                                          
                                                                                                                                
Representative Edgmon spoke in  support of the amendment. He                                                                    
believed  that  additional  funding  was  required  for  the                                                                    
programs because  prices have increased.  He added  that the                                                                    
programs create jobs and function as economic drivers.                                                                          
                                                                                                                                
11:34:01 AM                                                                                                                   
                                                                                                                                
Representative  Guttenberg affirmed  the  importance of  the                                                                    
programs. He spoke  of his own personal savings  as a result                                                                    
of the rebate program.                                                                                                          
                                                                                                                                
Representative Gara  WITHDREW his OBJECTION. There  being NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
Amendment 2 was ADOPTED.                                                                                                        
                                                                                                                                
11:36:05 AM                                                                                                                   
                                                                                                                                
Representative  Costello MOVED  to  ADOPT  Amendment 3  (27-                                                                    
LS8001\A.128, Kurtz, 5/12/11):                                                                                                  
                                                                                                                                
     *Sec.  A. Section  13(g),  CCS  HB 108,  Twenty-Seventh                                                                    
     Alaska State Legislature, is repealed                                                                                      
                                                                                                                                
     *Sec  B. Section  A of  this Act  takes effect  may 17,                                                                    
     2011.                                                                                                                      
                                                                                                                                
     Add to Section 13:                                                                                                         
     Agency: Commerce, Community, and Economic Development                                                                      
     Project: Destination Tourism Marketing Campaign                                                                            
     Amount: $12,000,000                                                                                                        
     Funding Source: Unrestricted General Funds (1004)                                                                          
                                                                                                                                
     Explanation: This  amendment zeroes out the  funding of                                                                    
     the Qualified  Trade Agreement in the  operating budget                                                                    
     and   inserts  a   $12  million   supplemental  capital                                                                    
     appropriation to the  Department of Commerce, Community                                                                    
     and  Economic  Development  for a  destination  tourism                                                                    
     marketing campaign.                                                                                                        
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative Costello explained  the amendment. She stated                                                                    
that  the  amendment  provides a  $12  million  supplemental                                                                    
capital budget  appropriation for tourism marketing  for the                                                                    
Department of Commerce,  Community and Economic Development.                                                                    
The amendment  removes the operating budget  50/50 match for                                                                    
the sake of simplicity. The effective date is May 17, 2011.                                                                     
                                                                                                                                
Co-Chair  Stoltze   stated  that  he  did   not  prefer  the                                                                    
mentioned  funding  plan.  He wished  to  have  the  tourism                                                                    
marketing funded through the operating budget.                                                                                  
                                                                                                                                
Representative Doogan  asked if the  $12 million would  be a                                                                    
net  increase  to  the   capital  budget.  Co-Chair  Stoltze                                                                    
responded  that this  year's  capital  budget contains  less                                                                    
money for tourism than that of last year.                                                                                       
                                                                                                                                
Representative Doogan  wondered if this amendment  added $12                                                                    
million  to the  capital  budget.  Co-Chair Stoltze  replied                                                                    
yes.                                                                                                                            
                                                                                                                                
Representative Gara asked if there  were additional funds in                                                                    
either budget for tourism. Co-Chair  Stoltze replied yes, as                                                                    
the amendment repealed Section 13(g) of HB 108.                                                                                 
                                                                                                                                
11:39:40 AM                                                                                                                   
                                                                                                                                
Representative  Gara   noted  that  tourism   increases  and                                                                    
decreases   with  the   economy.  He   explained  that   the                                                                    
projection for tourism was 5  percent, a record high. He was                                                                    
unsure if  an exact correlation existed  between the tourism                                                                    
marketing program  and additional tourists  visiting Alaska.                                                                    
He  was unsure  about  the connection  between an  increased                                                                    
state  share  and  additional  tourists.  He  believed  that                                                                    
tourism  was   economic  and   private  sector   driven.  He                                                                    
expressed  concern  with  the tourism  industry's  match  or                                                                    
contribution.                                                                                                                   
                                                                                                                                
Co-Chair Stoltze agreed that much  of the evidence regarding                                                                    
the effectiveness of tourism marketing was anecdotal.                                                                           
                                                                                                                              
Representative  Neuman supported  the  amendment. He  stated                                                                    
that  money in  the capital  budget should  benefit as  many                                                                    
people as  possible. He believed that  tourism marketing had                                                                    
many  benefits.  He  added  that he  did  not  consider  the                                                                    
funding a  subsidy. He  agreed that  the funding  belongs in                                                                    
the operating versus the capital  budget. The capital budget                                                                    
allows for oversight of the spending.                                                                                           
                                                                                                                                
11:43:47 AM                                                                                                                   
                                                                                                                                
Representative Chenault discussed the  history of the issue.                                                                    
He recalled a  House bill introduced earlier  in the session                                                                    
to reevaluate  the methods of funding  tourism marketing. He                                                                    
stated that the industry  does contribute taxes greater than                                                                    
$100 million in  Alaska each year. With the  downturn in the                                                                    
economy,  he  believed  that additional  state  funding  was                                                                    
warranted. He wished  for a program in place  to address the                                                                    
issue annually.                                                                                                                 
                                                                                                                                
11:45:39 AM                                                                                                                   
                                                                                                                                
Representative Wilson stated that she  also hoped for a bill                                                                    
addressing tourism marketing.  She saw the item  as a method                                                                    
of giving back to the  industry. She supported the temporary                                                                    
solution.                                                                                                                       
                                                                                                                                
Representative  Costello  responded to  Representative  Gara                                                                    
that the  tourism businesses bring in  $21.4 million through                                                                    
the corporate income  tax in addition to  nine other sources                                                                    
of income to the general fund.                                                                                                  
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
Amendment 3 was ADOPTED.                                                                                                        
                                                                                                                                
Representative Doogan MOVED to ADOPT Amendment 4:                                                                               
                                                                                                                                
     *Sec. A.  FUND TRANSFER.  The sum of  $2,200,000,000 is                                                                    
     appropriated  from the  statutory  budget reserve  fund                                                                    
     (AS 37.05.540)  to the Alaska permanent  fund (art. IX,                                                                    
     sec. 15, Constitution of the State of Alaska).                                                                             
     *Sec. B. The appropriation made in sec. A of this Act                                                                      
     takes effect July 1, 2011.                                                                                                 
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative   Doogan   explained   that   the   amendment                                                                    
transfers  money in  the Statutory  Budget Reserve  (SBR) to                                                                    
the  Alaska  Permanent  Fund.  The   amount  listed  in  the                                                                    
amendment was based on conversations  with Mr. Armstrong. He                                                                    
explained that $7 billion of  state funds will be spent this                                                                    
session when  the two budgets  are combined. He  argued that                                                                    
money has  not been  placed in  an inaccessible  account for                                                                    
the purpose of saving. The  amendment will leave $10 billion                                                                    
in the Constitutional  Budget Reserve (CBR) in  the event of                                                                    
problems  with  funding the  budget.  The  amendment was  an                                                                    
attempt  to  balance  the largest  budget  produced  in  the                                                                    
state.                                                                                                                          
                                                                                                                                
11:49:18 AM                                                                                                                   
                                                                                                                                
Representative  Joule   spoke  against  the   amendment.  He                                                                    
explained that he  did not see results of  poor spending. He                                                                    
added that  the transfer  might insinuate an  entitlement as                                                                    
it  includes the  Alaska Permanent  Fund.  He believed  that                                                                    
diversification  of the  funds was  beneficial. He  stressed                                                                    
that a  large transfer decision requires  greater discussion                                                                    
that that provided with the amendment.                                                                                          
                                                                                                                                
11:51:35 AM                                                                                                                   
                                                                                                                                
Representative    Edgmon    applauded   the    efforts    of                                                                    
Representative  Doogan.  He  understood the  spirit  of  the                                                                    
amendment and  would support a similar  concept with greater                                                                    
discussion. He echoed the  comments of Representative Joule.                                                                    
He added that the liquidity of state government.                                                                                
                                                                                                                                
11:52:27 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze opposed the amendment.  He also agreed with                                                                    
the  spirit  of the  amendment,  but  stated that  the  idea                                                                    
required greater discussion.                                                                                                    
                                                                                                                                
Representative Guttenberg  agreed that a  greater discussion                                                                    
was  required  prior to  making  the  proposed transfer.  He                                                                    
applauded and  supported the amendment and  the changes made                                                                    
to the capital budget.                                                                                                          
                                                                                                                                
11:55:06 AM                                                                                                                   
                                                                                                                                
Representative Neuman opposed the  amendment. He stated that                                                                    
the price of oil is declining.                                                                                                  
                                                                                                                                
Co-Chair  Stoltze  clarified  that the  amendment  does  not                                                                    
place the funding in the Permanent Fund Dividend (PFD).                                                                         
                                                                                                                                
Representative Neuman  opined that  the money  should remain                                                                    
in the SBR.                                                                                                                     
                                                                                                                                
Representative Doogan  expressed that  he was  serious about                                                                    
the  amendment.  The  funds  would  be  transferred  to  the                                                                    
Permanent  Fund  where  it  would  generate  an  incremental                                                                    
increase in the  dividend. He clarified that  the purpose of                                                                    
the amendment  was not to  increase the dividend.  He stated                                                                    
that  he did  not  support  the management  of  the CBR.  He                                                                    
believed that  the money should  be available with  a simple                                                                    
majority.  He would  support a  change  in the  constitution                                                                    
supporting the availability  of the CBR funds.  He wished to                                                                    
transfer excess state funds to  the Permanent Fund, which he                                                                    
opined was the best option for savings.                                                                                         
                                                                                                                                
Co-Chair   Stoltze   appreciated   Representative   Doogan's                                                                    
consistency regarding the issue.                                                                                                
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
4.                                                                                                                              
                                                                                                                                
IN FAVOR: 3                                                                                                                     
OPPOSED: 8                                                                                                                      
                                                                                                                                
The MOTION FAILED (3-8).                                                                                                        
                                                                                                                                
Representative Guttenberg MOVED to ADOPT Amendment 5:                                                                           
                                                                                                                                
     Agency: Commerce, Community and Economic Development                                                                       
     Project: Fairbanks North Star Borough - Kiwanis Field                                                                      
     Improvements (TPS 55972v1)                                                                                                 
     Amount: $2,500,000                                                                                                         
     Funding Source: General Fund                                                                                               
     Explanation: Convert Kiwanis Field from grass to                                                                           
     artificial turf.                                                                                                           
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative  Guttenberg   explained  the   amendment.  He                                                                    
stated  that   artificial  turf  had  many   advantages  for                                                                    
athletes. The advantages  include reduced injuries, extended                                                                    
playing seasons,  cost effectiveness, longer  sport seasons.                                                                    
He  stated that  eight artificial  turf fields  exist around                                                                    
the  state. He  wished  to see  the  artificial turf  fields                                                                    
available for all Alaskan students.                                                                                             
                                                                                                                                
Co-Chair Stoltze asked if there was a Capital Budget                                                                            
Submission and Information System (CAPSIS) request for the                                                                      
project. Representative Guttenberg replied yes.                                                                                 
                                                                                                                                
Representative Wilson opposed  the amendment. She understood                                                                    
the value of  artificial turf, but argued  that $1.9 million                                                                    
was allocated  to the Fairbanks Northstar  Borough for Parks                                                                    
and  Recreation facilities.  She  thought  that the  borough                                                                    
could create a priority list for the proposed development.                                                                      
                                                                                                                                
Co-Chair Stoltze  stated that he helped  initiate discussion                                                                    
on the  topic. He understood  the value of the  project, but                                                                    
would oppose the amendment.                                                                                                     
                                                                                                                                
12:05:33 PM                                                                                                                   
                                                                                                                                
Representative Gara understood  that Co-Chair Stoltze worked                                                                    
to promote  the incorporation of artificial  turf throughout                                                                    
the state. He emphasized the importance of statesmanship.                                                                       
                                                                                                                                
12:07:40 PM                                                                                                                   
                                                                                                                                
Representative  Guttenberg  thanked  the  co-chair  for  his                                                                    
advocacy of turf fields in Alaska.                                                                                              
                                                                                                                                
A roll call vote was taken on the motion for Amendment 5.                                                                       
                                                                                                                                
IN FAVOR: 3                                                                                                                     
OPPOSED: 8                                                                                                                      
                                                                                                                                
The MOTION FAILED (3-8).                                                                                                        
                                                                                                                                
12:09:04 PM                                                                                                                   
                                                                                                                                
Representative Guttenberg MOVED to ADOPT Amendment 6:                                                                           
                                                                                                                                
     Agency: Commerce, Community and Economic Development                                                                       
     Project: North Star Imagination Library - Literacy                                                                         
     Initiative Project (TPS 55785v1)                                                                                           
     Amount: $35,000                                                                                                            
     Funding Source: General Fund                                                                                               
     Explanation: Through a unique partnership the literacy                                                                     
     initiative project encourages parents and young child                                                                      
     to read together.                                                                                                          
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative  Guttenberg  stated   that  the  project  was                                                                    
included in CAPSIS. He amended  the amount from $50 thousand                                                                    
to  $35 thousand.  He stated  that  the Imagination  Library                                                                    
provides books for preschool children.                                                                                          
                                                                                                                                
Representative  Wilson understood  that there  was money  in                                                                    
the operating budget for Best Beginnings.                                                                                       
                                                                                                                                
Co-Chair  Stoltze  explained  that   the  funding  for  Best                                                                    
Beginnings was  reduced in the conference  committee hearing                                                                    
for HB 108.                                                                                                                     
                                                                                                                                
Representative  Gara   stated  that  the   Best  Beginning's                                                                    
funding  was only  partially  dedicated  to the  Imagination                                                                    
Library.                                                                                                                        
                                                                                                                                
Mr. Armstrong clarified the part of the bill amended.                                                                           
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
Amendment 6 was ADOPTED.                                                                                                        
                                                                                                                                
Mr.  Armstrong  added that  the  amendment  amends Page  68,                                                                    
Lines 7-9.                                                                                                                      
                                                                                                                                
12:12:13 PM                                                                                                                   
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 7:                                                                                 
                                                                                                                                
     Page 20, line 14:                                                                                                          
          Delete "37,500,000" in both places                                                                                    
          Insert "20,000,000" in both places                                                                                    
                                                                                                                                
     Adjust fund sources and totals accordingly.                                                                                
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative  Gara explained  that  he  sought a  fiscally                                                                    
sound method  of expanding the  port of Anchorage.  The port                                                                    
was  apparently  $800  million over  budget.  In  2003,  the                                                                    
proposed expansion  was $227 million and  the price steadily                                                                    
increased to the  current amount. Now the  projected cost is                                                                    
$1.1 billion. Most ports and  harbors involve local funding,                                                                    
which  increases efficiency.  The municipality  of Anchorage                                                                    
has contributed  nothing to the port.  The amendment reduces                                                                    
a  $37.5 million  appropriation down  to $20  million. Until                                                                    
four years  ago, the  state did not  contribute to  the port                                                                    
expansion project.  He spoke about the  various years' state                                                                    
appropriations. The  largest was  $20 million.  The governor                                                                    
proposed  $20  million in  this  year's  capital budget.  He                                                                    
agreed  that  the  port  required  expansion,  but  proposed                                                                    
limiting the state contribution to $20 million.                                                                                 
                                                                                                                                
12:16:43 PM                                                                                                                   
                                                                                                                                
Vice-chair Fairclough spoke in  opposition to the amendment.                                                                    
She  commented   on  the  litigation   between  contractors,                                                                    
cities,  and federal  state agencies.  She  stated that  the                                                                    
port expansion project provides  a docking location where 80                                                                    
percent  of  goods  arrive  in  Alaska.  She  added  that  a                                                                    
forensic audit  was requested  by the  city of  Anchorage. A                                                                    
prior   agreement   by   a  prior   administration   allowed                                                                    
flexibility  and oversight  by  the  United States  Maritime                                                                  
Administration (MARAD)  who hired a subcontractor  to manage                                                                    
the project. From some perspective  the contractor failed to                                                                    
manage  sheet pile  installation appropriately.  The project                                                                    
began because of the strategic  location of the port next to                                                                    
a military facility. The  northern expansion was established                                                                    
to meet  the need of  staging and moving  military personnel                                                                    
and moving  freight and  operation goods in  and out  of the                                                                    
state. One  agreement establishes  a committee  in Anchorage                                                                    
to  bring necessary  organizations together  to establish  a                                                                    
timeline  with  a  cost associated.  The  reason  to  invest                                                                    
additional  state money  is because  the current  pilings in                                                                    
the  existing port  may  be susceptible  to  failure in  the                                                                    
event of an  earthquake.  The contract  attempts to increase                                                                    
the stability of the port in addition to the expansion.                                                                         
                                                                                                                                
Co-Chair Stoltze added  that page 20 of the  house CS states                                                                    
that  "it  is  the  intent   of  the  legislature  that  the                                                                    
municipality   of  Anchorage   submits  quarterly   progress                                                                    
reports to  the President of  the Senate and the  Speaker of                                                                    
the  House  of  Representatives  on the  port  of  Anchorage                                                                    
expansion  project  detailing  all  cost  overruns  and  any                                                                    
significant  project  scope   changes."  He  understood  the                                                                    
importance of the port.                                                                                                         
                                                                                                                                
12:24:05 PM                                                                                                                   
                                                                                                                                
Vice-chair  Fairclough  contemplated   the  idea  of  asking                                                                    
Anchorage to  contribute municipal funding to  the projects.                                                                    
She  supposed that  the municipal  funding would  come as  a                                                                    
result  of  resident  taxation.  She  did  not  support  the                                                                    
additional  municipal taxation  of  residents. She  believed                                                                    
that  the community  of Anchorage  was contributing  time to                                                                    
the project.                                                                                                                    
                                                                                                                                
12:24:50 PM                                                                                                                   
                                                                                                                                
Representative Doogan  supported the amendment.  He reasoned                                                                    
that  the  cost  of  work  has  increased  considerably.  He                                                                    
advocated for  a reduction of the  state's contribution with                                                                    
the intention of achieving better  management and results of                                                                    
the project. He  admitted that the method was  crude, but he                                                                    
accepted  the proposed  tool as  the only  one available  to                                                                    
convey the need for changes in the project's management.                                                                        
                                                                                                                                
Co-Chair  Stoltze commented  on  increased  prices for  many                                                                    
capital projects.                                                                                                               
                                                                                                                                
Representative  Gara stated  that a  variety of  designs are                                                                    
acceptable  for the  port project.  He added  that oversight                                                                    
might manifest  in a  variety of ways  too. He  stressed the                                                                    
need for  oversight. He suggested that  legislative hearings                                                                    
regarding the  size of the  expansion might  prove valuable.                                                                    
He  did not  want the  city to  raise taxes  to pay  for the                                                                    
project. He  proposed bonding  as one  solution. He  did not                                                                    
agree  that  the  city  would engage  in  oversight  of  the                                                                    
project  without  funding  contributions. He  supported  the                                                                    
port's expansion.                                                                                                               
                                                                                                                                
A roll call vote was taken on the motion for Amendment 7.                                                                       
                                                                                                                                
IN FAVOR: 3                                                                                                                     
OPPOSED: 8                                                                                                                      
                                                                                                                                
The MOTION FAILED (3-8).                                                                                                        
                                                                                                                                
12:30:18 PM                                                                                                                   
                                                                                                                                
Representative  Gara   MOVED  to  ADOPT  Amendment   8  (27-                                                                    
GS1740\Y.2, Kurtz, 5/13/11):                                                                                                    
                                                                                                                                
     Page 159, lines 14-15:                                                                                                     
          Delete all material and insert:                                                                                       
     "*Sec. 20.  FUND TRANSFERS. (a) The  sum of $10,200,000                                                                    
     is   appropriated  from   the  general   fund  to   the                                                                    
     alternative  energy  conservation revolving  loan  fund                                                                    
     (AS 45.88.010)."                                                                                                           
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative Gara explained the  amendment. He stated that                                                                    
the amendment  adds money to  a fund  created in the  SB 220                                                                    
energy  bill.  Alaska  established  a  goal  of  50  percent                                                                    
renewable energy  within the next decade.  He explained that                                                                    
the fund provides  money to private home  owners and housing                                                                    
authorities  to upgrade  the energy  efficiency through  the                                                                    
energy  weatherization and  rebate  programs. Businesses  do                                                                    
not  receive  the  same  funding  to  upgrade  their  energy                                                                    
efficiency. He  explained that SB 220  contained a revolving                                                                    
loan fund.  For the  price of  approximately $10  million, a                                                                    
revolving  loan  fund  providing  50  loans  at  a  time  is                                                                    
possible. Private businesses in  rural Alaska do not receive                                                                    
Power  Cost Equalization  (PCE). Those  are businesses  that                                                                    
might apply for  the revolving loan fund. An  anomaly of PCE                                                                    
includes payment  of PCE without  provision of  incentive to                                                                    
upgrade energy efficiency. The Senate  added $2.5 million to                                                                    
the revolving loan fund, which  will result in approximately                                                                    
two  loans per  year. He  requested support  for the  modest                                                                    
increase.                                                                                                                       
                                                                                                                                
Co-Chair Stoltze stated that he  was not excited about other                                                                    
revolving loan fund.                                                                                                            
                                                                                                                                
A roll call vote was taken on the motion for Amendment 8.                                                                       
                                                                                                                                
IN FAVOR: 2                                                                                                                     
OPPOSED: 9                                                                                                                      
                                                                                                                                
The MOTION FAILED (2-9).                                                                                                        
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 9:                                                                                    
                                                                                                                                
     Agency:                                                                                                                    
     Department of Commerce, Community and Economic                                                                             
     Development                                                                                                                
                                                                                                                                
     Project:                                                                                                                   
     Juneau_ Cruise Ship Dock Improvements                                                                                      
                                                                                                                                
     Amount:                                                                                                                    
     Sec. 7, Page 141, lines 23 and 24 REMOVE ($2,500,000)                                                                      
                                                                                                                                
     Funding Source:                                                                                                            
     1211 Gamble Tax (UGF)                                                                                                      
                                                                                                                                
     Agency:                                                                                                                    
     Department of Commerce, Community and Economic                                                                             
     Development                                                                                                                
                                                                                                                                
     Project:                                                                                                                   
     Sealaska   Heritage  Institute   -  Sealaska   Heritage                                                                    
     Institute Center                                                                                                           
                                                                                                                                
     Amount:                                                                                                                    
     Sec. 1, Page 69, lines 28 and 29 ADD $2,500,000                                                                            
                                                                                                                                
     Funding Source:                                                                                                            
     1211 Gamble Tax (UGF)                                                                                                      
                                                                                                                                
     Explanation:                                                                                                               
                                                                                                                                
     Sealaska Heritage  Institute proposes  the construction                                                                    
     of  an innovative  institutional facility  contributing                                                                    
     to   the  survival   of  diversity   and  richness   of                                                                    
     civilization and  cultures of  the Tlingit,  Haida, and                                                                    
     Tsimshian.   The   project   will   be   a   first-rate                                                                    
     institution  for  the  study and  education  of  Native                                                                    
     cultures,   preservation  of   historical  papers   and                                                                    
     ethnographic  collections,  and cultivation  of  Native                                                                    
     arts.                                                                                                                      
                                                                                                                                
     The Sealaska  Heritage Institute requested  $10 million                                                                    
     in  state  funding  and is  funded  currently  at  $2.5                                                                    
     million.  This amendment  will remove  $2.5 million  in                                                                    
     Gamble  Tax (UGF)  from the  Juneau-  Cruise Ship  Dock                                                                    
     Improvements  project (leaving  $7.5  million and  will                                                                    
     increase the amount to  the Sealaska Heritage Institute                                                                    
     Center  by $2.5  million  in Gamble  Tax  (UGF). It  is                                                                    
     recommended that this project  now be listed in Section                                                                    
     7 for bill reporting purposes.                                                                                             
                                                                                                                                
Vice-chair Fairclough OBJECTED.                                                                                                 
                                                                                                                                
Mr.  Armstrong   explained  the   net  zero   amendment.  He                                                                    
explained that  the Juneau  delegation proposed  to transfer                                                                    
$2.5  million   from  the  $10  million   cruise  ship  dock                                                                    
improvement to  an existing appropriation with  the Sealaska                                                                    
Heritage Center.                                                                                                                
                                                                                                                                
Representative Guttenberg observed  that the Morris Thompson                                                                    
center  in  Fairbanks was  built  with  the support  of  the                                                                    
legislature.  He  credited  the   center  for  its  cultural                                                                    
diversity. He believed that the  amendment was worthwhile as                                                                    
it appeared to accomplish a similar task.                                                                                       
                                                                                                                                
Co-Chair Stoltze  added that  SB 84  had provisions  for tax                                                                    
credits for Alaska Native Heritage Centers.                                                                                     
                                                                                                                                
Representative Chenault added that  the gambling tax was set                                                                    
aside for  new and  emerging ports.  He thought  the project                                                                    
was  good but  he cautioned  the committee.  He stated  that                                                                    
Juneau is not  a new or emerging port.  He expressed concern                                                                    
about the use of funds for the stated purpose.                                                                                  
                                                                                                                                
Co-Chair  Stoltze added  that  the  amendment provides  less                                                                    
money from the gambling tax funding source.                                                                                     
                                                                                                                                
Vice-chair  Fairclough WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, it was so ordered.                                                                                        
                                                                                                                                
Amendment 9 was ADOPTED.                                                                                                        
                                                                                                                                
12:37:03 PM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
12:51:53 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 10:                                                                                   
                                                                                                                                
     Technical Amendment                                                                                                        
                                                                                                                                
     Page 180                                                                                                                   
                                                                                                                                
     Modify Sections 56 and Sections 57 as necessary to                                                                         
     make the following bill sections effective May 17,                                                                         
     2011:                                                                                                                      
                                                                                                                                
          36, 37(b), 39(a), 43, 44(a), 44(b), 44(g), 47,                                                                        
          48(b) and 49                                                                                                          
                                                                                                                                
     This amendment will make  the individual HOUSE DISTRICT                                                                    
     specific  legislative  scope   changes  of  prior  year                                                                    
     appropriations -  effective on May 17,  2011 instead of                                                                    
     on June 30, 2011.                                                                                                          
                                                                                                                                
     This will allow grant recipients to continue the                                                                           
     project changes necessary to expend these funds.                                                                           
                                                                                                                                
Vice-chair Fairclough OBJECTED.                                                                                                 
                                                                                                                                
Mr. Armstrong  explained the technical amendment.  He stated                                                                    
that the  Senate had an effective  date of May 17th  for any                                                                    
project scope  changes, which would  allow those  projects a                                                                    
five week head start.                                                                                                           
                                                                                                                                
Vice-chair  Fairclough WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, it was so ordered.                                                                                        
                                                                                                                                
Amendment 10 was ADOPTED.                                                                                                       
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 11:                                                                                   
                                                                                                                                
     Page 159, line 26 and 27                                                                                                   
                                                                                                                                
     Delete:   the     Alaska    performance     scholarship                                                                    
     investment fund                                                                                                            
                                                                                                                                
     Insert: a fund created for the purpose of providing                                                                        
     education grants or performance scholarships, or both.                                                                     
                                                                                                                                
Vice-chair Fairclough OBJECTED.                                                                                                 
                                                                                                                                
Co-Chair  Stoltze  explained  that  the  amendment  provided                                                                    
clarifying language changes  for the performance scholarship                                                                    
funds. He  added that  the funding  source was  intended for                                                                    
all  advantage/needs  based  scholarships  as  well  as  the                                                                    
performance scholarships.                                                                                                       
                                                                                                                                
Representative   Gara   thanked   the  committee   for   the                                                                    
amendment.  Co-Chair  Stoltze   agreed  that  the  amendment                                                                    
provided clarity.                                                                                                               
                                                                                                                                
Vice-chair  Fairclough WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, Amendment 11 was ADOPTED.                                                                                 
                                                                                                                                
Vice-chair Fairclough MOVED to  authorize Legal services and                                                                    
Legislative   Finance  Division   to   make  any   necessary                                                                    
technical and conforming changes to the legislation.                                                                            
                                                                                                                                
Mr.  Armstrong  acknowledged   Rob  Carpenter,  Amy  Fosket,                                                                    
Katherine Kurtz, Brian Kane, David  Teal, Miles Baker, Helen                                                                    
Phillips, Joe Michel and Karen Rehfeld.                                                                                         
                                                                                                                                
Co-Chair Stoltze  stated that Mr.  Michel was  a resourceful                                                                    
and valuable  employee. He applauded  the hard  and valuable                                                                    
work of Mr. Armstrong.                                                                                                          
                                                                                                                                
Representative Chenault commented on  changes in the finance                                                                    
committee meeting proceedings since he left.                                                                                    
                                                                                                                                
Vice-chair Fairclough MOVED to report HCSSB 46(FIN) as                                                                          
amended out of committee with individual recommendations.                                                                       
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HSCSB 46(FIN) was REPORTED out of committee with a "do                                                                          
pass" recommendation.                                                                                                           
                                                                                                                                
12:59:35 PM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:12 PM.                                                                                           

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