Legislature(2009 - 2010)

04/17/2009 04:54 PM House FIN

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* first hearing in first committee of referral
+ teleconferenced
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                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 17, 2009                                                                                           
                         4:54 p.m.                                                                                              
4:54:51 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Stoltze  called the House Finance  Committee meeting                                                                   
to order at 4:54 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas, Jr., Vice-Chair                                                                                     
Representative Allan Austerman                                                                                                  
Representative Harry Crawford                                                                                                   
Representative Anna Fairclough                                                                                                  
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
James  Armstrong,  Staff,  Co-Chair   Stoltze;  John  Bitney,                                                                   
Staff,  Speaker John  Harris;  Eddy Jeans,  Director,  School                                                                   
Finances and  Facilities, Department  of Education  and Early                                                                   
Development; Frank Richards, Deputy  Commissioner, Highways &                                                                   
Public Facilities,  Department  of Transportation and  Public                                                                   
Facilities;   David  Teal,   Director,  Legislative   Finance                                                                   
Division; Karen  Rehfeld, Director, Office of  Management and                                                                   
Budget,  Office   of  the   Governor;  Representative   Nancy                                                                   
Dahlstrom,  Sponsor;  Jesse  Cross,   Staff,  Senator  Johnny                                                                   
Ellis;  Senator   Kevin  Meyer,   Sponsor;  Jennifer   Yuhas,                                                                   
Legislative Liaison, Department of Fish and Game                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
Ron Pollock,  Anchorage Community Development  Authority; Pat                                                                   
Gamble,  President, CEO,  Alaska  Railroad Corporation;  Andy                                                                   
Szczesny, Owner, Alaska Fish and  Float; Monte Roberts, Kenai                                                                   
River  Professional   Guide  Association,   Soldotna;  Robert                                                                   
Jaynes, Self;  Charles Swanton,  Director, Division  of Sport                                                                   
Fish, Department of Fish and Game.                                                                                              
CSSB 75(FIN)                                                                                                                    
          "An  Act   making  and   amending   appropriations,                                                                   
          including  capital   appropriations,   supplemental                                                                   
          appropriations, and  appropriations  to  capitalize                                                                   
          funds; and providing for an effective date."                                                                          
          HCS CSSB 75 (FIN) was REPORTED out of Committee                                                                       
          with a "do pass" recommendation.                                                                                      
CSSB 177(FIN)                                                                                                                   
          "An Act  relating to an exception  for professional                                                                   
          fishing guide  services in the Kenai  River Special                                                                   
          Management  Area;  relating  to the  licensing  and                                                                   
          regulation  of sport  fishing  operators and  sport                                                                   
          fishing  guides and  licensing and registration  of                                                                   
          sport  fishing   vessels;  and  providing   for  an                                                                   
          effective date."                                                                                                      
          HCS CSSB 177 (FIN) was REPORTED out of Committee                                                                      
          with a "do pass" recommendation and with a new                                                                        
          fiscal note by the Department of Fish and Game.                                                                       
SB 165    "An Act authorizing the transfer of two parcels of                                                                    
          land  from the Alaska  Railroad Corporation  to the                                                                   
          Municipality  of Anchorage;  and  providing for  an                                                                   
          effective date."                                                                                                      
          SB 165 was REPORTED out of Committee with a "do                                                                       
          pass" recommendation and with zero fiscal note #1                                                                     
     by the Department of Commerce, Community and                                                                               
     Economic Development.                                                                                                      
4:55:36 PM                                                                                                                    
CS FOR SENATE BILL NO. 75(FIN)                                                                                                
     "An Act  making and  amending appropriations,  including                                                                   
     capital  appropriations,   supplemental  appropriations,                                                                   
     and appropriations  to capitalize  funds; and  providing                                                                   
     for an effective date."                                                                                                    
Co-Chair Hawker MOVED to adopt Version U of CSSB 75 (FIN) as                                                                    
the working draft before the committee.  There being NO                                                                         
OBJECTION, it was so ordered.                                                                                                   
4:56:33 PM                                                                                                                    
Co-Chair Stoltze reported that the bill had been previously                                                                     
heard in public testimony.                                                                                                      
AT-EASE:       4:57:21 PM                                                                                                     
RECONVENED:    5:00:46 PM                                                                                                     
Co-Chair  Stoltze requested  that  Mr. Armstrong  report  the                                                                   
5:01:16 PM                                                                                                                    
JAMES ARMSTRONG,  STAFF, CO-CHAIR STOLTZE, stated  that there                                                                   
were 10  changes to  the CS.  The first  change was  found on                                                                   
Page 2, Line 27. This was an intent  language request made by                                                                   
Vice-Chair Thomas and Representative Austerman.                                                                                 
Vice-Chair  Thomas  related  that  the  change  reflects  the                                                                   
reviewed Alaska Energy Authority  (AEA) grants in the budget.                                                                   
5:02:22 PM                                                                                                                    
Mr. Armstrong  reported that  contingent language  concerning                                                                   
the Port  of Anchorage  had been removed  from the  bill. The                                                                   
modification  to the  language  could be  found  on Page  30,                                                                   
lines 25  through 27. The new  language states that  the site                                                                   
for  the  M/V  Susitna  landing   will  be  determined  by  a                                                                   
recommendation from the U.S. Army Corps of Engineers.                                                                           
Co-Chair Stoltze  commented that  the issue was  contentious.                                                                   
The vessel was being constructed  in Ketchikan and the change                                                                   
in the  bill was  intended to  encourage the  parties on  the                                                                   
Anchorage side to facilitate a solution.                                                                                        
5:03:50 PM                                                                                                                    
Mr. Armstrong explained that the  change on page 43, Line 24,                                                                   
was a title change.                                                                                                             
Representative   Gara  asked   about   the  Alaska   Wildlife                                                                   
Conservation Center. Co-Chair  Hawker explained that it was a                                                                   
facility  at  the turn-off  to  the  Portage Glacier  on  the                                                                   
Seward Highway.  Representative Gara thought that  the center                                                                   
was  a private  entity.   Co-Chair  Hawker  replied that  the                                                                   
center was  a 501(c) 3, and  was working intimately  with the                                                                   
Department of Environmental Conservation  (DEC), and is where                                                                   
Wood Bison are housed.                                                                                                          
Representative  Foster inquired  about the  number of  grants                                                                   
listed  on  Page  43. He  wondered  if  the  Alaska  Wildlife                                                                   
Conservation Center  paid for  its peripheral expenses.   Co-                                                                   
Chair Hawker related  that the facility was one  of the first                                                                   
major stops for cruise ship tour  busses. Annually 250,000 to                                                                   
300,000 cruise  passengers pass  through the area.  The funds                                                                   
provide  an economic  base to  sustain  facilities once  they                                                                   
have been established.                                                                                                          
Representative  Gara wondered  why  the  facility would  need                                                                   
extra  funding   in  addition  to  the  tourist   dollars  it                                                                   
generated. Co-Chair  Hawker replied  that the funds  would go                                                                   
toward capital expansion to provide  services for cruise ship                                                                   
5:07:04 PM                                                                                                                    
Co-Chair Stoltze pointed out to the committee that the non-                                                                     
profit category contained many  worthy projects. He felt that                                                                   
funding   for   non-profits  as   not   unusual,   especially                                                                   
organizations  involved in  conservation and  research.   Co-                                                                   
Chair Hawker  added that this  facility was deeply  committed                                                                   
to  the   housing  of  Wood   Bison  and  was   receiving  no                                                                   
compensation for doing so.                                                                                                      
Mr.  Armstrong   offered  to  provide  more   information  to                                                                   
Representative Gara concerning the issue.                                                                                       
Mr. Armstrong  reported on page  53, Line 17,  which corrects                                                                   
the House District numbers for certain projects.                                                                                
5:08:46 PM                                                                                                                    
Mr.  Armstrong  announced  that   the  following  items  were                                                                   
language sections. Section 13,  intent language, and language                                                                   
in Sections  20 and  21, which deal  with in-state  gas, have                                                                   
been removed from the work draft.                                                                                               
Mr.  Armstrong  turned  to  Section 36,  Page  77,  Line  31,                                                                   
through Page 38,  which reflects a request  by Representative                                                                   
Kelly for a late reappropriation title change.                                                                                  
Representative  Kelly  reported  that the  request  from  his                                                                   
borough  was to reappropriate  funds  for the improvement  of                                                                   
Pioneer  Park parking  and access.  The net  change would  be                                                                   
Co-Chair Stoltze  informed the  committee that following  the                                                                   
reappropriation   process   procedures,    there   has   been                                                                   
coordination  with  the  other body  in  the  reappropriation                                                                   
5:10:50 PM                                                                                                                    
Mr. Armstrong  reported the last  change on page 80,  Lines 1                                                                   
through 4, which  was a drafting error. The  technical change                                                                   
was made.                                                                                                                       
Representative  Gara  had  a  question  about  the  gas  line                                                                   
language in Section 13, which was removed from the bill.                                                                        
5:12:38 PM                                                                                                                    
Co-Chair  Hawker thought  that language  that had  previously                                                                   
been  in  the  bill  was  more  appropriately  found  in  the                                                                   
operating budget.  He felt that  a solution to  the questions                                                                   
that  had been  raised  in  the supplemental  budget  process                                                                   
would be reflected in the operating budget.                                                                                     
5:13:40 PM                                                                                                                    
Co-Chair Stoltze MOVED to adopt Amendment 1:                                                                                    
     Page 78, line 29, through page 79, line 2:                                                                                 
     Delete all material                                                                                                        
     Reletter the following subsections accordingly.                                                                            
     Page 79, line 4:                                                                                                           
     Delete "and (c)"                                                                                                           
     Page 797, line 7, following "for"                                                                                          
     Insert   "purchase,   restoration,    and   display   of                                                                   
     historical art and artifacts in conjunction with                                                                           
     statehood celebrations, energy-related issues, and"                                                                        
     Page 84, line 1:                                                                                                           
     Delete "37(d),"                                                                                                            
Co-Chair Hawker OBJECTED.                                                                                                       
JOHN BITNEY, STAFF,  SPEAKER JOHN HARRIS, explained  that the                                                                   
language in the bill would be  simplified with the removal of                                                                   
Line 29,  Subsection C. The purpose  for the purchase  of the                                                                   
art  would  be  moved  to  Subsection  D,  which  would  give                                                                   
Legislative Council  broader discretion  for the use  for the                                                                   
Co-Chair  Hawker  WITHDREW his  objection.    There being  NO                                                                   
OBJECTION, the amendment was ADOPTED.                                                                                           
5:15:16 PM                                                                                                                    
Representative Foster hoped to  see future appropriations for                                                                   
Native Art  that would benefit  other areas of the  state. He                                                                   
felt that a limited number of  people in the state would have                                                                   
the opportunity to travel to Juneau to see historical art.                                                                      
Co-Chair Hawker clarified that  the language that referred to                                                                   
the capital city  is no longer in the bill.  The language now                                                                   
recognized  that  the  state has  an  interest  in  acquiring                                                                   
historical  art   and  artifacts  in  conjunction   with  the                                                                   
statehood celebration.                                                                                                          
5:17:48 PM                                                                                                                    
Representative Salmon MOVED to adopt Amendment 3:                                                                               
     Page 63, line 1:                                                                                                           
     Delete "sec. 21"                                                                                                           
     Insert "sec. 22"                                                                                                           
     Page 67, following line 11:                                                                                                
     Insert a new bill section to read:                                                                                         
     "*   Sec.  19.   DEPARTMENT  OF   EDUCATION  AND   EARLY                                                               
     DEVELOPMENT. The sum of $183,000 is appropriated from                                                                      
     the general fund to the Department of Education and                                                                        
     Early Development for payment as a grant under                                                                             
     AS 37.05.316 to the Tanana City School District for                                                                        
     debt repayment for the fiscal year ending June 30,                                                                         
     Renumber the following bill sections accordingly.                                                                          
     Page 82, line 4:                                                                                                           
     Delete "sec. 42(a)(2)"                                                                                                     
     Insert "sec. 43(a)(2)"                                                                                                     
     Page 84, line 20:                                                                                                          
     Delete "Section 43"                                                                                                        
     Insert "Section 44"                                                                                                        
     Page 84, lines 25 - 27:                                                                                                    
     Delete "22(b), 23(b), 23(c), 24(b), 25(d) - (f), 26(b)                                                                     
     - (e), 26(g) - (i), 30, 34(c), 34(e), 34(f), 37(a), 38,                                                                    
     39,  40(a)(1), 40(a)(2), 40(a)(4), 40(c), 40(d), and 41                                                                    
     - 43"                                                                                                                      
     Insert "23(b), 24(b), 24(c), 25(b), 26(d) - (f), 27(b)                                                                     
     - (e), 27(g) - (i), 31, 35(c), 35(e), 35(f), 38(a), 39,                                                                    
     40, 41(a)(1), 41(a)(2), 41(a)(4), 41(c), 41(d), and 42                                                                     
     - 44"                                                                                                                      
     Page 84, line 30:                                                                                                          
     Delete "19 - 21, 45, 46(a), and 46(b)"                                                                                     
     Insert "19 - 22, 46, 47(a), and 47(b)"                                                                                     
     Page 85, line 1:                                                                                                           
     Delete "22 - 41"                                                                                                           
     Insert "23 - 42"                                                                                                           
     Page 85, line 2:                                                                                                           
     Delete "secs. 49 and 50"                                                                                                   
     Insert "secs. 50 and 51"                                                                                                   
Co-Chair Stoltze objected.                                                                                                      
Representative  Salmon  said that  the amendment  corrects  a                                                                   
debt incurred  by the  Tanana City  School District  in 2008.                                                                   
He  explained that  the  district was  a  single site  school                                                                   
district and that  Tanana was a fist class  city supported by                                                                   
a three  percent sales tax. The  city fell into debt  for the                                                                   
following reasons;  the unexpected hike in the  cost of fuel,                                                                   
the   high   cost   of  electricity,   the   high   cost   of                                                                   
transportation, a  doubling of health insurance  costs, and a                                                                   
school district advance of $105,000 to pay for fuel.                                                                            
5:20:00 PM                                                                                                                    
Co-Chair Stoltze asked about the number on Line 8.                                                                              
Representative Salmon clarified it was for $150,000.                                                                            
Representative Fairclough  thought the amendment  was written                                                                   
off of the old version of the  bill, which resulted in a page                                                                   
differential.   She   suggested   making  the   amendment   a                                                                   
Conceptual Amendment.                                                                                                           
Representative  Salmon   agreed  to  make  it   a  Conceptual                                                                   
5:21:09 PM                                                                                                                    
EDDY  JEANS,   DIRECTOR,  SCHOOL  FINANCES   AND  FACILITIES,                                                                   
DEPARTMENT OF  EDUCATION AND EARLY DEVELOPMENT,  related that                                                                   
the  Tanana School  District  was  $200,000 over  budget.  In                                                                   
addition,  enrollment was down.  The school's  superintendent                                                                   
indicated  that  they  were making  reductions  to  the  2009                                                                   
budget.  An increase in  enrollment was  anticipated  for the                                                                   
2009 school  year, which would  help the city  with increases                                                                   
in the public school funding formula.                                                                                           
Co-Chair Stoltze  asked about  possible stimulus funds.   Mr.                                                                   
Jeans reported  that there  was a  possibility that  the city                                                                   
would  be   receiving  some   stimulus  state   stabilization                                                                   
funding. Categorical funds that  will be received through the                                                                   
stimulus package total $65,000.                                                                                                 
5:22:52 PM                                                                                                                    
Representative Gara  summarized the budget issues  in Tanana.                                                                   
He  felt that  the  $150,000 request  was,  when compared  to                                                                   
other appropriations  passed by the committee,  equivalent to                                                                   
"spare change".                                                                                                                 
5:25:02 PM                                                                                                                    
Vice-Chair Thomas asked who the  Tanana debt was specifically                                                                   
owed to.  Mr. Jeans  responded that there  were a  variety of                                                                   
invoices.  He believed  that the  city  had overextended  the                                                                   
budget, and failed  to make the budget  adjustments necessary                                                                   
based  on the  revenue being  collected.   Vice-Chair  Thomas                                                                   
asked if  this was  the only school  district in  Alaska that                                                                   
was in this position. Mr. Jeans understood that it was.                                                                         
Representative  Salmon  reported that  the  three items  that                                                                   
contributed to  the debt were:  high fuel, health  insurance,                                                                   
and teacher contracts.                                                                                                          
5:26:36 PM                                                                                                                    
Representative  Kelly wondered if  there was a  mechanism for                                                                   
acquiring a  loan for the city.   Mr. Jeans replied  that the                                                                   
department  was  currently  working with  the  Department  of                                                                   
Commerce and Economic  Development (DCED) to  craft an energy                                                                   
loan to aid  with fuel costs. Representative  Kelly suggested                                                                   
combining  services in  the district  with the Yukon  Koyukuk                                                                   
area. Mr. Jeans  replied that Tanana had indicated  that they                                                                   
did not want to combine services.                                                                                               
Co-Chair Stoltze  asked Mr. Jeans if he had  testified before                                                                   
the other body on the issue.  Mr. Jeans said he had not.                                                                        
Co-Chair Stoltze MAINTAINED his objection.                                                                                      
Representative  Kelly  encouraged Mr.  Jeans  to continue  to                                                                   
work on  finding funding  sources.   Co-Chair Stoltze  stated                                                                   
that there  had been numerous  discussions on the  issue. Mr.                                                                   
Jeans reported  that the  Department of  Education and  Early                                                                   
Development (DEED)  was bound by  law to assist  the district                                                                   
in balancing the budget.                                                                                                        
5:28:55 PM                                                                                                                    
Representative  Foster reported  that the  30 schools  in his                                                                   
district had made their budgets  over the years. He felt that                                                                   
if special consideration was going  to be made for the Tanana                                                                   
district, the same should be done for all districts.                                                                            
Representative  Gara requested  clarification  that this  was                                                                   
the only school  with deficit spending.  Mr.  Jeans clarified                                                                   
that the  expenditures pattern  had exceeded income  revenue.                                                                   
The  department  had not  been  aware  of the  problem  until                                                                   
December 2008.  When the  budget was  reviewed in July  2008,                                                                   
the numbers  had aligned,  but when  the financial  statement                                                                   
was issued  in November 2008,  it revealed that  the district                                                                   
had overspent  in 2007.  The debt  has compounded since  that                                                                   
Representative  Gara  pointed   out  that  he  represented  a                                                                   
charter school in  his district. He said that  exceptions had                                                                   
been made  for charter  school funding.  He thought  that the                                                                   
amount  that   was  being  requested   to  help   Tanana  was                                                                   
insignificant. He reiterated his support for the amendment.                                                                     
5:32:52 PM                                                                                                                    
Representative  Crawford wondered  how  being $150,000  short                                                                   
would affect the district. Mr.  Jeans related that the school                                                                   
has not  had the funds to  pay several bills.  The department                                                                   
has  requested that  the  superintendent  submit next  year's                                                                   
budget early in order to identify  areas where reductions can                                                                   
be made.  He pointed  out to the  committee that  the charter                                                                   
school  bill was  to fix  an inequity  in  the public  school                                                                   
funding formula.  In the  case of  Tanana, the problem  stems                                                                   
from  a  decline  in enrollment  and  the  lack  of  resource                                                                   
management as enrollment declined.                                                                                              
Representative  Crawford asked  if the  school would  be shut                                                                   
down early  due to  lack of funding.  Mr. Jeans thought  that                                                                   
additional   staffing  reductions   would  be  required.   He                                                                   
stressed  that  the  department  would be  working  with  the                                                                   
school district over the next  2 years to balance the budget.                                                                   
5:35:32 PM                                                                                                                    
Representative Salmon observed  that the Title 1 money is not                                                                   
guaranteed.  If it  could  be guaranteed  it  would help  the                                                                   
school  district. He  opined  that smaller  school  districts                                                                   
with high overhead face unique challenges.                                                                                      
Co-Chair Stoltze  related that the issue was  complicated and                                                                   
that the intention was not to set a precedent.                                                                                  
Representative  Foster  asked if  Tanana  was  a single  site                                                                   
school.  Mr. Jeans  replied  that Tanana  was  a first  class                                                                   
city,  single  site school  district.  Representative  Foster                                                                   
understood that the  district had a lot of staff  for a small                                                                   
population  base.  Mr. Jeans  countered  that  the staff  was                                                                   
minimal, but that there was a superintendent on contract.                                                                       
5:39:01 PM                                                                                                                    
Representative Gara asked how  many teachers were employed by                                                                   
the district.  Mr. Jeans said he did not know.                                                                                  
Representative Salmon thought  there were 4 or 5 teachers and                                                                   
a  position that  was  a combination  of  a  principal and  a                                                                   
Co-Chair Hawker recognized that  the department was obligated                                                                   
to assist  the district in resolving  the issue.   He thought                                                                   
that  aiding  the  district  in  working  out  its  financial                                                                   
problems, rather  than granting a "bailout",  would result in                                                                   
a healthier school overall.                                                                                                     
5:40:33 PM                                                                                                                    
Vice-Chair  Thomas  wanted  assurances  that  the  department                                                                   
would work  for a  successful outcome  for the Tanana  School                                                                   
District. He expressed difficulty  in voting on the amendment                                                                   
because it was "close to home".                                                                                                 
Mr. Jeans said he could not assure  the committee that Tanana                                                                   
would receive the  federal energy loan. However,  by law, the                                                                   
department  was bound to  work to  get the district's  budget                                                                   
back in balance.                                                                                                                
5:42:13 PM                                                                                                                    
Representative  Gara understood  that the  district would  be                                                                   
force to  let go of  two teachers.  Mr. Jeans clarified  that                                                                   
one teacher had already been cut  from the budget. The Energy                                                                   
loan  discussion   had  been   recent.  Representative   Gara                                                                   
wondered if the district had sought  out all possible grants.                                                                   
Mr.  Jeans said  all available  departmental  funds had  been                                                                   
allocated.  In  July,  the  district   requested  an  advance                                                                   
payment on current year funds to help pay fuel costs.                                                                           
Representative   Gara  reiterated   that  the  amount   being                                                                   
requested was reasonable.                                                                                                       
5:44:27 PM                                                                                                                    
Representative  Salmon  reported  that  contingency  language                                                                   
could be  added to the amendment.  He said that  the district                                                                   
had four choices; move to a larger  school district, obtain a                                                                   
bridge loan,  hope for federal  stimulus dollars,  or acquire                                                                   
the grant money stipulated in the amendment.                                                                                    
Co-Chair Stoltze MAINTAINED his objection.                                                                                      
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Gara, Salmon, Crawford                                                                                                
OPPOSED: Fairclough, Foster, Joule, Kelly, Thomas,                                                                              
          Austerman, Hawker, Stoltze                                                                                            
The MOTION FAILED (3-8).                                                                                                        
AT-EASE:       5:46:11 PM                                                                                                     
RECONVENED:    5:51:24 PM                                                                                                     
Representative Fairclough MOVED to adopt Amendment 4:                                                                           
     Page 53, after line 115                                                                                                    
     "It is the intent of the legislature that the                                                                              
     Department of Transportation and Public Facilities                                                                         
     install a new drainage culvert at MP 14.4 of the Glenn                                                                     
     Highway, if feasible and within the project scope,                                                                         
     budget and schedule, prior to paving this section of                                                                       
     the highway."                                                                                                              
     Explanation: This amendment allows construction and                                                                        
     installation of a culvert to alleviate long standing                                                                       
     drainage and flooding issues along the Glenn Highway                                                                       
     and in the Eagle Glen Subdivision.                                                                                         
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
Representative  Fairclough explained  that  the Glen  Highway                                                                   
project was to  be funded with stimulus dollars  and could be                                                                   
found on  Page 53, Line  14 of the  bill. She continued  that                                                                   
the Anchorage  Legislature Priority  Book listed  the project                                                                   
in  Chapter 8,  Page  14. She  stated  that  a major  highway                                                                   
corridor was opening in her district  which would require the                                                                   
installation of  a culvert under  the roadway.  She requested                                                                   
that  it  be   added  to  the  existing  language   that  the                                                                   
Department of  Transportation (DOT)  position the  culvert in                                                                   
such a way as to fix a drainage  problem in her district. The                                                                   
project would require no new funds, but was time sensitive.                                                                     
5:53:07 PM                                                                                                                    
Representative  Gara  asked about  the  cost  of the  culvert                                                                   
project. Representative  Fairclough replied that  the roadbed                                                                   
would already be  under construction and that  money would be                                                                   
saved by joining the two projects.                                                                                              
Representative Gara  thought that if minor  adjustments could                                                                   
be  made to  the bill  to help  Representative  Fairclaough's                                                                   
district, the  same consideration  should have been  extended                                                                   
to help the Tanana School District.                                                                                             
5:53:55 PM                                                                                                                    
Co-Chair  Stoltze asked  for the representative  from  DOT to                                                                   
speak for the department.                                                                                                       
FRANK  RICHARDS,  DEPUTY  COMMISSIONER,   HIGHWAYS  &  PUBLIC                                                                   
FACILITIES,   DEPARTMENT   OF   TRANSPORTATION   AND   PUBLIC                                                                   
FACILITIES, explained how the  culvert project was advancing.                                                                   
He agreed to look at the drainage  issue and move the project                                                                   
forward  within  the timeframe.    Representative  Fairclough                                                                   
added that the funding was non-existent  for similar projects                                                                   
throughout the  state, and that  this was an  opportunity for                                                                   
DOT to  help the  district in  the time  available. She  said                                                                   
that if DOT  cannot fix the drainage issue,  while working in                                                                   
the  initial  project  timeframe,  the  district  would  seek                                                                   
funding for the project at another time.                                                                                        
Representative Foster  asked why DOT had not  initially taken                                                                   
the initiative  to fix  the problem as  part of the  project.                                                                   
Mr.  Richards  explained  that  the original  design  of  the                                                                   
project was  to address the  rutting problems along  the Glen                                                                   
Highway,  and  was  not  intended  address  drainage  issues.                                                                   
Furthermore,  the expeditious  nature of  the stimulus  funds                                                                   
resulted in a  project put out quickly to capture  the funds,                                                                   
and put  Alaskans to work.  Representative Foster  maintained                                                                   
amazement  that  the issue  of  a  single culvert  was  being                                                                   
presented to the committee.                                                                                                     
5:56:39 PM                                                                                                                    
Representative  Fairclough explained that  DOT was  not aware                                                                   
of  the requested  fix until  the session  was underway.  The                                                                   
project has been  the number one priority for  her delegation                                                                   
for   three  years.   The   Municipality   of  Anchorage   in                                                                   
conjunction with  DOT has been  working on a plan  to address                                                                   
the  drainage issue.  She stated  that  a plan  had not  been                                                                   
drafted  until February  2009,  and that  DOT  had just  been                                                                   
notified of the request.                                                                                                        
Co-Chair Stoltze added that it  was an area wide project. The                                                                   
intent was  to finish  the project  within the parameters  of                                                                   
the  appropriation.  Representative Fairclough  relayed  that                                                                   
regardless  of federal  stimulus dollars,  her community  has                                                                   
recognized  the   need  for  the   drainage  problem   to  be                                                                   
Co-Chair  Stoltze wondered  if there  was talk of  litigation                                                                   
with DOT.  Representative Fairclough  reported that there are                                                                   
two flooding  issues in  her community.  In urban Alaska,  as                                                                   
development  moves  forward,   drainage  patters  change  and                                                                   
additional  housing causes less  ground surface  availability                                                                   
for water to  absorb. As the community has  become more urban                                                                   
the problem  has increased.  Some homeowners have  threatened                                                                   
to take drainage issues to the  court. The drainage issue has                                                                   
troubled the community  for the last 22 years.  When the Glen                                                                   
Highway  project  was  announced   it  seemed  reasonable  to                                                                   
request that the drainage problems be addressed.                                                                                
6:00:34 PM                                                                                                                    
Vice-Chair  Thomas  spoke  of   a  personal  experience  with                                                                   
flooding due to  construction.  He wondered if  a study would                                                                   
be required by  DOT to see if the culvert would  affect other                                                                   
communities. Representative Fairclough  said it would require                                                                   
permits, and may  not be possible inside of  the Glen Highway                                                                   
Project. Representative  Fairclough commented  that it  was a                                                                   
rainwater  drainage  issue and  did  not  involve a  body  of                                                                   
Co-Chair Stoltze WITHDREW his objection.                                                                                        
Representative Salmon OBJECTED.                                                                                                 
Representative  Gara understood  that  the appropriation  was                                                                   
for  $25 million  to resurface  miles 12  to 27  on the  Glen                                                                   
Highway.  He wondered  if funding the  culvert project  would                                                                   
interfere with the resurfacing  funding. Mr. Richards replied                                                                   
that the  initial project was  for resurfacing, to  take care                                                                   
of rutting  challenges  along the highway.  Efforts over  the                                                                   
next few weeks, as the project  is put out to bid, will be to                                                                   
examine what permitting  issues would need to  be overcome in                                                                   
order to put  the culvert request into the  original project.                                                                   
Representative Gara  cautioned that by including  the culvert                                                                   
project  in the  bill, the  general funds  allocated for  the                                                                   
resurfacing project could be exhausted  before the project is                                                                   
completed. He  warned that the  amendment could be seen  as a                                                                   
year in advance general fund appropriation  request. Co-Chair                                                                   
Stoltze echoed  the concern. He clarified that  the amendment                                                                   
was  meant to  provide  guidance  should the  opportunity  to                                                                   
install the culvert present itself.                                                                                             
Representative   Fairclough  restated   the  intent   of  the                                                                   
amendment.  She added  that  if the  details  of the  project                                                                   
cannot be  worked out  quickly, the project  would be  off of                                                                   
the table. Co-Chair  Stoltze noted that the  original project                                                                   
in the bill is a state highway resurfacing project.                                                                             
Representative Gara  felt that the intent language  read that                                                                   
the  culvert   was  the  priority.  He  requested   that  the                                                                   
amendment be  rewritten to reflect  the stated  intent, which                                                                   
is that  the resurfacing be  completed before the  culvert is                                                                   
put in.                                                                                                                         
AT-EASE:       6:06:14 PM                                                                                                     
RECONVENED:    6:07:27 PM                                                                                                     
Representative Foster thanked  Mr. Richards for his work over                                                                   
the years.                                                                                                                      
Mr. Armstrong  thought he  had a  technical amendment  to the                                                                   
amendment.  He suggested:                                                                                                       
     After "Highway" on Line 2                                                                                                  
      "if feasible and within the project's scope,                                                                              
     schedule, and budget,"                                                                                                     
6:08:18 PM                                                                                                                    
There  being   NO  OBJECTION,  the  technical   amendment  to                                                                   
Amendment 4 was adopted.                                                                                                        
Representative Salmon  MAINTAINED his objection  to Amendment                                                                   
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Fairclough, Foster, Gara, Joule, Kelly, Thomas,                                                                       
          Crawford, Hawker, Stoltze                                                                                             
OPPOSED: Salmon                                                                                                                 
Representative Austerman was absent from the vote.                                                                              
The MOTION PASSED (9-1).                                                                                                        
AT-EASE:       6:10:37 PM                                                                                                     
RECONVENED:    6:20:02 PM                                                                                                     
Representative  Gara  requested  information  concerning  the                                                                   
ramifications of  the provision on page 83,  Lines 22 through                                                                   
24. He understood  that the provision would  allow $2 million                                                                   
to be taken  out of the Constitutional Budget  Reserve (CBR),                                                                   
and  put it  into the  general fund,  whether or  not it  was                                                                   
needed to balance the budget.                                                                                                   
DAVID   TEAL,   DIRECTOR,   LEGISLATIVE   FINANCE   DIVISION,                                                                   
explained  that  17  (b),  Article 9,  of  the  Alaska  State                                                                   
Constitution  states  that if  the  amount available  for  an                                                                   
appropriation   in  FY   2010  was  less   than  the   amount                                                                   
appropriated  in FY  2009, a majority  vote  can be taken  to                                                                   
draw  from the  CBR for  up to  the  2009 appropriation.  The                                                                   
level  of general  fund spending  in 2009  was $7.1  billion,                                                                   
which  included  savings  and deposits  to  public  education                                                                   
funds. This set the first limit  at $7.1 billion, which would                                                                   
be reduced  by the  amount available  for appropriation,  and                                                                   
would include  the unrestricted  general fund revenue  stream                                                                   
of $3.5 billion.  Reserves available for  appropriation could                                                                   
then be added. The accounts from  which the reserves would be                                                                   
drawn, which total $1 billion,  include; the Statutory Budget                                                                   
Reserve  Account, the  Alaska  Housing Savings  Account,  the                                                                   
Rail  Belt  Energy  Fund, and  the  Power  Cost  Equalization                                                                   
Endowment.  Subsequently, the  earnings reserve account  from                                                                   
the   Permanent    Fund   is    considered   available    for                                                                   
appropriation. That  balance is $1 billion.  The $3.5 billion                                                                   
in  revenue when  combined with  the $2  billion in  reserves                                                                   
would  make $5.5  billion  available for  appropriation.  The                                                                   
reserve  amount available  for 2010 could  not be  predicted,                                                                   
but constitution stipulated that  there is an amount that can                                                                   
be  withdrawn. Mr.  Teal said  that  it could  take 6  months                                                                   
after  the close of  the fiscal  year to  determine what  the                                                                   
amount  would be.   He  believed  that the  amount would  not                                                                   
exceed $ 2 million,  and could be zero. He stressed  that the                                                                   
factors involved  were numerous which made the  calculation a                                                                   
6:27:14 PM                                                                                                                    
Representative Gara understood  that the funds would be taken                                                                   
out of  the CBR and  put in the  general fund,  whether there                                                                   
was  a  budget shortfall  or  not.  Mr.  Teal said  that  was                                                                   
correct.  He  added  that  it  would  depend  on  the  amount                                                                   
available, not  on the  amount appropriated. The  calculation                                                                   
would not  be not determined  on how  much was spent,  but by                                                                   
factors which have yet to be determined.                                                                                        
6:29:14 PM                                                                                                                    
Representative  Gara  interpreted  that the  provision  would                                                                   
allow the  taking of $1.6  to $2 billion  dollars out  of the                                                                   
CBR,  regardless  of  a  deficit. Mr.  Teal  replied  in  the                                                                   
affirmative.  Representative Gara  summarized that  the money                                                                   
would  not be  spent  on education  or  revenue sharing,  but                                                                   
would be taken  out of the CBR  and put in the  general fund.                                                                   
Mr. Teal said that was correct.                                                                                                 
Representative Gara  moved on to possible  litigation issues.                                                                   
It  was  unknown  if  funds  appropriated  or  available  for                                                                   
appropriation  would be  drawn  from general  funds,  federal                                                                   
funds,  other funds,  or  a combination.    Mr. Teal  agreed.                                                                   
Representative Gara  pointed out that the issue  had not been                                                                   
litigated before,  and that no  precedent had been set.   Mr.                                                                   
Teal shared that 17 (b), has never been applied.                                                                                
Representative  Gara asked  if  the administration  supported                                                                   
the provision.                                                                                                                  
6:30:44 PM                                                                                                                    
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
OFFICE  OF THE  GOVERNOR, responded  that the  administration                                                                   
has been looking  closely at the issue. She could  not say if                                                                   
the governor supported the language.                                                                                            
Representative  Gara asked  if  Ms. Rehfeld  agreed with  Mr.                                                                   
Teal about  the difficulty in  interpreting the  language and                                                                   
the possible  litigation issues.  Ms. Rehfeld replied  in the                                                                   
affirmative.    Representative   Gara    asked   would    the                                                                   
administration  support  taking  out  constitutional  savings                                                                   
funds even  if it were not  necessary to balance  the budget.                                                                   
Ms. Rehfeld  replied  that the  goal was to  have a  balanced                                                                   
budget  and  that  the  CBR  would not  be  used  if  it  was                                                                   
6:32:28 PM                                                                                                                    
Co-Chair Hawker  said the provision  was an insurance  policy                                                                   
should  the economy  falter. The  parameters  for the  amount                                                                   
appropriated  and the  amount  available  to appropriate  are                                                                   
wide.  The width  would increase  should the  economy take  a                                                                   
downturn.  He felt that  the task  of calculating the  amount                                                                   
available was possible.                                                                                                         
Representative  Gara understood  the  provision  had been  an                                                                   
insurance  policy to carry  the state  through the  summer of                                                                   
2009 because  of the dramatic  drop in oil prices.  He voiced                                                                   
concern that the vote today would  take the $2 billion out in                                                                   
June of 2010.                                                                                                                   
6:34:21 PM                                                                                                                    
Mr. Teal  responded that it was  unknown when money  would be                                                                   
withdrawn  from the  CBR. If there  is a  deficit, the  money                                                                   
would be  withdrawn to fill the  deficit. He agreed  with Co-                                                                   
Chair  Hawker that  it was  an insurance  policy. Should  the                                                                   
price of oil  fall, and the amount available  for expenditure                                                                   
decline, 17 (b) would fill that deficit.                                                                                        
Representative  Gara reasoned that  the amount available  for                                                                   
appropriation  for  the  fiscal  year  should  be  determined                                                                   
before  the calculation  could  be made.  Mr. Teal  explained                                                                   
that under 17 (b), the state is  allowed to pull money out if                                                                   
there was  a deficit. If  oil prices  are too low  to support                                                                   
the  budget that  has been  created,  the appropriated  money                                                                   
would come from CBR before June 30.                                                                                             
6:36:58 PM                                                                                                                    
Representative  Gara  quoted from  the  bill  "if the  amount                                                                   
available  for appropriation  for a fiscal  year". He  argued                                                                   
that "fiscal  year" applied  to 2010,  and stressed  that the                                                                   
revenue for that  year would not be calculated  until June 1,                                                                   
2010. He  wondered how the  insurance policy amount  could be                                                                   
calculated  before the  appropriated  amount was  determined.                                                                   
Mr. Teal felt that was a valid argument.                                                                                        
Co-Chair  Stoltze asked  Ms.  Rehfeld if  she  felt that  the                                                                   
provision was  necessary. Ms. Rehfeld  thought it was  a good                                                                   
Representative Gara maintained  that the language in the bill                                                                   
gave authority  to take money  out of  the CBR even  if there                                                                   
was a surplus, and thought the  provision should be rewritten                                                                   
to say,  "only as much as  is needed to balance  the budget."                                                                   
Co-Chair  Stoltze said  that it  was a provision  out of  the                                                                   
constitution  and a rewrite  would change  the intent  of the                                                                   
Mr.  Teal  said  the amount  appropriated  for  FY  2010  was                                                                   
irrelevant   to  the   calculation.  The   language  in   the                                                                   
constitution    states    "the     amount    available    for                                                                   
appropriation.",  so the same  amount would be  drawn whether                                                                   
there was a surplus or a deficit.                                                                                               
6:39:43 PM                                                                                                                    
Representative  Gara   pointed  out  that   the  constitution                                                                   
states,  "an  appropriation  may  be made,  and  it  may  not                                                                   
exceed",  he interpreted  that the amount  needed to  balance                                                                   
the budget  could be appropriated,  not the full  $2 billion.                                                                   
Mr.  Teal  replied that  the  legislature  has the  power  to                                                                   
determine  the size  of appropriations.  Representative  Gara                                                                   
recommended  that the language  in the  bill should  limit an                                                                   
appropriation from  the CBR to  the amount needed  to balance                                                                   
the budget.                                                                                                                     
6:40:30 PM                                                                                                                    
Representative Kelly  observed that the budget  year had been                                                                   
challenging.  He  noted  that the  committee  has  encouraged                                                                   
budget  discipline,  minimal  general  fund  usage,  and  the                                                                   
maximum  usage  of  formula  and  federal  funds.  He  voiced                                                                   
concern for federal  funds being left unused and  the lack of                                                                   
receipt authority  for bonding. He spoke specifically  of the                                                                   
Dalton  Highway  Project.  He  did  not  understand  why  the                                                                   
federal funds for  that project had not been  taken advantage                                                                   
of, particularly  at a time when  in-state jobs were  few. He                                                                   
intended  to support the  budget, but  stressed deep  concern                                                                   
about the Dalton Highway funds.                                                                                                 
6:44:08 PM                                                                                                                    
Representative  Kelly  spoke  of  the  University  of  Alaska                                                                   
request  for $15.3  million  for  receipt authority.  He  was                                                                   
disturbed  that  the  item  had  been  denied.  He  expressed                                                                   
frustration that  the Life and Health Sciences  Center, which                                                                   
has perpetually been  the number 1 request from  the Board of                                                                   
Regents, has  been consistently  omitted. He reiterated  that                                                                   
he would support the bill despite his frustration.                                                                              
6:46:34 PM                                                                                                                    
Representative  Gara wondered  what  would be  done with  the                                                                   
$26.3 million  in federal funds  that was left on  the table,                                                                   
and how much of  a state match would be required  to leverage                                                                   
the  funds. He  asked  for  clarification on  the  university                                                                   
receipts   issue   highlighted   by   Representative   Kelly.                                                                   
Representative  Kelly said that  strictly federal  funds were                                                                   
the  issue   concerning  the  Dalton  Highway   project,  and                                                                   
reiterated the  University bonding request for  $15.3 million                                                                   
for the first phase of the energy center.                                                                                       
Representative  Gara questioned  the funding  for the  Dalton                                                                   
Highway project. He wondered if  the $26.3 million was laying                                                                   
in wait, or if it had been used  elsewhere in the budget, and                                                                   
would a state match be required.                                                                                                
6:48:43 PM                                                                                                                    
Mr. Armstrong  informed the committee  that $22.7  million in                                                                   
FY  2009 STIP  funds  did not  make  it into  the  governor's                                                                   
Mr. Richards  added that the  project had originally  been on                                                                   
the request for the economic stimulus  package, which was 100                                                                   
percent  federal receipt  authority. The  request now  was to                                                                   
have  the project  funded  under the  FY  2010 budget,  which                                                                   
would  receive  legislative  authority  to proceed  with  the                                                                   
project, and a match requirement of 91 to 9 percent split.                                                                      
Representative  Gara asked  if there  was a  way to fund  the                                                                   
project without displacing another.  Mr. Richards said if the                                                                   
project  were  to  be funded  by  stimulus  dollars,  another                                                                   
project  would be  displaced.  Representative  Gara asked  if                                                                   
federal money would  be left on the table if  the project was                                                                   
not executed.  Mr. Richards  said that the  2010 STIP  was in                                                                   
development  and would  include  new projects  that had  been                                                                   
nominated  and national  highway  system  projects, like  the                                                                   
Dalton  Highway. He  reminded  that committee  of efforts  to                                                                   
fund the project in the past.                                                                                                   
6:51:09 PM                                                                                                                    
Representative Gara  clarified that federal dollars  were not                                                                   
being  left  unspent, but  they  were  being spent  on  other                                                                   
projects. Co-Chair Stoltze added  that the funds were used to                                                                   
fund  other STIP  priorities.   Mr.  Richards  said that  the                                                                   
department  woild use  the federal highway  receipts  that it                                                                   
receives  on   projects  that   the  legislature   has  given                                                                   
authority to spend them on.                                                                                                     
Representative  Kelly  asked if  the department  was  seeking                                                                   
receipt authority  for funds. He assumed that  the department                                                                   
would take advantage of the federal  funds to fund the Dalton                                                                   
project, if given authority by  the legislature. Mr. Richards                                                                   
replied that that was correct.                                                                                                  
6:52:44 PM                                                                                                                    
Co-Chair Hawker commented on the  amount of aggregate federal                                                                   
receipt  authority  appropriated  to the  department  in  the                                                                   
past. He  asked how much of  that receipt authority  does the                                                                   
department  have; how much  cash is  available, and  how much                                                                   
authority does  the department have  to spend that  cash. Mr.                                                                   
Richards guessed that the monetary number was large.                                                                            
Representative  Gara   concluded  that  there   were  varying                                                                   
opinions about how  the money would be allocated.  He said he                                                                   
supported  an expansion  of the  Anchorage  Port, but  wanted                                                                   
accountability  for money  spent. He  thought during  a tight                                                                   
budget year,  more money  should be  spent on education,  and                                                                   
not $10 million  on the port. He maintained  his concern that                                                                   
the budget  allows for $2  million of  the CBR account  to be                                                                   
spent, even  if it  is not  needed. He  felt that the  public                                                                   
would not want  money out of the CBR spent  unnecessarily. He                                                                   
praised the committee  for being prudent during  the process.                                                                   
He  though that  some of  the funds  could be  spent on  more                                                                   
important issues such as, education,  homelessness, and crime                                                                   
6:57:13 PM                                                                                                                    
Vice-Chair Thomas spoke to Representative  Gara's sentiments.                                                                   
He  said  that  capital  money  does a  great  deal  for  his                                                                   
district. He expressed satisfaction with the budget.                                                                            
Representative  Foster  recalled   his  early  years  in  the                                                                   
legislature,  and  the  smaller  budgets of  the  1990's.  He                                                                   
opined that no  matter how much money was available  it would                                                                   
still not be enough to satisfy  everyone. He thought that the                                                                   
process  of  creating  the  budget  was  an  opportunity  for                                                                   
Alaskans  to appreciative.  He  pointed out  that the  budget                                                                   
amount always rises  and has tripled in size  within the last                                                                   
five years.                                                                                                                     
6:58:59 PM                                                                                                                    
Representative  Gara   agreed  with  Vice-Chair   Thomas  and                                                                   
Representative  Foster.  He mentioned  his support  for rural                                                                   
projects  and   his  belief   that  rural  projects   created                                                                   
Co-Chair  Hawker  MOVED to  report  HCS  CSSB 75  (FIN)  from                                                                   
Committee.  There being NO OBJECTION, it was so ordered.                                                                        
HCS CSSB  75 (FIN) was REPORTED  out of Committee with  a "do                                                                   
pass" recommendation.                                                                                                           
Co-Chair Hawker  MOVED to authorize  legal to  make technical                                                                   
and  conforming changes  during the  drafting process.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
AT-EASE:       7:02:54 PM                                                                                                     
RECONVENED:    7:04:44 PM                                                                                                     
7:04:49 PM                                                                                                                    
SENATE BILL NO. 165                                                                                                           
     "An Act authorizing the transfer  of two parcels of land                                                                   
     from   the   Alaska   Railroad    Corporation   to   the                                                                   
     Municipality   of  Anchorage;   and  providing   for  an                                                                   
     effective date."                                                                                                           
7:05:08 PM                                                                                                                    
REPRESENTATIVE  NANCY  DAHLSTROM,  SPONSOR, stated  that  the                                                                   
land swap would benefit Government  Hill Elementary School by                                                                   
fixing a 22  year-old safety issue. The land  would allow for                                                                   
a  safer  entrance  to  the  school.  She  relayed  that  the                                                                   
railroad and the  community were in full  agreement regarding                                                                   
the issue.                                                                                                                      
7:06:14 PM                                                                                                                    
JESSE CROSS-CALL,  STAFF, SENATOR  JOHNNY ELLIS,  stated that                                                                   
Page 1, Line 6, described the  land that would be transferred                                                                   
to the  Municipality of Anchorage.  The first parcel  of land                                                                   
was 1.93 acres,  and is railroad land that  will be developed                                                                   
into  residential sub-divisions.  The second  parcel of  land                                                                   
was less  than 1/5th of  an acre.   This was the  parcel that                                                                   
would  enable  the fix  of  the dangerous  elementary  school                                                                   
7:08:34 PM                                                                                                                    
Page  2, Line  6 of  the bill  described the  purpose of  the                                                                   
transfer; for  the development  on East Government  Hill, and                                                                   
the  safer  school  entrance  on  West  Government  Hill.  In                                                                   
exchange for  the two  plots of  land the municipality  would                                                                   
relinquish  a small  parcel of  land  to the  railroad for  a                                                                   
parking  lot. There  is  a $40,000  discrepancy  in the  land                                                                   
being exchanged  between the  municipality and the  railroad,                                                                   
which  the  municipality  believes   will  not  be  a  future                                                                   
7:10:16 PM                                                                                                                    
Co-Chair Stoltze opened public testimony.                                                                                       
RON  POLLOCK,   ANCHORAGE  COMMUNITY  DEVELOPMENT   AUTHORITY                                                                   
testified via  teleconference. He urged support  for the bill                                                                   
and offered to answer questions.                                                                                                
PAT  GAMBLE,  PRESIDENT,  CEO,  ALASKA  RAILROAD  CORPORATION                                                                   
testified via  teleconference. He testified that  the project                                                                   
would  be beneficial  for the  city  and he  gave his  strong                                                                   
support for the bill.                                                                                                           
7:11:55 PM                                                                                                                    
Co-Chair Stoltze  implored Mr. Gamble to respond  to economic                                                                   
development  issues concerning  the  Mat-Su area,  and to  be                                                                   
careful of the  comments that he made in public  forums.  Mr.                                                                   
Gamble replied that he understood the message.                                                                                  
Co-Chair Stoltze closed public testimony.                                                                                       
7:13:13 PM                                                                                                                    
Representative  Fairclough wondered  about the connection  on                                                                   
the land route coming off the  bridge at Point Mackenzie. She                                                                   
asked if any of the properties  under discussion were located                                                                   
in the area. Representative Dahlstrom replied no.                                                                               
7:13:50 PM                                                                                                                    
Co-Chair Stoltze pointed out the zero fiscal note.                                                                              
Representative  Foster   MOVED  to  report  SB   165  out  of                                                                   
committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
SB  165  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation   and  with  zero   fiscal  note  #1   by  the                                                                   
Department of Commerce, Community and Economic Development.                                                                     
7:15:00 PM                                                                                                                    
CS FOR SENATE BILL NO. 177(FIN)                                                                                               
     "An  Act  relating  to  an  exception  for  professional                                                                   
     fishing  guide  services  in  the  Kenai  River  Special                                                                   
     Management   Area;  relating   to   the  licensing   and                                                                   
     regulation of sport fishing  operators and sport fishing                                                                   
     guides and  licensing and registration of  sport fishing                                                                   
     vessels; and providing for an effective date."                                                                             
7:15:07 PM                                                                                                                    
SENATOR  KEVIN MEYER,  SPONSOR,  stated that  the bill  would                                                                   
continue  the  licensing  and  regulation  of  sport  fishing                                                                   
operators  and guides through  the next  five years.  He said                                                                   
that in order to protect the guides  and the clients, minimum                                                                   
standards  were  needed.  The  program  began  in  2004,  and                                                                   
provided information  pertaining to  the number of  guides in                                                                   
the field,  what kind  of fish  were being  caught, and  what                                                                   
kind of  activity was  occurring in  the guided industry.  It                                                                   
also  provided basic  standards for  guides in  the areas  of                                                                   
cardiopulmonary   resuscitation   (CPR),   first   aid,   and                                                                   
liability  insurance.   He  shared   that  the  program   has                                                                   
increased the  level of professionalism, which  has helped to                                                                   
raise the  standards in  the industry  throughout the  state.                                                                   
The  bill was  modified  to include  a  waiver for  in-season                                                                   
replacement of  guides on the  Kenai River. This  would allow                                                                   
the quick  replacement  of a guide  should  one be lost  mid-                                                                   
season. The replacement  guide would be required  to meet the                                                                   
minimum  requirements  of  licensing,  first  aid,  and  drug                                                                   
7:16:25 PM                                                                                                                    
Senator Meyer relayed that the  replacement would be required                                                                   
to attend the  Kenai River Guide Academy should  they wish to                                                                   
continue  guiding  the following  season.  He  felt that  the                                                                   
program has  benefited the sport fishing  industry throughout                                                                   
the state.                                                                                                                      
Representative  Foster asked  if there  were any  extenuating                                                                   
subsistence issues. Senator Meyer replied no.                                                                                   
Co-Chair  Stoltze asked  Senator  Meyer if  he supported  the                                                                   
legislation  encompassed in  the proposed  CS. Senator  Meyer                                                                   
responded  that  the  change  in  the  CS  would  change  the                                                                   
effective date of the bill.                                                                                                     
Co-Chair Hawker  MOVED to adopt  the CSSB 177  (FIN), Version                                                                   
26LS0832\ S.                                                                                                                    
There being NO OBJECTION, it was so ordered.                                                                                    
ANDY  SZCZESNY,   OWNER,  ALASKA   FISH  AND  FLOAT,   KENAI,                                                                   
testified in support of the bill.                                                                                               
7:20:07 PM                                                                                                                    
MONTE ROBERTS,  KENAI RIVER  PROFESSIONAL GUIDE  ASSOCIATION,                                                                   
SOLDOTNA,  testified  via  teleconference.  He  testified  in                                                                   
support  of the  bill. He  believed  that the  CS would  keep                                                                   
members of the industry, in emergency  situations, from going                                                                   
out of business.                                                                                                                
7:21:34 PM                                                                                                                    
ROBER L. JAYNES, SELF, VALDEZ,  testified via teleconference.                                                                   
He testified that  he had some problems with the  bill in its                                                                   
current  form.  He expressed  concern  for  untrained  guides                                                                   
operating on  the Kenai, at any  time. He shared that  he was                                                                   
not  opposed to  the  licensing  per se,  but  felt that  fee                                                                   
involved was  too high.  He stated  that the data  collection                                                                   
system  posed problems.  He related that  his licensing  fees                                                                   
pay  for the  data collection,  but that  the data  currently                                                                   
collected was from charter operators only.                                                                                      
7:24:58 PM                                                                                                                    
Representative   Foster  questioned   the  fiscal   note.  He                                                                   
wondered what the cost would be to the state.                                                                                   
Co-Chair Stoltze closed public testimony.                                                                                       
7:25:54 PM                                                                                                                    
CHARLES   SWANTON,   DIRECTOR,   DIVISION  OF   SPORT   FISH,                                                                   
DEPARTMENT  OF FISH AND  GAME, replied  that the division  of                                                                   
funds was 50/50,  between the fees collected  from the guides                                                                   
and  the operators,  versus  licensed anglers.  He  clarified                                                                   
that  $256,000   was  collected  by  the  fee   program,  and                                                                   
$200,000 was from fishing licenses.                                                                                             
Vice-Chair Thomas  commented that there  was a surplus  of $3                                                                   
million put into  the Fish and Game budget and  could that be                                                                   
considered a contribution toward the sport fish management.                                                                     
Co-Chair Hawker  stated that  the only change  in the  new CS                                                                   
from  the  previous version  and  the  version to  which  the                                                                   
fiscal note  was written was that  the time period  until the                                                                   
statutes would be  repealed has been shortened,  from January                                                                   
1, 2015  until January 1,  2011.  He  wondered if  that would                                                                   
necessitate a new fiscal note.                                                                                                  
7:27:30 PM                                                                                                                    
Mr.  Swanton replied  that a  new  fiscal note  would not  be                                                                   
7:28:37 PM                                                                                                                    
Co-Chair    Hawker   exhibited    surprise   and    requested                                                                   
JENNIFER YUHAS,  LEGISLATIVE LIAISON, DEPARTMENT  OF FISH AND                                                                   
GAME,  offered  to provide  a  new  fiscal note,  showing  no                                                                   
subsidy for the  following years, should the  Committee adopt                                                                   
the new CS.                                                                                                                     
7:29:05 PM                                                                                                                    
Representative Foster  MOVED to report CSSB 177  (FIN) out of                                                                   
Committee  with individual  recommendations  and  with a  new                                                                   
fiscal note.                                                                                                                    
HCS CSSB 177 (FIN)  was REPORTED out of Committee  with a "do                                                                   
pass"  recommendation  and with  a  new  fiscal note  by  the                                                                   
Department of Fish and Game.                                                                                                    
7:30:32 PM                                                                                                                    
RECESSED:      7:31:18 PM                                                                                                     
RECONVENED:    9:02 PM                                                                                                          
The meeting was adjourned at 9:02 PM.                                                                                           

Document Name Date/Time Subjects