Legislature(2005 - 2006)

05/04/2005 04:45 PM FIN


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                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                            May 4, 2005                                                                                       
                             4:45 p.m.                                                                                        
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Green convened the meeting at approximately 4:45:43 PM.                                                              
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Donny Olson                                                                                                             
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
Also  Attending:   SENATOR  BEN  STEVENS;   SENATOR  RALPH   SEEKINS                                                          
REPRESENTATIVE  JAY  RAMRAS;  REPRESENTATIVE   MARK  NEUMAN;  GINGER                                                            
BLAISDELL,  Staff  to  Co-Chair  Green;  JOAN  BROWN,  Chief  Budget                                                            
Analyst, Office  of Management and  Budget, Office of the  Governor;                                                            
SHALON SZYMANSKI,  Staff  to Representative  Lesil McGuire;  MICHAEL                                                            
PAWLOWSKI,  Staff  to  Representative  Kevin  Meyer;  STEVE  WEAVER,                                                            
Assistant  Attorney  General,  Legislation  &  Regulations  Section,                                                            
Office of  the Attorney  General, Department  of Law; JANE  PEARSON,                                                            
Staff  to Representative  Ramras,  DEAN  GUANELI,  Chief  Assistance                                                            
Attorney  General,   Criminal  Division,  Office   of  the  Attorney                                                            
General, Department of Law                                                                                                      
                                                                                                                                
Attending via  Teleconference: From  an Offnet Site: JEFF  BARNHILL,                                                          
Palmer Golf Course                                                                                                              
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 46-BUDGET: CAPITAL & OTHER/ BRF                                                                                              
                                                                                                                                
The  Committee  heard  from  the Co-Chair's  staff,  the  Office  of                                                            
Management  and Budget and Senator  Seekins. Amendments to  the bill                                                            
were considered. The bill was held in Committee.                                                                                
                                                                                                                                
HB 61-GAMING: CALCUTTA POOLS & CRANE CLASSICS                                                                                   
                                                                                                                                
The Committee heard from  the bill's sponsor and Representative Mark                                                            
Neuman.  Public  testimony  was  taken  and  the bill  was  held  in                                                            
Committee.                                                                                                                      
                                                                                                                                
HB 33-REGULATIONS AFFECTING SMALL BUSINESSES                                                                                    
                                                                                                                                
The Committee  heard from the bill's  sponsor and the Department  of                                                            
Law. The bill was held in Committee.                                                                                            
                                                                                                                                
HB 149-CONTROLLED SUBSTANCES                                                                                                    
                                                                                                                                
The Committee  heard from the bill's  sponsor and the Department  of                                                            
Law. The bill was held in Committee.                                                                                            
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 46                                                                                                         
     "An  Act making capital  appropriations  and appropriations  to                                                            
      capitalize funds; and providing for an effective date."                                                                   
                                                                                                                                
                                                                                                                                
This  bill  had  previously   been  heard  in  the  Senate   Finance                                                            
Committee. Unless otherwise  noted, amendments are considered to the                                                            
committee substitute,  Version "Y" adopted at the  previous hearing.                                                            
                                                                                                                                
Amendment #35: This amendment  inserts a new subsection into Section                                                            
52. DEPARTMENT  OF ADMINISTRATION.,  on page 119, following  line 26                                                            
to read as follows.                                                                                                             
                                                                                                                                
          (c) The sum of $4,350,000 is appropriated from the                                                                    
     general    fund   to   the   Department   of   Administration,                                                             
     commissioner's  office, for distribution  to state agencies  to                                                            
     offset  the increased chargeback  rates for statewide  services                                                            
     as identified  in the statewide  federal cost allocation  plan.                                                            
                                                                                                                                
AND                                                                                                                             
                                                                                                                                
Amendment  #36: This  amendment  inserts  two new  subsections  into                                                            
Section 20. FUND  TRANSFERS., on page 96, following  line 18 to read                                                            
as follows.                                                                                                                     
                                                                                                                                
          (d) The sum of $12,000,000 is appropriated from the                                                                   
     general   fund  to   the  Alaska  public   building  fund   (AS                                                            
     37.05.570).                                                                                                                
          (e) The amount necessary to have an unobligated balance                                                               
     of  $5,000,000  in  the  state insurance   catastrophe  reserve                                                            
     account  in accordance with AS  37.05.289 is appropriated  from                                                            
     the  general fund to  the state insurance  catastrophe  reserve                                                            
     account (AS 37.05.289).                                                                                                    
                                                                                                                                
This  amendment  also deletes  "$300,000"  from  subsection  (b)  of                                                            
Section 52. DEPARTMENT OF ADMINISTRATION., on page 119, line 25 and                                                             
inserts "$40,300,000". The amended language reads as follows.                                                                   
                                                                                                                                
          (b) The sum of $40,300,000 is appropriated from the                                                                   
     general   fund   to   the   information   services   fund   (AS                                                            
     44.21.045(a)).                                                                                                             
                                                                                                                                
The Committee adopted the two amendments at the previous hearing.                                                               
                                                                                                                                
Co-Chair Wilken offered a motion to rescind action taken on                                                                     
Amendments #35 and #36.                                                                                                         
                                                                                                                                
There being no objection, the Committee's action adopting Amendment                                                             
#35 and Amendment #36 was RESCINDED.                                                                                            
                                                                                                                                
Co-Chair Green announced that these amendments would be replaced                                                                
with a new amendment.                                                                                                           
                                                                                                                                
Amendment #35 & 36(A): This amendment reads as follows.                                                                         
                                                                                                                                
     This amendment corrects amendments #35 and #36                                                                             
     This allows the authorization  to spend from the funds that are                                                            
     capitalized.                                                                                                               
                                                                                                                                
     SB 46 "F"                                                                                                                  
     Amendment offered by Senator Green                                                                                         
                                                                                                                                
     Add:                                                                                                                       
     Sec. 1.                                                                                                                    
     Enterprise Technology           $7,959,500 Information Svcs Fund                                                           
     Services and Statewide Administrative                                                                                      
     System Replacement capital projects                                                                                        
                                                                                                                                
     Deferred Maintenance for        $12,000,000 Public Building Fund                                                           
     Buildings in the Public                                                                                                    
     Building Fund                                                                                                              
                                                                                                                                
     Sec.  20.  FUND  TRANSFERS.  (c)  The  sum  of  $40,000,000  is                                                            
     appropriated from  the general fund to the information services                                                            
     fund.                                                                                                                      
     (d)  The amount  necessary to  have an  unobligated balance  of                                                            
     $5,000,000  in the state insurance catastrophe  reserve account                                                            
     in  accordance  with  AS 37.05.289  is  appropriated  from  the                                                            
     general  fund  to  the  state  insurance  catastrophe   reserve                                                            
     account.                                                                                                                   
                                                                                                                                
     New  Section  XX.  Department  of Administration.  The  sum  of                                                            
     $4,350,000    is   appropriated    to    the   Department    of                                                            
     Administration,  Commissioner's Office for the  distribution to                                                            
     state  agencies to offset  the increased  chargeback rates  for                                                            
     statewide services  as identified in the Statewide Federal Cost                                                            
     Allocation Plan.                                                                                                           
                                                                                                                                
GINGER BLAISDELL, Staff to Co-Chair Green, explained the new                                                                    
Amendment #35 & 36(A), saying it would have a net zero impact.                                                                  
                                                                                                                                
[Note: The Committee's intent was to adopt the amendment, although                                                              
no motion was made to do so.]                                                                                                   
                                                                                                                                
Co-Chair Green determined the amendment to be ADOPTED without                                                                   
objection.                                                                                                                      
                                                                                                                                
Amendment #37: This amendment inserts two new bill sections to read                                                             
as follows.                                                                                                                     
                                                                                                                                
     Sec.  XX. DEPARTMENT  OF HEALTH  AND SOCIAL  SERVICES  PERSONAL                                                            
     NEEDS  ALLOWANCE  FOR  ASSISTED LIVING  HOMES.  (a)  It is  the                                                            
     intent  of the legislature  that the  Department of Health  and                                                            
     Social  Services repeal 7 AAC  43.1058(k)(1)(B) effective  July                                                            
     1, 2005.                                                                                                                   
          (b) It is the further intent of the legislature that the                                                              
     Department  of  Health  and Social  Services  shall  adopt  new                                                            
     emergency  regulations establishing a personal  needs allowance                                                            
     for recipients  residing in an  assisted living facility  equal                                                            
     to the  monthly income  limit set in  AS 47.07.020(b)(6)  minus                                                            
     $260.00.  Until such  time as  the department  can adopt  these                                                            
     regulations  at 7 AAC  43.1058(k)(1)(B),  the department  shall                                                            
     apply  personal needs allowance  for recipients residing  in an                                                            
     assisted living facility  equal to the monthly income limit set                                                            
     in   AS  47.07.020(b)(6)   minus   $260.00.   This  meets   the                                                            
     requirements  for  finding  of  a public,  health,  safety  and                                                            
     welfare emergency under AS 44.62.250.                                                                                      
          (c) The sum of $363,500 is appropriated to the Department                                                             
     of  Health   and  Social  Services,  senior  and  disabilities                                                             
     Medicaid  services in order to adopt new emergency  regulations                                                            
     as outlined in subsections  (a) and (b) of this section for the                                                            
     fiscal  year ending June 30,  2006, from the following  sources                                                            
     in the amounts stated:                                                                                                     
                Federal Receipts          $209,300                                                                              
                General Fund Match         154,200                                                                              
                                                                                                                                
     Sec.__.  EFFECTIVE DATE. (a)  Section XX (a) is effective  July                                                            
     1, 2005.                                                                                                                   
          (b) Section XX (b) is effective July 2, 2005.                                                                         
                                                                                                                                
Co-Chair Green moved for adoption and outlined the amendment.                                                                   
                                                                                                                                
There being no objection, Amendment #37 was ADOPTED.                                                                            
                                                                                                                                
Amendment  #38:  This  amendment  inserts  a new  subsection  in  to                                                            
Section 20. FUND  TRANSFERS., on page 96, following  line 18 to read                                                            
as follows.                                                                                                                     
                                                                                                                                
          (d) The sum of $2,693,700 is appropriated from the                                                                    
     general  fund  to the  Alaska marine  highway  system fund  (AS                                                            
     19.65.060(a)).                                                                                                             
                                                                                                                                
This amendment  also stipulates  an effective  date of July  1, 2005                                                            
for  the inserted  subsection.  Accompanying   explanatory  language                                                            
reads as follows.                                                                                                               
                                                                                                                                
     DESCRIPTION: Marine highway fuel increase                                                                                  
     The FY 06  Governor's request as proposed in  December 2004 was                                                            
     based  on $1.17  per gallon  of fuel.  The  volatility of  fuel                                                            
     prices  is reflected in the $1.54  per gallon average  price to                                                            
     date  in FY 05. If  we use the Alaska  Department of  Revenue's                                                            
     Spring  Forecast to estimate  prices in FY 06, the result  is a                                                            
     delivered  fuel price for the AMHS at a slightly  lower average                                                            
     price of $1.425 per  gallon estimate. The marine highway system                                                            
     is projected to use  approximately 10.7 million gallons of fuel                                                            
     in FY 06.                                                                                                                  
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected for an explanation.                                                                                     
                                                                                                                                
Ms. Blaisdell  explained that this amendment would  appropriate over                                                            
$2  million   general  funds  for   Alaska  marine  highway   vessel                                                            
operations.  The  amount approved  in  the  FY 06  operating  budget                                                            
legislation would be insufficient.                                                                                              
                                                                                                                                
Senator Dyson  understood therefore  that this is a FY 06  operating                                                            
budget expenditure.                                                                                                             
                                                                                                                                
Co-Chair Green clarified  this would be a supplemental appropriation                                                            
to the amount provided in the operating budget.                                                                                 
                                                                                                                                
Ms.  Blaisdell  informed that  this  amendment  was offered  at  the                                                            
request of  the Office of Management  and Budget and the  Department                                                            
of Transportation  and Public  Facilities.  The need for  additional                                                            
funding was realized at  the time that the operating budgets for the                                                            
Department of  Transportation and Public Facilities  was closed out.                                                            
                                                                                                                                
Senator  Dyson   clarified  this  is  not  an  FY  05  supplemental                                                             
appropriation.                                                                                                                  
                                                                                                                                
Co-Chair Wilken affirmed.                                                                                                       
                                                                                                                                
There being no objection, Amendment #38 was ADOPTED.                                                                            
                                                                                                                                
Amendment  #39: This  amendment  deletes the  City of  Sand Point  -                                                            
Purchase and Upgrade of  Old Reeve Aleutian Airways Building (HD 37)                                                            
component  of the Airport  Improvement Program  Budget Request  Unit                                                            
(BRU), Department  of Transportation  and Public Facilities  on page                                                            
49, lines 29 -  32 and the $1 million allocation to  that component.                                                            
                                                                                                                                
This amendment also deletes  the Ketchikan: Airport Improvements (HD                                                            
1) component of  the Airport Improvement Program BRU,  Department of                                                            
Transportation  and Public Facilities on page 51,  lines 5 and 6 and                                                            
the $500,000 allocation to that component.                                                                                      
                                                                                                                                
This amendment also deletes  Sand Point: Terminal Redevelopment Plan                                                            
(HD  37) of  the  Airport Improvement  Program  BRU,  Department  of                                                            
Transportation  and Public  Facilities on page  52, lines 31  and 32                                                            
and the $200,000 allocation to that component.                                                                                  
                                                                                                                                
This amendment  also adds  a new City of Sand  Point - Purchase  and                                                            
Upgrade of Old Reeve Aleutian  Airways Building (HD 37) component to                                                            
the Congressional  Earmarks  BRU, Department  of Transportation  and                                                            
Public Facilities  on page  65, line 6 and  allocates $1 million  to                                                            
the component.                                                                                                                  
                                                                                                                                
This amendment  also adds a new Ketchikan: Airport  Improvements (HD                                                            
1)  component  to the  Congressional  Earmarks  BRU,  Department  of                                                            
Transportation  and  Public  Facilities  on  page  65,  line  6  and                                                            
allocates $500,000 to the component.                                                                                            
                                                                                                                                
This amendment  also adds a new Sand Point - Terminal  Redevelopment                                                            
Plan  (HD   37)  component  to  the   Congressional  Earmarks   BRU,                                                            
Department of Transportation  and Public Facilities on page 65, line                                                            
6 and allocates $200,000 to the component.                                                                                      
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Description:                                                                                                               
     These projects are  Congressional Earmarks, rather than Airport                                                            
     Improvement  Projects.  The funding source  (federal  receipts)                                                            
     does not  change. This amendment  just moves the projects  from                                                            
     the   Airport   Improvement   Program  appropriation   to   the                                                            
     Congressional Earmarks appropriations.                                                                                     
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms.  Blaisdell characterized  this  as  a technical  amendment.  She                                                            
proposed changes  to the amendment to delete the City  of Sand Point                                                            
- Purchase  and Upgrade of Old Reeve  Aleutian Airways Building  and                                                            
corresponding  $1 million  allocation  and change  the title of  the                                                            
Sand Point - Terminal Redevelopment  Plan (HD 37) component to read,                                                            
"Sand  Point -  Terminal  Redevelopment  (HD  37) and  increase  the                                                            
allocation to that component to $1 million.                                                                                     
                                                                                                                                
4:53:37 PM                                                                                                                    
                                                                                                                                
Ms. Blaisdell  continued to  outline the  proposed amendment  to the                                                            
amendment.                                                                                                                      
                                                                                                                                
Co-Chair  Green clarified  the  projects  should be  categorized  as                                                            
congressional earmarks.                                                                                                         
                                                                                                                                
Ms. Blaisdell affirmed, noting the federal funds.                                                                               
                                                                                                                                
[Note:  The  Committee   intent  was  to  amend  the   amendment  to                                                            
incorporate the changes  proposed by the witness, although no motion                                                            
was made.]                                                                                                                      
                                                                                                                                
Co-Chair Green  determined Amendment  #39 to be AMENDED and  ADOPTED                                                            
without objection.                                                                                                              
                                                                                                                                
4:54:17 PM                                                                                                                    
                                                                                                                                
Amendment  #40: This amendment  increases  the appropriation  to the                                                            
Alaska Aviation  Safety Project Phases  2 and 3 (HD 1-40)  component                                                            
of the  Department  of Military  and Veterans  Affairs  on page  38,                                                            
lines  13 through  15 from  $8,452,000  Other Funds  to $11,452,000                                                             
Other Funds. Accompanying explanatory language reads as follows.                                                                
                                                                                                                                
     Description: Alaska  Aviation Safety Project Phases 2 and 3 (HD                                                            
     1-40)                                                                                                                      
     The  department has recently  received  word that NASA  will be                                                            
     increasing this grant by $3 million.                                                                                       
     This  project involves  mapping  the most  dangerous major  air                                                            
     corridors  in Alaska using ortho-rectified, remote  imaging and                                                            
     digital  elevation models  to create  3-D visual fly-throughs.                                                             
     The aviation  community, Rescue  Coordination Center  (RCC) and                                                            
     the Medallion  Foundation will  use these renderings.  The goal                                                            
     of this research  is to apply advanced sciences  and technology                                                            
      to decrease aircraft accidents and related fatalities.                                                                    
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green overviewed the explanatory statement.                                                                            
                                                                                                                                
There being no objection, Amendment #40 was ADOPTED.                                                                            
                                                                                                                                
4:54:53 PM                                                                                                                    
                                                                                                                                
Amendment #41: This amendment  deletes the language pertaining to FY                                                            
03 from subsection  (d) of Section 35. RATIFICATIONS.,  on page 106,                                                            
lines 12 through 14. The amended language reads as follows.                                                                     
                                                                                                                                
          (d) The expenditures by the Department of Commerce,                                                                   
     Community  and  Economic  Development  for  a  qualified  trade                                                            
     association contract  for the fiscal year ending June 30, 2004,                                                            
     are ratified in the amount of $158,174.                                                                                    
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Description: Technical correction to reflect just fiscal year                                                              
     2004.                                                                                                                      
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green clarified this is a technical amendment.                                                                         
                                                                                                                                
JOAN BROWN, Chief  Budget Analyst, Office of Management  and Budget,                                                            
Office of the  Governor, affirmed  this is a technical amendment  to                                                            
eliminate ratification amounts for FY 03 from this provision.                                                                   
                                                                                                                                
AT EASE 4:56:13 PM / 4:56:15 PM                                                                                             
                                                                                                                                
There being no objection Amendment #41 was ADOPTED.                                                                             
                                                                                                                                
4:56:43 PM                                                                                                                    
                                                                                                                                
Amendment  #42: This  amendment changes  the funding  source of  the                                                            
$55,400  appropriation  to  the  Interior  Region  Timber  Marketing                                                            
Prospectus (HD  6) component of the Department of  Natural Resources                                                            
on  page 40,  lines  30 and  31 from  Statutory  Designated  Program                                                            
Receipts  (Fund   1108)  to  Timber  Sales  Receipts   (Fund  1155).                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Description: Interior Region Timber Marketing Prospectus                                                                   
     There is no source of SDPR for the Interior Region Timber                                                                  
     Marketing Prospectus.                                                                                                      
     Timber Sales Receipts could fund this program.                                                                             
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green explained this is another technical change.                                                                      
                                                                                                                                
There being no objection, Amendment #42 was ADOPTED.                                                                            
                                                                                                                                
4:57:11 PM                                                                                                                    
                                                                                                                                
Amendment  #43:  This amendment  increases  the  allocation  to  the                                                            
Fairbanks International  Airport:  Terminal Area Development  (HD 7-                                                            
11) component of the Airport  Improvement Program BRU, Department of                                                            
Transportation  and Public Facilities  on page 50, lines  19 through                                                            
21 from $2.2 million to  $40.6 million. A notation states "This will                                                            
change the Airport Improvement  Program appropriation amount on page                                                            
48." Accompanying explanatory language reads as follows.                                                                        
                                                                                                                                
     Description:                                                                                                               
     New fund sources:    $3,000,000 Federal Receipts (Fund 1002)                                                               
                          10,000,000 International Airport Revenue                                                              
                                          Funds (Fund 1027)                                                                     
                          27,600,000 International Airport                                                                      
                                          Construction Funds                                                                    
                                          (Fund 1112)                                                                           
     This  funding  change  was  submitted  in the  March  25,  2005                                                            
     amendment package sent to the Legislature.                                                                                 
     A terminal  area development  plan was completed for  FAI under                                                            
     the  guidance and  direction  of the FAI  Terminal Development                                                             
     Technical  Committee  consisting of representatives  from  FAI,                                                            
     DOT&PF,   FAA  (Federal   Aviation  Administration)   and   the                                                            
     airlines. As a subtask  of this effort, a deficiency evaluation                                                            
     was  completed for the  facility. This  deficiency study  notes                                                            
     that three  independent structural  evaluations found  portions                                                            
     of the  building to  be structurally unsound  and that  under a                                                            
     design  level seismic  event the  building will  be subject  to                                                            
     possible collapse  and significant damage. The study also noted                                                            
     that  portions  of the  facility  Department of  Education  and                                                            
     Early  Development  not  meet  required  fire and  life  safety                                                            
     codes,  are  functionally  deficient  and that  the  buildings'                                                            
     physical systems (HVAC,  electrical, etc.) were near the end of                                                            
     their useful life  and will require major repair or replacement                                                            
     in the near  future. A preferred alternative  for replacing and                                                            
     upgrading  portions  of  the  facility  to  address  the  noted                                                            
     deficiencies  while providing  adequate space for the  expected                                                            
     growth in passenger  traffic in the near term was developed and                                                            
      agreed upon by the members of the Technical Committee.                                                                    
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell  explained that  the Office  of Management and  Budget                                                            
has identified  additional funds,  none of which are general  funds.                                                            
                                                                                                                                
Co-Chair Green  clarified this amendment would have  no net increase                                                            
in general fund expenditure.                                                                                                    
                                                                                                                                
Ms. Blaisdell  stressed  the significant  increase  in use of  other                                                            
funds.                                                                                                                          
                                                                                                                                
There being no objection, Amendment #43 was ADOPTED.                                                                            
                                                                                                                                
4:58:23 PM                                                                                                                    
                                                                                                                                
Amendment #44: This amendment  inserts a new subsection into Section                                                            
22. OFFICE OF THE GOVERNOR.,  on page 98, line 9 to read as follows.                                                            
                                                                                                                                
          (a) Section 8(a), ch. 6, SLA 2005, is amended to read:                                                                
                     (a) The sum of $375,000 is appropriated from                                                               
                the general fund to  the Office of the Governor  for                                                            
                direct  support  of national  efforts  to  open  the                                                            
                coastal  plain  of  the  Arctic  National   Wildlife                                                            
                Refuge for oil and gas exploration  and development,                                                          
                and  other   oil  and  gas   and  natural   resource                                                          
                development projects,  for the  fiscal years  ending                                                          
                June 30, 2005, and June 30, 2006.                                                                               
                                                                                                                                
          New Text Underlined                                                                                                 
                                                                                                                                
This amendment  then renumbers the  existing subsections  of Section                                                            
22   accordingly.    Accompanying   explanatory   language    reads,                                                            
"Description: This extends the purpose of the appropriation."                                                                   
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green  objected for explanation,  noting it was  offered at                                                            
the request of the Office of Management and Budget.                                                                             
                                                                                                                                
Ms. Blaisdell  explained  this amendment  relates to "appropriation                                                             
items  that are  in the  gas pipeline  section of  the supplemental                                                             
portion of this bill."                                                                                                          
                                                                                                                                
Co-Chair Green ordered the amendment TABLED.                                                                                    
                                                                                                                                
4:59:11 PM                                                                                                                    
                                                                                                                                
Amendment  #45:  This amendment  adds  "and other  oil  and gas  and                                                            
natural resource development  projects" to subsection (a) of Section                                                            
22. OFFICE  OF THE GOVERNOR.,  on page 98,  lines 9 through  12. The                                                            
amended subsection reads as follows.                                                                                            
                                                                                                                                
          (a) The sum of $125,000 is appropriated from the Alaska                                                               
     Permanent  Fund  Corporation  receipts  to  the Office  of  the                                                            
     Governor  for direct  support of national  efforts to  open the                                                            
     coastal  plain of the Arctic  National Wildlife Refuge  for oil                                                            
     and gas exploration  and development, and other oil and gas and                                                            
     natural  resource development  projects,  for the fiscal  years                                                            
     ending June 30, 2005, and June 30, 2006.                                                                                   
                                                                                                                                
Accompanying explanatory  language reads, "Description: This expands                                                            
the purpose of the appropriation."                                                                                              
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell explained  that this amendment is similar to Amendment                                                            
#44.                                                                                                                            
                                                                                                                                
Co-Chair  Green objected  to the  motion and  ordered the  amendment                                                            
TABLED.                                                                                                                         
                                                                                                                                
4:59:41 PM                                                                                                                    
                                                                                                                                
Amendment   #46:  This   amendment   increases   the  general   fund                                                            
appropriation  to  the  Management  Information   System  (HD  1-40)                                                            
component of  the Department of Law  on page 38, lines 8  and 9 from                                                            
$500,000 to $1  million. Accompanying explanatory  language reads as                                                            
follows.                                                                                                                        
                                                                                                                                
     Description:                                                                                                               
     This  amendment  restores  this  project  to  the  full  amount                                                            
     requested  in  the Governor's  Capital  Budget.  The agency  is                                                            
     concerned  that reducing this appropriation to  50% jeopardizes                                                            
     its  ability  to  purchase  needed  software  and  hardware  to                                                            
     achieve  critically needed  improvements  in technology  in the                                                            
     State's  largest  law  office.   The current   timekeeping  and                                                            
     billing  system  is  outdated,  case  management  and  document                                                            
     management  is practically  nonexistent  when measured  against                                                            
     industry  standards. The agency  is hampered in its  ability to                                                            
     supply  accurate  and dependable  management  information  that                                                            
     would   be  the  cornerstone   of  meaningful  and   measurable                                                            
     performance information.                                                                                                   
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell outlined the explanatory statement.                                                                               
                                                                                                                                
There being no objection, Amendment #46 was ADOPTED.                                                                            
                                                                                                                                
5:00:37 PM                                                                                                                    
                                                                                                                                
Amendment #47:  This amendment deletes  the language of Section  10.                                                            
NATIONAL PETROLEUM  RESERVE - ALASKA  IMPACT GRANT PROGRAM;  INTENT.                                                            
(b), on page 92,  lines 16 - 20 and inserts new language  to read as                                                            
follows.                                                                                                                        
                                                                                                                                
          (b) The sum of $24,706,539, received by the National                                                                  
     Petroleum Reserve  - Alaska special revenue fund (AS 37.05.530)                                                            
     under  42 U.S.C. 6508  by August 31,  2005, is appropriated  to                                                            
     the Department of  Commerce, Community and Economic Development                                                            
     from  capital  project  grants  under  the  National  Petroleum                                                            
     Reserve  -  Alaska  impact  grant   program  to  the  following                                                            
     municipalities for  the purposes stated in the amounts set out:                                                            
          MUNICIPALITY               PROJECT                   AMOUNT                                                           
          (1)  North Slope Borough   Social and cultural      $275,880                                                          
                                       study - phase 2                                                                          
          (2) North Slope Borough Wainwright youth             229,500                                                          
                                       program                                                                                  
          (3) Nuiqsut                Local government          468,000                                                          
                        operations/cultural                                                                                     
                                       coordinator                                                                              
          (4) North Slope Borough Wainwright softball           35,000                                                          
                                       field                                                                                    
          (5) Barrow                 City impound and          174,389                                                          
                                       disposal site project                                                                    
          (6) North Slope Borough Atqasuk energy               100,042                                                          
                                       assessment                                                                               
          (7) North Slope Borough Wainwright local             311,500                                                          
                                       government operations                                                                    
          (8) Barrow                 City Hall building         69,413                                                          
                                       addition feasibility                                                                     
                                       study                                                                                    
          (9) Nuiqsut                Youth center operations 150,000                                                            
                                       and maintenance                                                                          
          (10) Atqasuk               Atqasuk local             336,468                                                          
                                       government operations                                                                    
          (11) Barrow                Roller rink renovation     63,556                                                          
                         feasibility study                                                                                      
          (12) North Slope Borough Utility master plan/        106,221                                                          
                                       emergency plan                                                                           
          (13)  North Slope Borough  Misdemeanor probation     346,071                                                          
                                       officer                                                                                  
          (14) North Slope Borough Fire equipment and          250,000                                                          
                                       training                                                                                 
          (15) Barrow                Barrow local            1,385,843                                                          
                                       government operations                                                                    
          (16) Nuiqsut               Design/install            200,000                                                          
                                       retractable boat ramp                                                                    
          (17)  North Slope Borough  Continuing studies to  2,461,368                                                           
                                       investigate                                                                              
                                       wildlife/subsistence                                                                     
          (18)  North Slope Borough  Oil spill response team   737,867                                                          
          (19)  North Slope Borough  Police officers for    1,486,689                                                           
                                       NPR-A villages                                                                           
          (20)  North Slope Borough  Health, survival, and     654,426                                                          
                                       sustainability of key                                                                    
                                       subsistence resources                                                                    
          (21)  North Slope Borough  Workforce development  3,729,451                                                           
                                       program                                                                                  
          (22)  North Slope Borough  Mayor's job program    2,527,961                                                           
          (23)  North Slope Borough  Police importation     1,101,512                                                           
                                       combat program                                                                           
          (24) North Slope Borough North Slope science         425,578                                                          
                                       initiative                                                                               
          (25) North Slope Borough Village capacity            968,182                                                          
                                       building                                                                                 
          (26) North Slope Borough NPR-A technical          1,468,508                                                           
                                       review team                                                                              
          (27) North Slope Borough Allied health            3,400,000                                                           
                                       training center                                                                          
          (28)  North Slope Borough  Wainwright city office     38,114                                                          
                                       renovation                                                                               
          (29) Atqasuk               Youth center addition     680,000                                                          
                        to community center                                                                                     
          (30) North Slope Borough Wainwright lagoon           525,000                                                          
                                       boat launch                                                                              
                                                                                                                                
          (c) If the amount available for appropriation from the                                                                
     National  Petroleum Reserve -  Alaska special reserve  fund (AS                                                            
     37.05.530) under (b)  of this section is less than $24,706,539,                                                            
     then each  of the appropriations made by (b)(1)  - (30) of this                                                            
     section  is  reduced   in  proportion  to  the  amount  of  the                                                            
     shortfall.                                                                                                                 
                                                                                                                                
This amendment  also stipulates  a lapse date  of June 30,  2006 for                                                            
the appropriations  made in Section  10(b)(1)-(13); a lapse  date of                                                            
June 30, 2007 for the appropriations  made in subsections (14)-(16);                                                            
a  lapse date  of  June 30,  2008  for the  appropriations  made  in                                                            
subsections  (17)-(26); and  a lapse date of  June 30, 2009  for the                                                            
appropriation  made in subsection  (27). The appropriations  made in                                                            
subsections (28)-(30) lapse under AS 37.25.020.                                                                                 
                                                                                                                                
Co-Chair Wilken  announced this amendment  would be NOT OFFERED,  as                                                            
it  is a  duplicate  of Amendment  #30,  which  was adopted  at  the                                                            
previous hearing.                                                                                                               
                                                                                                                                
5:00:49 PM                                                                                                                    
                                                                                                                                
Amendment #48:  This amendment inserts  a new subsection  to Section                                                            
10.  NATIONAL  PETROLEUM  RESERVE  - ALASKA  IMPACT  GRANT  PROGRAM;                                                            
INTENT., on page 92, following line 20 to read as follows.                                                                      
                                                                                                                                
          (c) That portion of the amount appropriated by (B) of                                                                 
     this section  that is not subject  to a signed grant  agreement                                                            
     between  the Department  of  Commerce, Community  and  Economic                                                            
     Development  and an impacted  municipality by August  31, 2005,                                                            
     lapses  into the National  Petroleum  Reserve - Alaska  special                                                            
     revenue fund (AS 37.05.530) September 1, 2005.                                                                             
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Description:                                                                                                               
     This amendment is needed to allow lapsing into the NPR-A Fund                                                              
     for funds that do not have a signed grant agreement.                                                                       
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green understood this to be a technical amendment.                                                                     
                                                                                                                                
Ms.  Blaisdell  affirmed   and  explained  the  language   had  been                                                            
inadvertently omitted.                                                                                                          
                                                                                                                                
There being no objection, Amendment #48 was ADOPTED.                                                                            
                                                                                                                                
5:01:41 PM                                                                                                                    
                                                                                                                                
Amendment  #49: This  amendment inserts  "and  construction" to  the                                                            
title  of  the  Lower   Kuskokwim  -  Kilbuck  Elementary   Deferred                                                            
Maintenance,  Bethel  (HD 38)  component  of the  Major Maintenance                                                             
Grant Fund  (AS 14.11.007)  BRU, Department  of Education and  Early                                                            
Development on  page 79, lines 22 through 24. The  amended component                                                            
title   is  "Lower   Kuskokwim   -   Kilbuck   Elementary   Deferred                                                            
Maintenance,  and Construction,  Bethel  (HD 38)".  The $24,251,565                                                             
general fund allocation remains unchanged.                                                                                      
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected for an explanation.                                                                                     
                                                                                                                                
Senator  Hoffman explained  this amendment  would provide the  Lower                                                            
Kuskokwim  School  District  the  option  to utilize  the  funds  to                                                            
construct a new school if deemed appropriate.                                                                                   
                                                                                                                                
Co-Chair  Wilken understood  that  the Department  of Education  and                                                            
Early  Development   must  first  review  new  school  construction                                                             
projects.  He asked  if this  facility  has undergone  the  approval                                                            
process.                                                                                                                        
                                                                                                                                
Senator  Hoffman  responded  that  this project  has  completed  the                                                            
Department of Education and Early Development review.                                                                           
                                                                                                                                
Senator   Stedman  clarified   the   estimated   cost  of   deferred                                                            
maintenance needs for the school is $24 million.                                                                                
                                                                                                                                
Senator Hoffman affirmed.                                                                                                       
                                                                                                                                
Co-Chair Green  requested Senator  Hoffman explain how the  estimate                                                            
was achieved.                                                                                                                   
                                                                                                                                
Senator  Hoffman replied  that the Lower  Kuskokwim School  District                                                            
submitted  this amount  to  the Department  after  prioritizing  the                                                            
needs.                                                                                                                          
                                                                                                                                
Senator  Stedman  asked  if  the  theory  is  that  demolishing  the                                                            
existing  school  and constructing  a  new  facility might  be  more                                                            
economical.                                                                                                                     
                                                                                                                                
Senator Hoffman  affirmed that such  a determination could  be made.                                                            
                                                                                                                                
There being no objection, Amendment #49 was ADOPTED.                                                                            
                                                                                                                                
5:03:36 PM                                                                                                                    
                                                                                                                                
Amendment  #50: This  amendment adds  a new  Special Olympics  Games                                                            
component  to the  Grants to Named  Recipients  (AS 37.05.316)  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
3 line  30 and 31  and appropriates  $250,000  general funds  to the                                                            
component.                                                                                                                      
                                                                                                                                
Senator Dyson moved for adoption.                                                                                               
                                                                                                                                
Senator  Dyson  offered  a  motion   to amend   the  amendment.  The                                                            
amendment to  the amendment reduces  the general fund appropriation                                                             
to the Special Olympics Games from $250,000 to $125,000.                                                                        
                                                                                                                                
The amendment  to the amendment also adds a new Arctic  Winter Games                                                            
component  to the Grants  to Named Recipients  BRU and appropriates                                                             
$125,000 general funds to that component.                                                                                       
                                                                                                                                
The  amendment  to the  amendment  also  adds  a new  2006  National                                                            
Veterans  Wheelchair   Games  component  to  the  Grants   to  Named                                                            
Recipients  BRU and  appropriates  $250,000  general  funds to  that                                                            
component.                                                                                                                      
                                                                                                                                
The  total  appropriation  to  the  amended  amendment  is  $500,000                                                            
general funds.                                                                                                                  
                                                                                                                                
The amendment was AMENDED without objection.                                                                                    
                                                                                                                                
Without further  objection Amendment  #50, as amended, was  ADOPTED.                                                            
                                                                                                                                
5:04:51 PM                                                                                                                    
                                                                                                                                
Amendment #51:  This amendment adds a new Fraternal  Order of Alaska                                                            
State  Troopers  (FOAST)  room  conversion   and facility   upgrades                                                            
component  to the  Grants  to Named  Recipients BRU,  Department  of                                                            
Commerce,  Community and Economic  Development  on page 3,  lines 30                                                            
and 31 and appropriates $12,000 general funds to the component.                                                                 
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Co-Chair Green  asked if Members had  further objection and  hearing                                                            
none, declared Amendment #51 ADOPTED.                                                                                           
                                                                                                                                
5:05:17 PM                                                                                                                    
                                                                                                                                
Amendment  #52: This  amendment  inserts a  new Fraternal  Order  of                                                            
Alaska   State  Troopers   (FOAST)   Photo/Video   Project   Program                                                            
Implementation  component  to the  Grants to  Named Recipients  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
3, lines 30 and 31 and  appropriates $50,000. The fund source is not                                                            
specified.                                                                                                                      
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair  Green objected  to the  motion and  ordered the  Amendment                                                            
TABLED.                                                                                                                         
                                                                                                                                
5:05:31 PM                                                                                                                    
                                                                                                                                
Amendment  #53: This amendment  inserts  a new City  of Adak  - Adak                                                            
Arctic  Shuttle Pre-Feasibility  Study  component to  the Grants  to                                                            
Municipalities   (AS  37.05.315)   BRU,  Department   of   Commerce,                                                            
Community and  Economic Development  on page 8, lines 11  and 12 and                                                            
appropriates  $50,000  to  the component.  The  fund source  is  not                                                            
specified.                                                                                                                      
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected to the motion and TABLED the amendment.                                                                 
                                                                                                                                
AT EASE: 5:05:48 PM / 5:06:17 PM                                                                                            
                                                                                                                                
Amendment  #54: This  amendment inserts  a new  Service High  School                                                            
PTSA  Scoreboard  Improvement  component  to  the  Grants  to  Named                                                            
Recipients  BRU,  Department  of Commerce,  Community  and  Economic                                                            
Development  on page 3 lines 30 and  31 and appropriates  $20,000 to                                                            
the component. The fund source is not specified.                                                                                
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
There being no objection, Amendment #54 was ADOPTED.                                                                            
                                                                                                                                
5:06:31 PM                                                                                                                    
                                                                                                                                
Amendment  #55:  This  amendment   inserts  a  new  Municipality  of                                                            
Anchorage  - 74th Ave Pedestrian  Facilities  - Arctic Boulevard  to                                                            
Chad St. component  to the Grants to Municipalities  BRU, Department                                                            
of Commerce, Community  and Economic Development on page 8, lines 11                                                            
and 12 and appropriates  $250,000 to the component.  The fund source                                                            
is not specified.                                                                                                               
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
There being no objection, Amendment #55 was ADOPTED.                                                                            
                                                                                                                                
5:06:36 PM                                                                                                                    
                                                                                                                                
Amendment   #56:  This   amendment   increases   the  general   fund                                                            
appropriation  to  the  Municipality  of Anchorage  -  Kincaid  Park                                                            
Summer  and Winter  Recreational  Improvements,  Fields, Paving  and                                                            
Equipment (HD 17-32) component  in the Grants to Municipalities BRU,                                                            
Department of Commerce,  Community and Economic Development, on page                                                            
23, lines 18 through 23 from $480,000 to $730,000.                                                                              
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
There being no objection, Amendment #56 was ADOPTED.                                                                            
                                                                                                                                
Co-Chair Green requested clarification of the project.                                                                          
                                                                                                                                
Ms.  Blaisdell  explained  the improvements  would  be  made to  the                                                            
recreational facilities of Kincaid Park in Anchorage.                                                                           
                                                                                                                                
5:07:01 PM                                                                                                                    
                                                                                                                                
Amendment  #57: This  amendment  changes the  title of  the City  of                                                            
Sterling  - Sterling  Senior  Center  Kitchen Equipment  (HD  33-35)                                                            
component  in  the  Grants  to  Municipalities  BRU,  Department  of                                                            
Commerce, Community  and Economic  Development on page 12,  lines 23                                                            
through  25, to  read "Sterling  Senior  Citizens,  Inc. -  Sterling                                                            
Senior  Center  Kitchen  Equipment  (HD  33-35).  The  general  fund                                                            
appropriation to the component of $64,000 is reduced to $58,000.                                                                
                                                                                                                                
This  amendment  also  changes  the title  of  the  Kenai  Peninsula                                                            
Borough  - Kenai  Road  Improvements  (HD  33-35) component  in  the                                                            
Grants to Municipalities  BRU, Department of Commerce, Community and                                                            
Economic Development on  page 14, lines 25 through 27, to read "City                                                            
of Kenai  - Kenai Road  Improvements (HD  33-35)". The general  fund                                                            
appropriation remains unchanged.                                                                                                
                                                                                                                                
This amendment  also reduces the general  fund appropriation  to the                                                            
Kenai Peninsula  Borough - Nikiski  Elementary School Bicycle  Trail                                                            
(HD  33-35)   component  in  the   Grants  to  Municipalities   BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
14, lines 31 - 33, from $154,400 to $137,000.                                                                                   
                                                                                                                                
This amendment  also reduces the general  fund appropriation  to the                                                            
Kenai Peninsula  Borough - Ninilchik  Pressure Reducing Station  (HD                                                            
33-35) component in the  Grants to Municipalities BRU, Department of                                                            
Commerce, Community  and Economic  Development on page 15,  lines 3,                                                            
through 5 from $225,000 to $210,000.                                                                                            
                                                                                                                                
This  amendment  also  changes  the title  of  the  Kenai  Peninsula                                                            
Borough - Ninilchik Pumper  Tanker Truck (HD 33-35) component in the                                                            
Grants to Municipalities  BRU, Department of Commerce, Community and                                                            
Economic  Development  on  page  15,  lines  6 through  8,  to  read                                                            
"Ninilchik Emergency Services,  Inc. - Ninilchik Pumper Tanker Truck                                                            
(HD 33-35)".  The  general fund  appropriation to  the component  is                                                            
reduced from $154,000 to $140,000.                                                                                              
                                                                                                                                
This  amendment  also  changes  the title  of  the  Kenai  Peninsula                                                            
Borough -  Soldotna Road  Improvements (HD  33-35) component  in the                                                            
Grants to Municipalities  BRU, Department of Commerce, Community and                                                            
Economic Development on  page 15, lines 16 through 18, to read "City                                                            
of Soldotna  - Soldotna Road Improvements  (HD 33-35)". The  general                                                            
fund appropriation remains unchanged.                                                                                           
                                                                                                                                
Co-Chair Wilken moved for adoption of the amendment.                                                                            
                                                                                                                                
Co-Chair  Green characterized   this as  a "neutral"  amendment,  in                                                            
which some funding reductions are made.                                                                                         
                                                                                                                                
There being no objection, Amendment #57 was ADOPTED.                                                                            
                                                                                                                                
5:07:40 PM                                                                                                                    
                                                                                                                                
Amendment   #58:  This   amendment   increases   the  general   fund                                                            
appropriation  to the Matanuska-Susitna  Borough  - Academy  Charter                                                            
School/Administrative Building  Improvements (HD 13-16) component in                                                            
the Grants to Municipalities  BRU, Department of Commerce, Community                                                            
and  Economic Development  on  page  16, lines  7 through  10,  from                                                            
$20,000 to $35,000.                                                                                                             
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Ms. Blaisdell explained this is a technical correction.                                                                         
                                                                                                                                
There being no objection, Amendment #58 was ADOPTED.                                                                            
                                                                                                                                
5:08:16 PM                                                                                                                    
                                                                                                                                
Amendment #59:  This amendment inserts a new 2006  National Veterans                                                            
Wheelchair  Games component to the  Grants to Named Recipients  BRU,                                                            
Department of  Commerce, Community and Economic Development  on page                                                            
3, lines 30  and 31 and appropriates  $250,000 general funds  to the                                                            
component.                                                                                                                      
                                                                                                                                
Co-Chair Green announced  this amendment would be NOT OFFERED due to                                                            
action taken on Amendment #50.                                                                                                  
                                                                                                                                
AT EASE 5:08:41 PM / 5:10:07 PM                                                                                             
                                                                                                                                
Amendment #60: This amendment  deletes the Denali Borough - Anderson                                                            
School/Septic  Leach Field Replacement (HD 7-11) component  from the                                                            
Grants to Municipalities  BRU, Department of Commerce, Community and                                                            
Economic  Development  on page  13,  lines 17  through  19, and  the                                                            
$77,800 general fund appropriation to that component.                                                                           
                                                                                                                                
This amendment also inserts  a new World War 2 Memorial component to                                                            
an unspecified  BRU and department  and appropriates $35,200  to the                                                            
component. The fund source is not specified.                                                                                    
                                                                                                                                
This  amendment   also  deletes  the   Denali  Borough  -   Cantwell                                                            
School/Sprinkler   System  Fire  Upgrade  and  New  Well  (HD  7-11)                                                            
component  from the  Grants  to Municipalities  BRU,  Department  of                                                            
Commerce, Community  and Economic  Development on page 13,  lines 20                                                            
through  23, and the  $182,400  general fund  appropriation to  that                                                            
component.                                                                                                                      
                                                                                                                                
This amendment  also inserts a new  Ester Volunteer Fire  Department                                                            
component  to an  unspecified BRU  and department  and appropriates                                                             
$125,000 to the component. The fund source is not specified.                                                                    
                                                                                                                                
This amendment  also inserts a new  Morris Thompson Cultural  Center                                                            
component  to an  unspecified BRU  and department  and appropriates                                                             
$100,000 to the component. The fund source is not specified.                                                                    
                                                                                                                                
A notation on the amendment reads "net zero technical change".                                                                  
                                                                                                                                
Co-Chair Green announced this amendment would be NOT OFFERED..                                                                  
                                                                                                                                
Amendment #61:  This amendment changes the title of  the City of San                                                            
Point - Purchase and Upgrade  of Old Reeve Aleutian Airways Building                                                            
(HD 37) component  in the Grants to  Municipalities BRU,  Department                                                            
of Commerce,  Community and Economic  Development on page  49, lines                                                            
29  through 32  to read,  "City  of Sand  Point -  Airport  Terminal                                                            
Project  (HD  37).   Accompanying  explanatory  language   reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     Amendment  is  requested  by  the City  of  Sand Point  at  the                                                            
     recommendation  of Kip Knudson,  Deputy Director for  Aviation,                                                            
     DOT. Knudson advised  that the inclusion of the word "purchase"                                                            
     may  overly  limit the  use of  funds in  the  event the  Reeve                                                            
     building  is  not  totally  recoverable   for  renovation.  The                                                            
     requested  broader language  will give  the City of Sand  Point                                                            
     the flexibility to  build a new terminal if and when the actual                                                            
     condition of the Reeve building is determined.                                                                             
                                                                                                                                
Co-Chair Green announced this amendment would be NOT OFFERED.                                                                   
                                                                                                                                
Amendment  #62: [Note:  The  amendment  specifies the  following  be                                                            
inserted "following  page 15, line  9, under Department of  Fish and                                                            
Game".  This page  of the committee  substitute  contains Grants  to                                                            
Municipalities  BRU components. Appropriations to  the Department of                                                            
Fish and Game  are contained on page 35, lines 11  through 32.] This                                                            
amendment inserts a new  Implementation of Intensive Management Laws                                                            
component and appropriates  $250,000 general funds to the component.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     The  Board of  Game  has authorized  several  predator  control                                                            
     programs  in  an  effort  to  allow  major  depleted   ungulate                                                            
     populations  that have been limited  by predation to  increase.                                                            
     In  order   to  sustain  these  programs  long   enough  to  be                                                            
     effective,  and  in  recognition  of the  need  for  additional                                                            
     similar   programs  in  other  areas,  there   is  a  need  for                                                            
     biological  inventories and studies to gather  information upon                                                            
     which the  Board can base its decisions. This  information also                                                            
     represents  the basis  for defending  the  programs from  legal                                                            
     challenges.                                                                                                                
                                                                                                                                
     The  existing intensive  management programs  and requests  for                                                            
     similar  programs from other  parts of the state have  placed a                                                            
     major   financial   burden   on  the   Division   of   Wildlife                                                            
     Conservation  in  the Department  of  Fish and  Game.  Although                                                            
     funds have  been prioritized within the division  to cover many                                                            
     of  the  most  important  expenses   for  these  programs,  the                                                            
     biological  data gathering and  administrative costs  needed to                                                            
     support  these programs  has escalated  beyond the capacity  of                                                            
     the division to respond.                                                                                                   
                                                                                                                                
     This  CIP  [capital   improvement  project]  demonstrates   the                                                            
     legislature's  intent  that the  Intensive  Management laws  be                                                            
     implemented to the maximum extent possible.                                                                                
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
5:10:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Green overviewed the explanatory statement.                                                                            
                                                                                                                                
Senator Hoffman supported the amendment.                                                                                        
                                                                                                                                
Co-Chair  Wilken commented  that the  commissioner  had submitted  a                                                            
funding request  approximately one  month ago. However, the  plan he                                                            
proposed was unclear.  Upon the Committee's request,  the Department                                                            
resubmitted   a  plan  detailing   the   predator  control   program                                                            
specifically targeting wolf and bear.                                                                                           
                                                                                                                                
There being no objection, Amendment #62 was ADOPTED.                                                                            
                                                                                                                                
AT EASE 5:12:10 PM / 5:13:10 PM                                                                                             
                                                                                                                                
Amended  Amendment  #9: This  amendment inserts  a  new Bristol  Bay                                                            
Borough  Community  Mapping  Project  component  to  the  Grants  to                                                            
Municipalities  (AS 37.05.315)  BRU of the  Department of  Commerce,                                                            
Community and Economic  Development on page 8, lines 11 and 12. This                                                            
amendment   also  appropriates   $150,000   general  funds   to  the                                                            
component.                                                                                                                      
                                                                                                                                
This amendment also increases  the general fund appropriation to the                                                            
Department of  Commerce, Community and Economic Development,  Grants                                                            
to  Municipalities  (AS 37.05.315)  BRU,  City  of Unalaska  -  Boat                                                            
Harbor (HD  37) component on page  13 lines 3 and 4 from  $2 million                                                            
to $4 million.                                                                                                                  
                                                                                                                                
This amendment also adds  a new Togiak/Twin Hills Bridge Feasibility                                                            
Study  component  to the  Department  of Transportation  and  Public                                                            
Facilities   and  appropriates   $150,000   general  funds   to  the                                                            
component.                                                                                                                      
                                                                                                                                
This amendment  also increases  the general  fund allocation  to the                                                            
Department of  Education and Early Development, School  Construction                                                            
Grant  Fund  (AS  14.11.005)  BRU,  Dillingham  Middle/High   School                                                            
construction  and  renovation  - Dillingham   City Schools  (HD  38)                                                            
component on page 83 lines  14 - 17 from $7 million to $9.5 million.                                                            
                                                                                                                                
The  amendment to  the  amendment  also adds  a new  Aleutians  East                                                            
Borough  - Cold  Bay Airport  Terminal  component to  the Grants  to                                                            
Municipalities   (AS  37.05.315)   BRU,  Department   of   Commerce,                                                            
Community  and  Economic   Development  and  appropriates   $500,000                                                            
general funds to the component.                                                                                                 
                                                                                                                                
Co-Chair  Green announced  that Amendment  #9 was  again before  the                                                            
Committee.  This amendment was amended  and adopted at the  previous                                                            
hearing.                                                                                                                        
                                                                                                                                
Ms. Blaisdell  reminded  that this  amendment had  been amended  and                                                            
outlined the changes.                                                                                                           
                                                                                                                                
Ms. Blaisdell  indicated the  amendment to  the amendment to  remove                                                            
from the amendment, the  Cold Bay access Improvements component from                                                            
the   Surface    Transportation    Improvements,    Department    of                                                            
Transportation  and Public Facilities, on page 58,  lines 30 and 31,                                                            
and the increased  general fund appropriation  to the component  was                                                            
in error.                                                                                                                       
                                                                                                                                
Ms. Blaisdell  stated  that the  amendment to  the amendment  should                                                            
have  provided that  the component  remain  in the bill  and the  $2                                                            
million appropriation  contained in the committee  substitute remain                                                            
unchanged.                                                                                                                      
                                                                                                                                
5:15:08 PM                                                                                                                    
                                                                                                                                
Senator Olson  asked if the airport  terminal project is  located at                                                            
Cold Bay or Sand Point.                                                                                                         
                                                                                                                                
Ms.  Blaisdell responded  the  appropriation  would be  made to  the                                                            
Aleutians East Borough not to Sand Point.                                                                                       
                                                                                                                                
Co-Chair  Green  clarified  the  grant  would  be  provided  to  the                                                            
Aleutians East Borough and is comprised of general funds.                                                                       
                                                                                                                                
[Note: No  motions were offered  and no formal  action was  taken on                                                            
the amendment. The Committee's intent was not specified.]                                                                       
                                                                                                                                
AT EASE 5:16:03 PM / 5:35:19 PM                                                                                             
                                                                                                                                
Amendment  #63:  This  amendment  inserts  a  new  bill  section  to                                                            
appropriate  $985,000 general  funds to the  Department of  Fish and                                                            
Game  for Chitna  Personal  Dip Net  Fishery (HD  99). Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     This amendment  funds dumpsters,  transporter vehicle  to carry                                                            
     dumpsters  to the landfill, portable  outhouses, service  truck                                                            
     to service outhouses  and concession building all to be located                                                            
     at  Chitna for  the services  of the  Chitna  personal dip  net                                                            
     fishery. Also includes signage and access design.                                                                          
                                                                                                                                
Co-Chair Wilken moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Green objected.                                                                                                        
                                                                                                                                
Co-Chair Wilken  corrected the amendment to appropriate  the funding                                                            
to the Department  of Natural Resources  rather than the  Department                                                            
of Fish and Game.                                                                                                               
                                                                                                                                
Co-Chair  Wilken explained  the need  for facilities  at the  Chitna                                                            
River  to provide  access. This  funding  request is  the result  of                                                            
months  of   consideration  and  negotiation   between  the   Native                                                            
corporation  landowner and  the Department  of Natural Resources.  A                                                            
survey would be conducted to establish future claims.                                                                           
                                                                                                                                
Senator Stedman  clarified this request is for "start-up  money" and                                                            
to develop a plan for future operations.                                                                                        
                                                                                                                                
Co-Chair  Wilken understood  this  is a capital  appropriation.  The                                                            
intent is that  user fees collected  from fishers would support  the                                                            
program in the future.                                                                                                          
                                                                                                                                
SENATOR RALPH  SEEKINS elaborated about the personal  use fishery at                                                            
Chitna, which  he is very familiar  with. A dip net fishery  plan to                                                            
mitigate the impact  of the fishery on the local community  has been                                                            
anticipated.  Approximately  20,000 personal use dip net permits are                                                            
sold for this  fishery every year. Administration  of the mitigation                                                            
program  would  be  similar  to that  utilized  for  a  State  park.                                                            
Participants  would be required to  utilize the facilities  provided                                                            
and minimize  impact. Previously,  facilities such as dumpsters  and                                                            
portable toilets were not  available, which resulted in an unhealthy                                                            
and unsightly  situation.  This funding  request  is to address  the                                                            
first stage  of the need and is supported  by Department  of Natural                                                            
Resources Commissioner Tom Irwin and Governor Murkowski.                                                                        
                                                                                                                                
5:41:11 PM                                                                                                                    
                                                                                                                                
Co-Chair Green thanked  Senator Seekins for proposing the amendment.                                                            
                                                                                                                                
Co-Chair Green  ordered the amendment  HELD in Committee.  She noted                                                            
that all State  parks are in need of funds and should  be addressed.                                                            
                                                                                                                                
Senator  Seekins emphasized  the significant  impact  of the  20,000                                                            
participants to the area.                                                                                                       
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
                                                                                                                                
5:42:44 PM                                                                                                                    
                                                                                                                                
AT EASE 5:43:08 PM / 5:44:18 PM                                                                                             
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 61(FIN)                                                                                              
     "An Act relating to Calcutta pools and crane classics as                                                                   
     authorized forms of charitable gaming."                                                                                    
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
SHALON SZYMANSKI, Staff  to Representative Lesil McGuire, the bill's                                                            
sponsor, explained  that current State  law contains "a very  narrow                                                            
and  specific  list of  allowable  games  of  chance and  skill  for                                                            
charitable purposes".  This bill would add Calcutta  pools and crane                                                            
classics to  that list. "Calcutta  pools have been held in  the past                                                            
and they have  proven to be a very effective way to  raise money for                                                            
charities across the State."  The operation of a Calcutta pool would                                                            
consist  of the  following  scenario: the  day before  the  sporting                                                            
event,  people would bid,  in an  auction format,  on the team  that                                                            
they believe would  win the tournament; and the winning  team's high                                                            
bidder would  receive a  predetermined percentage  of the pot.  This                                                            
bill would require  that at least 50-percent of the  pot be provided                                                            
to the  charity.  Other limitations  specify  that  a Calcutta  pool                                                            
could only  be held in conjunction  with a sporting event  occurring                                                            
within the  State of Alaska; could  not be held in conjunction  with                                                            
elementary,  secondary,  or post-secondary  schools  or other  youth                                                            
sporting event  organizations; bid participants must  be at least 18                                                            
years of age;  and the event must be conducted in  an auction format                                                            
to  which a  permit issued  by  the Department  of  Revenue must  be                                                            
acquired.                                                                                                                       
                                                                                                                                
5:46:26 PM                                                                                                                    
                                                                                                                                
Ms. Szymanski  pointed out  that only one  Calcutta permit  could be                                                            
issued per  event, and that  the only entity  that could obtain  the                                                            
permit would  be the person or organization  holding the  event. For                                                            
example, only one Calcutta  permit could be issued in regards to the                                                            
Iditarod  Sled Dog Race,  and the  Iditarod Committee  would  be the                                                            
only entity  that could request that  permit from the Department  of                                                            
Revenue.  She  reiterated  that  no  less  than  50-percent  of  the                                                            
Calcutta earnings could be provided to the charity.                                                                             
                                                                                                                                
Ms. Szymanski  avowed that inclusion  of Calcutta games in  the list                                                            
of allowable  games of chance would  incur "no more harm  than other                                                            
charitable games  events" that are permitted. Examples  of permitted                                                            
games would include rat races, pull-tabs, and classics.                                                                         
                                                                                                                                
5:47:26 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  for clarity  as  to whether  a Calcutta  pool                                                            
permit would be limited to a specific one-time event.                                                                           
                                                                                                                                
Ms. Szymanski  replied in the affirmative.  One permit per  sporting                                                            
event would be issued.                                                                                                          
                                                                                                                                
Co-Chair Green  understood therefore that a single  permit could not                                                            
be utilized for an entire football season.                                                                                      
                                                                                                                                
Ms.  Szymanski affirmed  that  it could  not; an  individual  permit                                                            
would be required for each football game.                                                                                       
                                                                                                                                
Senator  Stedman  professed  being  unfamiliar  with  this  gambling                                                            
scenario, and, to that  point, he asked for further clarification as                                                            
to whether the  football game, for example, must occur  in the State                                                            
of Alaska.                                                                                                                      
                                                                                                                                
Ms. Szymanski  confirmed that  the game must  take place within  the                                                            
State.                                                                                                                          
                                                                                                                                
Co-Chair  Wilken asked whether  Calcutta pools  are currently  being                                                            
conducted in the State.                                                                                                         
                                                                                                                                
Ms. Szymanski replied that,  "there have been Calcutta pools held in                                                            
the  past".  A [unidentified]   legal opinion  issued  a  few  years                                                            
earlier ruled,  "that Calcutta pools are an illegal  activity". Most                                                            
organizations  ceased conducting Calcutta  pools after that  ruling.                                                            
                                                                                                                                
Co-Chair  Wilken  understood  therefore  that  the  State  does  not                                                            
differentiate   between  Calcutta  games  conducted   by  non-profit                                                            
organizations  or other entities. Therefore, the Court  ruling could                                                            
be characterized as "a  blanket" ruling that prohibited any Calcutta                                                            
game from occurring in the State.                                                                                               
                                                                                                                                
Ms. Szymanski affirmed.                                                                                                         
                                                                                                                                
Co-Chair  Wilken understood  therefore that  this legislation  would                                                            
alter that scenario.                                                                                                            
                                                                                                                                
Ms. Szymanski affirmed.                                                                                                         
                                                                                                                                
Co-Chair Green interjected  that this legislation would specifically                                                            
state that Calcutta games would be limited to charitable gaming.                                                                
                                                                                                                                
Senator  Dyson furthered  Senator Stedman's  question by asking  for                                                            
confirmation that both  the Calcutta pool and the event must be held                                                            
in the State of Alaska.                                                                                                         
                                                                                                                                
Ms. Szymanski  clarified that the  event must be held in  the State.                                                            
For instance, a hockey  game to which a Calcutta pool was being held                                                            
must be played in the State.                                                                                                    
                                                                                                                                
Senator Dyson asked whether  for-profit businesses could be involved                                                            
in organizing and conducting a Calcutta game.                                                                                   
                                                                                                                                
Ms. Szymanski expressed  that the bill would specifically apply to a                                                            
non-profit  organization   that  is raising   money  for  charitable                                                            
purposes. Therefore, a  for-profit business would not be eligible to                                                            
obtain a permit for a Calcutta pool.                                                                                            
                                                                                                                                
5:50:37 PM                                                                                                                    
                                                                                                                                
Senator Dyson noted however,  that there are numerous "organizations                                                            
hustling  around looking  for charities  who, they  can 'quote  help                                                            
out' by doing  some charitable gaming  for them. Such organizations                                                             
make a significant  amount of revenue  out of doing this  charitable                                                            
gaming  fundraising  activity   on  behalf  of  some  charity."  The                                                            
question  is therefore,  whether  this legislation  would  "engender                                                            
that activity".                                                                                                                 
                                                                                                                                
Ms. Szymanski replied that  "significant changes" have been made "to                                                            
the bill to insure  that its only non-profit organizations  that can                                                            
obtain the permit".                                                                                                             
                                                                                                                                
Senator Dyson  opined that for-profit  entities seek out  non-profit                                                            
organizations; they "offer  to help" the non-profit by raising money                                                            
from a large number of  people who traditionally had not helped that                                                            
organization.  They  offer   to assist   in obtaining   the  permit,                                                            
conducting the event, and  to share the proceeds with the non-profit                                                            
organization.                                                                                                                   
                                                                                                                                
Ms. Szymanski stated that  the bill does contain language to prevent                                                            
the hiring  of an outside operator  to run the event. That  language                                                            
is located in Sec. 4 page two beginning on line 19.                                                                             
                                                                                                                                
Senator Dyson appreciated the inclusion of such language.                                                                       
                                                                                                                                
Co-Chair Green  asked for further  explanation of the "other  than a                                                            
Calcutta pool" language specified in Sec. 4.                                                                                    
                                                                                                                                
Ms.  Szymanski  expressed  that that  language  would  prohibit  the                                                            
hiring of an operator to run the pool.                                                                                          
                                                                                                                                
5:53:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Green asked for  "the best example" of an event and how the                                                            
pool would be facilitated.                                                                                                      
                                                                                                                                
Ms.  Szymanski  expressed  that  most  organizations  would  hold  a                                                            
reception the  evening before the actual sporting  event. An auction                                                            
would be conducted  at that reception. People would  bid on the team                                                            
they thought  would  win. Traditionally,  Calcutta  games have  been                                                            
held in conjunction  with pool or golf tournaments  due to the large                                                            
number of teams that are usually involved.                                                                                      
                                                                                                                                
Co-Chair  Green  ascertained  therefore  that  the income  would  be                                                            
generated  from  the people  who bet  on  the different  teams.  50-                                                            
percent of  the money received  would be provided  to the winner  of                                                            
the pool and 50-percent would be provided to the charity.                                                                       
                                                                                                                                
Ms. Szymanski affirmed.                                                                                                         
                                                                                                                                
Co-Chair Green understood  that there would be no holding, handling,                                                            
finders, or event fees.                                                                                                         
                                                                                                                                
Ms. Szymanski stated that that was correct.                                                                                     
                                                                                                                                
5:54:29 PM                                                                                                                    
                                                                                                                                
Senator  Stedman noted  that  most of the  information  in the  bill                                                            
packet examples  Calcutta pools that  have been held in states  such                                                            
as Montana,  Wyoming,  and North Dakota.  He was  curious as  to the                                                            
impact these  pools might  have incurred to  those states and  their                                                            
citizens. He asked whether  these games would be more popular in one                                                            
region of the  state verses another; in other words,  would there be                                                            
an expectation  that this  game would be  more popular in  Anchorage                                                            
and Fairbanks than in other areas of the State.                                                                                 
                                                                                                                                
Ms. Szymanski stated that  Calcutta pools could occur in any area of                                                            
the  State. An  area  with  a large  number  of golf  courses  might                                                            
experience more golf-related Calcutta events.                                                                                   
                                                                                                                                
5:55:53 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  surmised that "the  normal trend" would be  that the                                                            
event must  attract a crowd. Therefore  a more populated  area might                                                            
hold more Calcutta events.                                                                                                      
                                                                                                                                
Ms. Szymanski  agreed. Another factor  would be the charity  itself.                                                            
The goal  would be  to attract  as many  people as  possible to  the                                                            
auction in order to raise money for the charity.                                                                                
                                                                                                                                
Senator Stedman  asked the reason that more states  are not involved                                                            
in this endeavor.                                                                                                               
                                                                                                                                
Ms. Szymanski  replied that  Alaska is "one  of the few states  that                                                            
does not allow  legalized gambling", even on the reservations.  This                                                            
"is very different"  from other states, many of which  have casinos.                                                            
North Dakota and Montana are similar to Alaska in this regard.                                                                  
                                                                                                                                
Co-Chair  Green stated  that Alaska  is one of  the few states  that                                                            
limits gaming to pull-tabs and bingo.                                                                                           
                                                                                                                                
Ms. Szymanski  affirmed. The State is "very strict  when it comes to                                                            
allowing  the expansion  of  gaming  in any  way". The  scenario  is                                                            
however "different  when it comes  to raising money for charities".                                                             
It  is  "a  fun way  to  raise  money  for  charities"  as  long  as                                                            
limitations  are in  place. The  State would  not allow "charitable                                                             
gaming to rise  to a level that none of us would want  to see". This                                                            
bill would incorporate  "significant limitations to  insure that the                                                            
charitable gaming in this case would not get out of hand…"                                                                      
                                                                                                                                
Senator Dyson  asked regarding the  magnitude of the monetary  prize                                                            
in a Calcutta event involving 300 people.                                                                                       
                                                                                                                                
Ms. Szymanski responded  that it would depend on the amount of money                                                            
that was raised  during the auction. People might  bid anywhere from                                                            
$20 to $1,000 on a team.  At the end of the auction, the money would                                                            
be  placed  into a  pot,  and  upon the  conclusion  of  the  sports                                                            
tournament,  the high  bidder  of the winning  team  would be  given                                                            
their  percentage  of the  money.  The amount  of that  money  would                                                            
depend on a  number of factors including  the number of bidders  and                                                            
the amount of money being bid on each team.                                                                                     
                                                                                                                                
5:59:15 PM                                                                                                                    
                                                                                                                                
Senator Dyson asked whether a $300,000 pot might be possible.                                                                   
                                                                                                                                
Ms. Szymanski affirmed that it could.                                                                                           
                                                                                                                                
Senator Hoffman asked regarding the Sand Hills Crane Classic.                                                                   
                                                                                                                                
Ms. Szymanski  noted  that the Sand  Hills Crane  Classic was  added                                                            
during  the bill's  hearing in  the House of  Representatives  House                                                            
Finance Committee, at the  urging of Representative Mark Neuman. The                                                            
Sand Hills Crane Classic  occurs in the Talkeetna area. People would                                                            
guess the time  and date of when the cranes would  land on a pond in                                                            
that  area. People  would buy  a ticket  and make  their guess.  The                                                            
person closest  to the actual time would win a percent  of the money                                                            
raised through the ticket sales.                                                                                                
                                                                                                                                
REPRESENTATIVE  MARK NEUMAN explained  that a group of public  radio                                                            
supporters  in Talkeetna  have a  non-profit  gaming license  though                                                            
which  they are seeking  to  hold an event  to raise  money for  the                                                            
public radio station.  The event would be similar  to the Nenana Ice                                                            
Classic, as the organizers  would set of a series of cameras to film                                                            
the Sand Hills  Cranes as they land on the pond during  their annual                                                            
migration  through the  area. In  addition to  supporting  Talkeetna                                                            
public radio,  a portion of the money  would be used to protect  the                                                            
area in  which the  pond is located.  The Sand  Hills Crane  Classic                                                            
must be added  to the list of permissible gaming events  in order to                                                            
conduct the event.                                                                                                              
                                                                                                                                
6:02:15 PM                                                                                                                    
                                                                                                                                
JEFF BARNHILL,  Representative,  Palmer Golf  Course, testified  via                                                            
teleconference   from  offnet  site  and  voiced  support   for  the                                                            
legislation.  Like  other golf  courses,  tournaments  comprise  30-                                                            
percent of  the Palmer Golf Course's  business. The majority  of the                                                            
tournaments  are  fund-raisers  for non-profits.  A  Calcutta  would                                                            
provide another  opportunity through  which to raise money  for non-                                                            
profits  such   as  the  Boys  and   Girls  Clubs.  Any   additional                                                            
tournaments  that  might result  would  positively  impact the  golf                                                            
course by encouraging  more business.  Most areas of the  State host                                                            
some events  to which a Calcutta could  apply. A Calcutta  would not                                                            
incur any costs to the State.                                                                                                   
                                                                                                                                
6:05:23 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green noted  that  the testifier  had identified  a  youth                                                            
organization  as a  possible recipient  of Calcutta  funds. To  that                                                            
point, she asked  whether youth organizations would  be eligible for                                                            
Calcutta events.                                                                                                                
                                                                                                                                
Ms. Szymanski  clarified that  the only restriction  in the  bill is                                                            
that  a  Calcutta   could  not  be  held  in  regards   to  a  youth                                                            
organization's sporting  event such as a youth soccer game. However,                                                            
money could be raised to support a youth organization.                                                                          
                                                                                                                                
Co-Chair Green  understood therefore that raising  money for a youth                                                            
organization would be permissible.                                                                                              
                                                                                                                                
Ms. Szymanski affirmed.                                                                                                         
                                                                                                                                
Senator Stedman  asked whether  a fishing derby  could qualify  as a                                                            
Calcutta.                                                                                                                       
                                                                                                                                
Ms.  Szymanski qualified  that  the event  must include  teams  that                                                            
could be auctioned off.                                                                                                         
                                                                                                                                
Senator Stedman  asked whether a boat  or a team on a boat  could be                                                            
recognized as a team.                                                                                                           
                                                                                                                                
Ms. Szymanski  affirmed  that competing  boats would  qualify  for a                                                            
Calcutta as people could bid on which boat would win.                                                                           
                                                                                                                                
6:06:59 PM                                                                                                                    
                                                                                                                                
Senator Olson asked the origin of the name.                                                                                     
                                                                                                                                
6:07:10 PM                                                                                                                    
                                                                                                                                
Ms. Szymanski  stated  that the game  had originated  in regards  to                                                            
horseraces that were held in Calcutta India.                                                                                    
                                                                                                                                
Senator Olson  asked whether a single entrant such  as a dog team in                                                            
the Iditarod Sled  Dog Race would qualify as a team  as opposed to a                                                            
basketball team.                                                                                                                
                                                                                                                                
Ms.  Szymanski responded  that  an entrant  could  be a  team or  an                                                            
individual.                                                                                                                     
                                                                                                                                
AT EASE 6:08:04 PM / 6:09:52 PM                                                                                             
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 33(FIN)                                                                                              
     "An Act relating to required notification of the Department of                                                             
     Commerce, Community, and Economic Development, economic effect                                                             
     statements,  and regulatory flexibility analyses  regarding the                                                            
     adoption  of regulations that  may govern the conduct  of small                                                            
     businesses;  relating to a private cause of action,  regulation                                                            
     invalidation,   and   judicial  review   related  to   required                                                            
     notification,   economic  effect  statements,   and  regulatory                                                            
     flexibility  analyses for the adoption of regulations  that may                                                            
     govern  the conduct of small  businesses; and providing  for an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
MICHAEL PAWLOWSKI,  Staff to Representative Kevin  Meyer, the bill's                                                            
sponsor,  explained that  the basis  for this bill  was the  federal                                                            
Regulatory  Flexibility Act  of 1980. That  Act directed  regulatory                                                            
agencies to "first consider  the economic effect" a regulation would                                                            
incur on  small businesses,  and secondly  "consider an alternative                                                             
method of achieving  the same statutory  or regulatory goal".  While                                                            
this Act has been in effect  for 25-years, President George Bush has                                                            
furthered "the  Small Business Regulatory Reform Act  as a model for                                                            
states to  adopt to consider  ways of lowering  the burden  of state                                                            
regulations on small businesses."                                                                                               
                                                                                                                                
Mr. Pawlowski  characterized this  bill as being "loosely  patterned                                                            
after  the model  legislation  that  the  Office of  Small  Business                                                            
Administration  made  available  for  states".  A  "significant  and                                                            
detailed process" has been  conducted "to bring it into alliance and                                                            
to make  it work  for the  State of  Alaska". It  would direct  four                                                            
designated state agencies  "to consider the economic impact of their                                                            
regulations  on small business".  Consideration  should be  given to                                                            
such  things as  "the cost  of compliance"  and  to determine  other                                                            
methods through which to  accomplish such compliance. The Department                                                            
of Commerce,  Community and Economic  Development would be  asked to                                                            
take the "lead advisory  role, essentially a small business advocate                                                            
position"  in this endeavor  "to provide a  check in the  regulatory                                                            
process and a voice for the needs of small businesses".                                                                         
                                                                                                                                
Mr.  Pawlowski  noted that  Members'  packets  contain  a letter  of                                                            
support from the  Alaska State Chamber of Commerce,  dated March 15,                                                            
2005 [copy on file] and addressed to Representative Meyer.                                                                      
                                                                                                                                
Co-Chair Wilken voiced  his support for the effort and intent of the                                                            
legislation.  However, he questioned  the need  to add a $100,000  a                                                            
year position  to coordinate the program, as reflected  in the April                                                            
15, 2005 fiscal note #11  from the Department of Commerce, Community                                                            
and Economic  Development. He opined  that the Department  should be                                                            
able to conduct  this effort through its "normal course  of everyday                                                            
business".                                                                                                                      
                                                                                                                                
Mr. Pawlowski informed  the Committee that several fiscal notes were                                                            
added  to  the  bill  during  its  deliberations  in  the  House  of                                                            
Representatives.  One  of  those  notes  was as  high  as  $217,000.                                                            
Representative  Meyer "was  taken aback" at  the agencies'  position                                                            
that "the expertise" that  would be required to conduct this program                                                            
was  currently  unavailable   in  the  departments.   While  current                                                            
department  personnel   "are  really  dedicated  to   achieving  the                                                            
statutory  goals that are  put on them, and,  as the same time  they                                                            
come up with regulations  …. the thought process of  what that small                                                            
business is going  to have to go through to meet the  demands of the                                                            
regulations  doesn't  happen".  The  Governor's  Office  "felt  very                                                            
strongly that  an adequately funded  and very strong position  to be                                                            
that small  business  advocate would  make this  program  successful                                                            
given the experience in the current regulatory format".                                                                         
                                                                                                                                
Mr. Pawlowski  conveyed that utilizing  small business license  fees                                                            
to fund this  position had been discussed  but not advanced,  as not                                                            
doing so  would "demonstrate"  to small businesses  "that the  State                                                            
was giving  back to small  businesses from  the fees that they  were                                                            
paying  into  the  State".   Representative  Meyer  supported   that                                                            
decision and believes that the position is necessary.                                                                           
                                                                                                                                
Co-Chair Green  asked for an example of how the program  would work.                                                            
                                                                                                                                
6:14:55 PM                                                                                                                    
                                                                                                                                
Mr. Pawlowski  directed Members to a flowchart titled  "Steps in the                                                            
Regulation  Adoption  Process  Under  HB33" [copy  on  file],  which                                                            
depicts  how the  process  would be  conducted.  The  basis for  the                                                            
flowchart  is  the  current  "Drafting  Manual  for  Administrative                                                             
Regulations".  The shaded portions  on the chart indicate  the steps                                                            
that would be added to the process by the adoption of this bill.                                                                
                                                                                                                                
Mr.  Pawlowski  noted that  the  Department  of  Transportation  and                                                            
Public Facilities  is not designated as one of the  four agencies to                                                            
which  this legislation  would  apply as  the manner  in which  that                                                            
Department conducts its  business is deemed as being "outside of the                                                            
intent of the  bill". A standard has  been designated, as  reflected                                                            
in Sec. 1(i)(3)  on page four lines  20-23 that would apply  to "the                                                            
regulations that govern  the conduct of small businesses; that means                                                            
the  manner  in  which  a  small  business  conducts   its  business                                                            
activities".  The  issue pertinent  to  the bill  is  exampled by  a                                                            
recent  Department   of  Health  and  Social  Services  regulations                                                             
pertaining  to child care centers  that describe such things  as the                                                            
size of the required trashcans;  the size of the waste paper baskets                                                            
that those trashcans  must contain; and provisions  requiring that a                                                            
toy  that has  gone into  the mouth  of a  child  must be  sanitized                                                            
before it could  be used by another child. The question  is what how                                                            
much money  it would cost  a childcare center,  serving 30  children                                                            
for example, to adhere  to all the regulations. That is what governs                                                            
the conduct standard  "that would trigger when this  review would be                                                            
necessary".                                                                                                                     
                                                                                                                                
Mr. Pawlowski  explained that this legislation would  incur a change                                                            
in the process  when the agency making the regulation  would consult                                                            
with the Department of  Law in that regard as reflected at Step 4 on                                                            
the aforementioned  flowchart. The  change would be that  the agency                                                            
must also notify  the person holding  the new position requested  in                                                            
fiscal  note #11,  in  the Department  of  Commerce,  Community  and                                                            
Economic Development,  who would then  assist and advise  throughout                                                            
the public comment process.  Then the agency, assisted by the person                                                            
from Department  of Commerce,  Community  and Economic Development,                                                             
would utilize  information obtained from the public  comment process                                                            
and other information  from their files to follow  the nine Economic                                                            
Effect Statement  criteria  added by this bill  and depicted  in the                                                            
large shaded area  on the flowchart. This criterion  is specified as                                                            
follows.                                                                                                                        
                                                                                                                                
   Economic Effects Statement:                                                                                                  
     · Estimate of small businesses effected.                                                                                   
     · Proposed recordkeeping and admin. Costs.                                                                                 
     · Statement of economic effect.                                                                                            
     · Description of alternate methods.                                                                                        
                                                                                                                                
   Regulatory Flexibility Analysis: (examine)                                                                                   
      · Less stringent compliance or reporting requirements.                                                                    
     · Less stringent compliance or reporting deadlines.                                                                        
     · Consolidation or simplification of compliance or reporting.                                                              
     · Establishment of performance standards to replace design or                                                              
        operational standards.                                                                                                  
     · Exemption of small businesses.                                                                                           
                                                                                                                                
Mr. Pawlowski  stated that the alternative  methods included  in the                                                            
Economic Effect Statement  "would be achieved by working through the                                                            
Regulatory  Flexibility   Analysis",  whose  components   have  been                                                            
utilized for 25-years at  the federal level. The development of less                                                            
stringent compliance  or reporting  deadlines could be accomplished                                                             
by  simply  allowing  a  business  to report  annually,   quarterly,                                                            
monthly, or biannually depending on the size of the business.                                                                   
                                                                                                                                
Mr.  Pawlowski  stated  that poorly  written  regulations  would  be                                                            
resubmitted  to the  Legislature for  further reworking.  "HB  33 is                                                            
about trying to do it right in the first place."                                                                                
                                                                                                                                
6:20:05 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  recalled that Senator  Gene Therriault had,  in the                                                            
last  few  years,  submitted  legislation   that  had  inserted  the                                                            
Legislature into the flow chart process.                                                                                        
                                                                                                                                
Co-Chair Green  asked whether that legislation had  pertained to the                                                            
Administrative Regulation Review process.                                                                                       
                                                                                                                                
Co-Chair  Wilken could  not recall  the exact bill  number, but  did                                                            
recall that  it had allowed  the Legislature  to be included  in the                                                            
process  by the  inclusion  of a Regulations  Review  Committee.  He                                                            
questioned  the  reason  that  that  recently  added  step  was  not                                                            
reflected in the flowchart.                                                                                                     
                                                                                                                                
Mr.   Pawlowski   affirmed   that   legislation   establishing   the                                                            
Administrative  Regulation  Review  process  was adopted  two  years                                                            
prior.  Further clarification  of  its inclusion  was conducted  the                                                            
previous Session.  That step is reflected  on the chart at  Step 11.                                                            
He noted  that  the bill's  sponsor feels  that HB  33 is  necessary                                                            
because,  rather  than  taking  "the  word"  of  the Administrative                                                             
Regulation Review Committee,  this legislation would provide written                                                            
documentation  based on the nine aforementioned guidelines  that the                                                            
regulations pertaining  to small businesses would be analyzed to the                                                            
benefit of small businesses.                                                                                                    
                                                                                                                                
Co-Chair Wilken acknowledged.                                                                                                   
                                                                                                                                
6:22:49 PM                                                                                                                    
                                                                                                                                
STEVE WEAVER, Assistant  Attorney General, Legislation & Regulations                                                            
Section, Office  of the Attorney General, Department  of Law, shared                                                            
that the Governor Frank  Murkowski Administration supports the bill.                                                            
The  impact  of  regulations  on  small   businesses  "has  been  an                                                            
important issue" to the  Governor for quite a while. The legislation                                                            
has, as a result  of its Legislative  hearings, evolved into  a very                                                            
workable bill  for the State. The  Small Business Advocate  position                                                            
that would  be created in the Department  of Community and  Economic                                                            
Development  "would  be very  helpful in  the process"  as it  would                                                            
assist  the  agencies  "to  put  considerations  of  small  business                                                            
impacts into the  process in a consistent fashion;  to provide a one                                                            
stop shopping source for  that, and to avoid more costly alternative                                                            
processes such  as hiring outside  consultants which agencies  might                                                            
need to do otherwise.  The emphasis was on making  this bill as cost                                                            
effective as possible for the Administration."                                                                                  
                                                                                                                                
6:24:20 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green voiced  acceptance  of the Small  Business  Advocacy                                                            
position. However,  she noted that legislative mandates  such as the                                                            
requirement  that businesses must  have insurance coverage,  impacts                                                            
businesses  across  the state,  regardless  of their  size.  Another                                                            
broad size requirement is exampled by licensing fees.                                                                           
                                                                                                                                
6:25:30 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green  inquired  as  to  whether  the  emphasis  on  small                                                            
businesses  is  due to  the  fact that  there  is a  Small  Business                                                            
Administration.                                                                                                                 
                                                                                                                                
Mr. Pawlowski replied that  the emphasis on small business, which is                                                            
defined as a business with  100 or less employees, would affect more                                                            
than 170,000 people  in the State. "That's over half  of the State's                                                            
workforce." The  emphasis is due to the fact that  "small businesses                                                            
typically  do  not  have  the  resources   to  be  involved  in  the                                                            
regulatory process. They  don't have the ability or attention to pay                                                            
or the  time to pay; their  workforce is  spread relatively  thin. A                                                            
large business would have the time to devote to it."                                                                            
                                                                                                                                
Mr. Pawlowski  noted  that such  things as  user fees  would not  be                                                            
affected  by  this  legislation.   Continuing,  he  noted  that  the                                                            
Medicaid and  Medicare cost reimbursement  regulations are  excluded                                                            
from the legislation,  for "when the  Legislature directs  something                                                            
as a cost containment  provision"  to, for instance, the  Department                                                            
of Health  and Social  Services, it  might "save  up to $15  million                                                            
dollars  a year",  and  a one-day  delay in  the issuance  of  those                                                            
regulations  could cost the State  between $40,000 and $57,000.  The                                                            
cost benefits to a business would not be that extreme.                                                                          
                                                                                                                                
6:26:34 PM                                                                                                                    
                                                                                                                                
Co-Chair Green voiced appreciation for the explanation.                                                                         
                                                                                                                                
The bill was ordered HELD in Committee.                                                                                         
                                                                                                                                
6:26:44 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 149(JUD)                                                                               
     "An Act relating to  controlled substances regarding the crimes                                                            
     of   manslaughter  and   misconduct   involving  a   controlled                                                            
     substance;  relating to the manufacture of methamphetamine  and                                                            
     to  the sale, possession,  and delivery  of certain  substances                                                            
     and  precursors  used in the  manufacture  of methamphetamine;                                                             
     relating  to listing  certain anabolic  steroids as  controlled                                                            
     substances;   relating   to  the  listing   of  property   that                                                            
     constitutes  an illegal drug manufacturing site;  amending Rule                                                            
     41, Alaska  Rules of Criminal  Procedure; and providing  for an                                                            
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
6:27:16 PM                                                                                                                    
                                                                                                                                
JANE  PEARSON,  Staff  to  Representative  Jay  Ramras,  the  bill's                                                            
sponsor,  stated that  this bill, which  is a  hybrid of "the  best"                                                            
components  of SB 70-CRIMES INVOLVING  CONTROLLED SUBSTANCES  and SB
106-SALE  OF METHAMPHETAMINE  AND  PRECURSORS, has  evolved into  "a                                                            
truly  comprehensive  piece of  legislation". By  dealing  "directly                                                            
with the problems our society  is facing regarding the growing abuse                                                            
of methamphetamines  and anabolic steroids", this  bill "would serve                                                            
to combat the  growing and immediate  problems associated  with drug                                                            
manufacturing abuse in the State".                                                                                              
                                                                                                                                
Ms. Pearson informed that  Alaska is experiencing "a growing problem                                                            
with methamphetamines  being  made in small  local mom and  pop type                                                            
laboratories". The manufacturing  of methamphetamines produces toxic                                                            
waste into  the environment. The activity  is dangerous as  it could                                                            
result in fires,  explosions, and  endangerment to law enforcement,                                                             
other emergency  service personnel, and the community.  Seven pounds                                                            
of  toxic   waste  could   be  the  byproduct   of  each  pound   of                                                            
methamphetamine (meth) that is produced.                                                                                        
                                                                                                                                
Ms. Pearson stated that  by limiting the quantity of sole ingredient                                                            
pseudoephedrines that could  be purchased in a 30-day period to nine                                                            
grams, this  legislation would  impact the  ability of criminals  to                                                            
purchase pseudoephedrines,  iodine  crystals, and phosphorus,  which                                                            
are the three products  utilized to manufacture methamphetamines. In                                                            
addition, such products  would be contained behind a service counter                                                            
in  a store  and a  log of  such  purchases must  be  kept and  made                                                            
available to law enforcement  officers upon request. "Iodine crystal                                                            
purchases   must  also  be  logged".   The  logs  would   allow  law                                                            
enforcement  officers  to "see  who  is purchasing  the chemicals".                                                             
Other  components   of  the  bill   would  implement  distribution,                                                             
registration   and  record-keeping   provisions   for  wholesalers,                                                             
manufacturers,  distributors, and retailers who sell  such products.                                                            
Those who knowingly violate  the requirements would face a Class "A"                                                            
misdemeanor charge, "punishable by a fine of up to $10,000".                                                                    
                                                                                                                                
Ms. Pearson  also noted that  the bill would  allow for a charge  of                                                            
manslaughter to  be levied against the manufacturer  or deliverer of                                                            
meth were a person to die from its usage.                                                                                       
                                                                                                                                
Ms.  Pearson  stated  that  due  to  the  dangers   imposed  by  the                                                            
manufacturing  of meth,  this bill  "would increase  the bond  for a                                                            
meth manufacturer with  a previous felony methamphetamine conviction                                                            
to a minimum  of a $250,000  cash bond".  Presumptive sentencing  of                                                            
both "A"  and "B" felonies  for a person  manufacturing meth  with a                                                            
child present would also be increased.                                                                                          
                                                                                                                                
Ms. Pearson conveyed that  this legislation would also serve to make                                                            
anabolic steroids a Class  5A controlled substance. Use of steroids,                                                            
which are used to increase  muscle mass, has been on the increase in                                                            
the State, and abuses is  occurring in people as young as the junior                                                            
high  school level.  These abuses  have  been found  to cause  heart                                                            
disease, liver damage, and other unwanted physical side affects.                                                                
                                                                                                                                
Ms. Pearson stated  that "the bill would also amend"  State Statutes                                                            
pertaining to  the requirement that the Department  of Environmental                                                            
Conservation    keep   records   of   certain   contaminated    drug                                                            
manufacturing  sites  on their  website.  This information  must  be                                                            
maintained  "on the website  for five years  after the property  has                                                            
been deemed fit for use".                                                                                                       
                                                                                                                                
Ms. Pearson  reiterated that  meth production  and use, and  steroid                                                            
abuses are on the increase  in the State. She asked the Committee to                                                            
support the bill and move it out of Committee.                                                                                  
                                                                                                                                
[NOTE: Co-Chair Wilken assumed chair of the Committee.]                                                                         
                                                                                                                                
6:31:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JAY  RAMRAS,  the  bill's  sponsor,   informed  the                                                            
Committee that Ms. Pearson  and Senator Gretchen Guess have assisted                                                            
in the development of this  "terrific omnibus drug bill" which would                                                            
address a  multitude of  concerns, including  the increased  use and                                                            
manufacturing  of  meth.  The bill  would  also  include  provisions                                                            
through which to hold landlords  more responsible for whom they rent                                                            
to. He reiterated Ms. Pearson's  comments that the legislation would                                                            
"help  control" the  availability  of substances  sold by  retailers                                                            
that are used in the manufacturing of meth.                                                                                     
                                                                                                                                
Representative  Ramras explained  that the  regulations in  the bill                                                            
that  are applicable  to retailers  would  assist  in deterring  the                                                            
practice  referred  to  as  "smerfing".   Smerfing  occurs  "when  a                                                            
collection  of  young people  …  who use  meth,  gather  up the  raw                                                            
ingredients and deliver them to the meth cook and the meth lab".                                                                
                                                                                                                                
Representative Ramras addressed  the bill's fiscal impact by stating                                                            
that  the bill  would  generate a  positive  fiscal  note, as  other                                                            
states that "have adopted  a very proactive approach" in restricting                                                            
the supply of products  used in meth manufacturing via such means as                                                            
requiring retailers to  log such product purchases, have experienced                                                            
a tremendous  decline  in  meth production  and meth  labs;  thereby                                                            
allowing  law  enforcement   resources  to  be  used   elsewhere.  A                                                            
reduction in  steroid use would also  occur. This legislation  would                                                            
be beneficial to the State.                                                                                                     
                                                                                                                                
Co-Chair  Wilken noted that,  due to the  fact that a [unspecified]                                                             
testifier  who supports the  bill would not  be available until  the                                                            
following day, the bill would be held in Committee.                                                                             
                                                                                                                                
Senator Olson understood  that the maximum amount of pseudoephedrine                                                            
that could be purchased was nine grams.                                                                                         
                                                                                                                                
Ms. Pearson  expressed that the nine-gram  quantity would  equate to                                                            
three boxes of the specified drugs.                                                                                             
                                                                                                                                
Senator Olson  asked regarding language  in Sec. 3(d)(2)  page four,                                                            
line nine  of the bill that  specifies a quantity  "of less  than 24                                                            
grams" of the affected drugs.                                                                                                   
                                                                                                                                
Ms. Pearson  clarified  that the bill  was amended  to include  that                                                            
language.  It is specific  to the quantities  that could on  hand at                                                            
such  places  as lodges,  schools,  daycare  centers,  or  treatment                                                            
centers. Those  places might purchase  larger quantities  due to the                                                            
nature or location of their  activity. Such items must be secured in                                                            
a locked storage area.                                                                                                          
                                                                                                                                
Senator  Olson asked the  nature of  the log that  a small  remotely                                                            
located business  would be  required to maintain  pertaining  to the                                                            
sale of the over-the-counter drug "Sudafed".                                                                                    
                                                                                                                                
Ms. Pearson  stated that the information  required in the  log would                                                            
include  valid  government  issued photo  identification  and  other                                                            
information as determined by the Department of Public Safety.                                                                   
                                                                                                                                
Senator  Olson remarked  that  this  "would be  quite  a burden  for                                                            
someone" who just  wanted to purchase Sudafed to relieve  their cold                                                            
symptoms.                                                                                                                       
                                                                                                                                
Representative  Ramras acknowledged  that the concern about  "how to                                                            
apply this fairly"  has been an issue throughout the  development of                                                            
the bill. While  the meth issue is  primarily an urban problem,  any                                                            
action addressing  it would affect,  for instance, elderly  tourists                                                            
who might be seeking cold  relief or people living in rural areas in                                                            
which meth  abuse is less frequent  of an issue. Some supporters  of                                                            
this legislation  desire  to have  the information  in the  logbooks                                                            
electronically  transmitted  to  the Department  of  Public  Safety.                                                            
However,  he had countered  that such action  would serve to  inform                                                            
the Department  of Public  Safety of  everyone who  had a cold  last                                                            
year.  "The middle  road"  that  has been  developed  would  include                                                            
having  a logbook  that  would be  kept  confidential  so that  such                                                            
things as  identity thief  and target marketing  would be kept  to a                                                            
minimum. Local  law authority would  be able to access the  logs. As                                                            
an aside he noted that  the community of "North Pole is a particular                                                            
hot bed for meth labs".  Specific language in this regard is located                                                            
in  Sec.  11(e)   pertaining  to   municipalities  and  Sec.   11(f)                                                            
pertaining to  law enforcement agency as denoted on  page ten, lines                                                            
22 through 30.                                                                                                                  
                                                                                                                                
     (e)  Notwithstanding  (a) of  this section,  if a municipality                                                             
     enacts an  ordinance requiring wholesalers, manufacturers,  and                                                            
     distributors to report  the information maintained under (a) of                                                            
     this section,  each wholesaler,  manufacturer, and distributor                                                             
     shall  regularly  report  that  information  to  the  municipal                                                            
     police department at intervals required in the ordinance.                                                                  
                                                                                                                                
     (f)  Upon the written  request of any  law enforcement  agency,                                                            
     any wholesaler, manufacturer,  distributor, or a retailer shall                                                            
     report electronically  or by mail the information  collected in                                                            
     (a) or (b)  of this section for the six month  period following                                                            
     the written request.                                                                                                       
                                                                                                                                
Representative  Ramras  acknowledged  that  the  concern  voiced  by                                                            
Senator  Olson  about how  this  legislation  would affect  a  small                                                            
retailer  in a remote community  in which  there is no meth  problem                                                            
has not  been addressed  in this  bill. Unfortunately,  while  there                                                            
might not currently be  a meth problem in an area, the problem "pops                                                            
up everywhere".  Any  community  could be  "vulnerable"  to it.  The                                                            
requirement  would be  that a  logbook  be kept  and provided,  upon                                                            
request,  to law  enforcement.  There  would  be no  requirement  to                                                            
transmit   the  information   at   specified  intervals   unless   a                                                            
municipality adopted such policy.                                                                                               
                                                                                                                                
6:38:00 PM                                                                                                                    
                                                                                                                                
Senator Olson  agreed that  a meth lab could  operate anywhere.  One                                                            
was recently  discovered  in the  community of  Bethel. His  concern                                                            
however, was to evaluate  whether the logbook requirement would be a                                                            
burden on "small mom and pop stores".                                                                                           
                                                                                                                                
6:38:37 PM                                                                                                                    
                                                                                                                                
Representative  Ramras  voiced that  the desire was  to prevent  the                                                            
provisions of  the bill from being such "a burden  on commerce" that                                                            
a small convenience  store might choose  not to carry Sudafed.  That                                                            
action  could be  detrimental  to a  small business,  as  customers,                                                            
knowing that Sudafed was  no longer available there, would shop at a                                                            
larger store  to buy, not  only Sudafed but  also other incidentals                                                             
that they would  have purchased had they shopped at  the convenience                                                            
store.  The  intent  would  not be  to  drive  business  from  small                                                            
independent businesses  to larger businesses such as WalMart or Fred                                                            
Meyer  or Safeway.  He  disclosed,  "being  mindful of  that  burden                                                            
throughout" the  development of this bill. He stressed  that signing                                                            
the logbook  would be no  different that  showing identification  to                                                            
enter a bar or signing for a prescription at a drug store.                                                                      
                                                                                                                                
Senator  Olson  understood   that  the logbook   would  require  the                                                            
purchaser's signature.                                                                                                          
                                                                                                                                
Representative  Ramras  deferred  to Dean  Guaneli  of the  Attorney                                                            
General's Office to answer that question.                                                                                       
                                                                                                                                
6:40:26 PM                                                                                                                    
                                                                                                                                
DEAN GUANELI, Chief Assistance  Attorney General, Criminal Division,                                                            
Office  of the Attorney  General,  Department of  Law, informed  the                                                            
Committee that the entirety  of the provisions that were included in                                                            
SB 70-CRIMES INVOLVING  CONTROLLED SUBSTANCES, which was legislation                                                            
sponsored by  Governor Frank Murkowski,  have been included  in this                                                            
"comprehensive   methamphetamine   bill".  The  Department   of  Law                                                            
supports all the provisions  in HB 149. Representative Ramras worked                                                            
diligently  with the pharmaceutical  industry to develop  provisions                                                            
that were acceptable to  them as well as to address the needs of law                                                            
enforcement.                                                                                                                    
                                                                                                                                
Mr. Guaneli stated  that the nine-gram determination  "is actually a                                                            
fair amount  of pseudoephedrine".  Other states have adopted  a six-                                                            
gram level.  The largest  packet  available for  resale contains  96                                                            
pills, which is  "just under three grams". This supply  would equate                                                            
to 24 days  of usage for  an adult and twice  that for a child.  The                                                            
warnings  on the packet specify  seeking a  doctor's advice  if more                                                            
than a  seven days usage  is needed for  treatment. In summary,  the                                                            
nine-gram quantity would  allow people in Rural Alaska and elsewhere                                                            
to have an amount  that would sustain their needs  for a long period                                                            
of time.                                                                                                                        
                                                                                                                                
Co-Chair  Wilken,   noting  that  Senator  Gretchen   Guess  was  in                                                            
attendance, asked  the Senator to participate in the  discussion, as                                                            
he understood  that portions  of a separate  bill she had  developed                                                            
had been incorporated into this bill.                                                                                           
                                                                                                                                
6:42:30 PM                                                                                                                    
                                                                                                                                
Senator  Olson pointed  out that  numerous products  containing  the                                                            
drugs  and chemicals  specified  in  this  bill were  available  for                                                            
purchase over the Internet or through the mail.                                                                                 
                                                                                                                                
Mr. Guaneli communicated  that this would continue to be a challenge                                                            
to law  enforcement. Law  enforcement officers  have testified  that                                                            
"100-percent  of the product  uncovered at  meth labs" found  in the                                                            
State,  are in  the pure  form available  at local  retail  outlets.                                                            
"Once that source of raw  material dries up", other sources would be                                                            
sought. Other  pseudoephedrine sources  might include the  Internet.                                                            
Other bulk pseudoephedrine sources could be uncovered.                                                                          
                                                                                                                                
Mr. Guaneli  likened the transport  of these items to the  transport                                                            
of  illegal  substances  such   as cocaine   and  heroine  that  are                                                            
manufactured  outside of the State  and brought in. Law enforcement                                                             
would need  "to be  vigilant at  airports" and  continue their  good                                                            
working relationship with  the United States Postal Service in order                                                            
to seize  contraband items  prior to their  reaching the State.  "It                                                            
would  be a  constant  challenge." Law  enforcement  personnel  "are                                                            
aware that a shift" to other sources would occur.                                                                               
                                                                                                                                
6:44:26 PM                                                                                                                    
                                                                                                                                
Representative  Ramras stated that  meth distribution in  California                                                            
"is  so advanced"  that  the  people involved  have  masqueraded  as                                                            
Federal  Express  personnel  and have  stolen  "cases  and cases  of                                                            
Sudafed".  Meth abuse  should  be addressed  at the  federal  level.                                                            
35,000 pharmacies  and large  drug manufacturers  have organized  to                                                            
encourage   federal  regulation.   Major   drug  manufacturers   are                                                            
investigating how to produce  Sudafed so that its active ingredients                                                            
could not be "cooked out".                                                                                                      
                                                                                                                                
Representative Ramras noted  that most "meth heads don't have credit                                                            
cards";  they  are "unsophisticated"   cash buyers  "who  prey  upon                                                            
communities".                                                                                                                   
                                                                                                                                
6:45:44 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken   asked  whether  the  logbook  entries   would  be                                                            
sufficient to get a warrant.                                                                                                    
                                                                                                                                
6:46:01 PM                                                                                                                    
                                                                                                                                
Mr. Guaneli  understood  that logbook  entries would  be one  of the                                                            
components  that  could  substantiate  the issuance  of  a  warrant.                                                            
"Possessing nine-grams  is prima facie evidence of  intent to sell."                                                            
A scenario  could include that of  a law enforcement officer  asking                                                            
someone  who  was  manufacturing  meth  where  they  got  their  raw                                                            
materials; the  response might be that they got it  from someone who                                                            
got it  at the local WalMart.  Law enforcement  officers could  then                                                            
review  WalMart's logbook.  Findings  that  that person  had made  a                                                            
number  of  such purchases  over  a  period of  time  would  provide                                                            
sufficient information  to garner a warrant to search  someone's car                                                            
and/or apartment.  He noted however, that the purchase  of more than                                                            
nine-grams in a 30-day  period would carry more weight than a nine -                                                            
gram purchase over a six-month period. The shorter timeframe-                                                                   
purchasing  situation would likely  be required in conjunction  with                                                            
another illegal activity in order to have a warrant issued.                                                                     
                                                                                                                                
Representative  Ramras shared that  in the Fairbanks area,  a member                                                            
of a group of "meth heads"  "was arrested in three consecutive weeks                                                            
at  three  different  hotels".  A written  record  would  assist  in                                                            
tracking  such  individuals.  The  cost  and  time  associated  with                                                            
pursuing these  illegal activities  should also be a consideration.                                                             
                                                                                                                                
Representative  Ramras shared  a story  told to him  by a woman  who                                                            
works at a Fred Meyer store,  whose corporate policy is that Sudafed                                                            
be kept behind  the counter and purchases  be limited to  two boxes.                                                            
Through  an activity  referred  to as  "smerfing",  groups of  young                                                            
people, typically  arriving  in one car, would  converge on  a store                                                            
and individually  go in and each buys two boxes of  Sudafed. Through                                                            
such activity,  the group  could purchase  between eight and  twelve                                                            
boxes of Sudafed. The woman  told him that after one recent smerfing                                                            
incident,  she wrote down  the license plate  number of the  car and                                                            
reported it  to the Department of  Public Safety. Good citizens  are                                                            
concerned about the situation.  The logbook would be very helpful to                                                            
law enforcement  officials  "for the  purposes of  a warrant  or the                                                            
purpose  of connecting  all these  people to the  purchases of  this                                                            
drug."                                                                                                                          
                                                                                                                                
6:49:13 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken asked regarding  the criteria  through which  a law                                                            
enforcement officer could access the logbook.                                                                                   
                                                                                                                                
Mr. Guaneli responded that  the bill contains language to the effect                                                            
that they  could access  the logbook  "at any  reasonable time".  No                                                            
warrant would be required.                                                                                                      
                                                                                                                                
6:49:48 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken,  noting  the inclusion  of  a letter  in  Member's                                                            
packets from  Carrs/Safeway,  dated April 26,  2005 [copy on  file],                                                            
mentioned that he had,  just today, received a "well-written letter"                                                            
from Carrs/Safeway  [copy not provided]  about how this legislation                                                             
would affect their 25-stores.  While he did not have the letter with                                                            
him,  he asked  that Representative  Ramras  review  the letter  and                                                            
respond to the  concerns and points specified. He  asked that a copy                                                            
of that response be provided to his office.                                                                                     
                                                                                                                                
SENATOR  GRETCHEN   GUESS  asked  the  date  of  the   letter  being                                                            
referenced.                                                                                                                     
                                                                                                                                
Co-Chair Wilken  was uncertain as to whether the letter  was the one                                                            
in the packets or a more recent one.                                                                                            
                                                                                                                                
Senator  Guess informed  the  Committee  that the  Senate  Judiciary                                                            
Committee  had discussed  the concerns  specified  in the April  26,                                                            
2005 letter, and  that, with the lone exception being  the continued                                                            
inclusion of  the logbook; the store's  concerns had been  addressed                                                            
in the  Judiciary committee  substitute  Version 24-LS0596\V  before                                                            
the Committee. During the  discussions with the store, their lack of                                                            
support for the  logbook requirement was apparent.  However, through                                                            
compromise,  the Judiciary  Committee included  language that  would                                                            
repeal the  logbook in two years.  However, the logbook issue  could                                                            
be  revisited  were   the  Department  of  Public   Safety  and  the                                                            
Legislature  to   determine  that  the  logbook  was   essential  in                                                            
deterring meth lab activity.                                                                                                    
                                                                                                                                
Co-Chair Wilken  stated that he would verify the date  of the letter                                                            
in question.                                                                                                                    
                                                                                                                                
6:51:09 PM                                                                                                                    
                                                                                                                                
Representative  Ramras noted that in his experience  as the owner of                                                            
several  establishments that  serve alcoholic  beverages, a  trained                                                            
bartender, regardless of  how busy he or she was, would scrutinize a                                                            
piece of identification  in order  to assure that the name  and face                                                            
on the identification were  legitimate. "This is a reasonable burden                                                            
to put on somebody."  While he appreciated  the concerns  brought by                                                            
Carrs/Safeway,   "the   greater   good"   would   prevail.   Similar                                                            
legislation  in other states has achieved  "extraordinary  success".                                                            
                                                                                                                                
6:52:07 PM                                                                                                                    
                                                                                                                                
Representative   Ramras   expressed   personally    witnessing   the                                                            
devastation  created by meth  addiction. It  is easy to get  "hooked                                                            
on".  Rather  than  short-lived  errant  behavior,   meth  addiction                                                            
"wreaks" people  as addiction could occur after using  the drug even                                                            
one or two times.  "They are lost to society." Therefore,  "whatever                                                            
inconvenience  the retailer has to  suffer for the time being  until                                                            
the pharmaceutical  companies  catch up to  problem is okay  by me".                                                            
While  this  might  create a  burden  on  commerce,  Meth  use is  a                                                            
tremendous problem  and "is a scourge on men and women  age 18 to 29                                                            
and it is wreaking  our homes and our schools and  our workforce. It                                                            
is everywhere  in our community. It is causing crime.  Its something                                                            
that Carrs/Safeway needs  to do as good corporate citizens and being                                                            
good neighbors."                                                                                                                
                                                                                                                                
6:53:17 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  referred to  the  section of  the  April 26,  2005                                                            
letter from  Carrs/Safeway, which  expressed that the logbook  would                                                            
be contrary  to someone's  right to privacy.  A law-abiding  citizen                                                            
simply seeking  cold remedy should  not be subject to such  a public                                                            
event. It would  be okay for law enforcement officers  to review the                                                            
logbook were  there cause,  however, it would  be unacceptable  were                                                            
police  simply "on  a fishing expedition"  and  noted a law-abiding                                                             
citizen's name  reflected there. That customer could  get upset with                                                            
the retailer were  that to occur. He asked how "a  balance" could be                                                            
reached in this regard.                                                                                                         
                                                                                                                                
6:54:23 PM                                                                                                                    
                                                                                                                                
Mr. Guaneli  stated that from a legal  standpoint, "the activity  of                                                            
buying an over the counter  drug in a large store is a lot different                                                            
than  buying  prescription   medication  where  you  go  up  to  the                                                            
pharmacist counter and  no one knows what you are buying". One could                                                            
simply take  an over-the-counter drug  off the shelf and  proceed to                                                            
the regular  checkout stand.  There is a  "much less expectation  of                                                            
privacy" at a checkout stand.                                                                                                   
                                                                                                                                
Mr. Guaneli shared that  shortly before the state of Iowa passed its                                                            
pseudoephedrine  restrictions,  a  university  consumer  survey  was                                                            
conducted.  It found that 95-percent  of consumers of such  products                                                            
purchased one box at a  time and 75-percent of the consumers did not                                                            
object  to showing  some sort  of  identification  when making  that                                                            
purchase.  "Most people  understand  that there  is a  value to  the                                                            
logbooks and they support  that." In addition to the law enforcement                                                            
value, logbooks  would provide "a deterrent effect  for people", who                                                            
desire  to  misuse  these products.  To  this  point,  Alaska  State                                                            
Troopers  have determined  that people who  use these drugs  develop                                                            
paranoia,  which  would prevent  them  from  wanting to  show  their                                                            
identification. "There are a lot of benefits to be gained."                                                                     
                                                                                                                                
Mr. Guaneli stated  that it would be unlikely that  the Alaska Court                                                            
System would "allow a lawsuit  against a store" given "the nature of                                                            
the problem  in  Alaska and  given that  the material  must be  kept                                                            
confidential  except for law  enforcement use.  The stores  would be                                                            
"simply  following the  law as it's  written" …  that would  not "be                                                            
cause for liability".                                                                                                           
                                                                                                                                
6:57:11 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken   asked  whether  this  exposure   issue  had  been                                                            
discussed with Carrs/Safeway to "some resolution".                                                                              
                                                                                                                                
Senator  Guess  affirmed that  the  issue  had been  addressed.  The                                                            
Senate Judiciary Committee  added an amendment to exempt stores from                                                            
civil liability  "unless they knowingly or intentionally"  broke the                                                            
confidentially requirement.  This language is included in Sec. 11(g)                                                            
beginning on page ten,  line 31 and continuing through line seven on                                                            
page eleven.                                                                                                                    
                                                                                                                                
     (g) The log  required to be maintained by a retailer  under (b)                                                            
     of this  section and  the information  entered into the  log is                                                            
     confidential.  The retailer may not allow access  to the log or                                                            
     release  information  contained within  the log  except to  the                                                            
     Department of Public  Safety or other law enforcement officers.                                                            
     A  retailer is  not liable  in a  civil action  for release  of                                                            
     information   contained  in   the  log  in  violation   of  the                                                            
     confidentially requirement  of this section unless the retailer                                                            
     intentionally  released  the information  or was  aware at  the                                                            
     time of the release  that the information was being released in                                                            
     violation of this section.                                                                                                 
                                                                                                                                
6:57:52 PM                                                                                                                    
                                                                                                                                
Representative  Ramras  noted that  when processed  in  a meth  lab,                                                            
Sudafed  is "remarkable"  as  it delivers  a substance  that is  90-                                                            
percent  pseudoephedrine.  "Other multi-ingredient  cold  medicines"                                                            
produce  only seven-percent  pseudoephedrine  substance.  Thus,  one                                                            
would be required to purchase  in excess of $60 of other products to                                                            
yield the same  amount of pseudoephedrine  as a four-dollar  Sudafed                                                            
purchase  would  yield.  Were  a  consumer  uncomfortable  with  the                                                            
logbook,  they could purchase  one of several  hundred other  multi-                                                            
ingredient  cold  medicines  that  would  not  be  subject  to  this                                                            
legislation,   which   is  specific   to  single   ingredient   cold                                                            
medications. Therefore,  while a consumer might be  discouraged from                                                            
purchasing  a particular  brand, other  over  the counter  medicines                                                            
would  be available.  He  noted  that this  differs  from  cigarette                                                            
purchases  in  that all  cigarettes  are  located behind  a  secured                                                            
counter.                                                                                                                        
                                                                                                                                
6:59:29 PM                                                                                                                    
                                                                                                                                
Senator  Hoffman   asked  whether   the  legislation  includes   any                                                            
provisions  regarding  the  cross-referencing  of  logbooks  by  law                                                            
enforcement officials.                                                                                                          
                                                                                                                                
Mr. Guaneli  clarified  that the  legislation does  not contain  any                                                            
"specific  provisions"  in this regard.  He understood  that  larger                                                            
retail  chains would  be utilizing  electronic  formatted  logbooks,                                                            
which could be  easily sorted. Smaller stores would  be more limited                                                            
in how their logbooks are  organized. For investigative purposes, it                                                            
would be likely that the  Alaska State Troopers could be required to                                                            
implement electronic  sorting so that  the files would be  easier to                                                            
view.                                                                                                                           
                                                                                                                                
7:00:27 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  asked the reason that such specifications  were not                                                            
included  in the legislation,  as cross-checking  of names  would be                                                            
helpful.                                                                                                                        
                                                                                                                                
Mr. Guaneli  noted that this issue  was discussed during  the bill's                                                            
development. In an effort  to balance law enforcement needs with the                                                            
burden  on small businesses,  the  language in the  bill was  deemed                                                            
acceptable to the needs of the Department of Public Safety.                                                                     
                                                                                                                                
Senator Hoffman  argued that this "additional step  should be taken"                                                            
given the fact that, as  pointed out by Representative Ramras, using                                                            
meth  even one  or  two times  could  be addictive.  Non-aggressive                                                             
action  in this  manner  would  indicate  that the  nationwide  meth                                                            
threat is not as severe as stated.                                                                                              
                                                                                                                                
Representative  Ramras  stated  that  "we  are trying  to  give  law                                                            
enforcement  the tools  they asked  for". It  was determined,  after                                                            
discussing the issue with  the Department of Public Safety, that the                                                            
logbooks would  be utilized as a reference.  "For the Department  to                                                            
have a record  of everyone  in the State who  has had a cold  in the                                                            
last twelve  months"  would be burdensome.  The  desire is that  the                                                            
deterrents  in  this bill,  combined  with  the  child endangerment                                                             
language penalties,  would sufficiently curtail the  supply. Similar                                                            
legislation  has proven  to be quite  successful  in states such  as                                                            
Oregon, Iowa,  Oklahoma, and Nebraska.  Such action would  allow law                                                            
enforcement  to  redirect  some  of  their  resources  toward  other                                                            
endeavors.                                                                                                                      
                                                                                                                                
7:03:43 PM                                                                                                                    
                                                                                                                                
Representative  Ramras expressed that setting up meth  labs in rural                                                            
areas  is attractive  as the  cooking  process produces  a  terrible                                                            
smell. However,  rural settings are  not always the norm,  as a meth                                                            
lab was  found in an apartment  building in  Fairbanks in which  the                                                            
District Attorneys'  office occupied the first floor.  This occurred                                                            
even though the landlord  conducts thorough background checks on its                                                            
tenants. "This stuff is everywhere."                                                                                            
                                                                                                                                
Representative  Ramras commented that while there  might be a desire                                                            
to  more  thoroughly  perfect  this  process,  the  purpose  of  the                                                            
legislation  is to identify those  who are smerfing rather  than the                                                            
tourist who is purchasing Sudafed to address a cold.                                                                            
                                                                                                                                
7:04:57 PM                                                                                                                    
                                                                                                                                
Representative  Ramras thanked  the Committee  for its attention  to                                                            
"such an important issue" in the "waning days" of the Session.                                                                  
                                                                                                                                
Co-Chair Wilken  noted that the bill would be HELD  in Committee. It                                                            
would be  brought back  before the  Committee the  following  day in                                                            
order to allow for additional testimony.                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Wilken adjourned the meeting at 07:05 PM                                                                               

Document Name Date/Time Subjects