HOUSE BILL NO. 75 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; and providing for an effective date." AMENDMENTS: DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT LEGISLATURE UNIVERSITY OF ALASKA FRONT SECTION DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT Representative Kohring MOVED to adopt Amendment DCED-1 (copy on file). Representative Davies OBJECTED for purposes of discussion. Representative Kohring explained that the intent of the Subcommittee was to identify programs that could be eliminated. He observed that the Division of Tourism would be eliminated and their duties disseminated throughout the budget. The Subcommittee originally placed tourism functions in the Alaska Tourism Marketing Council (ATMC). The Division of Trade and Development would be renamed the Division of Trade and Tourism. The new division would carry forward the mission of the tourism industry. The Division of Trade and Tourism will be divided into the Office of Tourism and the Office of Trade. The division director position would be down-graded to a office manager and lowered to a range 18. Additional funding was place in the contractual line. Representative Kohring further explained the amendment as diagramed on page two. In response to a question by Representative Grussendorf, Representative Kohring clarified that a special assistant position in the Commissioner's Office was deleted. The director of the Division of Tourism was down-graded to office manager. Co-Chair Hanley summarized that the Alaska Tourism Marketing Council would remain intact. Representative Kohring clarified that international positions were retained. There being NO OBJECTION, Amendment DCED-1 was adopted. Representative Grussendorf MOVED to adopt Amendment DCED-2 (copy on file). Representative Kohring OBJECTED. Representative Grussendorf observed that the Alaska Tourism Marketing Council retains statutory requirements which limits it to an executive director and no more than two staff. The amendment would transfer the Film Office to the Division of Trade and Tourism. He emphasized that films are designed to attract economic development. Co-Chair Hanley acknowledged that the statutory three staff requirement for the Alaska Tourism Marketing Council prevents additional staff to manage the Film Office. Representative Kohring stressed that the Subcommittee's intent is to minimize the effect of reductions. A roll call vote was taken on the MOTION to adopt Amendment DCED- 2. IN FAVOR: Davis, Davies, Foster, Grussendorf, Kelly, Martin, Moses, Mulder, Therriault, Hanley OPPOSED: Kohring The MOTION PASSED (10-1). Representative Davies MOVED to adopt Amendment DCED-3 (copy on file). Representative Kohring OBJECTED for purposes of discussion. Representative Davies explained that the amendment would reestablish the Alaska Science and Technology Foundation (ASTF) as a grant giving agency. He spoke in support of the amendment. He gave examples of projects supported by the Alaska Science and Technology Foundation. Representative Martin spoke in support of the amendment. Representative Kohring explained that his plan to eliminate the Alaska Science and Technology Foundation were based on discussions with other legislative members. He spoke against the amendment. He maintained that the Alaska Science and Technology Foundation subsidizes the economy. He stressed that the state would continue to meet its contractual obligations. He stated that funding for a grant administrator and a clerical position were authorized to manage the remaining grants. He recommended that the remaining funding be spent on road and highway deferred maintenance. Representative Grussendorf spoke in support of the amendment. He stressed that ASTF is geared toward creating new market niches and diversifying the economy. Representative Kohring maintained that research should be the function of the University of Alaska system. He added that projects should be financed by private sector investors. Representative Davies stressed that ASTF is not a subsidy for business. He asserted that ASTF is a development activity that allows the state and private enterprise to share risk. If a product is developed that pays its own way it repays the Fund. He maintained that university research cannot make up for the loss of ASTF. A roll call vote was taken on the MOTION to adopt Amendment DCED- 3. IN FAVOR: Davies, Grussendorf, Moses, Kelly, Martin, Davis OPPOSED: Kohring, Mulder, Foster, Therriault, Hanley The MOTION PASSED (6-5). Representative Grussendorf MOVED to adopt Amendment DCED-4 (copy on file). He expressed concern with reductions to the Division of Trade and Development. He acknowledged that the Department of Commerce and Economic Development is at its budget cap. Representative Grussendorf WITHDREW Amendment DCED-4. Representative Grussendorf MOVED to adopt Amendment DCED-5 (copy on file). Representative Kohring OBJECTED for purposes of discussion. Amendment DCED-5 would add $200 thousand general fund dollars and $66.7 thousand dollars in designated program receipts to the Alaska Tourism Marketing Council for TV adds. Representative Grussendorf spoke in support of the amendment. He noted that television advertising has been reduced. (Tape Change, HFC 97-84, Side 2) GUY BELL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT explained that with Amendment DCED-5 the Alaska Tourism Marketing Council's FY 98 budget would be $370 thousand dollars below FY 97. Representative Kohring spoke against the amendment. He pointed out that $1.175 million dollars have been budget for television advertising. Mr. Bell clarified that the Governor's budget, as proposed had $1.17 million dollars for television advertising. The ATMC budget was reduced by $1 million dollars. He maintained that this reduction effectively eliminates the television advertising program. A roll call vote was taken on the MOTION to adopt Amendment DCED- 5. IN FAVOR: Davies, Grussendorf, Moses, Foster OPPOSED: Davis, Kohring, Martin, Mulder, Therriault, Hanley Representative Kelly was absent from the vote. The MOTION FAILED (4-6). Representative Kohring noted that funding was transferred from the Office of Trade to the Office of Tourism. Representative Grussendorf WITHDREW Amendment DCED-6. Representative Grussendorf MOVED to adopt Amendment DCED-7 (copy on file). Representative Kohring OBJECTED for purposes of discussion. Amendment DCED-7 would restore a special assistant position. He observed that the commissioner of the Department of Commerce and Economic Development sits on 16 major boards and 20 task forces. The special assistant position is able to be present when the commissioner cannot. Representative Kohring spoke against Amendment DCED-7. He emphasized the need to reduce the budget. He suggested that a reduction of the commissioner's duties and responsibilities could be considered. A roll call vote was taken on the MOTION to adopt Amendment DCED- 7. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). LEGISLATURE Representative Moses MOVED to adopt Amendment LEG-1 (copy on file). Co-Chair Hanley OBJECTED. Amendment LEG-1 would delete $84.1 thousand dollars from the Legislature's operating budget and restore $119.1 thousand dollars to Alaska Seafood Marketing Institute. The amendment would appropriate $78.9 thousand dollars in program receipts, $5.2 thousand dollars in general fund match and $35 thousand dollars in federal receipts. Representative Moses maintained that it is a poor time to reduce the ASMI program. Representative Grussendorf spoke in support of the amendment. A roll call vote was taken on the MOTION to adopt Amendment LEG-1. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). Representative Moses MOVED to adopt Amendment LEG-2 (copy on file). Co-Chair Hanley OBJECTED. Amendment LEG-2 would delete $300 thousand dollars from the Legislative Operating Budget and add $300 thousand dollars to the Department of Fish and Game, Commercial Fisheries Management and Development for support in the development of new fisheries. Representative Moses spoke in support of the amendment. He maintained that the Bering Sea fisheries have been handed to the state of Washington do to restrictions on Alaskan fishers. He emphasized the need for special openings for the small boat fleet and development of new fisheries. Representative Davis noted that there are economic development opportunities in unutilized fisheries around the state. He spoke in support of the amendment. Representative Grussendorf spoke in support of the amendment. He stressed that the amendment would develop fisheries. A roll call vote was taken on the MOTION to adopt Amendment LEG-2. IN FAVOR: Davies, Davis, Grussendorf, Moses OPPOSED: Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-7). Representative Moses MOVED to adopt Amendment LEG-3 (copy on file). Co-Chair Hanley OBJECTED. Representative Moses explained that the state trooper position stationed in Cold Bay is going to be eliminated. He noted that no troopers will be stationed between Dillingham and the end of the Aleutian chain. The amendment would delete $100 thousand dollars from the Legislative Operating Budget and add $100 thousand dollars to the Department of Public Safety to fund the Cold Bay trooper. He emphasized the high cost of flying troopers from Dillingham. Representative Davies spoke in support of the amendment. He recounted an experience he had in Cold Bay regarding the loss of geological equipment. He stressed that the local trooper was able to retrieve the equipment. He added that the weather in the area is unpredictable. A roll call vote was taken on the MOTION to adopt LEG-3. IN FAVOR: Davies, Davis, Grussendorf, Kelly, Moses OPPOSED: Mulder, Foster, Kohring, Martin, Hanley, Therriault The MOTION FAILED (5-6). Representative Moses MOVED to adopt Amendment LEG-4 (copy on file). Amendment LEG-4 would add intent language to provide a full time state trooper in Detachment A stationed in Cold Bay. Co-Chair Hanley noted that he supported the amendment. There being NO OBJECTION, it was so ordered. STATEWIDE Co-Chair Hanley MOVED to adopt Amendment Statewide-3 as revised (copy on file). Co-Chair Hanley explained that the amendment would deny general salary increases. Ms. McConnell spoke in support of the negotiated wage increase. She maintained that the negotiations were entered into in good faith. She stressed that the Governor has already cut money from the agencies' budgets to accommodate the increases in the second year of the contracts. (Tape Change, HFC 97-85, Side 1) Ms. McConnell stated that the Administration supports the contracts and that the negotiated increases have been incorporated into the Governor's budget. She maintained that it is the obligation of the Legislature to support commitments made for the whole term of the contracts. Co-Chair Hanley noted that it is the Administration's obligation to support the contracts. He stated that there is no statutory obligation for the Legislature to support the contracts. He observed that, in previous years, similar contracts negotiated by the Administration have been turned down by the union membership. Co-Chair Hanley recalled that salary increases, approved last year, were for one year only. Co-Chair Therriault recounted statements made during floor debate in the past legislative session. He observed that he indicated, at the time, that his vote should not be construed as an endorsement of the contracts up to the year 2000. He noted that a salary study was requested. He asserted that future legislatures cannot be bound. Representative Davies acknowledged that the Legislature can deny the salary increases. He questioned if it is good public policy to renegotiate labor contracts every year. He argued that it would be better to accept the contract. Representative Grussendorf spoke against the amendment. Ms. McConnell reiterated support for the contracts. She stressed the difficulty of renegotiating the contracts. A roll call vote was taken on the MOTION to adopt Statewide-3. IN FAVOR: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley OPPOSED: Davies, Grussendorf Representative Moses was absent from the vote. The MOTION PASSED (8-2). UNIVERSITY OF ALASKA Co-Chair Therriault MOVED to Rescind the Committee's action in failing to adopt Amendment UA-3. A roll call vote was taken on the MOTION. IN FAVOR: Davies, Grussendorf, Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault OPPOSED: Hanley Representative Moses was absent from the vote. Co-Chair Therriault MOVED to Amend Amendment UA-3 by deleting the reference to the University of Alaska,Fairbanks/Fairbanks Organized Research. There being NO OBJECTION, it was so ordered. Amendment UA-3 as amended would delete $530 thousand dollars from the University of Alaska. There being NO OBJECTION, Amendment UA-3 was adopted as amended. FRONT SECTION Representative Martin MOVED to Rescind the Committee's action in failing to adopt Amendment Front-4. A roll call vote was taken on the MOTION. IN FAVOR: Davies, Grussendorf, Foster, Kelly, Kohring, Martin, Therriault, Hanley OPPOSED: Mulder, Davis Representative Moses was absent from the vote. The MOTION PASSED (8-2). Co-Chair Hanley summarized that Amendment Front-4 would allow revenues generated by the Alaska Railroad Corporation to be appropriated to the railroad. He observed that the amendment would only have an effect if legislation is passed placing the railroad under the Executive Budget Act. A roll call vote was taken on the MOTION to adopt Amendment Front- 4. IN FAVOR: Davies, Grussendorf, Kelly, Kohring, Martin, Therriault, Hanley OPPOSED: Mulder, Davis, Foster Representative Moses was absent from the vote. The MOTION PASSED (7-3). DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS Representative Grussendorf MOVED to Rescind the Committee's action in adopting Amendment CRA-8. Co-Chair Hanley OBJECTED. Amendment CRA-8 increased the overall reduction to municipal assistance and revenue sharing to 6 percent. A roll call vote was taken on the MOTION to Rescind Amendment CRA- 8. IN FAVOR: Davies, Grussendorf OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley Representative Moses was absent from the vote. The MOTION FAILED (2-8). DEPARTMENT OF HEALTH AND SOCIAL SERVICES Co-Chair Hanley MOVED to adopt Amendment HSS-20 (copy on file). He explained that the amendment would delete an $125 thousand dollar increment in State Health Services/Public Health Administrative Services and add to Child Protection Services $41.7 thousand dollars in the Northern Region, $41.7 thousand dollars in the South Central Region and $41.6 thousand dollars in the South Eastern Region. There being NO OBJECTION, it was so ordered. LEGISLATURE Co-Chair Hanley MOVED to Adopt an $100 thousand dollar unallocated reduction to the Legislative Operating Budget. There being NO OBJECTION, it was so ordered. HB 75 and HB 76 were HELD in Committee for further consideration.