HOUSE BILL NO. 325 An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date. HOUSE BILL NO. 326 An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date. DEPARTMENT OF LABOR Co-Chair Therriault MOVED to ADOPT Amendment Labor-1 (copy on file). He explained that the Department of Labor Subcommittee reduced excess general fund match used in the Alaska Work Program. The Amendment would authorize additional interagency receipts to the Alaska Work Program from the Department of Health and Social Services. Representative Grussendorf spoke in support of the amendment. There being NO OBJECTION, it was so ordered. Representative Grussendorf MOVED to ADOPT Amendment Labor-2 (copy on file). Co-Chair Hanley OBJECTED for the purpose of discussion. Amendment Labor-2 would add $4.8 thousand dollars for Employment Security Services and $1.6 thousand dollars for Employment Security unemployment insurance. Representative Grussendorf spoke in support of the amendment. He observed that the federal government reimburses the Department of Labor for the use of its vehicle fleet for on the job inspections. The Department of Labor receives reimbursement based on a 15-year depreciation. The amendment reflects that the actual depreciation time is less than 15 years. Co-Chair Therriault emphasized that the department could absorb the amount. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses, Foster OPPOSED: Davis, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-7). Representative Grussendorf WITHDREW Amendment Labor-3. MILITARY AND VETERANS AFFAIRS Co-Chair Therriault MOVED to ADOPT Amendment MVA-1 (copy on file). Amendment MVA-1 would delete $50 thousand dollars from Disaster Planning and Control and add $50 thousand general fund dollars, $50 thousand agriculture revolving loan fund dollars and $25 thousand dollars in statutory designated receipts to the Department of Natural Resources, Agricultural Development. He explained that the appropriation would allow field certification and assist in marketing seed potatoes in Taiwan. He observed that money has, earmarked for Red Cross assistance, was lapsed from the Disaster Planning and Control Account during the last two years. He observed that the intent is that the Department of Commerce and Economic Development develop a business plan for continuation of the project. Alaska is the only state that has broken into the Taiwanese market. Representative Grussendorf pointed out that approximately $500 thousand dollars has been appropriated toward the project. He questioned when the project would start to pay for itself. Co-Chair Therriault stated that, based on increased purchases, the project should begin to pay for itself. He noted that the farmers would contribute $25 thousand dollars toward the project. There being NO OBJECTION, Amendment MVA-1 was adopted. In response to a question by Representative Foster, Co-Chair Hanley observed that the Committee previously adopted intent language. ALASKA COURT SYSTEM Representative Davies MOVED to ADOPT Amendment Court-1 (copy on file). Co-Chair Hanley OBJECTED. Amendment Court-1 would appropriate $1,417.0 million dollars to the Alaska Court System for administration and support. Representative Davies explained that the appropriation would provide security for out-of-custody hearings. He stressed that the Courts are concerned with the lack of security. Co-Chair Therriault pointed out that the Alaska Court System had a $600 - $700 thousand-dollar savings in personnel cost. Of this amount, $380 thousand dollars is committed to covering costs related to adoptions under the Smart Start Program. He observed that the remaining savings could be used to fund increased courtroom security. Representative Grussendorf spoke in support of the amendment. Representative Davies MOVED to amend Amendment Court-1 to $708.5 thousand dollars. He observed that the amendment would provide 11 court officers. He stressed that court security officers have been diverted to prisoner transport due to a high caseload. There being NO OBJECTION, the amendment to Amendment Court-1 was adopted. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kohring, Martin, Mulder, Therriault, Hanley Representative Kelly was absent from the vote. The MOTION FAILED (3-7). DEPARTMENT OF REVENUE Representative Grussendorf MOVED to ADOPT Amendment Rev-1 (copy on file). Amendment Rev-1 would replace a federal appropriation of $110 thousand dollars with general funds to the Division Child Support Enforcement. GINGER PATTON, FISCAL ANALYST, LEGISLATIVE FINANCE DIVISION testified that the amendment had be previously adopted. Representative Grussendorf WITHDREW the amendment. Representative Grussendorf MOVED to ADOPT Amendment Rev-2 (copy on file). Representative Mulder OBJECTED. Amendment Rev-1 would authorize an additional $4,494.0 million dollars in fund receipts to the Alaska Permanent Fund Corporation. He observed that the amendment would bring their FY 99 appropriation, in this area, equal to the FY 98 authorized and supplemental appropriations. Representative Martin spoke against the amendment. He argued that savings could be obtained and pointed out that the FY 98 request was greater than the actual appropriation, with the addition of the supplemental. Representative Grussendorf observed that the FY 99 appropriation is less than the combined FY 98 appropriation. Co-Chair Hanley spoke against the amendment. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). Representative Grussendorf MOVED to ADOPT Amendment Rev-3 (copy on file). Representative Mulder OBJECTED. Amendment Rev-3 adds $76 thousand dollars in program receipts to the Alcohol Beverage Control Board. Representative Grussendorf explained that the amendment restores an increment for an investigator in Southeast Alaska. Representative Martin spoke against the amendment. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses, Foster OPPOSED: Davis, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-8). DEPARTMENT OF NATURAL RESOURCES Representative Kelly WITHDREW Amendment DNR-1 (copy on file). Representative Kelly MOVED to ADOPT Amendment DNR-2 (copy on file). Amendment DNR-2 would delete a $35.4 thousand dollar appropriation from the Agriculture Revolving Loan Fund (ARLF), which would have increased to full-time a special assistant position. It would add $63.0 thousand ARLF dollars for an additional agricultural inspector position in Fairbanks and add $55.4 thousand ARLF dollars to contractual. Under the contractual amount $15.4 thousand dollars would authorize increased warrants and $40 thousand dollars would be used for the Alaska Grown Promotion program. SENATOR LYDA GREEN explained that the agricultural inspector I position would be used in the Mat-Su area. She spoke in support of the amendment. (Tape Change, HFC 98 - 106, Side 2) Co-Chair Hanley questioned if the private sector compliments the Alaska Grown Promotion program. Senator Green noted that there is some private contribution. Representative Grussendorf asked if the amendment is contained in the Senate version. Senator Green observed that it is in the senate version. In response to a question by Representative Davies, Senator Green explained that additional staff is needed to cover inspections while the existing positions are in training. There would be four full-time inspectors. Representative Kelly MOVED to amend Amendment DNR-2, delete "Fairbanks" and insert "Mat-Su". There being NO OBJECTION, it was so ordered. There being NO OBJECTION, Amendment DNR- 2 was adopted as amended. Representative Davies MOVED to ADOPT Amendment DNR-3 (copy on file). Co-Chair Hanley OBJECTED. Amendment DNR-3 would delete $50 thousand dollars from Fire Suppression and add $50 thousand dollars to the Commissioner's Officer. Representative Davies spoke in support of the amendment. Co-Chair Therriault spoke in opposition to the amendment. He objected to the funding source. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Martin, Mulder, Therriault, Hanley Representative Kohring was absent from the vote. The MOTION FAILED (3-7). Amendments DNR-4 and DNR-5 were not offered. Representative Davies MOVED to ADOPT Amendment DNR-6. Amendment DNR-6 contained intent language to clarified that the department would request through the Legislative Budget and Audit Committee statutory designated program receipt authority in the amount of $150 thousand dollars for specific land use plans. Co-Chair Hanley pointed out that the department already has the authority to request authorization for statutory designated program receipts. ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR emphasized that it is helpful to have a clarification on record since the Legislative Budget and Audit Committee has been concerned that it not authorize expenditures that were not intended in the operating budget. There being NO OBJECTION, Amendment DNR-6 was adopted. DEPARTMENT OF FISH AND GAME Representative Mulder MOVED to ADOPT Amendment F&G-1 (copy on file). Co-Chair Hanley OBJECTED for the purpose of discussion. Amendment F&G-1 would delete $100.0 thousand dollars from the Commissioner's Office. Representative Mulder observed that fish and game funds, derived from hunting and sport fish licenses are being used to fund a position in the Commissioner's Office. He pointed out that fish and game funds are to be used to promote opportunities for recreational hunters and fishermen. Representative Grussendorf spoke against the amendment. He stressed that activities in the Commissioner's Office are tied to sport fishing and hunting. Representative Davies spoke against the amendment. He stressed that the position could provide a basis for people to expect and demand representation at the commissioner's level for sport fishing and hunting issues. FRED FISHER, FISCAL ANALYST, LEGISLATIVE FINANCE DIVISION clarified, in response to a question by, Co-Chair Hanley that the funds could come from either sport fish or game licenses. Representative Mulder noted that he would not object to other use of Fish and Game funds. FRANK RUE, COMMISSIONER, DEPARTMENT OF FISH AND GAME observed that fish and game funds are used in other states' commissioner's offices. He emphasized that the Commissioner's Office handles game and sport fishing issues. The appropriation is only 10 or 15 percent of the Commissioner's Office's overall budget. He acknowledged concerns that there is not adequate representation for sport fishing and game issues on the North Pacific Council or Board of Fish. He stressed the need to be active on endangered species issues. He assured the Committee that the funds would be used to support the opportunity for sport hunting and fishing. A roll call vote was taken on the motion. IN FAVOR: Foster, Kelly, Kohring, Martin, Mulder, Therriault OPPOSED: Davies, Grussendorf, Moses, Davis, Hanley The MOTION PASSED (6-5). Representative Mulder MOVED to ADOPT Amendment F&G-2 (copy on file). Representative Davies OBJECTED. Amendment F&G-2 would move $75 thousand dollars from the Soldotna office of the Central Regional Fisheries Management to the Kenai River Center, Habitat Permitting/Title 16. He observed that the department indicated that, at the current level, the $75 thousand dollars in general funds would be used for Title 16 permitting, not the Kenai River Center. Representative Grussendorf expressed concern with the funding source. Representative Davis acknowledged the need for funding to the Kenai River Center, but expressed concern with the funding source. He MOVED to amend Amendment F&G-2 by deleting the deletion and reducing the addition from $75 thousand dollars to $52 thousand dollars. KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF FISH AND GAME agreed with Representative Mulder's assessment that the current level of funding would be used for permitting. He observed that the Governor requested an increment of $175 thousand dollars to allow the Habitat Division to deal with increased workload. The workload has increased about 38 percent, while the division's general funds have been reduced approximately 47 percent. This is the last year that capital improvement funds are available. The current budget would not cover the Kenai River Center. Representative Davis noted that the Kenai Borough has received a request for assistance in covering operational and maintenance expenses. He questioned if "Title 16" should be deleted from the amendment to assure that the funds go to the Kenai River Center. Mr. Rue explained that the Center issues permits. Representative Mulder spoke against reducing the addition to $52 thousand dollars. Co-Chair Hanley spoke against the amendment. He noted that the Department of Fish and Game is at its spending cap. Representative Davis clarified that the $52 thousand dollars in state funds was built into the Kenai River Center's budget. A roll call vote was taken on the motion to amend Amendment F&G-2. IN FAVOR: Davies, Davis, Grussendorf, Moses OPPOSED: Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-7). Representative Davies MOVED to divide the question. Co- Chair Hanley OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Davies, Davis, Grussendorf, Moses OPPOSED: Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-7). A roll call vote was taken on the motion to adopt Amendment F&G-2. IN FAVOR: Mulder, Foster, Kelly, Kohring, Martin, Therriault OPPOSED: Davies, Davis, Grussendorf, Moses, Hanley The MOTION PASSED (6-5). Representative Grussendorf MOVED to ADOPT Amendment F&G-3 (copy on file). Amendment F&G-3 would add a $75 thousand dollar increment to the Division of Habitat for oil and gas leasing. Representative Grussendorf emphasized that the appropriation would be used to assure that the state's fish and wildlife resources are protected. Co-Chair Hanley spoke in opposition to the amendment. He pointed out that the Subcommittee did not delete the savings the division anticipates from early retirements. He stressed that these savings should offset reductions made in the FY 98 budget. (Tape Change, HFC 98 - 107, Side 1) Representative Davies asked the anticipated amount that would be saved from early retirements. Co-Chair Hanley stated that there is a potential savings of approximately $30 thousand dollars. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). Representative Grussendorf MOVED to ADOPT Amendment F&G-4 (copy on file). He noted that the amendment would be an addition of $100 thousand dollars for Habitat Permitting/Title 16. The amendment would allow for permitting increases in Mat-Su and Southeast Alaska. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). Representative Grussendorf MOVED to ADOPT Amendment F&G-5 (copy on file). The amendment would add $150 thousand dollars for Subsistence Field Offices. He stressed the need for data regarding harvest levels. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault, Hanley Representative Mulder was absent from the vote. The MOTION FAILED (3-7). DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES Representative Foster MOVED to ADOPT Amendment DOT-1 (copy on file). He explained that the amendment would correct a technical problem, which occurred with the closeout. NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION explained that the subcommittee requested that the unallocated reduction for the Department of Transportation and Public Facilities be taken in the same manner as in FY 98. The unallocated reduction in FY 98 was divided between the statewide programs and the Alaska Marine Highway System. The Alaska Marine Highway System is a front section appropriation. The amendment moves $800 thousand dollars of the unallocated reduction to the Alaska Marine Stabilization Fund to offset an increment that was requested for assistance. The level of service would not be reduced. There being NO OBJECTION, Amendment DOT-1 was adopted. Representative Foster MOVED to ADOPT Amendment DOT-2 (copy on file). Ms. Slagle explained that the amendment moves the BRU and component budget structure for the Alaska Marine Highway System. There would be no impact to the Alaska Marine Highway System. Co-Chair Hanley noted that it is a technical amendment. There being NO OBJECTION, it was so ordered.