CS FOR HOUSE BILL NO. 137(FIN) am An Act making supplemental appropriations for the expenses of state government; making capital appropriations; amending operating appropriations; making appropriations to the disaster relief fund and to the Alaska marine highway system fund; and providing for an effective date. Co-chairman Frank directed that CSHB 137(Fin) be brought on for discussion and referenced a draft SCS CSHB 137(Fin) (9- GH0036\Z, Cramer, 3/13/95) and its accompanying spread sheet highlighting differences between the Governor's amended request and House and Senate versions. The Co-chairman then commented on the following items within the Senate bill: 1. Addition of funding to the Dept. of Corrections for the correctional academy to make Senate funding consistent with House funding of $172.0. 2. Addition of $99.0 for correctional industries, which is consistent with House funding. 3. Addition of $25.0 to the Dept. of Administration, Alaska Public Offices Commission, for an administrative hearing. 4. Addition of $500.0 to the Dept. of Law for repayment of inappropriate federal cost allocation charges. 5. Addition of $4,394.1 for judgments and claims. 6. Reduction of uncollectible program receipts within the Dept. of Health and Social Services, Alaska Psychiatric Hospital, from $325.0 to $200.0. 7. Addition of $410.0 for judgment and claims in Dept. of Health and Social Services, division of administration and support services. 8. A technical amendment was made extending the lapse date on Exxon Valdez Oil Trustee Council restoration projects, consistent with approvals made by the Legislative Budget and Audit Committee. 9. Addition of $191.0 to the Dept. of Public Safety for the arbitrator's award relating to state trooper detachments. 10. Funding of $1.00 to the Dept. of Transportation and Public Facilities, marine highway stabilization fund, because language relating to an appropriation to the fund is included within the title of the bill. 11. Extension of the lapse date on the Egegik organizational grant through the Dept. of Community and Regional Affairs. 12. Addition of $39.4 to the Dept. of Administration for stale dated warrants. 13. Addition of $95.8 to the Dept. of Labor to cover an additional stale dated warrant request. Senator Rieger asked if the $4.4 million supplemental to the Dept. of Law for judgments and claims involves collection of a number of small miscellaneous claims. Co-chairman Frank explained that the largest amount, $3.2 million, involves the Constantine case--a class action suit regarding fishing violations. The department fined numerous fishermen more than the court allowed. The remaining amount represents a number of smaller claims. Senator Donley raised a question concerning reduced funding of $460.0 for Dept. of Health and Social Services activities at McLaughlin. Co-chairman Halford explained that while the Governor requested $580.5, "It looked like they could get by with the $460.0." He acknowledged that the department had subsequently requested the higher amount, and he suggested that funding represents a policy call by committee. Co- chairman Frank advised of a conversation with the Office of Management and Budget indicating that other areas could be reduced to increase funding at McLaughlin. KAREN PERDUE, Commissioner, Dept. of Health and Social Services, came before committee accompanied by KATHY TIBBLES, Acting Director, Division of Family and Youth Services, Dept. of Health and Social Services. Ms. Tibbles explained that if the recent two weeks of reduced detention at McLaughlin holds, and if vacant youth counselor positions are filled to lessen the need for overtime, and all other budget items for McLaughlin hold, the facility might end up with a $5.0 lapse at the end of the year. She cautioned that the admission rate has historically increased in the spring. The department does not believe the situation at McLaughlin will remain stable. The division has also been unable to obtain registers to fill youth counselor vacancies. The register will not be released for another five weeks. The division has explored the possibility of utilizing funds from foster care, residential care, and other youth facilities to cover a deficit at McLaughlin, but has not found needed funding. There is concern that an additional cottage will have to be closed. In changing a 20-bed treatment facility to a detention facility, the division released "as many kids as we could on early releases." There are no further discharges that can be made without endangering the community. Placement of additional young people in detention rather than treatment beds will lead to court sanctions. Ms. Tibbles concluded her remarks by indicating: If we have an unhistoric decrease in detention for the remainder of this year, we might be able to cover with our existing resources. But we don't believe that's going to happen, and . . . we do need the full supplemental . . . we requested. Commissioner Perdue noted that the department has other funds to cover the shortfall. However, those funds are not within the impacted BRU. She said she would provide a list of areas where transfers would have to be made. Comments followed by Senator Donley regarding lack of ability to incarcerate dangerous juveniles. He attested to the fact that police officers in Anchorage often have no place to take young people who have committed a crime. Loss of an additional 20 beds will not improve the situation. Senator Zharoff asked for clarification of the $1.8 million proposed by the Governor for the Toksook Bay school district fuel spill settlement and cleanup. Co-chairman Frank voiced concern that bad precedent would be set if the proposed settlement is funded. DUANE GUILEY, Director, School Finance, Dept. of Education, came before committee. He explained that the state owns both the school building and the site upon which it is located. The school district uses the building on a use permit. A 5,000 gallon oil spill occurred in 1990. The community of Toksook Bay filed an action against the district and listed the state as owner. End: SFC-95, #15, Side 1 Begin: SFC-95, #15, Side 2 The state and school district had a number of discussions with plaintiffs in an attempt to settle, prior to going to court. At a mediation session before a judge in Anchorage, the state informed the district that the state had a preference for settlement and suggested that the district join the state in an attempt to reach a "global settlement." The district chose not to settle in advance. The state proceeded to settle and has received tentative approval of the settlement, pending funding by the legislature. The $1.8 million will "get the state out of the lawsuit entirely." The district would then go forward to jury trial. Senator Rieger inquired concerning damages claimed in the suit. Mr. Guiley advised that the initial claim was $40.4 million. That amount consists of miscellaneous health claims--fear of potential for leukemia and cancer and other such diseases as a result of the petroleum product entering their homes through the water system. Mr. Guiley attested to claims of short-term nausea, dizziness, and other discomforts. There was also the inconvenience of not having access to water in one's home, having to haul water, and having to deal with honey buckets. Not all miscellaneous claims have been documented and approved by the state. The class-action suit involves approximately 500 residents of the community. BARBARA RITCHIE, Assistant Attorney General, Dept. of Law, next came before committee to certify to the class-action nature of the suit. In response to a further question from Senator Rieger, Mr. Guiley reiterated that the $1.8 million "settles the state's interest entirely." He referenced attorney fees and interest under "the Rule of 82." The total award would be approximately $3,600 per plaintiff. The settlement amount would be divided among individual claims, attorney fees, and costs. Estimated attorney fees total $110.0. The settlement consists of that amount, an $800.0 judgment, prejudgment interest of $290.0, reimbursable costs of approximately $100.0 for actual medical expenses incurred, and avoided defense cost of not proceeding to jury trial. In response to a question from Co-chairman Halford, Mr. Guiley said that the settlement was based on an assessment of risk by the Dept. of Law. The settlement was also negotiated by the Dept. of Law. Co-chairman Halford voiced his understanding that the water system at Toksook Bay was posted and known to be "in trouble." People continued to use the water even after it was posted as unsuitable. Mr. Guiley concurred. He explained that there are two sources of water in Toksook Bay. The secondary water source is used in the event the primary source freezes. The secondary source is non-potable water from an aquifer. The non-potable water supply was contaminated by the spill. The city was notified of the spill by the school district. The city decided to turn on the backup supply to prevent the entire system from freezing. It appears that the city may have had notice of the contamination prior to turning on the backup supply. In response to a question from Co-chairman Halford, Mr. Guiley informed members that the city joined the class- action suit filed by individual residents. The state had a counterclaim against both the city and the local Native corporation because of the appearance of spills from other bulk tanks in the community and those located at the store. The Co-chairman asked if the source of pollution was conclusively proven to be "just the school." Mr. Guiley advised that the 5,000 gallon spill was documented based on records of volume in the tanks. The aquifer was tested for contamination, and the samples of oil in the aquifer matched samples of oil from the bulk fuel tanks at the school district. In addition to that spill, oil is seeping out on the beach. It appears that oil on the beach may not be from the 5,000 gallon spill at the school but from Native corporation tanks at the store. Over time, there has been more than one spill. A previous 1,000 gallon spill was also documented when the BIA ran the school, prior to state possession of the facility. Senator Donley inquired concerning the basis upon which the Dept. of Law recommended payment of the settlement. Barbara Ritchie explained that, under present statutes, the state incurred strict liability for damages from the spill. The state cannot avoid paying some amount of damages. The facts indicated that pursuing the issue through the courts would cost at least half a million dollars in attorney time and might have avoided liability to only "about 100 of the 500 plaintiffs." Given the nature of jury awards in these types of circumstances, the Dept. of Law believes that a settlement of $3,600 per plaintiff is an excellent settlement. It was thus negotiated and recommended for funding. Senator Donley asked what percentage of individual damages is represented by the $3,600 settlement. Ms. Ritchie said it would depend upon what happens with the balance of the case. Most of the plaintiffs are children who have suffered "real damages" in the nature of short-term health effects, interruption of water service, etc. The Senator asked how much the department anticipates plaintiffs will collect from others in the suit. Mr. Guiley explained that the state initially argued that it had 10% responsibility because the state was merely the owner of the building and site while the district was the actual operator. As attorneys attempted to negotiate the settlement before the judge, the judge said he was not interested in apportionment. He instead sought global settlement. The amount the district negotiated with plaintiffs to a point close to settlement was "at least three times that of the state . . . ." The district argued the other side of the issue, saying that it had only 10% liability and the state had 90% because the state failed to provide the district adequate resources to properly maintain the building. Senator Donley asked that in the future the Dept. of Law send before committee the attorney who actually worked on the case. Ms. Ritchie explained that the primary attorney is located in Anchorage. Co-chairman Frank directed that he be contacted via teleconference. Senator Rieger noted reference to strict liability statutes and voiced his understanding that they relate to cleanup costs rather than damage awards to third parties. Ms. Ritchie advised that, in this instance, the strict liability of the State of Alaska flows from the fact that the state is the owner of the property. The state, as the owner, is responsible for both cleanup and reimbursement of parties for damages under the statutory scheme of strict liability. Senator Sharp voiced his understanding that the secondary water supply was never potable. Mr. Guiley concurred. The Senator then asked if ongoing testing indicated contamination prior to the spill. Mr. Guiley acknowledged testing of the primary water supply. He stressed that the contaminated aquifer was the backup. The primary source has problems with temporary freezing during extreme weather conditions. The backup supply was non-potable due to inclusion of chemicals and metallic particles not due to petroleum product. The state hired experts to conduct testing and analysis of the contamination in an attempt to trace the petroleum product to specific supplies within the community. There was sufficient evidence to convince attorneys that "It was, in fact, the same oil that came from the school district tanks that was in the aquifer." The cleanup to which the state has agreed is contained within a written plan approved by the Dept. of Environmental Conservation. It is limited to $400.0. The budgeted cost of the cleanup, scheduled to take place this summer, is $397.0. The cleanup plaintiffs want, based on professional estimates, is a $10 million cleanup. Plaintiffs want all oil removed from the aquifer. The $397.0 cleanup will not do that, but it will remove oil to the extent that DEC will approve the cleanup as sufficient under state statutes. Co-chairman Halford stressed that the city made the decision to run contaminated water through the system after it knew "the water was bad" because it wanted to protect its primary system. That had nothing to do with the school district. The city should not now be party to a lawsuit "suing us for their action." Mr. Guiley said that the primary purpose of the settlement is to release the state from the claims of individual residents. When the settlement is finalized, the state will receive a release from "all of those claims as well as from the city." He again referenced counterclaims against the city and Native corporation relating to "their apportionment of the damages from the total oil spill which relates to the spill at the beach site." Co-chairman Halford asked if the state intends to pursue the counterclaims. Mr. Guiley voiced his understanding that if the settlement is funded by the legislature, the counterclaims may continue against the school district to recover the $397.0 in cleanup costs. He advised that he was unsure whether counterclaims would continue against "the other plaintiffs." Senator Donley voiced frustration that the school district would merely come to the legislature for more money. It thus appears that money is merely being shifted around. Senator Zharoff asked if the state would be completely out of the case should the settlement go forward. Mr. Guiley responded affirmatively, saying: Yes. The state would be completely out of it to the extent of the plaintiffs. And then, if the state were to continue this effort, it would be only to recover costs incurred. Senator Zharoff voiced his understanding that the state is viewed as the "deep pocket" in the case. Mr. Guiley answered: Certainly . . . in the apportionment, where the state originally tried to argue the 10% responsibility with the district being 90% responsibility [sic]. The concern is that if there is a substantial settlement against the district, that, in fact, the state may end up having to pay the cost anyway. Senator Donley concurred, noting that if the state gets out of the case, and the school district does not do a good job of defending itself and is subsequently hit with a "big judgment," the state will end up paying that also. Mr. Guiley observed that the district has resources upon which it can draw. That would depend upon to what extent the legislature would require the district to be responsible for its own claims. Senator Zharoff voiced his understanding that "Everybody is agreeing to settlement to some degree" but there is some difference between the city and plaintiffs. Mr. Guiley said that the district and plaintiffs were "very close to a final settlement." Negotiations "came down to within a couple of hundred thousand dollars," but they could not come to final agreement. At this point, the case is scheduled for a jury trial in Bethel. Co-chairman Frank directed that review of other portions of the supplemental request proceed pending establishment of a teleconference link with the Dept. of Law in Anchorage. Senator Donley raised a question regarding funding for the public defender agency within the Dept. of Administration. Co-chairman Frank said that supplemental funding puts the agency above last year's request by the Governor. Senator Donley referenced comments by the agency that its budget is case driven. However, the agency fails to discuss administrative decisions relating to how much is spent on individual cases. Comments from those in the legal community indicate that the state provides "some outstanding defenses for criminals in this state--much more than any ordinary citizen could ever provide for themselves . . . ." Co-chairman Frank concurred in frustration over what is adequate, what choices are made, and what controls are in place. The budgetary message should be that there are limits to what the legislature is willing to provide. The agency should be challenged to manage within the appropriated level. Senator Donley advised that he was not convinced of need for the $50.0 in supplemental funding. ALISON ELGEE, Deputy Commissioner, Dept. of Administration, briefly came before committee. Senator Donley inquired concerning the number of convictions overturned because of inadequate representation by the public defender's office. Ms. Elgee deferred comment to Mr. Salemi, director of the agency, and offered to make arrangements for him to testify via teleconference. Co-chairman Frank asked that Senator Donley pursue his concerns through the subcommittee reviewing the budget for the Dept. of Administration. Ms. Elgee advised that budgets for the office of public advocacy and public defender have, over the last several years, been developed based on prior year plus supplemental funding. That does not provide a factor for substantial case load increases experienced by both agencies. The cost per case is decreasing, but the sheer volume of activity drives up program costs. Comments followed by Senator Donley regarding need for recommendations for reducing both costs and volume. Ms. Elgee attested to a 30 to 40% reduction in costs, resulting in an average cost of $500 per case. Senator Donley suggested need for statutory changes to allow the agencies to perform within budget limitations. Ms. Elgee spoke to recommendations stemming from criminal justice working group efforts. She specifically noted need to reduce the incidence of alcohol use because of its correlation to violent crime. Senator Donley voiced need for changes to "the structure . . . that compel the state to provide a certain level of defense." Ms. Elgee attested to controls which restrict evidence processing to that needed to response to the prosecution's case. Further discussion of parameters followed. Co-chairman Frank advised of a teleconference link to the Dept. of Law in Anchorage. [The following is a transcription of teleconference discussion of the Toksook Bay settlement.] CO-CHAIR FRANK: We do have Chris Funk, from the Dept. of Law, in place of the attorney that negotiated the Toksook Bay settlement. He apparently . . . I don't know if it's a he or she, but this attorney apparently knows something about the case. Are you on line? Yes, go ahead. BARBARA RITCHIE: Mr. Chair. Yes, it should be Ray Funk. CO-CHAIR FRANK: Ray? Oh, okay. BARBARA RITCHIE: Chris Kennedy is apparently on leave this week. Ray Funk is in the tort section in the Fairbanks office and was also involved in the case. CO-CHAIR FRANK: We got the names transposed here. So, okay. Is it Mr. Funk then? FUNK: Yes, sir, can you hear me? CO-CHAIR FRANK: Yes, we can. FUNK: I wanted to clear up one matter first, that Barbara Ritchie brought to my attention. The question was, was the case a class action. The case was not filed as a class action, but in trying to effect settlement of the case, we were concerned that there might be more suits later from other individuals. And we made a settlement based upon the court certifying a settlement class, to be able to ensure that this litigation was a final end to any and all potential claims that came out of this fuel spill, for the state. CO-CHAIR FRANK: Senator Sharp. SEN. SHARP: Does that include the school district, if the state pays 100 per cent? FUNK: No. The school district is still litigating. We made attempts to have a joint settlement between both defendants and the plaintiffs a couple of times, and those have been unsuccessful to date. CO-CHAIR FRANK: Senator Donley. SEN. DONLEY: Well, Mr. Funk, I guess one of the concerns I've got is that, you know, as an attorney you're looking at your client's interest (which is the state and the people), but as a finance committee we've got to look at the overall costs involved. And if we're paying for the costs for not only your client but also for the school district, I mean, we have a different frame of reference in our decision making here. I'm wondering did you consider, and I don't know whether it would be or not, any advantage to the state staying in the case to make sure the school district properly litigates. Because, we're probably going to end up paying what they pay too. FUNK: We certainly looked at those concerns, and those concerns were brought up by the school district any time there was consideration of separate discussions of settlement. And, those were reviewed all along. As well, I've been on the phone as recently as last Friday with various issues concerning the defense, by the school district, of other claims. They're interested in some of the information we've developed, some of the experts . . . . No, we are still recognizing the legislature's concern about their defense of the case. We also have some issues between us in terms of cross claims between us and the school district that we attempted unsuccessfully, to date, to resolve through settlement discussion. CO-CHAIR FRANK: Senator Halford. CO-CHAIR HALFORD: What about the city? Are you proceeding in any counterclaims against the city for actually making the decision that incurred the liability? FUNK: There were counterclaims filed in the lawsuit concerning decisions by the city to pass the oiled water on to the residents of Toksook Bay. And, in settlement of this case, those were part of the dismissal. Those are still being pursued by the school district as to their part of the case. But, part of the resolution of the lawsuit was our dismissal of those counterclaims. CO-CHAIR HALFORD: Oh, so you're going to dismiss the counterclaims against the city as a part of this deal? FUNK: Yes, Senator. CO-CHAIR HALFORD: What was the reason that the city's primary system was allowed to freeze up? FUNK: I'm sorry, sir, I don't . . . . The system had been faulty and they were worried about it freezing up. And, it was because of that concern--that it might freeze up--that it appears the city disregarded advise from the Dept. of Environmental Conservation, once the backup well had been contaminated, to go ahead and use it to prevent the freeze up. But, my understanding of the facts are that it had not frozen up prior to that occasion. CO-CHAIR HALFORD: So, the primary source that was DEC approved hadn't frozen up at all, then. FUNK: No. They were worried, historically, I guess, that it might. It's an infiltration system out of a stream. The well that was contaminated was a backup well that they tried never to use because it was also brackish and made the water less potable. So, it was only used on rare occasions and would only be used in these concerns that during the winter the infiltration system had some problems that led to the fear of freeze up. CO-CHAIR FRANK: Senator Halford CO-CHAIR HALFORD: Just following your proposed settlement through, does it basically include virtually every member of the population of the community as a recipient of the individual shares? FUNK: Yes, sir, that was the intent to prevent . . . . When proposing a settlement class, we basically proposed language that would include anybody in the town or [who] passed through the town that could have been contaminated during the period when the contamination existed and the cleanup prevented problems. [It took] nine months to clean up the water system. So there was [sic] a lot of problems in town and hauling water. Things like that. CO-CHAIR HALFORD: So, I assume the person that made the decision to spread the water around was a resident of the community. And, he will be . . . possibly if he has a large family, he might get $30,000 in damages for his decision to provide contaminated water to the rest of the community. FUNK: Sir, it was our understanding it wasn't any individual person. But, it was a water committee operating on the information they had. But, the answer to your question is certainly that would be a member of the potential settlement class. And, I think a large part of the settlement money would be spread evenly between all of them. The proposal of plaintiffs' lawyers to the court is that certain moneys be paid in attorneys fees, certain moneys be held for costs, and the rest be distributed. CO-CHAIR FRANK: Senator Donley, then Senator Sharp SEN. DONLEY: Thanks, Mr. Chairman. I just wanted to walk through this a little bit more too. So, when the state . . . if the state . . . if we approve this settlement, and the state dismisses its cross claim or counterclaim against the city, who else . . . is there . . . do the parties, then, also have a claim against the city that would be ongoing? FUNK: The school district does. My memory is, yes, that they filed, also, a counterclaim against the city. SEN. DONLEY: But the parties didn't sue the city? So the city would be out of it, other than the school district's counterclaim? FUNK: The city is one of the plaintiffs who's suing the school district as well. The suit was brought on behalf of the city of Toksook Bay, the Toksook Bay Traditional Council, and a large number of individual plaintiffs that kept growing as they tried to amend the complaint as people got to know about the lawsuit. The eventual number of individuals, I think, is close to 500 now, in the thirteenth amended complaint. SEN. DONLEY: Well, it's just that . . . . It seems like it was the city which made the decision to turn on the water. But since they'd be suing themselves, if they did that, they rolled the state in. The state settles out. They're out of it. They've got no liability. They've got no personal responsibility to come up with the money to pay their own people the damages they caused to them. FUNK: Certainly, the possibility of an insurance coverage by the city that may have created some funds for a resolution of the case that would leave them with a percentage of fault or some liability was investigated. And, because of recent pollution exclusions in insurance policies, we couldn't locate any likely available pots of money that would have provided good likelihood of their being a serious participant for those issues. SEN. DONLEY: Could you tell me the statute that's . . . . Well, could you tell me exactly the cause of your belief that, you know, . . . what the statutory law or case law is that says the state has some exposure here. FUNK: Certainly, sir. The lawsuit was based upon claims both under traditional negligence law and nuisance law, but primarily it's based on AS 46.03.822, which is the state statute for strict liability for the release of hazardous substances. And, it sets forth very, you know, very limited defenses in sec. (b) of that statute--mostly concerning acts of war and acts of God--none of which appeared to at all apply to the state. But, strict liability is for either the owner of the facility (in this case the state had received title to this facility from the federal government the year before) and for the owner of the hazardous substance (in this case the fuel) which was and is the school district (LKSD). And they were also the ones in control of the facility. Through a use agreement with the state, they were in control of the facility. So, both of us, in a sense, had strict liability for this hazardous release and, under the statute, then, are liable for the reasonable costs of cleanup and for any damages that grow out of the release. SEN. DONLEY: But, what did the state do wrong, here? I mean, it seems like unless the state actually did something wrong, you still have . . . . You can subrogate your claim. I mean, you can go after the parties who did do something wrong to 100 percent of your damage--anything you pay out, right? FUNK: No, sir. That's what strict liability is all about. It doesn't look at fault. It just says, 'Did a release occur? Are you the owner or operator of the facility?' Therefore, you have to pay damages. SEN. DONLEY: Right. Right. [Indiscernible comments due to more than one person speaking.] FUNK: . . . because of the difficulty of finding who's at fault. SEN. DONLEY: Right. Okay, so the state pays, but they still can sue the parties who actually are at fault and collect from them, can't they? Isn't that what the countersuit and cross-claims are all about? FUNK: They're about indemnity and about contribution, which are those issues. The state believes that its . . . [End of tape transcription. The following portion of these minutes reflects transcription of shorthand notes.] (Senate President Pearce arrived at the meeting at this time.) Senator Rieger inquired concerning actual cleanup costs. Mr. Funk explained that part of the settlement requires the state to pay $1.8 million and conduct cleanup expected to cost $400.0. He acknowledged that, at one point in the discussion, plaintiffs wanted to control cleanup. In response to comments by Senator Rieger concerning the complexity of the issue, Mr. Funk again referenced sec. (b) of the strict liability statute and said that it is clear, in his legal analysis as well as review by other attorneys in the department, that all factors apply. Language reflects environmental law that makes it difficult for anyone to slip out of liability. The law was drafted against polluters. This is the first case where it is coming back on the state as the defendant. Responding to a further question from Senator Rieger concerning the cross-claim, Mr. Funk said it was disturbing to him that the state could not achieve a settlement that included the school district as well. Mr. Funk attested to brokered mediation and the fact that the state continues to want discussion with school district lawyers. It would have been better if all issues could have been resolved. Co-chairman Halford said that his recommendation not to include requested settlement funding in the supplemental was based on the fact that it would, in effect, pay the people who made the decision, at state expense. Payment also appears to leave the state with further liability. He reiterated his belief that the settlement should not be funded in the supplemental. He further advised that he did not think it should be funded at all. The Co-chair suggested that the case should be litigated to conclusion. Senator Sharp asked if any testing or evaluation of school property was done prior to last year's transfer from the federal government to the state. Mr. Funk responded that he was unaware of an evaluation. The Senator suggested that it was hard to believe the state would accept the transfer without testing. Mr. Funk explained that the spill occurred because a pipe rotted away and burst beneath the elementary school, a few feet away from the backup well. The Dept. of Law looked for ways to blame the prior owner of the elementary school. Mr. Funk mentioned federal government involvement in a minor spill at the site in 1975 or 1976, but the Dept. of Law could find no evidence in this instance. The backup well was always tested by the city, and there was no major evidence of pollution. In 1990, a maintenance man at the school found that a tank that should have had 5,000 gallons of fuel oil was empty. It was the rotting of the pipe that caused the pollution. The Dept. of Law tried to link prior pollution to damages, but could not find a good basis to advance a claim. The real damage to the community appears to be from this spill. Senator Sharp asked if the state performed a test. Mr. Funk answered, "Not to my knowledge." Senator Zharoff inquired concerning the effect of the state not settling at this time, both in monetary and precedent setting terms. Mr. Funk explained that the alternative is to look at what could happen in a verdict. The Dept. of Law believes that claims of strict liability would be the determining factor. There is risk of a judgment in the tens of millions of dollars. That is one of the reasons the settlement was reached. The cost of litigation is also anticipated to be expensive. The cost of experts would be high since complex environmental issues are involved. Discovery might require expensive drilling at a remote site. It was for that reason that the state wanted the settlement. Speaking to precedent, Mr. Funk voiced department concern that the state, as owner, is responsible for speedy cleanup efforts. The state needs to step forward and meet the requirements it imposes on others. Senator Rieger inquired concerning the date of the spill and subsequent cleanup action. Mr. Funk said that the spill occurred during the months of October and November, 1990. In a couple of days, staff at the city noticed the backup well was contaminated. Since no one seemed aware that the state owned the facility, the school district hired contractors to conduct cleanup. It took approximately 9 months to clean the water system. It was August of 1991 before the water was certified by DEC. To date, nothing has happened in terms of cleanup costs. Part of the settlement covers the cost to cleanup the aquifer, next summer. Senator Zharoff raised a question regarding funding of $1.00 for marine highway stabilization as opposed to the $1.5 million requested by the ferry system, the $739.8 proposed by the Governor, and the $400.0 provided by the House. He suggested that the state would lose revenue because it would have to reduce the number of sailings. GARY HAYDEN, Director, Marine Highway System, Dept. of Transportation and Public Facilities, came before committee. Co-chairman Frank reiterated that inclusion of language relating to appropriation to the Alaska Marine Highway System fund in the title of the supplemental required the Senate to appropriate something; hence inclusion of $1.00. The Co-chairman referenced the subcommittee recommendation that the supplemental cover only unavoidable costs rather than needs that result from policy decisions by the administration. Mr. Hayden said that if the system does not receive the three positions he would: 1. Keep the TUSTUMENA in dry dock at Seward for a savings of $60.0 per week. 2. Keep the LaCONTI in dry dock in Bellingham and save $50.0 per week. Those savings will also reduce revenues $91.5 per week. In the end the state would save $110.0 but lose $90.0. The above vessels are more expensive to operate per the amount of revenue they produce. In response to a question from Co- chairman Frank, Mr. Hayden spoke to costs associated with staffing levels (engine room and deck personnel), and maintenance of power plants and lines when vessels are in dry dock. Begin: SFC-95, #17, Side 1 [Minutes from this point reflect transcription of tape recording.] Mr. Hayden said that should supplemental funding not be forthcoming, in addition to extended dry docking of two vessels, he would carry the imbalance forward into next year and cut back on projected service for that fiscal year in an attempt to balance the budget. Co-chairman Frank suggested that if the $400.0 imbalance was carried forward, the system would have a whole year to make up the difference. Mr. Hayden concurred. He then explained that for the current year the system is providing 307 weeks of service. The budget for next year projects 303 weeks. Service would probably be lowered to 295 or 300 to accommodate the imbalance. Co-chairman Halford inquired concerning the balance of the marine highway fund. Mr. Hayden advised of $40 million, including general fund deposits. Up to this point, the system has generated approximately $22 million in sales. In response to additional questions from the Co-chairman, Mr. Hayden advised that approximately $12 million of the $14 million in the vessel replacement fund has been obligated to the new vessel. Discussion followed regarding the status of the new vessel. Mr. Hayden said that it has been sent to the shipyards. They are in the process of preparing stage I proposals for return to the state. A preproposal meeting with the five shipyards will be held in Seattle tomorrow. The state expects to have a contract signed in August. The total projected cost is $85 million. Responding to a question from Senator Zharoff concerning how carry forward of the imbalance would impact bookings and schedules, Mr. Hayden explained that the draft of next winter's schedule has been sent to communities for comment and review. It currently proposes 303 weeks of service. Less service will have to be provided because of the imbalance. No bookings for next winter have yet been made. Senator Zharoff noted that winter sailings are those that impact Alaska residents. Mr. Hayden concurred. Senator Zharoff next raised a question regarding the impact of lack of supplemental funding for contract jails. DEL SMITH, Deputy Commissioner, Dept. of Public Safety, and LT. BACHMAN, Administrator of Contract Jails, Dept. of Public Safety, came before committee. Mr. Smith advised that funding for the 15 contract jail sites for FY 95 is within the Dept. of Public Safety. Proposed legislation would move the function to the Dept. of Corrections in FY 96. Mr. Smith referenced a reduction in the number of sites from 17 to 15 when two jails were closed at the department's request. The state has signed contracts for FY 95 with 14 communities. One contract remains pending. Thirteen of the contracts are contingent upon approval of funding at the level requested in the supplemental. The other contract, with the North Slope Borough, contains language saying that if it is not funded, the jail will close at midnight May 9, 1995. FY 93 funding is currently in place. The FY 95 supplemental request would adequately address the present cost of operating the jails. In response to a question from Co-chairman Frank, Mr. Smith explained that charges brought against offenders within the North Slope Borough are brought under state statutes. The care of prisoners, following initial arrest, is the responsibility of the commissioner of the Dept. of Public Safety. The department thus contracts with community jails to hold prisoners until they can be moved to a state facility or an arrangement is made to retain them within the community while they serve their time. With the exception of Anchorage, most communities utilize state misdemeanor and felony charges. Responding to an additional question, Mr. Smith read from AS 33.30.071 concerning the custody, care, and discipline of prisoners pending arraignment and commitment to the Dept. of Corrections. Lt. Bachman added that once the cost of operating the jail for the North Slope Borough was identified, the community was not willing to operate the facility at all. The state agreed to the terms of the above-noted contract because the borough handles over 900 prisoners a year. The department would immediately become responsible for those offenders if some form of contract was not in place. In light of transport costs, the department agreed to "allow them to at least operate until the first of May . . . ." Lt. Bachman further explained that contracts now in place received an extension for the first four months of FY 95. They expired the end of October, last year. Mr. Smith read a listing of contract jail sites: Bristol Bay Cordova Craig Dillingham Haines Homer Kodiak Kotzebue North Slope Borough Petersburg Seward Sitka Unalaska Valdez Wrangell Facilities at Seldovia and Emmonak have been closed. He reiterated that the state signed contracts with 14 communities, contingent upon funding by the legislature. Discussion followed between Senator Sharp and Lt. Bachman regarding municipal law enforcement. Lt. Bachman reiterated that most cities bring charges under state law. With the exception of Anchorage and Juneau, they do not use municipal ordinances. Senator Zharoff again inquired regarding the impact of lack of supplemental funding, asking if the contracts would be void. Mr. Smith responded that it would depend upon situations at individual sites. Some may continue operating under FY 93 level funding and absorbing the cost through June 30 and then not agree to a new contract. Others may serve notification that they will no longer participate and will not house state prisoners. In that case, other department resources would have to be directed toward transport of offenders to the nearest state facility. Unfortunately, state facilities are at capacity and beyond. Other options would be requesting "own recognizance release" as opposed to immediately placing offenders in jail. Deferred prosecution is a further option. If transport is necessary, troopers would have to be taken from other functions to make the transfer. Co-chairman Frank inquired concerning a comparison between existing contracts and the FY 96 request. Mr. Smith directed attention to backup information (copy appended to these minutes) accompanying the supplemental request. He explained that it reflects eight months of funding from November 1, 1994, through the end of FY 95 on June 30. Senator Zharoff voiced his understanding that offenders held in contract jails are held for violation of state law. Mr. Smith concurred. He then reiterated that those arrested under state law become the responsibility of the commissioner of the Dept. of Public Safety. Co-chairman Frank suggested that the state has little control over arrests at the local level which feed prisoners into the state system. He then asked if communities share in the cost of contract jails. Lt. Bachman explained that the state pays 100% of the operating cost: personnel, vehicle costs, electricity, and other utilities. The state does not pay for the actual physical plant. That is contributed by the community. Senator Zharoff asked if communities could refuse to house state prisoners. Lt. Bachman explained that contracts require that they take state prisoners; they cannot refuse. In the absence of a contract, they could decline to do so. In response to an inquiry from Co-chairman Frank, Mr. Smith told members that prior to November 1, when findings and standards were developed for identifying actual costs for which the state is responsible, there was no listing or accountability for what the state was "paying for." Standards provide stability to the program. FY 95 supplemental funding will get the effort on track and enable the program to be predictable in future years. The Co-chairman voiced his understanding that the department will have to renegotiate contracts at the end of the fiscal year in June. Discussion followed regarding potential for increases and need for a FY 96 supplemental as well. Mr. Smith advised that under the newly developed standards formula, increases should be substantially smaller and involve cost of living needs. Senator Zharoff next inquired concerning lack of supplemental funding in Alaska Housing Finance Corporation for senior housing to match the HUD allocation level, asking what impact it would have at Stebbins and Barrow. BOB BARATKO, Director, Administrative Services, Dept. of Revenue, came before committee. He advised of AHFC's anticipation that HUD funds would be made available in the next federal fiscal year. There is, however, no guarantee that would happen. Discussion of the overlap of state and federal fiscal years followed. The state would lose the upcoming building season by not capitalizing in FY 95. There is also a possibility that HUD will not provide the same level of funding next year. The funding ratio is approximately $5.00 federal dollars for each state $1.00. Stebbins would receive $621.0 in AHFC funding. HUD funding totals $3,265.0. Barrow would receive $621.5, with HUD funding of $3,262.9. Funding would provide 20 housing units in each community. In response to a question from Co-chairman Frank, Mr. Baratko explained that AHFC's request is based on best estimates provided by federal agencies. However, federal agencies do not define the allocation of funds until well into the federal fiscal year. Requested funding was unanticipated when AHFC developed its budget submission. Co-chairman Frank asked if projects are bid-ready for construction this year. Mr. Baratko answered, "That's my understanding, sir." Contractors are lined up to present bids. NANCY SLAGLE, Director of Budget Review, Office of Management and Budget, advised of information from staff at AHFC indicating that April is a critical time since that is when the moneys are allocated by the federal government. If corporate receipt moneys are available at that time, the federal government will be able to make the allocation for these projects and put them on line this summer. If AHFC must await the FY 96 capital budget process, the state loses that window, and the projects will be delayed a year. Co- chairman Frank questioned whether the projects are bid-ready to proceed. Senator Rieger inquired concerning the federal allocation process. Mr. Baratko voiced his understanding that federal money is made available and identified to the states. The states then have a certain amount of time to commit to the match. HUD then releases funds to the state. If the state does not provide the match, the offer is withdrawn for the year. April is the deadline for the match. That allows HUD time to reallocate funds to other states prior to the end of the federal fiscal year in September. Senator Sharp advised of three reasons to deny the request: 1. The poison pill clause in AHFC's latest mortgage that prohibits transfer of unrestricted assets of the State of Alaska, or any department agency, instrumentality, or political subdivisions thereof, pursuant to legislative appropriation, or otherwise, without receiving in consideration thereof assets or equivalent fair market value. Transfer of $1.00 without receipt of equal assets could trigger default. 2. It is bad public policy to place significant capital in a supplemental budget. 3. The funds are available in the federal budget until October. They can thus be included in the FY 96 capital budget. AHFC has not yet been able to cite a single instance wherein bid-ready documents are in place. A two or three month slide in providing the match does not lead to forfeit of federal moneys. Mr. Baratko reiterated need for a commitment by April. Senator Zharoff asked if the state had previously lost federal funds by failure to make the April commitment. Nancy Slagle said she did not know what the historical background has been, since AHFC only recently came under the executive budget act. Co-chairman Frank voiced his recollection that similar funding was dealt with in the capital rather than supplemental budget. Ms. Slagle stressed need for timeliness. Senator Donley directed attention to the following proposed intent language: The public defender, the office of public advocacy and the Department of Law shall each, within 15 days of passage of this legislation, report to the legislature on what statutory changes or regulatory action can be constitutionally taken to reduce the operational costs to the state of defending accused individuals in the state criminal justice system. Co-chairman Frank called for objections. None were forthcoming, and the intent was ADOPTED. Co-chairman Halford directed attention to the following additional intent: It is the intent of the legislature that the Department of Corrections shall maintain funding for operation of the McKinley meat plant in Palmer during the remainder of fiscal year 1995. Co-chairman Frank called for objections. Senator Zharoff inquired concerning need for the intent. Co-chairman Halford explained that it merely seeks to ensure that the department utilizes supplemental moneys for the purposes for which they were sought. MARGARET PUGH, Commissioner, Dept. of Corrections, came before committee. She concurred that with proper funding, the department should be able to maintain the plant. If adequate funding is not provided, the plan was to continue the prison industry laundry at the Lemon Creek facility since it provides services to the marine highway system. Beyond that, the department had not selected specific industries to continue. The cost of continuing the McKinley plant is approximately $13.0 for the remainder of the year. Co-chairman Halford voiced his understanding that the plant would continue to operate under the $99.0 funded in both the House and Senate bills. BOB COLE, Director, Division of Administrative Services, Dept. of Corrections, came before committee. He advised of department intent to hold all correctional industries harmless until the end of the fiscal year. Co-chairman Frank called for objections to the proposed intent. No objection having been raised, the intent language was ADOPTED. Co-chairman Frank referenced March 10, 1995, correspondence and asked how the department would deal with lack of funding for the request. Commissioner Pugh advised that the department "would like to seek another $2.5 million in supplemental funding . . . ." Co-chairman Frank voiced his understanding that the new request is in addition to the $609.0. The Commissioner responded affirmatively, advising that it is not possible for the department to compress a savings of $2.5 million into the remaining months of the current fiscal year. The department has scaled back and reduced its original supplemental request from $13.6 to $10.6 through efficiencies, recalculation of worker's compensation, cancellation of planned training sessions, cancellation of an emergency 25-bed CRC (community residential center contract), movement of prisoners around to balance the population and avoid overtime, and transfer of prisoners to Arizona and to CRCs to avoid court fines. End: SFC-95, #17, Side 1 Begin: SFC-95, #17, Side 2 If additional funding is not received, the department will have to implement a hiring freeze. There are approximately 40 vacancies in the department, at the present time. Those and subsequent vacancies would have to be held open. Control of expenditure of overtime would require rescheduling of annual leave. The department would also implement "emergency purchase only" for supplies, travel, and food. Cancellation of training means that the department will not be in compliance with state statutes for the level of training required for correctional and probation officers. In addition to a sweep of all accounts, the department would have to cancel some community residential center contracts and place offenders in those programs on some sort of commutation or return them to institutions. Commissioner Pugh said that cancellation of contracts for community residential centers could be mitigated by use of $570.0 in earned program receipts from DWI collections. The department does not now have authority to receive and expend those moneys. Co-chairman Frank noted that in comparing the request to the FY 95 budget request for institutions, the $609.0 brings the department up to the level of the Governor's request. Funds for out-of-state contractual have also been provided. The legislature does not understand why the department is in a bind. Commissioner Pugh explained that in FY 94, the department held 55 to 60 positions in institutions open. In October, the department filled those positions. Co-chairman Frank advised of a commitment from the prior administration that it would not spend beyond the FY 95 Governor's request. Senator Donley voiced concern regarding the budget for the Dept. of Corrections and suggested that other areas of the budget should first be reduced before impacting ability to incarcerate dangerous people. He suggested that furlough programs have been pushed as far as they can go. There is concern regarding endangerment due to lack of incarceration. The Senator voiced support for a shift of priorities toward corrections, from a public safety point of view. Co-chairman Halford directed attention to a proposed amendment involving three transfers within the Dept. of Health and Social Services to provide $580.5 for the McLaughlin Youth Center. Senator Rieger inquired regarding the impact of the reduction in waivers services. JANET CLARKE, Director, Administrative Services, Dept. of Health and Social Services, explained that reduced funding relates to the four Medicaid waivers the department received from the federal government for adults with physical disabilities, children with complex medical conditions, older Alaskans, etc. The program is new and has existed only a year. Projections on how fast the department was able to get clients on the waiver have not proven to be accurate. The funds will lapse if not expended. Senator Rieger sought assurance that costs incurred in FY 95 would not be paid out of FY 96 moneys. In response to a question from Senator Zharoff, Ms. Clarke described the process whereby the department reviewed the budget for lapsing balances, or items that could be deferred, to come up with funds for the McLaughlin Youth Center. The Commissioner stressed that transfers should not impact direct service. Co-chairman Frank called for objections to the proposed amendment. No objection having been raised, the AMENDMENT was ADOPTED. Senator Donley again raised public safety concerns due to lack of adequate funding for the Dept. of Corrections. Directing attention to Sec. 4, statewide operations for all institutions, he MOVED to add an additional $2.5 million and that the funding source be the underground storage tank fund. Co-chairman Frank asked that the motion be HELD pending a recess of the meeting. Senator Zharoff voiced need for additional amendments relating to the ferry system, community jails, Toksook Bay, the gaming task force, office of public advocacy, the public defendant agency, and Alaska Housing Finance Corporation. Senator Donley advised that if his foregoing motion for the additional $2.5 million fails, he would instead move to allow department use of the $570.0 in program receipts from DWI offenders. RECESS - 11:40 A.M. RECONVENE - 12:55 P.M. Co-chairman Halford MOVED for adoption of the following three-part amendment: 1. Add $1.5 million in general funds to the Dept. of Law for oil and gas litigation. The Senate total would remain below both the initial request and House funding. 2. Add $570.0 in general fund, program receipts from DWI fines to the Dept. of Corrections, institutions. 3. Add $106.9 to the Alaska Court System, trial courts, for Arctic Slope royalty case. No objection having been raised, the AMENDMENT was ADOPTED. Directing attention to Sec. 20 of the draft SCS CSHB 137 (Fin) and the $500.0 appropriation to the disaster relief fund, Co-chairman Halford MOVED to delete the last phrase at page 4, line 30, thus removing "for the fiscal year ending June 30, 1996." No objection having been raised, the AMENDMENT was ADOPTED. Senator Donley MOVED to restore the Governor's request for statewide operation of Dept. of Corrections. He acknowledged addition of the $570.0 in program receipts but voiced need for restoration of the original request as well. He further MOVED to use the underground storage tank assistance fund as the funding source for the $2.5 million requested by the department. Senator Sharp OBJECTED. Co- chairman Frank called for a show of hands. The motion FAILED on a vote of 2 to 4. Senator Sharp referenced the $1.8 million in AHFC corporate receipts proposed by the Governor for use as a match to HUD funds for senior housing and asked that the administration include it in the FY 96 capital budget, if it is not ultimately funded in the proposed supplemental. Senator Donley advised that he was not yet convinced a supplemental is necessary for the public defender agency and MOVED to delete the $50.0 from the Senate bill. Co-chairman Frank voiced support for the recommendation by Senator Phillips, chairman of the subcommittee on the Dept. of Administration budget. The Co-chairman suggested that earlier adopted intent should focus agency interest on reductions. In response to a question concerning impact of the deletion, Senator Donley referenced past years where funding for the public defender increased dramatically while prosecution was held to little or no growth. At the present time, the public defender has superior equipment to the prosecutor and is able to provide costly defenses. Senator Zharoff advised that he could not support the deletion and would instead seek to offer an amendment increasing support to $75.0. Senator Sharp voiced support for the $50.0 recommended by the subcommittee chairman, but also noted that he would ask that Senator Phillips reconsider the recommendation. Co-chairman Halford concurred in comments by Senator Donley but advised of his intent to support the subcommittee recommendation. Co- chairman Frank called for a show of hands. The motion FAILED on a vote of 1 to 5. Senator Zharoff then MOVED to increase funding for the public defender agency from $50.0 to $75.0, because the case load from court appointments has continued to increase. Senator Sharp OBJECTED. Co-chairman Frank called for a show of hands. The motion FAILED on a vote of 1 to 5. Senator Zharoff next MOVED to increase funding for the marine highway system from $1.00 to the House figure of $400.0. Co-chairman Halford OBJECTED. Co-chairman Frank called for a show of hands. The motion FAILED on a vote of 1 to 5. Senator Zharoff MOVED to provide funding of $682.4 for contract jails to cover existing contracts with communities. He suggested that the state has taken advantage of communities in the past and has not paid the full cost of services. Contract jails have been a benefit to the state. Without them, costs will escalate considerably, particularly in the transport of prisoners. Co-chairman Frank acknowledged concern on behalf of the legislature and suggested that the jails would be dealt with in the FY 96 budget. Senator Donley concurred in concern, saying that should the motion fail, he would support providing half the funding from an alternative funding source. Senator Zharoff expressed further concern that funding for the jails was deleted in both House and Senate versions of the supplemental. That leaves little room for negotiation in a conference committee. Reduction of funding sends a clear message to communities. Reaction is likely to be immediate. Co-chairman Frank called for a show of hands. The motion FAILED on a vote of 1 to 5. Senator Donley MOVED to restore $341.2 (half of the original request) to contract jails through an appropriation from the agricultural revolving loan fund, saying that contract jails represent a higher priority than loans. The Senator reiterated that failure to provide funding leaves little opportunity for negotiation. Co-chairman Frank called for a show of hands. The motion FAILED on a vote of 2 to 4. Senator Zharoff MOVED to provide the $1.8 million for the Toksook Bay settlement. He suggested that if preventive measures are not taken at this time, long-term costs will be much higher. Both Co-chairman Halford and Senator Sharp voiced OBJECTION. Co-chairman Frank called for a show of hands. The motion FAILED on a vote of 1 to 5. Senator Zharoff referenced the charitable gaming task force which was established last year but not adequately funded. He then MOVED to add $33.8 in general fund program receipts to the Dept. of Revenue for costs associated with the task force. Co-chairman Halford OBJECTED. Senator Rieger voiced his recollection that the task force reflects a new effort that was not authorized in the FY 95 operating budget. He then referenced the committee decision not to fund policy calls that represent a change of direction from the FY 95 budget. That approach is appropriate given the present financial situation. Senate President, Drue Pearce, advised that the legislature passed gaming legislation. Regulations implementing the legislation were taken to court by operators. Although the Dept. of Law indicated the state would win in court, the new administration established the referenced task force and is not proceeding with either the law suit or establishment of regulations. That is contrary to what the legislature passed. Funding is not warranted. Co-chairman Frank called for a show of hands on the motion. The motion FAILED on a vote of 1 to 5. Senator Zharoff again referenced the $1.8 million request for Alaska Housing Finance Corporation for senior housing and stressed need to capture federal dollars within the necessary time frame. Senator Donley MOVED to utilize the underground storage tank assistance fund to restore half, $1,250, of the $2,500 request for the tourism marketing council. Senator Zharoff questioned whether the source of funds had already been committed. Nancy Slagle advised of an existing appropriation of approximately $3 million for operating costs of the program which are not reflected in access documents provided to Legislative Finance. There is thus no balance available in the storage tank assistant fund without going back and reappropriating moneys already identified for operation of the program for the current year. Senator Donley said he was willing to do that. Co-chairman Frank called for a show of hands. The motion FAILED on a vote of 1 to 5. Co-chairman Halford MOVED for passage of SCS CSHB 137 (Fin) with individual recommendations. Senator Zharoff OBJECTED for the purpose of statement. He then voiced concern that the Senate bill would damage existing programs and suggested that the committee went further than necessary in effecting reductions. Senator Donley concurred in the OBJECTION. End: SFC-95, #17, Side 2 Begin: SFC-95, #19, Side 1 He again stressed need to properly incarcerate those who pose a danger to public safety. Co-chairman Halford concurred and noted that addition of the $570.0 in program receipts to statewide correctional operations will avoid placing someone on early release because of lack of space. Co-chairman Frank noted that funding incorporated within the supplemental raises the budget above the governor's request for FY 95. He concurred in concern but added that responsible funding has been provided. While it may not include everything the Dept. of Corrections would like, it will force management decisions and prioritizations consistent with outlines presented by the commissioner. The approach is reasonable. Co-chairman Frank called for a show of hands on passage of the supplemental bill. The motion CARRIED on a vote of 4 to 2, and SCS CSHB 137 (Fin) was REPORTED OUT of committee. Co-chairmen Frank and Halford and Senators Rieger and Sharp signed the committee report with a "do pass" recommendation. Senators Donley and Zharoff signed "no recommendation." ADJOURNMENT The meeting was adjourned at approximately 1:25 p.m.