2d CS FOR SENATE BILL NO. 136(FIN) "An Act making, amending, and repealing appropriations; 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." Co-chairman Halford introduced SB 136 and said it was a combination to date of the work of the Transportation Committee and the State Affairs Committee who has been working on the AHFC portion and the general fund portions of the Governor's capital bill. Senator Rieger gave a short review on the transportation hearings regarding the Governor's capital budget. The first hearings had to do with the six-year plan of the Department of Transportation which was held 20 February 1996 with Commissioner Perkins. The only Governor's requests which were not heard were those submitted late last week. Senator Sharp gave a short review on the AHFC hearings which were primarily through the finance subcommittee for the Department of Revenue. The recommendations made to the co- chair on Alaska Housing Finance and reflected in the bill before the committee was that most of the new components and not in previous years were denied except for AHFC replacement of telephone systems. Funding between supplemental housing up to low-income weatherization program was switched. This resulted in several million dollars more in the low-income weatherization program than originally requested because there was information that much money had already been applied for or qualified for low-income weatherization. Co-chairman Halford indicated that the draft before the committee included of the general fund $99,819 million. It included changes to AHFC in two water-sewer projects. Wrangell and Unalaska DEC and landfill projects were added to the Governor's AHFC which included small water-sewer projects. The bill contained almost nothing in add-ons and a few re-allocations and changes. Senator Sharp had a package that was worked on through the Fish and Game operating budget and there were a number of transfers to capital from operating. Senator Sharp reviewed the operating budget and said there was a reduction of $2 million Fish and Game funds and recommended adding back to the capital budget specific projects amounting to $1,390 million of which $200,000 is federal Fish and Game funds and $1,190 million is state Fish and Game funds for projects that were in the operating portion but was felt more appropriate they be in the capital budget. That was Potter's Marsh, Rabbit Creek Rifle Range and facility improvements which are keyed toward statewide areas wherein the Division of Wildlife Conservation would coordinate with Department of Natural Resources on determining logging techniques, habitat restoration and also regarding private lands agreements to establish pilot projects to better re-establish habitat. Co-chairman Halford indicated these were Fish and Game funds rather than general funds. He further reviewed staff recommendations and restorations to the Governor's budget including the Rural Utilities Business Assistance Program at the request of Department of Commerce; Village Safe Water remained as it was; Department of Education remained as it was with the exception of changes in the Juneau appropriation regarding two projects; two projects for municipal sanitation went to AHFC for Unalaska and Wrangell; above ground storage tanks were funded from the 470 fund instead of the general fund and moved from DEC to DE&RA; deletion of South Denali Wildlife study in Fish and Game; transfer from the operating budget on protection of State's rights; denial of the lease/purchase proposal by the Administration for technological equipment in the amount of $1.4 million; Johnson Youth Center was still under consideration in the amount of $3 million; consideration of a bond package for adult and juvenile corrections including private alternatives; increase in the supplemental for settlement of the Kirk case in the amount of $2.6 million; reduction in deferred maintenance with the allowance of $1 million; increase in geological/geophysical surveys of $600,000 of which $200,000 is Western Alaska Aerial Magnetic; proposal from Fish and Wildlife Protection that was considered on the sale of 2 -3 Grumman aircraft which resulted in an increase in program receipts if the sale is made added to their maintenance repair which included $500,000 general funds and $500,000 program receipts if the sale is made; operating transfers, AST equipment, license plates, Public Safety Information Network was included in the budget; request from Department of Revenue on a CSED project that was denied because existing match balance available from a prior year; and Bethel erosion at $1.7 million. The majority of the bill was as the Governor requested. He referred to two inserts at the end of the back section. One regarded what was instructed on the transfer of above ground storage tanks from DEC to DC&RA and the other regarded language that was inadvertently omitted when the transportation committee bill was brought forward on STIP. They were included in the CS before the committee. Senator Rieger moved the present CS before the committee as a work draft and without objection it was adopted. Senator Zharoff moved amendment #1 regarding Ouzinke Power reflecting a title change to meet the down time experienced over the past winter. There would be no monetary change, just the title. He verified that this was their request through the system and OMB had been given a copy of this. Without objection, amendment #1 was adopted. Senator Zharoff moved amendment #2 regarding a late request for the capital matching grant for the City of Akhiok. This would cover a new land fill site. Without objection, amendment #2 was adopted. Senator Donley moved amendment #3. Tom Brigham, DOT was invited to join the committee and said that the project was included in the 1996 STIP for design. He said he would check to see if a specific line item would be necessary. Co-chairman Halford said he would hold this amendment pending an answer back from Mr. Brigham. Senator Donley concurred. Co-chairman Halford said there was a question brought up from Petersburg on page 11, line 11 regarding Petersburg Cabin Creek Watershed Development Project. The request was to insert "only for existing platted lower road". Senator Zharoff moved amendment #4. Mr. Don Koenigs, former Petersburg mayor was invited to join the committee. He said he was a general contractor in the City of Petersburg. He supported the conceptual amendment and said he spoke on behalf of three ex-mayors of Petersburg all supporting this amendment. He explained the Petersburg Cabin Creek Watershed Project. The proposed road would also provide access for two subdivisions. In 1994 a change in the city council of Petersburg resulted in moving the road outside the platted right-of-way and ultimately this will cause several access roads having to be built. The issue has divided the community with the exception of the importance of getting water which all support. He asked the committee to support this amendment as it would result in a win/win situation for Petersburg. John Winther, Petersburg resident was invited to join the committee. He supported the amendment and urged the committee to support it. The 1993 original deal should be complied with. After further discussion regarding this matter between Mr. Koenigs, Mr. Winther and the committee, Senator Donley requested to hear from Department of Environmental Conservation. Keith Kelton, DEC was invited to join the committee. He said he was unaware of this issue. When the Department evaluated the project it was based on the need to provide a water supply for residential and industrial growth in the City of Petersburg. The issue of the road had not been raised to the Department and is a local issue. The Department felt the present language was appropriate. Ms. Slagle concurred. Co-chairman Halford suggested amendment #4 be withdrawn and Senator Zharoff complied. Senator Phillips moved amendment read "Cabin Creek consensus Watershed Development Project" and without objection it was adopted. (The committee took a brief at ease from 11:30 a.m. until 11:55 a.m.) Senator Donley moved amendment #6 regarding designated grant to victims for justice. He referred to the volunteers of the Court Watch program and noted they were the only statewide victims' group. Co-chairman Halford indicated he considered this a good amendment but would support it at a later date. Upon a vote of 5 -2 amendment #6 failed to be adopted. Senator Sharp moved amendment #7 regarding addition of AHFC language on page 17 and without objection it was adopted. Senator Sharp moved amendment #8 regarding an increase in AHFC receipts and without objection it was adopted. Senator Frank moved amendment #9 regarding federal funds for the Department of Health and Social Services. Janet Clarke, DHSS was invited to join the committee and testified on behalf of the amendment. $2 million would be available in food stamp funds via electronic benefit transfer. She explained the process and said it had greatly helped reduce food stamp fraud. Since Alaska has a small volume of users they combined with the states of Colorado, Wyoming and Hawaii in order to get a better transaction price. Without objection amendment #9 was adopted. Senator Zharoff moved amendment #10 to re-insert the Johnson Youth Center. Margaret Pugh, Commissioner, DOC was invited to join the committee. She explained the severe overcrowding at the facility; it having eight beds and typically housing eighteen children. If capacity is not increased it means children from southeast Alaska will have to be sent to McGlaughlin, Bethel or Fairbanks causing overcrowding in those facilities and also separating the children from their families. Construction could be commenced in the spring and it would allow immediate relief to the system. Upon a vote of 5 - 2 amendment #10 failed to be adopted. Senator Zharoff moved amendment #11 and said it had to do with funding for schools. There may have been some misunderstanding on the amount originally included that it did not take into account another high priority in the district. Karen Rehfeld, DOE was invited to join the committee and testified that the department's priority list for major maintenance projects included the Juneau-Douglas High School roof repair in the amount of $646,900 as priority one and priority three was the Mendenhall River School roof project for $1,365,200. The Governor's request included $1 million for Juneau school district roof repairs. Upon a vote by the committee amendment #11 failed to be adopted. Senator Sharp moved amendment #12 regarding page 13, lines 24 and 25 be eliminated referring to $1.6 million for public health laboratory planning and design. Without objection amendment #12 was adopted. Senator Zharoff moved amendment #13. Nico Bus, DNR was invited to join the committee and explained the amendment regarding the land status geographic information system. This was a multi-year project with approximately 1,000 townships left to be converted from manual maps to digitalized maps. These new digitalized maps were used by all resource managers to make land management decisions quicker and make the information as soon as possible available to the public. If stopped now, this would leave the project incomplete. Senator Zharoff said no figures relating to this were in the Senate version of the capital budget. He referred to a reduction in the Wainwright sewer and water project from $190,000. That was at the request of the sponsor of the amendment. Marla Berg, staff aid to Senator Al Adams was invited to join the committee. She said there would be no money involved, just a transfer. Co-chairman Halford said the effect of the amendment would be an increase of $100,000 at Wainwright; $100,000 in village safe water; $350,000 in land status and a decrease commensurate with that in the two projects of aerial magnetic survey southwest Alaska and airborne geophysical and geological. Nico Bus advised the Department supported the amendment. Upon a vote by the committee amendment #13 failed to be adopted. Senator Sharp moved amendment #14 and said this amendment was meant to clarify the source of funds for the item on page 45 line 11 and 13 of the original budget from 75% federal funds/25% state funds to 50% from each source. Kevin Brooks, DF&G was invited to join the committee and concurred with Senator Sharp saying this related to upgrades at the Rabbit Creek Rifle Range. They felt this would be a better mix to use the funds based on 50% federal funds and 50% Fish and Game funds. Without objection amendment #14 was adopted. Senator Frank moved amendment #15. As explained by co- chairman Halford this dealt with state STIP and concerns on the EIS. This was a request to add the project back along with the intent statement. It had been deleted from the Governor's request. Without objection amendment #15 was adopted. Senator Frank moved amendment #16. As explained by co- chairman Halford this was at the request of a house member and it referred to a capital matching grant item which will not affect the total. Without objection amendment #16 was adopted. Co-chairman Halford indicated that these two amendments were to be adopted only if OMB had the requests otherwise they would be withdrawn. Senator Donley requested the committee return to amendment said the project had not begun as yet and as long as AMATS leaves it in the 1996 program they will start it. They would prefer the engineering money for the project remain in the general pre-construction project. Co-chairman Halford said he would rather not allocate this as long as there is a commitment from AMATS to go forward. Upon a vote of the committee amendment #3 failed to be adopted. Nancy Slagle advised the committee that it would be necessary to await the arrival of Annalee McConnell, Director OMB and therefore co-chairman Halford recessed the committee at 12:30 p.m. until 1:00 p.m. (tape SFC-96, #103, sides 1 and 2) Co-chairman Halford called the committee back into session at 2:50 p.m. He noted all members were present. Annalee McConnell was invited to join the committee. She commented on the selection of the projects as being those with high priority and were generally on the capital budget. She pointed out AHFC (energy rated homes) on page 4 and Department of Corrections (Fort Rich Brig and Harborview) on page 5. She explained that Fort Rich was a project that U.S. Senator Ted Stevens was working that would allow a 3 - 1 match with federal dollars. This is the only way the State could acquire 45 beds within six months. She also called attention to the Administration's concern to have the prison bonds on the ballot in November. This was not only because of the Cleary case but rather the state is unable to house the criminals. There is no point in passing stronger laws if it cannot be seen through the system. Harborview is not only important to Corrections to have beds for alcohol treatment program offenders but also it would be an important economic development feature for the community of Valdez. Co-chairman Halford indicated that the problem was the cost per bed at Harborview would be $175/day/person on the low side or $204/day/person on the high side. This would be out of range in terms of any kind of a per person cost. Fort Richardson would be higher than anything south of Fairbanks with the exception of Ketchikan. Ms. McConnell appreciated the concern but felt that in weighing the additional factors, the additional beds were needed, and this would make sense until additional facilities could be built. If the prison bond was put on the ballot it would deal in a more complete way with the overall problem of needing facilities statewide for both adults and juveniles. She referred to the Denali Development Project, page 15, and said there was concern over building new facilities when the current ones are not maintained. This particular facility for the State's most heavily visited attraction were woefully inadequate for tourists. There has been significant co-operative effort on the part of the State, the federal government and the private sector. Page 18 referred to the Americans with Disabilities Act and the reason for reducing the recommended $1.5 million for ADA compliance by $250,000 was because of the belief there was $250,000 remaining unencumbered. There was $168,000 remaining unencumbered because of lawsuits or threat of lawsuits on particular facilities. She noted calls received from advocacy groups that were concerned about the State's slow compliance with ADA and their thoughts on pursuing legal action against the State to speed this up. Other items included technology bonds wherein $6 million worth of projects had been proposed, the debt service for which would be $1.4 million this year. These projects are considered to be extremely important and encouraged the committee to treat them just as if they were other general funded projects in terms of priority. The single largest project related to the criminal justice system. This was a Public Safety issue that was only partially funded last year and it is necessary to go through with the next phase. She said there was a big problem with the computer systems, especially in the criminal justice system. The reason revenue bond financing had been proposed was because presently the State does do lease/purchases of various kinds of equipment and it is believed that it would be more cost effective to do that not at private financing rates but rather at the State's rate. Many projects on the list are necessary to meet federal requirements and various deadlines the departments are under for some emergency communications issues. Election office equipment is obviously needed in time for the August elections. There are departments that have not been able to fund replacement of computers, including the WANG system at the Department of Labor, but also breakdown of computers individuals use every day. She stressed these items could not be left out of consideration in the overall budget. She continued on page 19, DHSS, and the amendment to return the Johnson Youth Center to the capital budget was defeated and said this has been an extremely high priority matter for years. It is now a critical need within the juvenile justice system. It could be under construction quite quickly and would meet a need not just in the Juneau area but would also meet needs in all of southeast Alaska. It would also prevent children from being sent to Anchorage, Fairbanks or other facilities around the state, which obviously defeats the purpose of maintaining the effort of family communications. She strongly encouraged re- instatement of the project. Page 23 referred to the match for federal funds for the Juneau Armory in the Department of Military and Veterans Affairs. This would bring in millions of dollars upon completion. Page 24 refers to the Department of Natural Resources land status geographic information system and has been the department's highest priority. Two years were left to complete the project. If it is taken out of the capital budget the project will not be completed. She said there would be an amendment coming in regarding aircraft under the Department of Public Safety. At this point she indicated they would come back to the Department of Revenue as last minute information was being compiled on the child support items. She referred to page 27 and said the general fund match was reduced by $150,000 leaving $20,000 which would not be sufficient to get the federal funds necessary for the project. Fred Fisher, fiscal analyst said the recommendation was based on the fact there was some documentation from LB&A committee meeting which indicated that the Department of Revenue had a general fund match balance of about $319,000. Upon a review it appeared that balance was still available to the Department for matching these projects. Ms. McConnell said they would check the matter with the Department. She continued on to page 28 and said there were a few projects within the AHFC area of particular concern and that had been reduced in the draft budget. One was regarding the low income weatherization program and recent information indicated they may not get the federal money in the amount of $1.8 million so they would like to use corporate receipts for that due to the level being proposed would not be sufficient for the program. Page 29 referred to the senior citizen's housing program and the amount remaining after reduction being $750,000 would not complete any of the projects on the list. The projects are done by private developers and she said she would supply a list of figures so the committee would know what amount would fund projects. The Homeless Assistance Program needs increase from the $250,000 that was allowed. John Bitney, AHFC was invited to join the committee. He said this was basically a new item and AHFC combined some funds from the federal competitive grants. This program was listed on page 29 of the side-by-side sheet. The corporate funding amount was $1 million. Some funds were transferred as part of the request for 1997 from that program into the Homeless Assistance Program. The reason was that not only was the federal government lowering their participation for these kinds of programs they have also reformulated the program to where it is now more driven by population. The State of Alaska is not only losing federal funding for these programs but also they are losing under federal reformulation. In response to co-chairman Halford he said the total amount between the emergency housing assistance grants last year was $250,000. The amount authorized for the federal competitive grants was $2.1 million for a combined total of $1.350 million. The corporate request for homeless assistance was $1.2 million and for federal competitive was $1 million. The total corporate funds requested was $2.2 for 1997. Ms. McConnell referred to the next item on page 32. The Soldotna Maintenance Station would be a replacement of the current facility which jeopardizes the water quality on the Kenai River. Restoration of the quality of the Kenai River is a high priority. It would not require additional O&M costs for the State once it was built. The current site would need to be cleaned up because of the oil leakage. The City of Kenai donated the land for the facility and there would be no land cost to the State. She further referred to federal highway and federal aviation projects and said it was important to maximize federal dollars that the State would be eligible for because when the formula changed less money will come in from the federal government. Fred Fisher commented on reducing ineligible costs and utilize the savings on highway maintenance. Ms. McConnell said they should continue to work toward the most effective use of the dollars as possible. She referred to changes made in the budget that had been suggested last year regarding management control. They would work with DOT in order to not jeopardize federal dollars. Referring to page 33 and the Corps of Engineer match she said it was recommended that rather than appropriating specific amounts for each of the projects it be done by allocation. She noted the Bethel sea wall project had been omitted and felt that it was a serious concern and should be re-instated under allocation. Co-chairman Halford said the problem was that it came in after the sixty-day deadline. Mr. Brigham commented on page 34 and asked the committee's reconsideration of the Anchorage ride-sharing project saying it was 100% federally funded and no state match is required. This was also being used by commuters to and from the Mat-Su valley. This project was significantly less expensive than providing buses or other public transportation as the costs are borne by the users. Bob Baratko, Department of Revenue was invited to join the committee. He said the original project was a computer system upgrade within the child support division for a total cost of $2,680,900. In October 1995 they had requested through LBA $859,600. That increased the total authorization to just over $3.5 million and that is what was reflected in the access system. To date they have collected $352,000 in State funds and just under $2 million of federal funds which leaves them still to collect $404,000 and $785,000 from the federal funding source. Originally, when the system was funded it was a 66/34% match. The federal agency changed that to a 90/10% match. The state funds are needed to collect the remaining federal funds. Co-chairman Halford asked if they had responded to the Budget & Audit request for a plan on the $319,000? Mr. Baratko said the letter he just had seen only indicated that child support had to appear before LBA to receive authority to expend that money. There was nothing that requested a long-term plan or in-the-future plan. Mike Greany, Director, Division of Legislative was invited to join the committee. He referred to Buget and Audit of last fall a certain amount of general funds was appropriated to match available federal funds for a project of a certain scope at that time. The idea was for the department to advise Budget and Audit committee of a plan as to how that would proceed. Obviously what was being heard now was that the project continues to balloon and there was some misunderstanding at this point of how much of the initial over-match money is to be used versus new money to continue on some other phase of the project. Mr. Baratko concurred in that the system was being enhanced beyond the original request, however, Glenda Straub had testified previously that the federal requirements do keep changing on that system. The costs to implement the enhancements also rose. Glenda Straub, Child Support Enforcement Division was invited to join the committee. She said the deadline for matching funds was October 1. Mr. Baratko said he did not believe the funding could be stopped without impact to the system development and implementation. The contractors were working and the staff of child support was working and had done a great deal on their own concerning data processing conversions. It should be a project that continued as it began. He concurred with co-chairman Halford that the final approval had to be from LBA. Ms. McConnell suggested that the Department of Revenue and Legislative Finance should get together and sort this matter out and then return and advise the committee. Co-chairman Halford concurred. She further noted that there was some misunderstanding on the federal match for DOT on page 33. She referred to a memo to Mr. Brigham from Commissioner Perkins. Mr. Brigham said in concurrence with Ms. McConnell that it had appeared the federal match this year had been greater than last year but it had not been taken into account that last year reappropriation funds had been used in order to flush out the state match for federal dollars. Ms. McConnell said they were not proposing a higher budget than last year. She said she would address the amendment on the projects on the revenue bond list after testimony from the Department of Law. Senator Donley said he would like to hear from the Criminal Justice System on the computer system used for record keeping. Laurie Otto, Criminal Division, Department of Law was invited to join the committee. She said every police officer in the State was dependent on computerized fingerprint records. Those working with children are also dependent. Every state prosecutor is dependent on computerized criminal history records to ask for bail, sentencing and to be able to track cases. Every state correctional officer is dependent on the system to be able to track who is in custody, when they get out and when victims get notified. The system is obsolete dating back to the 1980's and are not being supported by vendors. The legislature had been aware of this problem and appropriated small amounts of money to do business process re-engineering studies to figure out what was needed to replace the systems. That was all completed and now they were at the next stage of the process. She explained how the $3 million in the budget for the criminal information system would be used. The Department could no longer operate effectively with the obsolete system it was using. Senator Donley said that good progress had been made over the last few years in anti-crime legislation and it all keys into the data being available within the system to enforce the laws. Co- chairman Halford said the problem was because this was a $1.4 million section that represented a $6 million plus increase in the capital budget. Ms. McConnell said the requests were within the capital budget and these were brought forward because they did not want to circumvent the legislative process in terms of acknowledging the projects. They felt they could get a more effective deal for the State rather than through the private sector. Co-chairman Halford commented on the $1.4 million appropriation in the capital budget represented an expenditure of $6 million and it would be all state funds that eventually end up there. She said they understood there was a cost to financing. Unfortunately computer projects along with deferred maintenance tend to fall off the list and not get funded adequately because they are not as visible to the public. In order to eventually reduce personnel it will be essential to have the computer system in place. She said especially in areas of the criminal justice system it would be unacceptable to not go forward on these projects and these had been capital budget items in the past. Senator Donley asked about the implementation period of time and what problems were being faced in the short period of time. Ms. Otto said it would take approximately two years to replace the system that will die in 1999. She noted laws such as felony DWI which are dependent on accurate criminal history records, fingerprinting laws and victim's rights constitutional amendment and said this system could not effectively function with the system as is. She referred to a study funded by the legislature three years ago and said they were aware of all this and noted the frustration of knowing the repercussions for the criminal justice system if they do not catch up this year. If the computer system does not work the ability to identify criminals will go away. Co-chairman Halford suggested the Administration come up with a non general fund sources for an amendment to fix this problem which would be acceptable and the committee would entertain. Ms. McConnell said they were trying to stretch the dollars and projects on the list had been pared down. She encouraged the consideration of revenue bonds. Senator Rieger said the transportation committee did discuss $1.4 million appropriation. Co-chairman Halford said if there were no further questions the committee would return to discussion on the amendments. Senator Zharoff moved amendment #17 regarding village safe water as sponsored by the Department of Environmental Conservation. It would restore the funding for the solid waste project in Beaver. Co-chairman Halford said this was one of two projects that was funded through RUBA and therefore would not support it. Upon a vote of the committee amendment #17 failed to be adopted. Senator Zharoff moved amendment #18 regarding the conversion of Harborview to a correctional facility. This project would be beneficial to the community of Valdez and the State. Although the costs for incarceration were high on a daily basis he noted there was a general fund contribution of $250,000. Bob Cole, Department of Corrections was invited to join the committee. He explained the uniqueness of the program. He said they believed good alcohol treatment should be provided for the middle tier of offenders. They have the best potential for reducing recidivism and for reducing the length of sentence while in custody. Therefore the average cost today took on a different perspective because if the length of time of incarceration is reduced there is a major cost savings and if they are able to intervene effectively so that individuals do not re-offend that was an even greater savings. He felt this program was much more cost effective than the one for substance abuse or mental health which ran approximately $500/day and was covered by insurance companies. Senator Donley said he believed the correctional system was in need of help and supported the amendment. He felt this was of a higher priority than some other items in the budget. Mr. Cole said another attraction of this was that it would make use of an existing state facility as opposed to building a new facility at approximately $150,000/bed. The City of Valdez supported this project. Upon a vote of the committee amendment #18 failed to be adopted. Senator Zharoff moved amendment #19 regarding Department of Corrections deferred maintenance. Mr. Cole said that deferred maintenance was a major concern and said these were not office buildings but rather buildings jammed with individuals being held against their will and were open seven days a week, twenty-four hours a day. He said $24 million worth of unfunded liability for deferred maintenance on 83 buildings. This amount would only increase and said $1.5 million in this amendment was a very modest but good investment. Co-chairman Halford commented and said he knew when in dealing with deferred maintenance there was never enough. Mr. Cole commented on the number of prisoners booked and held, how many transactions were complied with and that individuals had served over one million man hours. Upon a vote of the committee amendment $19 failed to be adopted. Senator Zharoff moved amendment #20 regarding the Fort Richardson renewal and replacement to be used as a 40-bed state correctional center. Mr. Cole said there was a cheaper version of the operating cost for this facility in the amount $470,000. U.S. Senator Ted Stevens supported the change in this facility along with the post commander at Fort Richardson. Senator Donley said he supported this amendment especially since it was being contributed to by the federal government. Upon a vote of the committee amendment #20 failed to be adopted. Senator Zharoff withdrew amendment #21 in deference to amendment #23. Senator Sharp moved amendment #22 regarding tribal entities. Ms. Slagle explained the amendment. She said these were requests received by legislative offices from communities after submittal of the capital budget and these would be included in the back section for the specific projects unless they were already submitted in the budget. Co- chairman Halford said the requests would reflect the up- dated version of what the community wanted. Senator Zharoff said he had concerns with the deletions. This would say the entities do not exist. Co-chairman Halford said that this would say they would not be recognized by the state. Senator Zharoff said he would continue his objection to the deletions but not specifically the amendment. Upon a vote of the committee amendment #22 was adopted. Co-chairman Halford said he drafted amendment #23 to try and deal with the questions in Public Safety. He said the original request was for $750,000 for Fish and Wildlife Protection aircraft and vessel repair and maintenance. There was also a proposal for the sale of two Grumman aircraft and for purchase of another aircraft. The language in the bill had rolled those two together. He also noted the addition to the front section being the sale of the two aircraft. Ken Bischoff, Department of Public Safety said the amendment met their concerns. Senator Sharp moved amendment #23 and without objection it was adopted. (tape changed to SFC-96, #104, sides 1 and 2) Co-chairman Halford introduced amendment #24 regarding language change in Kerr vs. State. Senator Rieger moved amendment #24 and without objection it was adopted. Senator Zharoff moved amendment #25 regarding communities not included in other amendments for capital matching grants. If funds are not utilized the first year it will accumulate to the next year wherein interest is also included. Ms. Slagle advised that four communities should be deleted. Senator Zharoff moved to delete the communities of Circle, Gakona, Lake Minchumina and Northway and without objection this conceptual amendment was adopted. Upon a vote by the committee amendment #25 was adopted without objection. Co-chairman Halford said the four communities would need a new amendment and Senator Zharoff said he would submit such. Senator Zharoff moved amendment #26. Ms. Slagle said this particular amendment dealt with municipal capital projects and those not submitted yet. Senator Zharoff moved to include Angoon at $25,000 and change the total to $275,000 and without objection the conceptual amendment was adopted. Ms. Slagle said the administration supported the amendment and there would be no general fund change. Upon a vote by the committee amendment #26 was adopted without objection. Senator Zharoff moved amendment #27 regarding Stebbins Facility Upgrade. Ms. Slagle said this was the original appropriation plus interest. She said the communities have the ability to build up money to use on a larger project they need in the future. There would be no general fund change. Upon a vote by the committee amendment #27 was adopted without objection. Senator Zharoff moved amendment #28 allocating AHFC funds to Wainwright and Beaver. Co-chairman Halford said this was the same money recommended to be transferred into RUBA and was for the benefit of the same constituencies. Upon a vote by the committee amendment #28 failed. Senator Zharoff moved amendment #29 regarding the landfill site for the City of Akhiok. Ms. Slagle confirmed the correct amount and there would be no general fund change. Upon a vote by the committee amendment #29 was adopted. Senator Zharoff moved amendment #30 regarding registry of child support. Mr. Bob Baratko was invited to join the committee. He said the child support division was requesting capital funding for the federal case registry of child support orders. This system was also included in the welfare reform bill approved at the federal level. This allowed registry of all child support orders established in any state. Mike Greany was invited to join the committee. He said the original project was still the highest priority. This project would be second priority. Senator Zharoff questioned federal receipts in the amount of $330,000 and asked if this were available on a state fund match. Mr. Baratko concurred but indicated that the general fund match had been reduced to $20,000 and would not allow for capturing the available $330,000 federal funds. Upon a vote by the committee amendment #30 failed to be adopted. Senator Zharoff moved amendment #31 regarding unincorporated community grants. Ms. Slagle confirmed the stated amounts. Upon a vote by the committee amendment #31 was adopted. Senator Zharoff moved amendment #32 regarding Paxon and without objection it was adopted. Senator Zharoff withdrew amendment #33. Senator Zharoff moved amendment #34 regarding lease payments for the initial term of technology equipment lease for state agencies. Co-chairman Halford said he opposed using revenue bonds. Upon a vote by the committee amendment #34 failed. Senator Sharp moved amendment #35 regarding a fire truck purchase for Hyder and without objection it was adopted. Senator Donley moved amendment #36 regarding funding for hatchery operations and without objection it was adopted. Senator Zharoff moved amendment #37 regarding the four unincorporated communities of Circle, Gakona, Lake Minchumina and Northway. Ms. Slagle said the money was available to the communities, had been appropriated but not claimed. She said there would be no net increase in the amendment. Without objection it was adopted. Senator Frank moved amendment #38. He said section 14 of the amendment was a sweep provision. Section 15 covered unrestricted state revenue. Section 16 would keep supplementals to a minimum. Upon a vote by the committee amendment #38 was adopted without objection. Senator Frank moved amendment #39. Senator Rieger objected to the amendment and asked for an explanation of enhancements and the iced tea program. Senator Donley asked what percentage was to be spent on enhancements. Tom Brigham, DOT was invited to join the committee. He explained the enhancements in Alaska had been such as roadside pulloffs, historical interpretation, natural history for residents and tourists as they drive down the road. This also included trail work, water runoff and historical restoration. Senator Phillips wanted to know the bulk of monies spent on enhancements. Mr. Brigham said there were two major projects the department was proposing to spend money on, one being the roadside improvements; the other being trails, sidewalks and landscaping. He said approximately 50% would be expended on trails, 40% on roadside improvements and the rest would go for a variety of things including historical renovation projects. Co- chairman Halford asked if this amendment would stop the department from doing anything that was in the 1997 list of projects and Mr. Brigham said that there was enough to cover 1996 and another $20 million had been estimated for 1997. He noted that required projects was in the amount of $11 million/year. 1998 would bring new federal legislation and therefore they did not know what would happen to enhancements and other projects. Further discussion between co-chairman Halford and Mr. Brigham ensued regarding the iced tea program. Senator Frank advised that he wished to moved a revised version of amendment #39. He said that the numbers regarding page 19, line were corrected to reflect the correct amounts. He said the legislature wanted to meet the community needs and that road maintenance and major reconstruction was needed. Senator Zharoff said some places had no adequate roads and wanted to know what happened to that money. Mr. Brigham said the federal government did allow for some flexibility and there is some time to obligate monies. That is what the department was trying to do because they do not know if enhancements will survive pending new legislation in 1998. However, if the money now is not obligated it must be returned to the federal government. He noted that Alaska had always been able to obligate the federal monies. Upon a vote by the committee revised amendment #39 failed to be adopted. (Co-chairman Halford took a brief at ease from 8:30 p.m. until 8:55 p.m.) Senator Frank moved to rescind the failure of amendment #39 and without objection it was rescinded. Senator Frank then moved to amend revised amendment #39. He said under the insertion on page 24, lines 10 and 11 after the word "department" should be deleted and instead inserted "submit specific projects sufficient to meet the minimum federal funding required". Upon a vote by the committee it was adopted without objection. Senator Frank moved the revised amendment #39 and with the objection of Senators Donley and Zharoff and abstention of Senator Phillips being duly noted the amendment was adopted. Senator Rieger moved amendment #40. Senator Robin Taylor was invited to join the committee. He referred to the Petersburg Cabin Creek Watershed Project and the insertion of the word "consensus". Since this word may have been misinterpreted this amendment was suggested instead. It was felt that Petersburg could hold an election to decide the road and pipeline route so the issue could be resolved within the community. After further discussion between Senators Taylor and Rieger it was decided that the word "consensus" as adopted in amendment #5 would be fine. Senator Rieger withdrew amendment #40. Senator Frank moved 2nd CSSB 136(FIN). (tape changed to SFC-96, #105, Side 1) Senator Zharoff his objected to 2nd CSSB 136(FIN) and said although he appreciated all the hard work of OMB and the departments he felt the area of major concern, particularly in the reduction of the overall capital budget was not going to meet the goals of this administration and the areas that were identified around the state, particularly school construction, water and sewer projects, roads and some of the problems faced in rural Alaska. Senator Donley said his concern was that this was a major component of what was worked for this year and wished it could have been better discussed what was included in the $100 million and the priorities among that money. It was rather difficult to have a reasonable discussion all in one day. He felt some things were left out that were of a higher priority than those that were in. Co-chairman Halford said there still was time before the process was complete. At this time Senator Frank withdrew his motion on 2nd CSSB 136(FIN). Co-chairman Halford introduced amendment #41 and said Mr. Simmons from AIDEA was available to testify on behalf of this amendment. Randy Simmons, Board of Directors, AIDEA was invited to join the committee. He said this amendment would clarify the section and not change it. The Board of Directors of AIDEA would approve the purchase at fair market value of a loan portfolio from DCRA and transfer to AIDEA. Senator Frank moved the adoption of amendment #41. Senator Donley said he was concerned of the capacity of AIDEA to handle the amount of programs being pushed off on them. Mr. Simmons said AIDEA was comfortable with the purchase of the portfolio. However, the part of the portfolio that AIDEA was not agreeable to would not be purchased by them. Upon a vote by the committee amendment Senator Frank moved 2nd CSSB 136(FIN) and with the objection of Senators Zharoff and Donley and abstention of Senator Phillips being duly noted the bill was passed out with individual recommendations. Senator Sharp further requested the chair to provide a to each Senator a breakdown by election district of where all the funds would be going. ADJOURNMENT Co-chairman Halford took an at ease at approximately 10:35 P.M.