SENATE BILL NO. 32 "An Act making and amending capital appropriations and reappropriations and capitalizing funds; and providing for an effective date." The committee considered amendments to the committee substitute, 1-GS1022/D 5/3/99, in the following order: DEPARTMENT OF ADMINISTRATION ADM #1: This amendment increases the amount for the Pioneers' Home Health and Safety Repairs component from $144,000 to $250,000. The original request was $500,000; this amendment would fund the request at 50 percent. Senator Gary Wilken moved for adoption. He explained this would allow the department to fund the Sitka Pioneer home elevator mechanical upgrade. He said there would be a small amount leftover to respond to emergency situations or to address violations as they appear in the five other Pioneer's Homes. Senator Al Adams supported the amendment but noted it only granted half of what was needed. He hoped the maker of the motion would support the full cost. Co-Chair John Torgerson commented that he wished the committee could vote yes on all the amendments but there was not adequate funding to do so. However, he stated that he supported this amendment. There was no objection and the amendment was ADOPTED. ADM #2: This amendment of $3,500,000 for the Information Service Fund Equipment Replacement is funded by the state's Information Services Fund. Adoption would not reduce costs to the Information Technology Group nor to user agencies in fiscal year 2000 (FY00). Senator Gary Wilken moved for adoption. Co-Chair John Torgerson objected. Senator Gary Wilken explained this would have no general fund impact and would be paid with interagency receipts. He said the amendment authorized the expenditures of monies collected from the agencies in order to upgrade the $40-50 million investment in equipment. He added that this represents about 70 percent of an on-going process. Co-Chair John Torgerson removed his objection and the amendment was ADOPTED. ADM #3: This amendment is identical to the previous amendment. Senator Al Adams did NOT OFFER due to action taken on ADM #2. ADM #4: This amendment is for $250,000 to fund the Bethel Courthouse Transfer. Senator Al Adams requested this be HELD. ADM #5: This amendment increases the amount of funding for the Pioneer's Home Health and Safety Repairs to the original Governor's request of $500,000. Senator Al Adams stated that due to action taken in ADM #1 that restores fifty percent of the funding, he would NOT OFFER this amendment. ADM #6: This amendment inserts a new item, Information Technology Literacy Project with $175,000 of general funds. Senator Al Adams moved for adoption. Senator Dave Donley objected. Senator Al Adams explained the amendment provides continuation of funding for on-line technology training for all public employees, including university staff, faculty and students. He noted that Alaska is the only state in the nation to provide this training opportunity, a goal accomplished through a partnership between the state and the Gartner Group, a private company. The appropriation leverages a $4.5 million grant package to enhance information technology management skills. He warned that without this amendment, the state would have lost the most cost-effective means of training state employees. Training either will not occur, or will be more expensive. Currently, 3,345 users are enrolled in 4,000 on-line training courses. Senator Loren Leman noted this had a 26-1 match ratio and it seemed to him that the departments could find the funds needed. Senator Al Adams said he could have the department testify but guessed that when unallocated general reductions were made, it would affect the availability of flexible funds. ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor came to the table and agreed with Senator Al Adams. She stressed that when, in addition to specific program cuts, cuts were made to unallocated funds it was difficult to "find" funds. She spoke to the importance of this training program. She felt the technical investment is an important leverage in a time of tight budgets. Senator Lyda Green wanted to know if there were ever a fee imposed for the students taking these training courses. Annalee McConnell replied that the kind of training provided is for basic skills needed for state employees to perform their jobs, so they are not charged a fee. She continued stressing the advantage of the partnership with the Gartner Group, saying it allowed for a high level of training using very little state dollars. Co-Chair John Torgerson said he would remain opposed to the amendment. The amendment FAILED by a vote of 1-8. Senator Al Adams cast the yea vote. ADM #7: (This amendment was introduced and acted upon later in the meeting.) DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT CED #1: This amendment inserts $100,000 in general funds for Economic Development Administration (EDA) Annual Planning Grant. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained this amount is matched with an equal amount of federal funds and is a high priority for the department. Senator Lyda Green asked what is the function of the planning grant. TOM LAWSON, Director, Division of Administrative Services, Department of Commerce and Economic Development, explained the purpose of the grant is to annually provide funds to continue economic development efforts. He said that in the past three years, the department operated several different programs, including a cultural tourism program in rural regions of the state. This year, the goal is to work with rural businesses to get them export-ready. He pointed out that the federal funds were authorized in the FY00 Operating Budget. Senator Dave Donley wanted to know why the general funds were requested in the capital budget rather than the operating budget. Tom Lawson explained that in the past, the matching funds were part of the Economic Development Matching Grant program, which had not been funded for the last two years. Therefore this year, the EDA grant request was separated out to better obtain funding. Based on what the department learned, he said next year the federal funds would be removed from the operating budget and put in the capital budget along with this matching fund request. Senator Lyda Green objected to the motion. Senator Dave Donley pointed out that the department had flexibility in the operating budget and he believed this request should not have been included in the capital budget. Senator Sean Parnell stated he supported the motion. By a vote of 5-4 the amendment was ADOPTED. Senator Pete Kelly, Senator Lyda Green, Senator Randy Phillips and Senator Dave Donley voted against the motion. CED #2: This technical amendment increases the amount of other funds for the Kodiak Launch Complex by one million dollars to $6 million to correspond to the Front section of the bill. Co-Chair John Torgerson explained he would NOT OFFER this amendment at this time due to a possible technical problem. Senator Al Adams wanted to know if this amendment would capture all the funding. Co-Chair John Torgerson answered there is another bill pending that would give authorization to spend the funds and that he would check to see if all available funds would be captured. CED #3: This amendment restores the originally requested $200,000 general fund match for the Economic Development Matching Grant Program. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams said this would restore the cornerstone of the department's economic efforts since 1980. He explained that an eligible project would be the construction of an economic development facility and international trade show or small business economic development conference. He spoke of past grants and projects, saying that from 1995 to 1997, the Division of Trade and Development funded more than forty economic development projects statewide totaling more than $1.3 million through this program. He pointed out that the funds matched over $9.2 million of non-general fund monies. He felt this was a great program to assist small economic projects that should be continued. The amendment FAILED by a vote of 1-8. Senator Al Adams voted in favor of adoption. CED #4: Because this amendment is identical to CED #1, Senator Al Adams did NOT OFFER. CED #5: (This amendment was addressed later in the meeting.) DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS Amendments for this department were deferred until later in the meeting. DEPARTMENT OF CORRECTIONS COR #1: This amendment increases the amount for Equipment Replacement from $125.0 to $250.0 general funds. Senator Al Adams moved for adoption. Senator Dave Donley and Senator Loren Leman objected. Senator Al Adams explained that the present capital budget only provided for half of the amount needed. He spoke to the equipment failures and said these monies would be used to replace equipment that is either inoperable or worn down. He detailed the major kitchen equipment, laundry room commercial equipment and security and safety equipment and the daily reliance on this equipment. He talked about the need to address deferred maintenance projects. By a vote of 1-8, the amendment FAILED to be adopted. Senator Al Adams cast the yea vote. COR #2: This amendment doubles the amount of general funding to $900.0 for Maintenance, Renovation, Repair, Renewal and Replacement from what was granted in the committee substitute. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams said only half of the needed funds had been granted. He repeated his argument of the need to fund deferred maintenance. He noted the replacement value investment of the approximate 112 state-owned buildings is over $324 million. The funds in this request would only be used to replace equipment that is already broken or inoperable. He stressed that the equipment is used 24 hours a day 365 days a year. The state is responsible for the security; safety and medical care for an annual daily average of 985,000 inmates. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams cast the yea vote. ALASKA COURT SYSTEM CRT #1: This amendment inserts $100,000 general funds for Deferred Maintenance. Co-Chair John Torgerson announced that although he sponsored this amendment, he would not offer it for adoption. Senator Al Adams moved for its adoption. Co-Chair John Torgerson objected. Senator Al Adams again stressed the need for deferred maintenance and noted the small dollar amount requested. By a vote of 1-8, the amendment FAILED to be adopted. Senator Al Adams voted yea. DEPARTMENT OF EDUCATION EDU #1: This amendment deletes $90,000 general funds for Library-Repair Archives, Building Foundation and inserts that same amount for Library-Statewide Library, Electronic Doorway (SLED). Senator Gary Wilken moved for adoption. He explained this is a transfer of funds to SLED. He detailed the services SLED provides. Through a cooperative venture between the University of Alaska-Fairbanks and the State Library, SLED provides Internet access to more than 50 communities in Alaska. SLED allows access to the state and legislative home pages, basic government, education, medical and legal information. SLED does not provide e-mail or other commercial Internet services. The major goal of SLED is to provide increased information access for Alaskans. Senator Gary Wilken noted that the repair of the Archives Building foundation is not a safety-related project. A safety study by the Department of Transportation and Public Utilities determined that the building, staff and contents are secure. The project as proposed will not fix the problems with the building. The Department of Education will continue to work with the Department of Transportation and Public Utilities to identify the scope and cost for the foundation work. Senator Randy Phillips asked if this amendment proposes substituting capital funds for an operating expense. KAREN CRANE, Director, Division of Libraries, Archives and Museums, Department of Education came to the table. She told the committee that SLED had been traditionally funded through the capital budget. Senator Randy Phillips wanted to know if the funds would be used to buy hardware, which is considered capital expenditures. Karen Crane answered it would not. Senator Randy Phillips wanted to know how long SLED had been funded from the capital budget. Karen Crane replied SLED has been funded in this manner since its inception in 1994. She added that there was some funding contained in the operating budget for SLED. Senator Dave Donley said he knew the department had great flexibility within the operating budget and could fund SLED from the operating budget general fund. He thought the program should funded from the operating budget and not the capital budget. He supported maintaining the Archive Building repair component. He warned that if the problems with the building's foundation were not addresses there would be problems with the entire building. Senator Al Adams noted the original request was $100,000 and asked if the program could proceed with the $90,000 allocation. Karen Crane affirmed that it could. Senator Randy Phillips wanted to know if the funding mechanism to fund SLED through the capital budget was an administrative decision or legislative. Karen Crane explained that the original capital funds were for SLED equipment costs. She pointed out that the cost has been steadily reduced over the years, adding that AT&T contributed to the program. Co-Chair John Torgerson wanted to know if the witness supported the fund shift. Karen Crane did. Senator Randy Phillips wanted to know if it was true that the archive building was not safety related. Karen Crane said the Department of Transportation and Public Facilities had examined the building and found no danger to contents or employees. She qualified that at some time repairs to the building will need to be addressed but that it will cost several hundred thousand dollars. The Department of Transportation and Public Utilities determined it would be better to address the project as a whole rather than piecemeal as proposed in the original request. Senator Pete Kelly had toured the building, saw the extensive damage and concluded that it was not a problem that can be fixed with only $90,000. Senator Randy Phillips wanted to know if this funding shift was an administrative request. Karen Crane replied that the funding request was included in the Governor's capital budget. Senator Dave Donley noted that the $90,000 request for the archive building came from the Governor. Karen Crane admitted she submitted the original request and was recommended by the Governor. Senator Dave Donley said he wondered what else was in the governor's budget was unnecessary. The amendment was ADOPTED by a vote of 7-2. Senator Dave Donley and Senator Sean Parnell voted against it. EDU #2: This amendment is similar to the previous amendment but with an amount of $100,000. Senator Al Adams did NOT OFFER based on action taken on EDU #1. Senator Dave Donley suggested Annalee McConnell come to the table and tell the Committee what other items were included in the Governor's budget request that are not really necessary. Senator Al Adams suggested that the Committee should therefore discuss the items the Capital Budget Subcommittee added to the budget that were not originally included. Co-Chair John Torgerson noted that discussion on the budget as a whole would be held later. DEPARTMENT OF ENVIRONMENTAL CONSERVATION An amendment for this department's budget was considered later in the meeting. DEPARTMENT OF FISH AND GAME F&G #1: This amendment deletes $200,000 general funds for Statewide Facilities Deferred Maintenance, $100,000 general funds for Vessel and Aircraft Maintenance and inserts $400,000 general funds for Deferred Maintenance, Renewal, Replacement of Facilities, Equipment, Vessels and Aircraft. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained the amendment combines the facilities deferred maintenance and the vessel and aircraft maintenance and increases the funding amount by $100,000. He noted the amendment would give the department more flexibility to spend the funds within the components. There was no objection, and the amendment was ADOPTED. F&G #2: This amendment deletes, "Rabbit Creek Shooting Range" and inserts, "Anchorage Indoor Rifle Range" on page 16 line 26 of the committee substitute. Senator Dave Donley moved for adoption. Senator Al Adams objected. Senator Dave Donley explained that this is a technical correction to the Subcommittee report. He listed past legislative appropriations of fish and game funds for indoor shooting ranges in Fairbanks and in Juneau. The current funding amount is to begin the process of research and planning to build a similar facility in Anchorage, according to Senator Dave Donley. He noted that the fish and game funds are generated by taxes on ammunition. Co-Chair John Torgerson pointed out that this amendment is simply a name change and that no additional funds are added to the budget. Senator Al Adams remarked this appropriation is a case of the Subcommittee chair taking care of his own needs rather than considering the rest of the Committee. He stressed that this item was contained in the Governor's capital budget. By a vote of 7-1-1, the amendment was ADOPTED. Senator Al Adams cast the nay vote. Senator Pete Kelly was absent. F&G #3: This amendment inserts $1,240,400 general funds and $137,800 other funds for the Southeast Region Vessel Facility. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams explained this amendment provides funds to replace the Southeast vessel maintenance shop, which is currently housed in the Subport building on the Juneau waterfront. The Subport is sited on land owned by the Mental Health Trust Authority and although the Subport lease has been extended several times, new space must be secured before the facility is forced to move. Senator Al Adams continued saying the Department of Fish and Game has negotiated a cooperative agreement with the National Oceanic Atmospheric Administration (NOAA) and the National Marine Fisheries Service (NMFS) to construct a building on their site and use the NOAA and NMFS existing dock facility. This agreement substantially reduces the cost of the project, according to Senator Al Adams. He warned that all other options are more expensive and may lead to loss of fishery management capability if vessels must be mothballed for lack of a maintenance facility. The amendment FAILED by a 1-7-1 vote. Senator Al Adams voted in favor and Senator Pete Kelly was absent. F&G #4: This amendment adds $375,000 general funds for Dock Repair, Maintenance and Replacement. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams detailed the poor condition of the timber retaining walls and support pilings at the two dock facilities located in King Salmon and Cordova. In order to protect state equipment, he surmised these funds must be allocated. Senator Lyda Green wanted to know if funds for this request were provided in Co-Chair John Torgerson's earlier amendment. Co-Chair John Torgerson replied F&G #1 provided significantly less money, but did put all items in one component to allow the department to prioritize projects. The amendment FAILED to be adopted by a vote of 6-2-1. Senator Loren Leman and Senator Al Adams cast yea votes. Senator Pete Kelly was absent. At Ease 10:00 AM / 1:43 PM OFFICE OF THE GOVERNOR There were no amendments submitted for the Office of the Governor's budget. DEPARTMENT OF HEALTH AND SOCIAL SERVICES HSS #1: This amendment adds $34,500 general funds for Alaska Center for the Blind - Sprinkler System. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams spoke to the motion, saying the request is for a nonprofit organization's residential living and training center. He explained that when the facility was purchased and remodeled, the fire code did not require a sprinkler system. The fire Marshall is now insisting a system be installed, according to Senator Al Adams. The funds will cover the cost of design, engineering, permits, materials and labor, plus connection to the city water system. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams cast the yea vote. HSS #2: This amendment adds $600,000 general funds for the Alano Club Land Purchase. Senator Al Adams moved for adoption. Senator Lyda Green objected. Senator Al Adams explained the club is a self-supported non-profit organization that provides alcohol free and drug free social and educational settings for people recovering from addiction. He continued saying the club provides nearly two dozen Alcoholics Anonymous meetings each week, a social atmosphere for Friday and Saturday night dances and holiday dinners and gifts for families in need. Senator Al Adams pointed out that the Municipality of Anchorage granted the organization $260,000 toward the purchase of land that cost $350,000. He said the cost of the requested 4,000 square foot building is approximately $564,000 and the amount of funds needed for access, landscaping, development and paving amounts to approximately $200,000. The members of the Alano club are asking for $600,000 from the state to help cover the costs. Senator Dave Donley noted a member of the public was present and he wished this person be allowed to come forward to testify on this request. BILL BREDESEN came to the table and told the Committee that the Municipality of Anchorage is widening 15th Avenue, where the current facility is located, and therefore the organization is forced to relocate. As a realtor, he has been searching unsuccessfully for an existing facility to move into. He said the Municipality is unable to grant enough money to cover to entire cost of new construction and therefore, the request is being made to the state. He pointed out that the Department of Law; judges through court orders and the Veteran's Administration refer individuals to the Alano program. Senator Dave Donley told the Committee that he was aware of the problem with the relocation of the club facility and had attempted to assist earlier in the session, but was told the organization had a policy to not accept governmental assistance. He said he recently learned that the organization has changed its policy because of the need for funds for a new facility. By a vote of 1-8 the amendment FAILED to be adopted. Senator Al Adams cast the yea vote. HSS #3: This amendment adds $7,000 for Alaska Center for the Blind - Boiler Replacement. Senator Al Adams moved for adoption. Co-Chair John Torgerson and Senator Lyda Green objected. Senator Al Adams detailed the need to replace the twenty-year old boiler at the facility. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams voted in favor. HSS #4: This amendment adds $100,000 general funds for Public Health Nursing Wide Area Network and Computer Upgrade. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams explained this request would help the public health nurses have a reliable, cost effective and secure rapid data exchange network to handle a volume of sensitive patient care data across the State Of Alaska. He stated that the existing modems are slow, expensive and unreliable. He added that they must run 24 hours a day to maintain the best possible data exchange with the outdated technology. He noted that the Alaska Native Tribal Health Consortium pays the modem and toll charges. The amendment FAILED to be adopted by a vote of 1-7-1. Senator Al Adams voted yea and Senator Loren Leman was absent. Tape: SFC - 99 #127, Side B 1:52PM HSS #5: This amendment adds $100,000 general funds for Family Services Field Safety, Office and Transportation Equipment. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams explained that the Division of Family and Youth Services' social workers are frequently exposed to potentially dangerous situations while performing their duties of protecting the children of the state. He stressed that the ability for workers to call for assistance in the event of an emergency is critical. He believed modern communications equipment including radios, cellular and satellite telephones provide increased worker safety and are cost-effective. He warned that if this request is not funded, the department's ability to provide this equipment will be seriously diminished and the safety of state employees will be compromised. Senator Al Adams noted that this request was only half of the original amount asked for in the Governor's proposed capital budget. By a vote of 1-8, the amendment FAILED to be adopted. Senator Al Adams cast the supporting vote. DEPARTMENT OF LABOR There were no amendments submitted for this department's budget. DEPARTMENT OF LAW An amendment for this department's budget was considered later in the meeting. LEGISLATURE There were no amendments submitted for the Legislature's budget. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS MVA #1: This amendment appropriates $30,000 from the general fund to the Air Force Association for an air show at the Elmendorf Air Force Base celebration of the 18th Anniversary of the Third Wing in June 1999. Senator Loren Leman moved for adoption. AT EASE 1:53 PM / 1:56PM Senator Al Adams and Senator Sean Parnell objected to the adoption of the amendment. Senator Al Adams admonished that this request is for an air show while the Committee was rejecting more critically needed items. He felt the priorities were backwards. Co-Chair John Torgerson reminded him that this amendment had not yet passed. Senator Loren Leman stressed that the issue is more than just granting $30,000 for an air show, it is an investment in the state because the military is a big part of the state's economy. He noted that the State had contributed to the air show the previous year and that the air show is largely supported by private and military contributions. He added that over 10,000 people would participate in the air show this year. Senator Al Adams stated that the native organization he works for in the interim would be happy to contribute $500 toward the air show. He suggested the organizers attempt to gather more contributions from businesses. Senator Loren Leman had asked the air show organizers to try harder for private contributions. The amendment FAILED to be adopted by a vote of 1-8. Senator Loren Leman voted in favor. DEPARTMENT OF NATURAL RESOURCES DNR #1: This amendment adds $200,000 general funds for Land Status Geographic Information Systems to complete the automation of the State's land status plats. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained the original request was $300,000 for this project and he was proposing to restore $200,000. The amendment was ADOPTED without objection. DNR #2: this amendment inserts $100,000 general funds for Copper River Basin Best Interest Finding. Senator Randy Phillips moved for adoption. Co-Chair John Torgerson objected. Senator Randy Phillips noted this item was originally in the operating budget but the Department of Natural Resources Subcommittee decided to address in the capital budget. Senator Randy Phillips stated that there are two companies interested in oil exploration in the Copper River Basin area. He said this request would provide the funding to gather data for the statutorily required best interest finding. He added that this project would be a revenue- generating item if and when gas is discovered. Senator Al Adams supported the amendment, but wanted to know about the revenue that would be generated. Senator Randy Phillips responded that future revenues are unknown but that if gas were discovered, the state would get royalties. Co-Chair John Torgerson said he would support the amendment but admonished this item belonged in the operating budget. There was no objection to the motion and the amendment was ADOPTED. DNR #3: This amendment appropriates as a grant, $120,000 general fund to the Alaska State Snowmobile Association for snowmobile trail development. Senator Lyda Green moved for adoption. Senator Al Adams objected. Senator Lyda Green pointed out that legislation passed the last session requires snowmobile registration. She said the intended use for the registration fees is for trail development. She had received information and comments complaining about the oversight of the Division of Parks regarding trail development. She concluded that there is more emphasis placed on trail closures than on development of new trails. Therefore, she wanted the funds to be paid directly to the association to be used for the development of a trail system. Co-Chair John Torgerson wanted to know if this item was already in the budget and if the amendment simply reappropriates the funds. Senator Lyda Green answered it was. Co-Chair John Torgerson noted the amendment then results in a net zero change. Senator Dave Donley pointed out that the original appropriation was on page 19 line 17 of the committee substitute. Senator Lyda Green added that Committee members might have heard from varying factions on which group should have oversight of the funds. She said another amendment could accomplish the same purpose. However, she wanted to make sure the Division of Parks is directed to show an interest in developing trails rather than spending the funds on employees or other items. Senator Loren Leman wanted to know if the overhead of the Alaska State Snowmobile Association is as high as the State's. Senator Lyda Green estimated the overhead for the volunteer organization would be about $6000 compared to over $50,000 for the division. Senator Randy Phillips asked if there would need to be a Request for Proposal (RFP) to give the funds to a specific group. Co-Chair John Torgerson responded the grant line appropriation is as specific as the legislation could get although contractual language could be added later as a letter of intent. Senator Randy Phillips indicated interest in doing so. Senator Al Adams did not think the funds should be granted to one snowmachine organization that did not have full membership participation from across the State, particularly in rural Alaska. He suggested the revenue generated from the snowmobile registration fees be granted to the state park service for distribution to this organization and also to others across the state. He also suggested utilizing some of the trails program's federal funding to match these state funds. Senator Lyda Green quoted correspondence from Jim Stratton, Director, Division of Parks written to Elizabeth Harron, President, Alaska Quiet Rights Coalition. The letter stated in part, "I share your disappointment that we were unable to move forward with our proposed closure to snowmobiles in Denali State Park, though the political climate would not permit it to occur. These are not closures we speak loudly about, for fear of legislative retribution. And we know from our proposed snowmobile closure experience on Curry and Kesugi ridges that retribution to be real. I am managing the state's park system to provide natural quiet as often as possible, given the current political climate." (Copy of letter on file.) Senator Al Adams realized the intent of the amendment due to the content of the memo, was that the funds be dedicated to snowmachine trail development. He recommended the next amendment, DNR #4 instead, since it did not limit the allocation of funds to one organization. Senator Lyda Green asked if there was a way to amend the amendment to give direction to allocate the funds to an association rather than the Division of Parks. Senator Sean Parnell said he had some correspondence from a constituent, the president of the Alaska Snowmobile Representatives Alliance stating, "We have worked closely for the last several years with Jim Stratton and his department to institute both a funding source and a mechanism for programs to be handled fairly. The Alaska State Snowmobile Association and the Alaska Snowmobile Representatives Alliance in concert with the Alaska State Parks and Outdoor Recreation have agreed to the entire process. I would urge you to stay the course and allocate the funding in the budget to State Parks and Outdoor Recreation." Senator Sean Parnell concluded that at least one of the affected snowmobile organizations believed the Division of Parks was handling the matter fairly. Therefore, though he was not involved in the negotiations, he opposed the amendment. Senator Randy Phillips suggested removing the name of the organization from the amendment and adding a letter of intent to RFP the funds through a competitive bid at a later time. He understood Senator Lyda Green's concerns and also understood the difficulties in trying to referee competing groups. It was determined that Senator Lyda Green would draft new language to address the concerns of granting the funds to a single organization. Senator Lyda Green removed her motion to adopt the amendment. There was no objection and the amendment was HELD. DNR #4: This amendment added intent language that states, ".the $120,000 in general funds being appropriated for Snowmobile Trails Development be expended only on snowmobile trail development and maintenance, safety education programs and the Snowmobile Grant-In-Aid program. The Legislature does not intend for any snowmobile point of sale receipts to be spent on a Snowmobile Program Coordinator." Senator Gary Wilken requested this amendment be HELD pending the outcome of Senator Lyda Green's revision to DNR #3. DNR #5: This amendment inserts $85,000 general funds for the Mat-Su Harvest Access. Senator Lyda Green moved for adoption. Senator Dave Donley objected. Senator Lyda Green explained that a small grant was given to the Division of Forestry two years ago for summer volunteers and interns to build a portion of a road to allow access to timberland that is otherwise inaccessible. She pointed out that numerous businesses were created with the addition of that road. This allocation would be used to extend the road and would result in a value many times the cost, according to Senator Lyda Green, because of the method of construction using volunteer labor. She said it would make more land accessible for timber harvest. Co-Chair John Torgerson stated that he would oppose the amendment because of budget constraints. Senator Randy Phillips understood that the road extension project would generate an estimated $200,000 in general funds. The amendment FAILED to be adopted by a vote of 2-7. Senator Lyda Green and Senator Randy Phillips voted in favor. DNR #6: This amendment adds a new section, and appropriates $350,000 general funds for Reforestation Funding. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams stressed that in order to have a viable timber industry, restoration is important in areas where nature does not take care of itself. He said that this project would affect 1,335 acres in Fairbanks, Delta, Tok, Copper River and the Kenai areas. He said the money would be used to contract for cone collection, storage, seedling growing, planting and seeding. By a vote of 7-2, the amendment FAILED to be adopted. Senator Al Adams and Senator Loren Leman voted in favor. DNR #7: This amendment doubles the amount of general funds allocated to the Division of Parks to $400,000. Senator Al Adams moved for adoption. Senator Dave Donley objected. Senator Al Adams spoke of the state park system's $35 million backlog in deferred maintenance projects. He explained that $56,000 is for restoration and repairs of campgrounds, leveling trails, road repair and to replace tables in the Kenai, Kodiak and Sitka parks. He continued saying $50,000 would be used for trailhead and trail repairs in Chugiak State Park, Tonsina Point Park and Point Bridget and $70,000 would be used for roof repair, communications and cabin repair in the Mat-Su, Kodiak and Kenai areas. The remainder of the allocation, $24,000, would be used for water and sewer upgrades in the Chena River State Recreation Site and the Anchor River State Recreation Areas plus toilet repairs in Seward. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams cast the yea vote. DNR #8: This amendment shifts $48,000 general funds from State Park Emergency Repairs to Perseverance Trail Emergency Repairs and Transfer of Ownership of Repaired Trail. Senator Al Adams moved for adoption. Senator Sean Parnell and Senator Lyda Green objected. Senator Sean Parnell asked Senator Al Adams to hold the amendment until he could distribute a letter from the City and Borough of Juneau to be considered with the amendment. The letter gives a written commitment that the municipality will assume ownership and maintenance responsibility for the trail. (Copy on file.) Senator Sean Parnell stated he had worked for several years to convey ownership of the trail to the city and borough. Senator Randy Phillips wanted the Department of Law to review the letter to make sure the commitment is constitutional. Senator Sean Parnell pointed out that the amendment results in a net zero change to the budget. Senator Al Adams withdrew his motion to adopt the amendment and without objection, it was HELD. DNR #9: This amendment appropriates $300,000 general funds for Land Status Geographic Info Systems. Senator Al Adams stated that he would not offer due to action taken on DNR AT EASE 2:20PM / 3:04 PM DEPARTMENT OF PUBLIC SAFETY DPS #1: This amendment deletes $500,000 general funds from Aircraft Vessel Repair and Maintenance and $125,000 general funds from Fish and Wildlife Protection - Statewide Equipment and inserted $975,000 general funds into Repair, Replacement and Maintenance of Vessels, Fish and Wildlife Enforcement Vessels and Aircraft. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained the combination of the two items and that there is a $350,000 increase. There was no objection and the amendment was ADOPTED. DPS #2: This amendment adds $650,000 other funds for Village Police Officer Training and Equipment. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained this amendment appropriates one-time federal receipts for advanced training, uniforms and equipment for village and tribal police officers at the request of the Administration. He noted no general funds are involved. Senator Dave Donley commented that the Subcommittee had no opportunity to review what uses the federal funds are really available for to determine the best allocation. He thought it would be interesting to see how the funds are actually used and how much flexibility is possible. The amendment was ADOPTED without objection. DPS #3: This amendment adds $8000 general funds for Birchwood Squadron, Alaska Civil Air Patrol. The funding is to remove two underground fuel storage tanks at the Civil Air Patrol hanger at the Birchwood Airport. The Alaska Civil Air Patrol has applied for, and received approval for matching funds from the Department of Environmental Conservation Storage Tank Assistance Program for $12,000. This funding provides the required match. Senator Randy Phillips moved for adoption. Co-Chair John Torgerson objected. Senator Randy Phillips corrected the description of the amendment stating that the two underground fuel storage tanks are 12,000 gallons in size. He said the tanks are actually 4,000 gallons. Co-Chair John Torgerson wanted to know why this did not qualify for 470/response funds. Senator Randy Phillips and Senator Al Adams requested Senator Rick Halford's staff to address the matter. BILL STOLTZ, staff to Senator Rick Halford, came to the table. He told the Committee the Alaska Civil Air Patrol had qualified for the Department of Environmental Conservation grant for a sixty-percent match. He noted the facility has been under a non-compliance order but had been granted an extension. He could not answer the question on why the project does not qualify for "470" funding, but he stressed that this is a high priority item. Co-Chair John Torgerson thought the project does qualify. Senator Dave Donley wanted to amend the amendment to ensure no general funds are used for the project. Bill Stoltz pointed out that the facility is a contamination site and the tank removal is required. Senator Dave Donley noted the project would qualify for "470" funding if the pending Storage Tank Assistance Fund legislation (SB 128) passes because of enabling language to allow similar projects to qualify. Senator Al Adams asked to hear from the Department of Environmental Conservation. BARBARA FRANK, Director, Division of Administrative Services, Department of Environmental Conservation said this project could be eligible but the department would then need to cost recover against the civil air patrol. She explained that by statute the state is required to recover the cost of tank removal from the responsible party. Co-Chair John Torgerson wanted to know if, of the millions of dollars spent on the storage tank clean-up program, the department intends to seek recovery. Barbara Frank clarified that the storage tank assistance fund is different than the 470/response fund, which is proposed in this discussion. Co-Chair John Torgerson then asked if the storage tank fund can be used to fund this project. Barbara Frank answered that it is eligible for the fund and would not require reimbursement. Co-Chair John Torgerson offered a friendly conceptual amendment to change the funding source to Storage Tank Assistance Funds. Bill Stoltz commented that the army had already applied for and received 60-percent funds from the storage tank assistance fund. The amount requested in this amendment would be used as matching funds required for the grant. He noted that the civil air patrol functions with a small operating budget and is staffed by volunteers. The amendment was ADOPTED by a vote of 5-2-2. Senator Sean Parnell and Senator John Torgerson cast nay votes and Senator Pete Kelly and Senator Lyda Green were absent. DPS #4: This amendment adds $537,500 general funds for Fish and Wildlife Protection Enforcement Replacement Vessels. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams recounted testimony heard in Committee regarding the need for a replacement vessel to be stationed in Kodiak. The amendment FAILED to be adopted by a vote of 1-6-2. Senator Al Adams voted in favor and Senator Pete Kelly and Senator Lyda Green were absent. DPS #5: This amendment increases the amount of general funds for Alaska State Trooper Statewide Equipment from $175,000 to $350,000. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams noted that only half of the requested amount was included in the committee substitute for this item. He said amendment would fund the In-Car Video Systems program to install 23 cameras in state trooper vehicles across the state. He stated that the video technology has improved conviction rates for traffic citations and other driving related matters. He believed this project would save time and reduce costs within the criminal justice system. By a vote of 1-7-1, the amendment FAILED to be adopted. Senator Al Adams cast the yea vote and Senator Lyda Green was absent. DPS #6: This amendment increases the Fish and Wildlife Protection Enforcement Officer Equipment from $125,000 to $250,000 general funds. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams said this amendment represents the other half of the requested amount from the Governor's budget proposal. He stated that the committee substitute reduction eliminates half of the funding to replace skiffs, outboards, snowmachines, ATV's and other equipment required for Division of Fish and Wildlife Protection officers to accomplish their enforcement duties. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams voted in favor of the motion. DPS #7: This amendment doubles the amount appropriated from the general fund to Aircraft Vessel Repair and Maintenance to $1 million. Senator Al Adams did not offer due to action taken on DPS #1. DEPARTMENT OF REVENUE REV #1: This amendment appropriates $2,315,300 Alaska Housing Finance Corporation (AHFC) receipts to Senior Citizen Housing Development Program; allocating $1,100,000 to Wasilla Senior Housing and $1,215,300 to Talkeetna Senior Housing. Senator Lyda Green requested this be HELD. REV #2: This amendment adds $500,000 general funds for AHFC Riverbend Multi-Purpose Building. Senator Al Adams moved for adoption. Senator Sean Parnell, Senator Randy Phillips and Senator Dave Donley objected. Senator Al Adams explained the appropriation would fund a multi-purpose facility at the Riverbend affordable housing project in Juneau. Currently, he said, the tenants of the housing complex have no facility available for meetings or after- school activities for resident children, and there is a lack of adequate shop and storage space. He warned that if the planned construction of this facility were not undertaken this year, the cost would increase by approximately $25,000. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams voted in favor of the motion. REV #3: This amendment adds $3,917,000 general funds for AHFC Mountain View Senior Units, Phase II. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams explained the housing remodel is required in order to meet new federal guidelines relating to housing for seniors and disabled persons, and if not completed, the facility will be out of compliance with federal regulations. He pointed out that a delay in construction would result in a cost increase of approximately $195,000. In addition, he warned, the housing complex would lose $71,475 in rental income on the eight apartments already vacated in preparation for the interior renovation. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams cast the yea vote. REV #4: This amendment increases AHFC receipts funding for AHFC Low Income Weatherization from $2,400,000 to $5,400,000. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams testified this project improves the quality of life for low-income residents and lowers their cost of living. He added that the program provides jobs and boosts the economy of Anchorage - home to many installation workers, contractors and suppliers of building materials. By a vote of 1-8, the amendment FAILED to be adopted. Senator Al Adams voted in favor of the motion. REV #5: This amendment adds $4,000,000 AHFC receipts for Senior Citizens Housing Development. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams believed the housing development grant program should be continued, but noted all the funds were eliminated in the committee substitute. He listed the amount of money lost by various groups: the Elders Action Group in Naknek, $675,000; Wasilla Area Seniors, $1.1 million; Upper Susitina Seniors in Talkeetna, $1.2 million; Residents Senior Services in Ketchikan, $156,000; Homer Seniors, $754,000; and the AHFC Pre-Development Grants Program, $99,400. He thought the impact of losing funds for this program would result in displacement of senior citizens from their communities due to inadequate housing. He believed the state should assist its seniors no matter where they lived. The amendment FAILED to be adopted by a vote of 2-7. Senator Al Adams and Senator Lyda Green cast yea votes. REV #6: This amendment adds $6,000,000 AHFC receipts for AHFC Supplemental Housing Development Funds. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams referred to testimony heard earlier in the Committee stating this funding will leverage approximately $48 million federal Housing and Urban Development funds. He explained the combined funding will complete about 6500 homes throughout the state and will benefit the state's urban economy because over fifty-percent of the money will be used for the purchase of supplies and expertise from urban areas. Tape: SFC - 99 #128, Side A 3:25PM By a vote of 1-8, the amendment FAILED to be adopted. Senator Al Adams voted in favor of the motion. AT EASE 3:25PM / 3:30PM DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES DOT #1: This amendment appropriates $11,500,000 international airport revenue funds for Anchorage International Airport Terminal Baggage System Upgrade/Replacement. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained this appropriation comes from airport funds and has a net zero effect on general funds. He said the air carriers had voted to assess themselves to generate revenues for this project. Senator Randy Phillips wanted to hear from the department whether the air carriers intend to absorb the cost of this project or if they intend to pass the cost along to their passengers. KURT PARKAN, Deputy Commissioner, Department of Transportation and Public Utilities testified that the revenues would be an assessment by the airlines and imposed through landing fees. He could not speak the matter of whether the costs would be passed along to passengers. He stressed that the airlines will pay for the project rather than the State. Without objection, the amendment was ADOPTED. DOT #2: This amendment specifies that $150,000 of the $1,028,000 general funds appropriated to Facilities Deferred Maintenance and Critical Repairs is to be allocated to Closure of State-Maintained Portion of Harborview Facility. Senator Sean Parnell moved for adoption then removed his motion without objection. Co- Chair John Torgerson WITHDREW this amendment to defer to DOT #11. DOT #3: This amendment shifts funding to the National Highway System Program (NHS) Construction allocating $24,500,000 to Anchorage International Airport Terminal Expansion Landslide Access Improvements. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained this moves a NHS project from the Airport Improvement Program. He claimed this allocation was the original intent for the funds but that an error was made in drafting the committee substitute. He stated this change results in a zero net affect to the general fund. Kurt Parkan addressed the matter saying this amendment is a technical amendment. The component was originally located in the Airport Improvement Program portion of the budget as a national highway project and this amendment restores the location of the funds, he stated. The amendment was ADOPTED without objection. DOT #4: This amendment specifically allocates the following federal and general funds to certain bridge projects under the NHS Bridge Replacement Program: Copper River Highway, Million Dollar Bridge #0206, $10,500,000; Glenn Highway, MP 105 Caribou Creek Bridge Replacement, $14,000,000; and Sterling Highway, Soldotna Urban and Kenai River Bridge for adoption. He stated that the amendment to the State Transportation Improvement Program (STIP) is offered on the recommendation of the Capital Budget Subcommittee. He explained that there is $100 million in federal discretionary funds available nationwide for bridge projects and that the Department of Transportation and Public Utilities plans to apply for grants to construct three bridges. While the department did not anticipate receiving a grant for all three bridges, Senator Dave Donley remarked that they did expect to receive at least one and maybe two. Therefore, the purpose of this funding is to give legislative approval for matching funds for whichever projects did receive a federal grant. He preferred legislative oversight and authorization rather than allowing the department to arbitrarily remove funding from another project, which was the department's original intent. Senator Al Adams did not recall a recommendation on this matter during the Subcommittee process and suggested the discussion may have occurred behind closed doors. He asked if the department supported his theory that allocating specific projects in this fashion will result in construction delays. Kurt Parkan replied that the potential for project delays is present when projects are categorized into multiple appropriations. He stressed that Alaska will be competing for the bridge construction grants and could expect to receive at least one, but possibly more. However, he cautioned that there is a 20-percent state match requirement and the appropriation in this amendment only contains enough funds to match one grant. If more than one grant is approved, there will not be enough general funds to cover the match requirement and he warned that this is where the delays will occur. Senator Dave Donley stated that he didn't feel strongly on this matter, but noted that it was discussed during a Subcommittee meeting when Senator Al Adams was out of town. Senator Dave Donley wanted to give the full Committee an opportunity to review the merits of the request. He stressed the ramifications for not adopting the amendment is that $14 million designated for other projects could "disappear" to be used as matching funds for the bridge grants and the legislature would have no say in the matter. Kurt Parkan answered Senator Lyda Green's question that the grants would all be awarded in one year rather than over several years, and would cover the construction portion of the projects that need to be completed in one phase. Senator Lyda Green noted no general fund match for the bridge projects is provided in the committee substitute. Senator Dave Donley responded saying the committee substitute contains $3.5 million not designated for specific projects. He explained that the department is speculating on the possibility of receiving one or more grants. If one grant is awarded, the committee substitute contains adequate matching funds, according to Senator Dave Donley. However, if more than one grant is awarded, the department would need to draw matching funds from the STIP and that would affect other projects. His intention is to remove all three bridge projects from the STIP so the STIP funds cannot be raided. He stressed that there are advantages and disadvantages of either funding method and that this is a policy decision for the Committee to make. Senator Randy Phillips asked about the department's priority system that determines which project will be addressed if more than one grant is awarded. Kurt Parkan answered that the federal government would make the priority determinations. He spoke of the new discretionary system under the TEA-21 (federal transportation plan) where states can apply for funding for various projects. Because the department has had no experience with the new system, Kurt Parkan explained the plan is to submit several projects in hopes of gaining at least one approval. He stressed that the department wants to capture as much federal funding as possible and therefore applies for more than it expects to receive. Therefore, he could not say how the federal government would prioritize the three projects or what criteria would be applied. He only knew that there is a set amount of funds available nationwide for the discretionary bridge project. Senator Lyda Green asked if the grants required a 20- percent state match rather than the usual ten-percent for most transportation projects. Kurt Parkan said that is correct and is because the projects are in addition to the regular projects. Senator Lyda Green calculated the amount requested in the amendment was inadequate to provide the match for all three bridge projects. Kurt Parkan clarified that the department did not anticipate receiving all three grants and that the amount requested in the amendment would cover one project. Kurt Parkan then answered Co-Chair John Torgerson's question that if the bill were not amended, the projects would remain in the STIP program, which contains adequate funds for two projects. Co-Chair John Torgerson stated that he did not approve of the way the department implemented the intent of the legislature with regard to the STIP. However, he felt that the committee substitute is better than the amendment. Co-Chair John Torgerson asked what would happen if none of the bridge project grants were awarded. Kurt Parkan responded the department would spend the funds set aside in this amendment. Senator Dave Donley removed his motion without objection and WITHDREW the amendment. DOT #5: This amendment eliminates the appropriation distinctions for Trials and Recreational Access for Alaska (TRAAK) Category A: $12,528,663, Category B: $1,005,826 and Category C: $8,392,877, combines the funding into a single TRAAK appropriation of $22,175,799, and specifies certain projects and amounts to be spent on each project. Senator Dave Donley moved for adoption. Senator Al Adams objected because he wanted to know what projects would be eliminated. Senator Dave Donley said one project, $100,000 federal receipts and $9,926 general funds for the Copper River Bike Path, is deleted from the TRAACK at the request of the Governor. He noted several projects are added back into the budget: Church Road Bike Path, Petersburg/Mitkof Highway Coastal Path and Wrangell Airport Loop Phase I. Senator Al Adams asked the department about the project breakdown and if the amendment will hamper any projects. Kurt Parkan replied the amendment to remove the TRAAK categories is an improvement over the original draft submitted by the Subcommittee. The department wished the Copper River trail had not been removed. He noted that the department's original request contained a "collapsed" matching fund from which projects could draw that would minimize the amount of general funds required. By compartmentalizing the projects, the general fund match requirement is increased, he cautioned. He detailed the past Capital Project Clean-up Effort and attributed the difficulties in getting adequate matching funds to the fact that the matching funds were already attached to specific projects. He summarized that compartmentalizing the projects makes it more difficult for the department to capture federal dollars and is a less efficient use of general funds. He added that this argument also applies to other amendments coming before the Committee. Senator Randy Phillips wanted to know why Juneau is receiving $3.5 million for trails and why Anchorage is receiving less than that amount. He wanted to know the criteria the department uses in selecting projects. Kurt Parkan explained the criteria compares projects against others across the state and that while Juneau receives significant funds this year, Anchorage may get more next year. Senator Randy Phillips commented that he believed Juneau is receiving a disproportionate amount of funding. Kurt Parkan responded that this is just a snapshot in time and over the course of several years, the TRAAK funds are allocated fairly across the state. Senator Randy Phillips requested a history of the funding. Senator Dave Donley addressed Senator Randy Phillips's concerns saying the department had adopted informal criteria and internal policies to set priorities. The Administrative Procedures Act states that the allocation of resources must be done by regulation so he speculated the department's practices could be illegal under the Supreme Court's interpretation of the state statute. In spite of this, he said, the department has refused to adopt regulations to replace the current policy. He said the legislature is attempting to make reforms in this area and he is disappointed the department has not addressed the matter already. Senator Dave Donley complained that the current criteria did not weigh a project based on the volume of use. Senator Randy Phillips wanted to hold the amendment until a detailed funding history of TRAAK is provided to the Committee. TOM BRIGHAM, Director, Division of Statewide Planning, Department of Transportation and Public Utilities replied the information will be prepared for the Committee. Senator Dave Donley pointed out that there is funding for TRAAK projects under the Anchorage Metropolitan Area Transportation Study (AMATS) program. He said the reason the US Forest Service Portage Valley Trail System is included in this amendment is because it is outside the Municipality of Anchorage. Senator Dave Donley withdrew his motion without objection and the amendment was HELD. DOT #6: This amendment breaks down the $49,912,059 appropriation for AMATS into individual projects and assigns specific funding amounts for each. Senator Dave Donley WITHDREW this amendment saying that DOT #10 will be offered in its place. DOT #7: This amendment eliminates the appropriation distinctions for Community Transportation Program (CTP) Category A: $69,207,533, Category B: $23,845,880 and Category C: $2,717,694, combines the funding into a single CTP appropriation of $95,723,564, and specifies certain projects and amounts to be spent on each. Senator Dave Donley moved for adoption. Senator Al Adams objected. Senator Dave Donley noted one project is deleted from the Governor's list of requested projects, the Iliamna/Nondalton Road Completion Project. He also noted the addition of $1,395,000 for Sitka Harbor Way Reconstruction/O'Connell Bridge-Harbor Drive project. He explained this project was included in the STIP until a month ago when it was deleted despite the Subcommittee's recommendation to maintain it. Senator Al Adams referred to the elimination of the Iliamna/Nondalton Highway project and pointed out that the project is "ready to go". He wondered why a different project is not eliminated instead and stated he would be offering DOT #9 to address the matter. He argued that the project should not be taken away from rural Alaska. Senator Randy Phillips wanted to know if this amendment would build any new roads or just provide improvements on existing roads. Senator Dave Donley explained the CTP component of the STIP includes both new roads and rehabilitation of old roads in a combination of traffic improvements and revisions. The new roads include one to St. Mary's Airport and a new sanitation road in Venati. Senator Al Adams repeated his concern with the change of appropriations. He wanted the department to identify which projects are eliminated by this amendment and how this amendment affects existing projects. Kurt Parkan concurred with Senator Dave Donley that the Iliamna/Nondalton Highway is the only project eliminated. Kurt Parkan stated the department feels this highway is a good project that connects two communities. He noted that the project scored high on the priority determination. Co-Chair John Torgerson asked why the Sitka Harbor Way project was dropped off the STIP. Kurt Parkan did not know specifically why but stated he would find out and report back to the Committee. The amendment was ADOPTED by a vote of 7-1-1. Senator Al Adams voted against the motion and Senator Pete Kelly was absent. DOT #8: This amendment increases the general funds for Nome Port and Harbor Improvements from $1,231,000 to $2,462,000. Senator Al Adams moved for adoption. Senator Dave Donley objected. Senator Al Adams spoke to the amendment saying it restores the funds to the original request made by the Governor. He claimed that the Subcommittee took the money allocated to this project and instead appropriated it to the Port of Anchorage. The City of Nome already expended $1 million in matching funds for this project and is prepared to provide an additional $4.8 million for completion of the entire project, he stressed. Because of the city's efforts, he thought the money should be returned to the project. Senator Dave Donley reminded Senator Al Adams that the appropriation in the committee substitute was part of the Subcommittee report that was adopted during a public meeting. Senator Al Adams countered that he still didn't think it was right to take funding from a rural project to give to an urban project. Senator Loren Leman commented that the Municipality of Anchorage is contributing greatly to the match requirement for the Port of Anchorage project. He added that 85 percent of the cargo coming into the state arrives at the Port of Anchorage and is then spread out across the state, including rural Alaska. Therefore, he concluded that dredging the Knik Arm Schoal has a substantial effect on the cost of goods coming into Alaska. Senator Al Adams stated that these were two good projects and neither one should be compromised. He pointed out that the Port of Nome project would encourage economic development in the mining industry for rural Alaska. In response to Senator Randy Phillips' inquiry, Kurt Parkan explained the department merely forwarded the port project requests from communities to the legislature for allocation of matching funds. He noted the Municipality of Anchorage request came in late and missed the deadline for inclusion in the Governor's budget proposal. He stated that the department has supported this project in the past and continues to support it. Senator Randy Phillips wanted to know if the projects are compared against each other or simply considered as they are received. Kurt Parkan replied that the department makes no modifications to the requests. Senator Dave Donley pointed out the Nome project is funded in the committee substitute for more than the Anchorage project. By a vote of 1-8, the amendment FAILED to be adopted. Senator Al Adams voted in favor. DOT #9: This amendment adds $4,845,000 federal funds for Iliamna/Nondalton Highway. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams explained this is a top project of the Senator from Bethel, Lyman Hoffman. Senator Al Adams repeated his earlier statement that the project is ready to begin. Senator Randy Phillips wanted to know why the project was dropped from the Governor's budget request. Senator Dave Donley answered the removal was the recommendation of the Subcommittee. Senator Randy Phillips asked if the project only involves federal funds. Senator Dave Donley answered that the funding is a combination that includes state matching funds. Kurt Parkan explained this project requires the usual 90-10 split with the federal government providing 90 percent of the funds and the state providing ten-percent in matching funds. Senator Randy Phillips calculated that the amendment would require $485,000 general funds. Kurt Parkan commented that this project could be considered a new road. Co-Chair John Torgerson noted a bridge is also included in the project. Senator Dave Donley noted the Subcommittee heard testimony that the number of vehicles available to use the highway is only thirteen. He added that those vehicle owners pay no registration fees to assist in the cost of road construction or maintenance. Co-Chair John Torgerson said his office had received phone calls informing him that there are more than thirteen vehicles that would use the highway. Kurt Parkan stated the highway would serve approximately 500 residents. Senator Randy Phillips wanted to know if the purpose of the highway is to connect two communities, access mining development or perhaps serve a different purpose. Kurt Parkan responded saying there are several benefits to the connection of the two communities including consolidation of emergency services and sharing one airport and landfill. Senator Al Adams commented that this is an overland access route to help the economy of the two communities and the Lake and Peninsula Borough as a whole. He added that the highway will help reduce Department of Public Safety's response time, reduce air travel and would also prevent accidents caused by snowmachines breaking through ice. Educational and medical services would also benefit, he stated. Kurt Parkan elaborated saying that with the completion of the highway, the department would probably concentrate improvement efforts on only one of the two airports in the two communities, which would benefit the state in the long- term. Senator Randy Phillips wanted to know the savings for combining all the services. Kurt Parkan did not know but thought the Borough could determine an amount. Senator Gary Wilken wanted to know if this would allow the consolidation of two schools. Kurt Parkan said that is conceivable and possible. Senator Al Adams noted the highway could improve the transportation of supplies and of students. It could enhance educational opportunities, allow for staff reductions and provide competition between two schools, he stated. Senator Randy Phillips wanted the Borough to provide information showing the cost savings to the Committee by the next day. Kurt Parkan said he would contact the Borough. Senator Lyda Green appreciated Senator Randy Phillips's interest, but noted if cost saving information is required on this project, it should be required for all projects. The amendment FAILED to be adopted by a vote of 2-7. Senator Al Adams and Senator Loren Leman voted in favor. Tape: SFC - 99 #128, Side B 4:17 PM AT EASE 4:17PM / 4:17PM DOT #10: This amendment breaks the AMATS appropriation of $49,912,059 into specific projects and states the amount to be spent on each. Senator Dave Donley moved for adoption. Senator Al Adams moved to amend the amendment. Senator Sean Parnell objected. The amendment to DOT #10 deletes $655,800 federal highway funds from Anchorage Area Contingency for Planning Construction Shortfalls and Road/Intersection Improvements and $1,364,700 federal highway funds from Dowling Road-Raspberry to Lake Otis Parkway. The funds are then inserted into the Iliamna/Nondalton Highway project. Senator Al Adams spoke to the amendment changes noting the two deleted projects have already been funded in the previous year's budget. Senator Dave Donley explained the projects were placed in last year's budget, but that the Commissioner of the Department of Transportation and Public Utilities failed to submit them to the AMATS committee for consideration and the funds were never utilized. That was why the projects are seen here with no general fund match, according to Senator Dave Donley. He referred to Commissioner Perkins' testimony before the Committee in January stating that adjustments must be made within the existing STIP allocation to accommodate these two projects if they were to be included. Senator Dave Donley remarked that DOT #10 provides the accommodation. Senator Al Adams argued the funds granted last year for the projects still remains and did not need to be reappropriated. Senator Dave Donley commented that argument was true for the Victor Road project and that the Commissioner refused to incorporate the project into the STIP. The amendment to the amendment FAILED by a vote of 1-8. Senator Al Adams cast the yea vote. Senator Al Adams stated he would oppose the amendment citing it as a double appropriation. Co-Chair John Torgerson noted the department's recommendation to handle the funding of the two projects in this manner. The amendment was ADOPTED by a vote of 8-1. Senator Al Adams voted against the motion. DOT #11: This amendment adds $150,000 general funds to Facilities Deferred Maintenance and Critical Repairs allocating it for Closure of State-Maintained Portion of Harborview Facility. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained that this amendment replaces DOT #1 and provides funding for closure of the state's portion of the Harborview facility in Valdez and seal it off from the community-maintained hospital. The funds also provide for the purchase of a generator to allow the two portions of the facility to operate independent of each other. Senator Al Adams moved to amend DOT #11. Senator Sean Parnell objected. The amendment to the amendment inserts $400,000 AHFC funds for Maniilaq Senior Center. Senator Al Adams favored the original amendment but wanted to improve it by adding funds for foundation repair of this senior center. He noted the additional funds are not general funds and that the intent is to turn the state-owned facility over to a non-profit organization after repairs are completed. The motion to amend the amendment FAILED by a vote of 1-8. Senator Al Adams voted in favor of the motion. Co-Chair John Torgerson spoke to the state's $232,000 annual maintenance cost for the Harborview facility and the attempts to sell it to the City of Valdez. In the operating budget, he stated that he denied the funding request for on-going maintenance and asked the department to provide an estimate of the cost to close the facility. Therefore, this amendment is in lieu of the on-going operating expense, he said. The amendment was ADOPTED without objection. DOT #12: This amendment adds $3,500,000 federal funds to the CTP and allocates it to Kenai Peninsula Roads. Senator Gary Wilken told the Committee of a recent Federal Highway Administration creation of a Public Lands Discretionary project on the Kenai Peninsula that provides 100-percent federal funding. He moved for adoption of the amendment. Senator Sean Parnell asked the department to confirm that this project requires no state match. Kurt Parkan confirmed. Senator Loren Leman asked where this project is located. Kurt Parkan replied that there are several projects, including Homer East End Road. Tom Brigham elaborated, saying the principle project is the East End Road and that if funds are left over, additional projects will be undertaken. He said the regional branch of the department is in the process of identifying which projects would be addressed with South Kenai as the target area. Senator Randy Phillips asked about this program. Kurt Parkan spoke about requests received for projects on adjoining state and federal public lands, including state parks. He said most requests come from a community, however, the department itself identified the East End Road project. Co-Chair John Torgerson noted the federal funds available for the program are limited. There was no objection and the amendment was ADOPTED. DOT #13: (This amendment was introduced and acted upon later in the meeting.) DOT #14: (This amendment was introduced and acted upon later in the meeting.) DOT #15: (This amendment was introduced and acted upon later in the meeting.) UNIVERSITY OF ALASKA UNV #1: This amendment appropriates $800,000 university receipts for Juneau PE/Recreational Facility. Co-Chair John Torgerson said he would HOLD this amendment. UNV #2: This amendment adds $450,000 general funds for Small Business Development Program and "Buy Alaska" Program. Senator Loren Leman said he would NOT OFFER this amendment, deferring to UNV #3, of the same topic. UNV #3: This amendment adds $450,000 general funds for the Small Business Development Program. Senator Lyda Green moved for adoption. Co-Chair John Torgerson stated he supports the amendment, believing the program should be funded because of the impact it has on the state. Senator Lyda Green pointed out that this item was omitted from the original Governor's budget. Without objection, the amendment was ADOPTED. UNV #4: This amendment adds $7 million general funds for UAF-Tanana Valley College/Hutchison Career Center Renovation. Senator Gary Wilken moved for adoption. Co- Chair John Torgerson and Senator Lyda Green objected. Senator Gary Wilken explained the funds requested are in addition to the Governor's original request of $3 million. Senator Gary Wilken noted that this appropriation also pays for $1,480,000 in deferred maintenance required to complete the project. He added that the Fairbanks North Star Borough plans to match the appropriation with $14 million. He stressed that the facility is a unique and innovative concept in grades K-14 education and has support from Interior educators and administrators. Senator Dave Donley remarked that this was one of the most painful reductions that had to be made this year. He complemented the community of Fairbanks for its support of this project. He noted that no other school projects are included in the budget this year therefore no community is singled out. He hoped funding could be included in the capital budget next year. He pointed out a large influx of funds for the university through AHFC bonds in the prior year. Co-Chair John Torgerson agreed with Senator Dave Donley that it is hard to oppose funding for this project. Senator Gary Wilken applauded the community for their efforts and hoped other communities would use this situation as a model. He was convinced the project will go forward, if somewhat delayed. The amendment FAILED to be adopted by a vote of 2-6-1. Senator Gary Wilken and Senator Pete Kelly voted in favor and Senator Al Adams was absent. UNV #5: This Amendment adds $3 million general funds for UAF-Tanana Valley College/Hutchison Career Center Renovation. Senator Gary Wilken moved for adoption. Senator Sean Parnell objected. Senator Gary Wilken emphasized that this amount is necessary to allow the passage of the local bond issue in the fall election. He noted this is the amount originally requested in the Governor's budget. By a vote of 3-5-1, the amendment FAILED to be adopted. Senator Gary Wilken, Senator Pete Kelly and Senator Loren Leman cast yea votes and Senator Al Adams was absent. AT EASE 4:38PM / 4:38PM UNV #6: This amendment inserts $30,470,000 general funds for UAA Consortium Library. Senator Al Adams moved for adoption. Senator Lyda Green and Co-Chair John Torgerson objected. Senator Al Adams spoke to the motion, saying the funds are to construct this library. He pointed out that $10 million was appropriated the prior year to fund site design and preparation. The $30 million will complete the project, he noted. Senator Al Adams stressed that failure to fund this request would allow the previous year's efforts go to waste. He suggested there are many financial ways the project can be addressed, including a bond issuance. Senator Sean Parnell stated he fully supported the University of Alaska-Anchorage, had approved of past allocations, and that he will support this project in the future when the budget gap is not as big. He said he could not support this request when the smaller Hutchison project was not being funded. Senator Al Adams suggested that an equitable bond package could be made in the Committee. Senator Loren Leman supported the project as one of the first signers of a petition calling for a new library and he also co-sponsored enabling legislation. However, he felt this is not the appropriate mechanism to address the funding. He appreciated that Senator Al Adams recognized that some of the core Anchorage projects supported all of Alaska. Senator Al Adams stressed rural Alaskans supported Anchorage pointing out that a healthy rural Alaska makes for a healthy urban Alaska. Senator Gary Wilken hoped the Committee would consider that an assessment was being done to identify the most important university facilities. He stated that the facilities are being designed to better accommodate many needs and that libraries of the future won't need to be as large because of the availability of information on computers. He wanted to ensure that the entire $30 million request is truly necessary. By a vote of 1-8, the amendment FAILED to be adopted. Senator Al Adams cast the favoring vote. UNV #7: This amendment inserts $800,000 university receipts for University of Alaska Southeast, Juneau PE/Recreation Facility. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams noted a technical correction of changing "general funds" to "university receipts". He pointed out that this amendment authorizes the university to receive university receipts to construct a physical education and recreation facility. He stressed that currently the Juneau campus has no recreation facility. Senator Randy Phillips wanted to know if this amendment is similar to UNV #1. Co-Chair John Torgerson replied that it is identical and that he recommends the committee hold this amendment to wait for UNV #1 to be re-offered, or simply vote it down. Senator Al Adams WITHDREW his motion to defer to UNV #1. UNV #8: This amendment adds $450,000 general funds for the Small Business Development Center and was NOT OFFERED due to action taken on UNV #3. MUNICIPAL/ UNINCORPORATED GRANTS MUNI #1: This is a two-part amendment. The first part addresses Municipal Capital Project Matching Grants, shifting $25,000 other funds from Mountain Village- Community Facilities and Equipment to Mountain Village Teen Center Renovation and Equipment Purchase. The second part of the amendment addresses Municipal and Unincorporated Capital Project Matching Grants-Title Changes. The title changes are Chefornak Community Building Phase II to Chefornak Generator Purchase; Juneau Fire Station Repairs Phase IV to Juneau Building Maintenance: Deferred Building Maintenance and Koliganek Emergency Completion VPSO Building to Koliganek Equipment Repairs. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained that the amendment appropriates the municipal grant funds in the Mountain Village account to a particular project and also provides for requested project changes to three grantees. Senator Randy Phillips moved to divide the question. Without objection, the amendment was divided into MUNI #1A, Municipal Capital Project Matching Grants and MUNI #1B, Municipal and Unincorporated Capital Project Matching Grants-Title Changes. MUNI #1A: Senator Randy Phillips objected to its adoption. Co-Chair John Torgerson noted that the funds have a net zero affect on the general fund. He explained that communities are allowed to accrue $25,000 a year for five years for a particular project and at that point, the funds must be appropriated to that project, which is the case here. He stated that this amendment deletes the funds from the Front section of the committee substitute and inserts them into the Back section to appropriate them to a project. The amendment was ADOPTED by a vote of 8-1. Senator Randy Phillips cast the nay vote. MUNI #1B was ADOPTED without objection or further discussion. MUNI #2: This amendment reduces the capital matching grant for Shungnak from $50,000 to $25,000. Senator Al Adams moved for adoption. Co-Chair John Torgerson objected for explanation. Senator Al Adams explained the community wishes to save its capital matching grant allocations for a larger project but had encountered a sewer system emergency and needed some funds to address repairs. Only $25,000 was needed for the repairs and the amendment returns the balance to the community's account. There is a net zero affect on the budget. There was no objection and the amendment was ADOPTED. SUPPLEMENTAL SUPP #1: In this amendment, front section language is added to read, ".Fish and Game. The appropriation made by chapter 137, SLA 1998, page 32, line 20 (Administration and Support) is amended by adjusting the "Other Funds" as follows: Federal Receipts, $60,000, Inter-Agency Receipts, ($60,000)". Senator Sean Parnell moved for adoption. Co-Chair John Torgerson said the amendment is submitted at the request of the Department of Fish and Game. He explained that in FY99 the department had lower expenditures of inter-agency receipts and higher expenditures of federal funds than estimated. He stressed this amendment is a net zero adjustment to compensate for the actual expenditures and does not increase the department's spending authority. Without objection, the amendment was ADOPTED. FRONT SECTION FRONT #1: This amendment extends the lapse date of appropriations made to the Department of Natural Resources in 1998 for Appraisal Of Public School Trust Fund Lands. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson told the Committee that the original appraisal was challenged in court without success and this extension will allow the department to proceed with the appraisals. He added that this amendment will have a net zero impact on the budget. The amendment was ADOPTED without objection. FRONT #2: This amendment replaces $15,000,000 general funds with the same amount of unappropriated AHFC receipts for Capital Project Matching Grant Programs. Senator Sean Parnell moved for adoption. Senator Al Adams objected. He wanted to hear from AHFC about the impact this amendment would have on the AHFC budget. JOHN BITTNEY, Legislative Liaison, Alaska Housing Finance Corporation, Department of Revenue came to the table and said the Corporation was hoping for some consideration to the reductions made to the AHFC capital budget. With the remaining funds from the AHFC dividends, he requested they be used for the outstanding capital projects. He also wanted to prevent the dividend from being overspent. Senator Al Adams clarified that the Corporation wants to see the AHFC restored funds used for projects they requested. John Bittney agreed, noting that the preferred projects are those that will benefit their residents and also will protect the high investment rating of the bonds. The amendment was ADOPTED by a vote of 7-2. Senator Al Adams and Senator Lyda Green voted against the motion. FRONT #3: This amendment appropriates $100,000 general funds to the Department of Health and Social Services for payment as a grant to the Hope Community Resources for improvements, maintenance and repairs. Senator Dave Donley sponsored this amendment and announced he would NOT OFFER it for consideration. FRONT #4: This amendment appropriates a total of $566,000 federal funds to the Department of Natural Resources and the Department of Fish and Game for specific projects. Senator Loren Leman moved for adoption. Co-Chair John Torgerson objected. Senator Loren Leman WITHDREW his motion to await action on FRONT #9. FRONT #5: This amendment appropriates $250,000 general funds to the Department of Community and Regional Affairs for payment as a grant to Arctic Power for education efforts to open the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development. Senator Loren Leman moved for adoption. Co- Chair John Torgerson stated that he supported the amendment. Without objection, the amendment was ADOPTED. FRONT #6: This amendment appropriates $200,000 of statutory designated program receipts to the Department of Health and Social Services for construction of a regional youth/residential diagnostic treatment facility in Ketchikan. Senator Dave Donley moved for adoption. Co-Chair John Torgerson explained he sponsored the amendment at the request of Senator Robin Taylor. Co-Chair John Torgerson referred to an attached memo explaining the funds were given to the City of Ketchikan who wants to transfer them to the Department of Health and Social Services for construction of the facility. This amendment allows the appropriation and Co-Chair John Torgerson noted there is no general fund impact. The amendment was ADOPTED without objection. FRONT #7: This amendment appropriates $900,000 general funds to the Department of Administration for payment as a grant to the Matanuska-Susitna Borough for construction of public infrastructure at Hatcher Pass. Senator Lyda Green moved for adoption. Co-Chair John Torgerson and Senator Al Adams objected. Senator Lyda Green spoke to the motion saying the requested $900,000 will secure $8 million in private sector investments, $2 million from the Matanuska- Susitna Borough and over $2 million from federal sources. Senator Al Adams stated that his concern was related to unresolved legislation regarding the transfer of land from the State to the Borough. He felt the funds should be appropriated to the Department of Natural Resources and, if and when the land did transfer to the Borough, RSA the funds to the Borough. Senator Lyda Green countered that the property proposed for development in this amendment is not the property under consideration for transfer. She said the developer has already made land use arrangements with the Department of Natural Resources and the Borough. Senator Al Adams then asked if a private developer is undertaking the Hatcher Pass development. Senator Lyda Green confirmed but noted that this amendment addresses the infrastructure involved with the development. By a vote of 1-8, the amendment FAILED to be adopted. Senator Lyda Green voted in favor. AT EASE 5:04 PM / 5:28PM Tape: SFC - 99 #129, Side A 5:28PM FRONT #8: This amendment reappropriates the 1994 Department of Administration's unexpended and unobligated corporate receipt balances for Boiler System Replacement at the Fairbanks Pioneer's Home to the Department of Community and Regional Affairs for state match of federal funds from the US Department of Commerce. Senator Sean Parnell moved for adoption. Without discussion or objection, the amendment was ADOPTED. FRONT #9: This amendment appropriates $566,000 from interagency receipts to the Department of Natural Resources and the Department of Fish and Game for specific projects. Senator Loren Leman moved for adoption. Senator Loren Leman moved to amend the amendment on page 1 line 3 after "interagency receipts" to insert "from the Department of Environmental Conservation from federal non- point source pollution funds". He noted that the federal allocations are for Section 319 projects and that this amendment corresponds to the operating budget through an amendment he had submitted to the Conference Committee to reduce the amount of non-point source pollution grants. Senator Al Adams asked if this amendment to the amendment would result in any restrictions regarding expenditures of the funds. Co-Chair John Torgerson wanted to know if the Administration requested this change. BARBARA FRANK, Director, Division of Administrative Services, Department of Environmental Conservation came to the table and testified that the department did not propose the amendment but the uses are consistent with the Section 319 projects. Senator Loren Leman interjected saying the amendment to the amendment was offered at the request of a high-ranking employee of the department. Senator Al Adams asked if there are restrictions attached to the non-point pollution funds. Barbara Frank responded that the allocations are within the perimeters of the fund. Senator Randy Phillips wanted to know if this would increase the general fund obligation in the next fiscal year. Senator Loren Leman didn't think so and said this appropriation is for specific projects. He reminded the Committee that the funds were originally distributed to different projects, but at the request of the departments, some of the funds are now redirected to these high-priority projects. Without objection, the amendment was AMENDED and the amended amendment was ADOPTED. FRONT #10: This amendment adds $25,000 general funds for Hope Community Resources fire Suppression Sprinkler System and $34,500 general funds for Alaska Center for the Blind Fire Suppression Sprinkler System. Senator Dave Donley moved for adoption. Co-Chair John Torgerson objected. Senator Dave Donley spoke of the earlier request from the AK Center for the Blind and the Hope center for sprinkler systems. This amendment would address both requests. Senator Lyda Green stated she did not support the amendment and was bothered by the fund source. Senator Al Adams supported the amendment however he was concerned about the diversion of funds from AHFC senior housing deferred maintenance projects and recommended reinstating at least half of the funds. Senator Gary Wilken asked if the remaining appropriations listed on line 5 page 21 of the committee substitute would be available for similar projects. Senator Dave Donley affirmed and stressed that he believed the fire suppression systems are fair and necessary requests. By a vote of 6-3 the amendment was ADOPTED. Senator Lyda Green, Senator Gary Wilken and Senator Pete Kelly cast nay votes. FRONT #11: This amendment reduces the amount of general funds appropriated to the Cordova Mile 17 Landfill Construction to $1,745,000 and adds a new section relating to the Exxon Valdez Oil Spill Restoration Fund and the appropriation of $215,000 from the settlement fund to the landfill project. Senator Sean Parnell moved for adoption. Senator Lyda Green objected. Co-Chair John Torgerson explained this amendment would reappropriate income accrued from the Exxon fund to the Cordova landfill construction project and frees money from the general fund. In the past, the Exxon funds were used for similar projects but had to meet certain criteria and be located in the spill area, according to Co-Chair John Torgerson. He said that the Cordova landfill is the only project in the FY 00 budget that meets the criteria. Senator Lyda Green asked if the settlement judgement is currently under appeal. Co-Chair John Torgerson answered it is not, that this fund source is interest earned off the criminal settlement. Senator Dave Donley wanted to know if this funding change frees federal match funds. Co-Chair John Torgerson said it does not and that it only replaces a portion of the general fund needed to construct the project. Senator Lyda Green removed her objection and the amendment was ADOPTED. FRONT #12: This amendment appropriates $500,000 general funds for the Ketchikan Juvenile Detention Center and is contingent on receipt of at least $250,000 from the Mental Health Trust Authority. Senator Sean Parnell moved for adoption. Senator Al Adams objected. Senator Al Adams asked if the amendment language contains a binding stipulation on the receipt of MHTA receipts. Co- Chair John Torgerson responded that he did not intend to support this amendment and therefore had not considered a stipulation. SENATOR ROBIN TAYLOR came to the table to speak to the request saying this is the final funding increment necessary to complete the juvenile detention facility in Ketchikan. He spoke of the millions spent on the Johnson Youth Center in Juneau noting that approximately fifty- percent of the residents are from southern Southeast Alaska. He stated that prior commitments to fund a facility in Ketchikan were not fulfilled and as a result, the City of Ketchikan is willing to contribute between $500,000 to $750,000 in matching funds. He also noted that if the general funds were appropriated, the Mental Health Trust Authority would contribute $250,000 since it will utilize the facility as well. He stressed that if the facility is not completed, youths will continue to be transported from the Ketchikan area into Juneau. The amendment FAILED to be adopted by a vote of 4-5. Senator Dave Donley, Senator Loren Leman, Senator Lyda Green and Senator Randy Phillips voted in favor. FRONT #13: This amendment inserts $331,400 general funds and appropriates $2,641,200 federal funds for Ketchikan Shipyard Facility Development. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson objected. Senator Al Adams asked what was the recommendation of the Subcommittee on this item. Senator Dave Donley replied that the project was not discussed because the request was submitted past the deadline for consideration. Senator Robin Taylor indicated that the project was not submitted until three weeks prior and therefore the Subcommittee did not have an opportunity to fully review it. He noted that the City of Ketchikan is willing to contribute an equal amount of funding as requested from the state to pay for improvements to the state-owned facility. He understood that the Department of Transportation and Public Facilities, Division of Marine Highways strongly supports this project. He stressed that the funding is a 90-10 match with the state contributing only ten percent and that he understood 90-10 projects would be funded in this year's budget. He asked that this project be given the same consideration as the Governor's requested projects. Co-Chair John Torgerson pointed out that if money were put into this project, funds would have to be removed from another project elsewhere. Therefore, he opposed the amendment. Senator Loren Leman asked if this project dislodges other federal funds. Senator Robin Taylor answered that the funds are lost if not matched. Senator Dave Donley wanted to know if the federal money for this project comes from a US Corps of Engineers fund. Senator Robin Taylor replied that it is not. Senator Dave Donley stated that he was unfamiliar with any harbor projects funded under the TEA 21 program. He said the other harbor projects considered by the Subcommittee qualify for US Corps of Engineers funding and are not a 90-10 match but instead are limited only by the amount of the match contribution. Senator Robin Taylor responded that this project is very specific and the city is willing to match the state's funds. He felt that if the project were brought up in time, it would have been included in the Governor's budget. He pointed out that the Committee diverted funds from the deferred maintenance account for another project submitted late. He emphasized that he hated to see the federal money lost. Senator Al Adams recalled that the Committee put adequate funds into last year's appropriation for this project. Kurt Parkan said only the federal funds were appropriated last year. He added that this was a high priority project of Alaska's congressional delegation the prior year. However, he noted there is a 20 percent match requirement, which was not included in the FY99 state's budget. He said this amendment would fulfill the match requirement because the city is contributing half the needed amount. He explained that the federal appropriation is unlike most appropriations that are lost if the match money is not produced by a certain date. The federal funds for this project are available indefinitely because of the high priority of the project, according to Kurt Parkan. Senator Lyda Green wanted to know if this is a Department of Commerce and Economic Development project. Senator Robin Taylor responded that it is because AIDEA operates the facility, leasing it from the state. Senator Gary Wilken expressed regret that the project did not come before the Committee earlier. He asked if there are other projects in the sponsor's district that the sponsor could reprioritize to allow for this project. Senator Robin Taylor stressed there are many 90-10 projects across the state and pointed out that another project the Committee added to the budget does not have a 90-10 match. He apologized for the lateness of the project. Senator Al Adams suggested changing the funding source from general funds to AIDEA funds since the project pertains to economic development. AT EASE 5:52PM / 8:08PM Senator Robin Taylor answered Senator Loren Leman' question about whether this project would "exceed authority", saying the Department of Transportation and Public Utilities determined this is a unique project. Senator Dave Donley's understanding was that if this amendment did not pass today, the federal funds would not lapse and would be available the next year. Co-Chair John Torgerson had the same understanding. The amendment FAILED to be adopted by a vote of 2-7. Senator Loren Leman and Senator Al Adams voted in favor. FRONT #14: This amendment inserts $500,000 general funds for Wrangell Heritage Harbor Project. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson objected for the same reason he objected to the previous amendment. Senator Robin Taylor restated his assertion that funding should be granted for 90-10 match projects. He testified that this $13 million dollar project only recently received approval from the federal government for $11,700,000. He added that the City of Wrangell will provide six percent of the required match, and the state will only need to provide four percent. He emphasized that this is a major economic development project. By a vote of 3-6, the amendment FAILED to be adopted. Senator Al Adams, Senator Dave Donley and Senator Loren Leman cast yea votes. FRONT #15: This amendment inserts a new section relating to appropriations from the Constitutional Budget Reserve (CBR). It increases the CBR appropriation for FY99 expenditures from $900,000,001 to $1,050,000,000 and inserts an FY00 appropriation amount not to exceed $1,007,000,000. Senator Sean Parnell moved to adopt. Senator Sean Parnell then moved to amend the amendment to increase the FY99 appropriation amount (located on line 11 of the amendment) to $1,100,000,000. He explained that CBR expenditures had already exceeded the $900 million and because of lower than anticipated corporate income tax receipts, additional funds are needed. Senator Sean Parnell then shared that the FY00 CBR appropriation is based on projections made in the Spring Revenue Forecast. He noted that the provision does not authorize an open-ended CBR withdrawal, but instead is an amount-certain. Without objection the amendment was AMENDED. There was no objection and the amended amendment was ADOPTED. AT EASE 8:16PM / 8:17PM FRONT #16: This amendment extends the lapse date of the FY98 American Red Cross Grant to the Department of Military and Veterans Affairs for Disaster Planning and Control to June 30, 2000. Senator Sean Parnell moved for adoption. The amendment was ADOPTED without objection. FRONT #17: This amendment appropriates general funds to the Department of Administration: $2,423.29, Department of Fish and Game: $1,952.90 and the Department of Law: $1,189.20 to pay miscellaneous claims and stale-dated warrants for FY 99. Senator Sean Parnell moved for adoption. He explained that this amendment is for funds in addition to those appropriated in the FY99 Supplemental budget and was made at the request of the Office of Management and Budget. Senator Randy Phillips commented that the law requires the funds to be appropriated retroactively. Without objection, the amendment was ADOPTED. FRONT #18: This amendment appropriates $100,000 general funds to the Department of Law and $100,000 to the Alaska Legislative Council for costs associated with the proposed BP Amoco/ARCO merger for FY99 and FY00. Senator Sean Parnell moved for adoption. He stated that both Senator Rick Halford and Senator Drue Pearce supported the amendment and that he believed the funding will help the Administration and the Legislature send a strong message showing that Alaskans have a stake in the merger. Senator Dave Donley supported the amendment but had a question on the status of the Conference Committee's efforts in reallocating funds from the Oil and Gas Litigation Section. He wanted to know if reductions could be made, citing that testimony in budget hearings showed funds given to the Section were "really soft". Senator Sean Parnell agreed with Senator Dave Donley's assessment and added that there was another argument in favor of using permanent fund receipts to address the merger. Senator Sean Parnell WITHDREW his motion to adopt and requested the amendment be HELD. There was no objection. FRONT #19: This amendment appropriates $30,000 general funds to the Department of Law for costs relating to the Glacier Bay-Tongass Submerged Lands Quiet Title Litigation for FY99. Senator Sean Parnell moved for adoption and explained this is a supplemental request sponsored by Senator Rick Halford and Senator Jerry Mackie. Senator Sean Parnell urged the members' support for the amendment. Senator Randy Phillips wanted to know if this amendment is in the same category as FRONT #18. Senator Dave Donley pointed out this is a supplemental budget request and is somewhat different. Senator Dave Donley lamented that while he chaired the budget Subcommittee, the Department of Law never came to him with this request. With no objection, Senator Sean Parnell WITHDREW his motion and the amendment was HELD until the sponsors could address the Committee. Senator Dave Donley asked if there was written backup accompanying the amendment. Senator Sean Parnell replied that he had a memorandum but it was not with him. AT EASE 8:23PM / 8:33PM FRONT #18: This was the second consideration for this amendment. Senator Sean Parnell moved for adoption. He stated that he did not have backup available relating to the possible use of permanent fund receipts but he wished the amendment to be considered on its merits as is. Senator Al Adams asked if sufficient funds were not already provided to the Legislative Council in the operating budget to address matters similar to the BP-ARCO merger. Senator Sean Parnell's understanding was that the legislature did not. He stated that both the legislature and the governor have a vested interest in ensuring accurate information and quality legal expertise relating to the merger. The amendment was ADOPTED without objection. FRONT #19: This was the second consideration of this amendment. Senator Sean Parnell moved for adoption. BRETT HUBER, staff to Senator Rick Halford, addressed the Committee. He said that in looking at the department's need for FY99, an additional $30,000 was required. Alternate funding sources had been discussed but it was determined that the matter fell outside the scope of the Oil and Gas Litigation Section, according to Brett Huber. There was no objection and the amendment was ADOPTED. FRONT #20: This amendment adds a new section stipulating that federal or other program receipts that exceed the amounts appropriated in FY98 are appropriated to FY99, conditioned upon compliance with the program review provisions. Senator Sean Parnell moved for adoption. DAVID TEAL, Director, Division of Legislative Finance explained the language is typical in every capital bill with the exception of the previous year's bill, which it was omitted. He said there were some technical problems in transferring funds because of the omission. This amendment will correct the matter and be retroactive. AT EASE 8:37PM / 8:45PM Senator Dave Donley objected to the motion. By a vote of 7-2, the amendment was ADOPTED. Senator Dave Donley and Senator Loren Leman voted in opposition. DEPARTMENT OF LAW LAW #1: This amendment extends the lapse date to June 30, 2000 of a $300,000 general fund appropriation for additional costs associated with court challenges to the statutes dealing with medical procedures and parental consent for abortions. Senator Sean Parnell moved for adoption and explained the amendment was offered at the request of the department. Senator Loren Leman asked if the funds are used for outside council. Senator Sean Parnell was unsure. BARBARA RICHIE, Deputy Attorney General, Civil Division, Department of Law explained that the funds are not for outside council and that the cases are being handled by the Office of Special Prosecutions and Appeals. She noted that the case in question is currently pending before the Supreme Court. Senator Sean Parnell said he had understood the appropriation was for outside council. He then WITHDREW his motion to adopt the amendment. DEPARTMENT OF ADMINISTRATION (Continued from earlier in the meeting.) ADM #7: This amendment appropriates $188,000 general funds to the Alaska Oil and Gas Conservation Commission (AOGCC) and $100,000 general funds to the Longevity Bonus Grant Program for increased operating costs for FY99. Senator Sean Parnell moved for adoption and explained this is a supplemental request submitted by the department. He had spoken to the Commissioner regarding the AOGCC request and learned that if the additional funds are not appropriated, the Commission will close beginning June 4, 1999. Given the importance of the BP-ARCO merger and the role of the Commission, Senator Sean Parnell recommended the additional funds be approved. Senator Loren Leman asked for an explanation on the second portion of the amendment regarding the longevity bonus program. Annalee McConnell explained that the funds requested are based on a projection of the amount needed to pay the last longevity bonus payment in FY99. She said that the projections indicate the program will run out of money in the eleventh month. Senator Dave Donley moved to DIVIDE the question. ADM #7A contains the appropriation to the AOGCC and ADM #7B contains the Longevity Bonus Grant Program appropriation. Tape: SFC - 99 #129, Side B 8:50PM ADM #7A: By a vote of 7-2, the amendment was ADOPTED. Senator Randy Phillips and Senator Dave Donley cast nay votes. ADM #7B: Without objection, the amendment was ADOPTED. Senator Randy Phillips questioned why the supplemental items and other operating items are included in this capital bill. Senator Sean Parnell explained that the practice of considering supplemental requests for inclusion in the capital budget has always been done because this budget is the final appropriation bill for the session. Senator Dave Donley commented to his concerns with the appropriation to the AOGCC made with the last amendment. He ascertained that the agency overspent its budget without making any reductions even with the knowledge that the money was running out. He felt that the threat to close down the agency if more funds are not approved sets a bad example and could result in other agencies using the same strategy next year. Because of this, he concluded that the request should have been made to the Committee during the regular supplemental process and if additional funds were not approved, reductions should be made accordingly. Senator Sean Parnell understood the concerns but shared that he learned from Cammy Oechsli, a Commissioner with AOGCC, that a request was submitted to the Department of Administration but was never forwarded to the Legislature by the Office of Management and Budget. Therefore, he learned about the matter after the supplemental process was complete. Senator Dave Donley wanted the special circumstances of this situation made clear on the record. He hoped that other omissions of the Office of Management and Budget would not result in an influx of similar requests in the future. DEPARTMENT OF NATURAL RESOURCES (Continued from earlier in the meeting.) DNR #10: This amendment inserts intent language directing the department to contract with appropriate entities to develop snowmobile trails, safety and education programs. The language also stipulates that funds appropriated for this purpose are not to be spent on additional staff in the department. Senator Lyda Green moved for adoption. Senator Al Adams moved to AMEND the amendment. The amended amendment directs the department to develop "rural" trails. Without discussion or objection, he WITHDREW his motion to amend the amendment. Senator Dave Donley noted that almost one-half million dollars are appropriated for rural trails in the TRAAK portion of this budget. There was no objection, and the amendment was ADOPTED. DEPARTMENT OF TRANSPORTATION AND PUBLIC UTILITIES (Continued from earlier in the meeting.) DOT #13: This amendment inserts a new section that allocates general and federal funding in specific amounts to specific AMATS projects. It also replaces three other sections relating to effective dates and stipulates that the appropriation section takes effect on the day after the Commissioner publishes public notice of a proposal to amend the STIP to reflect the specific projects indicated in this amendment. The provisions in this amendment are similar to those in DOT #14 and #15. Senator Dave Donley moved for adoption and explained this amendment is the result of joint efforts to amend the STIP to enforce legislative intent. By withholding the effective date until the appropriation provisions of the amendment are published, he hoped the projects requested by the legislature would be addressed through the public process. He stated that the process would not be delayed because the only extra work required of the department is the public notice. Senator Dave Donley clarified for Senator Al Adams's benefit that this amendment only relates the Anchorage STIP projects. The next two amendments address the CIP and TRAAK. KURT PARKAN told the Committee that the recently submitted amendments were distributed after federal highway personnel had gone home and so they had no opportunity to review the changes. However, he stressed that in principle, the provisions are inconsistent with federal regulations and could jeopardize federal funding. He explained that the state has only one vote out of five members on the AMATS Policy Committee that determines which projects will be undertaken. Therefore to stipulate that the Commissioner must insert specific projects when he did not have that authority is inconsistent with federal regulations. Senator Dave Donley moved to AMEND the amendment to insert, "the AMATS Policy Committee authorizes" on page 1 line 5 following, "the day after the". The amended amendment also changes language on line six from, "facilities publishes" to "facilities to publish" for grammatical clarification. The section now stipulates that the Commissioner must submit the amendment's specific project list for public comment after receiving authorization from the AMATS Policy Committee. Senator Al Adams pointed out that the AMATS Policy Committee has two members who are appointed by the legislature and he wondered if this amendment is to take effect before or after the next appointments are made. It was determined that the appointment legislation was not before the Committee at this time and the question went unanswered. Co-Chair John Torgerson stated that the membership of the AMATS Policy Committee has no affect on this amendment. Senator Lyda Green wanted the sponsor to explain why the provision is desired. Senator Dave Donley related that in the previous year, the Legislature had added several projects but that the AMATS Policy Committee never considered those projects. In addition he stated, the Legislature added contingent language relating to a 15th Avenue project requesting public hearings, which was also ignored. He pointed out that the reconstruction of that street displaced the Alano Club and resulted in the club's $600,000 request to the Legislature for funds to construct a new facility. He felt this and other actions demonstrated the department's disregard for legislative intent and that this amendment would require the department to participate in a public process before receiving funding. He pointed out that the amendment does not require the department to institute the appropriations made in the amendment, only to follow a public process in considering them. Senator Lyda Green asked if this amendment applies only to the initial stage of projects or if it applies to on-going projects as well. Senator Dave Donley replied that this provision applies only to the specific projects listed in this section of the bill. Senator Al Adams referred to DOT #13, #14 and #15 and wanted to know if any of the listed projects could be jeopardized, delayed or hampered because of an inconsistency with federal regulations. He was concerned that even with the amendment to the amendment, the federal funding could be delayed. Curt Parkan replied that it is conceivable that these projects could be jeopardized. However, it would be unknown until the federal highway employees could review and advise on the matter. The amendment was AMENDED by a vote of 7-2. Senator Al Adams and Senator Lyda Green cast nay votes. The amended amendment was ADOPTED by a vote of 6-3. Senator Al Adams, Senator Pete Kelly and Senator Lyda Green voted in opposition. DOT #14: This amendment inserts a new section that allocates general and federal funding of specific amounts to specific STIP (except AMATS) projects. It also replaces three other sections relating to effective dates and stipulates that the appropriation section takes effect on the day after the Commissioner publishes public notice of a proposal to amend the STIP to reflect the specific projects indicated in this amendment. The provisions in this amendment are similar to those in DOT #13 and #15. Senator Dave Donley moved for adoption. Senator Al Adams objected. Senator Dave Donley explained this amendment is a parallel amendment that deals with the Community Transportation Program (CTP) section of the STIP. He noted that the AMATS Policy Committee is not involved in these proposed projects and therefore, their participation in the public notice process is not necessary. He pointed out that this amendment includes a change to the Sitka Harbor Way Reconstruction/O'Connell Bridge project. Senator Al Adams asked, if because it is unknown whether the "public notice" stipulation will meet federal requirements for the AMATS projects, is it necessary to insert the same provision into the CTP projects. Kurt Parkan responded that the department feels the stipulation is not necessary. He commented that the stipulation requires public notice but does not necessarily require that all the proposed projects be added to the STIP. Co-Chair John Torgerson said this amendment is another attempt to force the Department of Transportation and Public Facilities to do the projects set forth in the capital budget appropriated by the legislature and signed into law by the governor. He spoke to the ranking system employed by the department pointing out that department refuses to undertake some projects even though funding is appropriated by the legislature. He stressed that this amendment requires the department to start the process by amending the STIP. He noted this is the forth year in a row such an attempt has been made. He hoped this method would be successful because the effective language cannot be vetoed from the capital bill. Senator Al Adams opposed the amendment and thought the Department of Transportation and Public Facilities did a good job with rural Alaska roads and airports. Co-Chair John Torgerson countered that the department made the same promises in rural Alaska as in urban areas that have not been followed through. He added that this project list contains some projects requested by rural legislators that have not been fulfilled. Senator Lyda Green still did not see how this amendment would accomplish the goal of making the department address specific projects. She suggested the department could publish a public notice but never follow through with changes. Co-Chair John Torgerson and Senator Dave Donley agreed that is possible, but Co-Chair John Torgerson repeated this will prevent the department from completely ignoring the legislature's directives. Senator Dave Donley explained the amendment begins the public information process for working toward an amendment in the STIP that is necessary to implement the legislative intent. He said this is an improvement of the previous year's process, which ignored the legislative intent and did not allow public comment on the changes the legislature proposed. Co-Chair John Torgerson stated that if this amendment does not work; another attempt will be made next year. The amendment was ADOPTED by a vote of 7-2. Senator Lyda Green and Senator Al Adams cast nay votes. DOT #15: This amendment inserts a new section that allocates general and federal funding of specific amounts to specific TRAAK projects. It also replaces three other sections relating to effective dates and stipulates that the appropriation section takes effect on the day after the Commissioner publishes public notice of a proposal to amend the STIP to reflect the specific projects indicated in this amendment. The provisions in this amendment are similar to those in DOT #13 and #14. Senator Dave Donley moved for adoption. Senator Al Adams objected. Senator Randy Phillips wanted to know if the department had the information he requested regarding the history of funds spent on TRAAK projects across the state. Kurt Parkan did, and the information was handed out. By a vote of 7-2, the amendment was ADOPTED. Senator Lyda Green and Senator Al Adams voted against the motion. DEPARTMENT OF ENVIRONMENTAL CONSERVATION DEC #1: This amendment replaces $10,365,868 general funds with AHFC receipts for Village Safe Water Grants. It also reduces the general fund allocation from $8,364,900 to 1,289,818 and adds $6,860,082 AHFC receipts for Municipal Matching Grant Program reducing the total appropriation to $17,949,200. Senator Sean Parnell moved for adoption. Senator Al Adams objected. Co-Chair John Torgerson explained this is a funding source change. Senator Al Adams wanted to know the impact of removing an additional $52 million from the AHFC. Annalee McConnell said she was calculating to see if this appropriation goes above the total amount available from AHFC. Co-Chair John Torgerson stated that according to the Division of Legislative Finance, it does not, but that a conforming amendment would be made to allow adjustments if necessary. Senator Al Adams removed his objection and the amendment was ADOPTED. AT EASE 9:18PM / 9:32PM DEPARTMENT OF ADMINISTRATION (Continued from earlier in the meeting.) ADM #4: This amendment adds $250,000 general funds for Bethel Courthouse Transfer. Senator Al Adams moved for adoption. Senator John Torgerson, Senator Sean Parnell and Senator Lyda Green objected. Senator Al Adams spoke to the efforts the local community made to raise a portion of the funds needed to remodel the city office building, add additional square footage and bring the building up to Y2K standards. He read a statement in support of the amendment, saying the upgrades are necessary for the operation of the Court System, Department of Corrections, Department of Law, Department of Environmental Conservation, the Recording Office and other agencies housed in the facility. He stated that the remodel would create efficiencies for the public and cost less over time for the agencies. He noted the agencies have agreed to the lease requirements with the City of Bethel. However, the cost of moving into the building is not part of the lease agreement and needs to be financed. Co-Chair John Torgerson maintained his objection. The amendment FAILED to be adopted by a vote of 1-8. Senator Al Adams voted in favor. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (Continued from earlier in the meeting.) CED #2: This amendment increases the appropriation for the Kodiak Launch Complex from $5 million to $6 million in other funds to correspond to the front section of the bill. Senator Sean Parnell moved for adoption. Co-Chair John Torgerson explained no technical adjustment was needed to this amendment as earlier mentioned. Without objection, the amendment was ADOPTED. CED #5: This amendment deletes $5,000,000 other funds for the Kodiak Launch Complex from the front section of the committee substitute. Co-Chair John Torgerson stated he would NOT OFFER the amendment, due to action taken on CED DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS CRA #1: This amendment adds $350,000 other funds for Flood Mitigation Assistance Grants. Senator Pete Kelly moved for adoption and explained this is a federal fund authorization. Co-Chair John Torgerson pointed out that this amendment is totally federal funded with no impact on the general fund. Senator Loren Leman wanted to know where the funds go and if they are spent on small projects across the state. [Inaudible answer] There was no objection and the amendment was ADOPTED. CRA #2: This amendment appropriates $75,000 general funds for Arctic Winter Games Team Alaska. Senator Randy Phillips moved for adoption. Senator Gary Wilken objected and asked what amount was funded the prior year. Senator Randy Phillips answered it was $125,000. The amendment was ADOPTED by a vote of 7-2. Senator Lyda Green and Senator Gary Wilken voted in opposition. DEPARTMENT OF NATURAL RESOURCES (Continued from earlier in the meeting.) DNR #3: This amendment was NOT OFFERRED deferring to DNR DNR #4: This amendment was NOT OFFERRED deferring to DNR DNR #8: This amendment pertaining to Perseverance Trail emergency repairs had been held earlier in the meeting. Senator Al Adams moved for adoption and noted a letter from the City and Borough of Juneau handed out by Senator Sean Parnell. Senator Sean Parnell spoke about his efforts to transfer ownership of the trail to the municipality because it is located on borough land rather than state or federal land. He stated that the legislature appropriated money for other repairs to the trail in the past with a contingency that the trail is turned over to the city upon completion. He noted the repairs were done without the use of state funds and yet the state still had ownership of the trail. He referred to the aforementioned letter where the city manager wrote, "These repairs would address the major safety concerns of this portion of the trail. In return, the city would take over ownership and maintenance of the repaired portion of the trail. Expenditure of the appropriation would be contingent upon agreement between the State and CBJ to take over ownership and maintenance.." Senator Sean Parnell stressed that this is the first time the legislature has had anything in writing from the city promising to take over ownership of the trail. He pointed out the net zero affect the amendment has on the general fund and he urged the Committee's support. Senator Sean Parnell also pointed out that the original request of $134,000 was reduced to $48,500 through the use of volunteer and donated labor and equipment secured by Trail Mix, Inc. He referred to a letter before members from Trail Mix, Inc. detailing the projected expenditures. Senator Sean Parnell added that by granting ownership to the city, the state is relieved of the responsibility of maintenance of the trail. Senator Randy Phillips wanted to know if this appropriation would take funds from other state park emergency repairs. NICO BUS, Administrative Services Manager, Division of Support Services, Department of Natural Resources, responded that the department will have to reprioritize other projects to accommodate this reduction. Senator Randy Phillips asked if he had a current priority list of the projects. Nico Bus did not. Senator Lyda Green wanted to know if another request would be made the next year before the city will assume ownership. Senator Sean Parnell said that was up to the city and the legislative body on whether to approve an additional request. He remarked that earlier requests had been denied because of the high expense and the municipality's requirement that the entire trail be repaired before accepting ownership. His intent with this amendment is to do repairs at the minimal safety level. It would be up to the legislature to decide future funding, he concluded. Senator Al Adams noted there was a representative of the city present. Co-Chair John Torgerson didn't know what capacity the representative held. CLARK GREUNING, lobbyist, spoke to his understanding of the city assembly's desire to eventually assume ownership of all downtown area trails. He also believed the intent is to one day take over responsibility for all trails located within the borough. He noted that the portion of the trail this amendment will address is a high-maintenance area that experienced a washout last fall. He spoke of the reduction in the original request made in the FY99 Supplemental budget. Co-Chair John Torgerson asked if there would be a supplemental request next year. Clark Gruening replied that a request could be submitted as part of a future capital budget for a different part of the trial and also have a transfer of ownership contingency. Nico Bus had a list of identified state park emergency repairs projects that he would make available. By a vote of 8-1, the amendment was ADOPTED. Senator Randy Phillips cast the nay vote. DEPARTMENT OF REVENUE (Continued from earlier in the meeting.) REV #1: This amendment appropriates $2,315,300 AHFC receipts, allocating $1,100,000 to Wasilla Senior Housing and $1,215,300 to Talkeetna Senior Housing. Senator Lyda Green moved for adoption. Co-Chair John Torgerson objected. Senator Lyda Green spoke to the amendment, saying it pertains to two senior housing projects in the Mat-Su Valley, which are supported by fund raising efforts. She stated that substantial amounts of money are tied to the projects and is contingent upon receipt of this AHFC funding. Some of the funds will be lost without this match, she warned. Senator Al Adams stated that he tried to obtain funding for these projects with REV #5, which funds the entire senior housing component. While he supported the Wasilla area projects, he said he didn't believe they should be singled out at the expense of the others. Senator Loren Leman asked if Senator Lyda Green knew why the cost of the facilities is so high. He thought that $200,000 per unit seems higher than it should be. Senator Lyda Green noted this amount covers the costs starting from ground zero including road access, site prep, utilities, etc. Tape: SFC - 99 #130, Side A 9:50PM The amendment FAILED to be adopted by a vote of 2-7. Senator Loren Leman and Senator Lyda Green voted in favor. UNIVERSITY OF ALASKA (Continued from earlier in the meeting.) UNV #1: This amendment was addressed earlier in the meeting and appropriates $800,000 university receipts for Juneau PE/Recreation Facility. Co-Chair John Torgerson stated he would NOT OFFER this amendment. UNV #7: This amendment was also heard earlier in the meeting and appropriates $800,000 university receipts for Juneau PE/Recreation Facility as well. Senator Al Adams moved for adoption. Senator Sean Parnell objected. Senator Al Adams said this amendment uses university receipts to finance the construction of a recreation facility. He noted similar facilities are located on the Fairbanks and Anchorage campuses and the legislature has the ability to build one in Juneau. He stressed that no general funds are used. Senator Randy Phillips asked if the program receipts are generated by the Juneau campus or statewide. Senator Al Adams believed the revenues come from the Juneau campus. Senator Randy Phillips requested a representative from the university come to the table to verify that. WENDY REDMOND, Vice President, University Relations, University of Alaska said the revenues are expected to come from student fees as is done on the other campuses. She stressed that this is a very limited facility that will house a running track and some basketball courts. Senator Dave Donley asked how $800,000 could possibly be raised in only one year. Wendy Redmond said it would not be raised in one year, that a revenue bond would be issued and additional student fees will pay for the facility for many years into the future. She added that there are a couple other funding ideas including the sale of the Bill Ray Center. Co-Chair John Torgerson remained opposed to the amendment. Senator Lyda Green asked if this amendment failed and if the Bill Ray Center were sold, would the proceeds of the sale have to fund a capital project. Wendy Redmond replied that in either case, revenues from the building sale would have to be reappropriated as university receipts. Senator Dave Donley asked how the university expected to pay for the operating costs of the recreational facility. Wendy Redmond responded that all costs are considered, including the operating costs and debt service when determining the student fees. She noted the process is the same for the Fairbanks campus and is very successful. Senator Loren Leman asked what is the fee in Fairbanks. Wendy Redmond replied the current amount charged is $75 per semester. Senator Loren Leman wanted to know if every student pays the fee or only those who used the facility. Wendy Redmond answered that everyone must pay the fee. Senator Al Adams moved to technically amend the amendment to change "general funds" to "university receipts". The amendment was AMENDED. By a vote of 3-6, the amended amendment FAILED to be adopted. Senator Loren Leman, Senator Al Adams and Senator Randy Phillips voted in favor. DEPARTMENT OF TRANSPORTATION AND PUBLIC UTILITIES (Continued from earlier in the meeting.) DOT #5: This amendment was held earlier in the meeting. It eliminates the appropriation distinctions for Trials and Recreational Access for Alaska (TRAAK) Category A: $12,528,663, Category B: $1,005,826 and Category C: $8,392,877, combines the funding into a single TRAAK appropriation of $22,175,799, and specifies certain projects and amounts to be spent on each. Senator Dave Donley moved for adoption. Senator Al Adams objected. Senator Dave Donley reminded the Committee that this amendment had been held because Senator Randy Phillips requested information from the department regarding the locations of past projects. Senator Randy Phillips had the information and was ready to take action on the amendment. The amendment was ADOPTED by a vote of 8-1. Senator Al Adams voted in opposition. CONFORMING AMENDMENTS Conform Amend #1: This amendment instructs the Division of Legislative Finance and the Division of Legal Services to make necessary technical adjustments to ensure that all back section appropriations and language conform with the front section items. Senator Sean Parnell moved for adoption. There was no objection, and the amendment was ADOPTED. Conform Amend #2: This amendment stipulates, "that any adjustment to limit the AHFC receipt appropriation to the total of $52,628,300 be made to the Sanitation Grant identified in DEC #1 as discussed. The intent is to fully fund those sanitation grants, first with AHFC receipts and second with general funds." Senator Sean Parnell read the amendment language into the record and moved for adoption. Co-Chair John Torgerson explained the purpose of the amendment is to replace general funds with AHFC receipts for the Department of Environmental Conservation water programs. Senator Sean Parnell moved to technically AMEND the amendment to change the amount to $52,638,300 and there was no objection. Without objection, the amended amendment was ADOPTED. AT EASE 10:02PM / 10:17PM Co-Chair John Torgerson verified the amendments with the Committee Secretary, the Division of Legislative Finance and the Office of Management and Budget. Everything appeared to be in order. Co-Chair John Torgerson announced the schedule for distribution of the new committee substitute, which should be available by 5:00 PM tomorrow. Co-Chair John Torgerson thanked Senator Dave Donley for his work as Subcommittee chair. He believed this added more scrutiny to the process. Co-Chair John Torgerson thanked Tracy Carpenter from the Division of Legislative Finance and Terry Cramer from the Division of Legal Services and also Llewellyn Lutchansky from his office. . Senator Sean Parnell offered a motion to move CS SB 32 (FIN) as amended from committee. Senator Al Adams objected. Senator Al Adams made a statement denouncing the Capital Budget Subcommittee process as an obscene way of doing business, especially with the removal of funds from rural areas. He took special exception to the removal of $1.2 million for the Port of Nome and the diversion of those funds into an urban project. While he believed both the Nome and Anchorage ports were good projects, he felt both should have been funded. He also criticized the elimination of the $4.8 million in federal funds for the Nondalton/Iliamna Highway. He charged that the Subcommittee process was a hidden process done behind closed doors. As a member of the Senate Minority, he could graciously accept defeat on different projects as long at the process is held in an open forum. He listed several projects that were not funded, which he felt were important and should have been addressed. These projects included supplemental housing, weatherization, senior housing, the Hutchison training center and deferred maintenance projects throughout the State Of Alaska. He also suggested that additional school projects should have been considered. For these reasons, he opposed the committee substitute. By a vote of 8-1, the bill moved from committee. Senator Al Adams voted in opposition. Co-Chair John Torgerson thanked the Senate Finance Secretary and the Senate Finance Committee Page. Co-Chair John Torgerson announced there will be no finance committee meeting tomorrow. Bills scheduled for Monday morning are SB 157, SB 169 plus others listed on the agenda. ADJOURNED Senator Torgerson adjourned the meeting at approximately 10:30 PM. SFC-99 (1) 5/7/99