SENATE BILL NO. 46 "An Act making capital appropriations and appropriations to capitalize funds; and providing for an effective date." This bill had previously been heard in the Senate Finance Committee. 9:16:44 AM Co-Chair Green noted that a revised work draft, Version 24-GS1074\Y was before the Committee for consideration. Version "Y" contains a few changes as a result of the Committee discussion on the previous work draft, Version 24-GS1074\G. Ms. Blaisdell, Co-Chair Green's capital budget aide, would explain the changes to the Committee. Amendments to Version "Y" would be addressed when the Committee reconvened at approximately 4:00 P.M. this afternoon. To that point, she asked that Committee Members provide amendments by 3:00 P.M. GINGER BLAISDELL, Staff to Senator Green, verified that the Version "Y" work draft had been distributed. Co-Chair Wilken moved to adopt committee substitute Version "Y" as the working document. Co-Chair Green objected for explanation. Ms. Blaisdell explained the changes contained in Version "Y". Pages one through 74 include the individual agency requests for projects that would be typically included in a Capital Budget. Governor Frank Murkowski originally submitted the majority of those requests. She pointed out that a large component of the bill is dedicated to named recipients grants and grants to communities. The majority of those are requests of Legislators. Some of those requests might be separately included under specific Departments such as the Department of Transportation and Public Facilities. Ms. Blaisdell characterized pages 75 through 90 as being "the contingent section" of the bill that would finance SB 155 education projects. That section would be unfunded were SB 155 adopted; however, were SB 155 to fail, its education projects would be funded from the general fund. Ms. Blaisdell stated that approximately $60,000,000 of Amerada Hess interest earnings would be appropriated to the projects identified in Sec. 6 on page 91. There is also an additional section pertaining to the Capital Income Account. However, she noted that that Account must be established prior to enacting the language included in Sec. 6. Co-Chair Green noted that the Capital Income Account, which is addressed in SB 187, would be heard during today's Committee meeting. Ms. Blaisdell continued that Sec. 7 on page 91 would provide the authorization for Legislative Budget & Audit and other general provisions that are typically included in Capital Appropriation Budgets. 9:20:21 AM Ms. Blaisdell stated that language in Sec. 13 pages 93 through 106 would address the supplemental appropriations that were originally presented in SB 97. 9:20:54 AM Ms. Blaisdell identified that language in Sec. 13 differs from that of the previous version of the bill. Sections 13(f) and 13(g) on page 93 would provide two appropriations to the Division of Retirement and Benefits, Department of Administration, for work relating to SB 141. 9:21:27 AM Ms. Blaisdell informed the Committee that due to a drafting error, a correction must be made in Sec. 20, page 96, lines 17 and 18. The language reading "the sum of $34,563,300 is appropriated from the general fund to the Alaska Debt Retirement Fund" should be deleted from the bill. Ms. Blaisdell noted that language referring to the Alaska Gas Pipeline appropriations is located on page 21 of the bill. That language would mirror the language contained in the previous work draft. Ms. Blaisdell noted that language in Sec. 35, subsection (d), page 106, lines 12 through 14, pertaining to the Expenditures by the Department of Commerce, Community and Economic Development for the ratification of the Qualified Trade Association contract, differs from the language in the previous work draft. Ms. Blaisdell stated that Sec. 36, pages 106 through 119, would begin the reappropriation language in the bill. Any appropriations that might be lapsing would be addressed in this section. 9:23:35 AM Ms. Blaisdell noted that Sec. 52 pages 119 through 122, beginning with the Department of Administration, would also address reappropriations. This language is identical to the language that was forwarded in SB 97, the supplemental bill. Ms. Blaisdell continued that Sections 60 and 61, page 122, would pertain to the provisions of the Capital Income Fund. A number of calls and emails were received "regarding the necessity of having" these sections in the bill. Were the Capital Income Fund bill adopted, this provision must be included, as absent it, existing language would mandate that the funds go to Permanent Fund rather than the Capital Income Account. 9:24:51 AM Co-Chair Green understood therefore that this language would be "null and void" were SB 187 to fail. Ms. Blaisdell concurred. This concluded the explanation of the committee substitute. Senator Hoffman asked for assistance in locating the agency requests for $825,000 for the Bethel Courthouse; the $233,900 Department of Health and Social Services request for the security system for the Bethel Youth Facility; the one million dollar Department of Commerce, Community and Economic Development request for the Bethel Learning Center; and the one million dollar federal receipt request for the Department of Natural Resources coastal wetlands grant. He asked whether these or any other agency requests might have been excluded in this version of the bill. 9:26:53 AM Ms. Blaisdell responded that the Governor had originally proposed the use of Amerada Hess bonds as the funding mechanism for the Bethel Courthouse project. Due to the fact that the Legislature has not passed a bond bill, efforts were made to identify other fund sources to support as many of the Amerada Hess funded projects as possible. No funds to support the Bethel Courthouse project were identified. She stated that further review of the funding relating to the Department of Health and Social Services request for enhanced security for the Bethel Youth facility would be required. Senator Hoffman pointed out that the security needs of the Bethel Youth Facility were identified by the Department of Health and Social Services as being its number one priority. 9:27:38 AM Ms. Blaisdell stated that further review of that funding request would be undertaken. Ms. Blaisdell communicated that no funds were identified to replace the Amerada Hess funding to support the Bethel Learning Center. Senator Hoffman clarified that the original funding for the Bethel Learning Center was general funds Ms. Blaisdell responded therefore, that the decision was made to not fund that facility. Choices had to be made in light of limited general funds. 9:27:58 AM Senator Hoffman asked regarding the decision to exclude the one million dollars federal receipts request for the Department of Natural Resources coastal wetlands grant. Ms. Blaisdell responded that, while no State general funds would be required, three similar federally funded projects were removed from the capital budget. The decision to remove those projects was a policy call, as further understanding pertaining to the use of the land and the impact that accepting those federal funds might incur on the Alaska Department of Natural Resources and its management of that land would be desired. Senator Hoffman requested that, at some future point in time, the Department of Natural Resources could testify in regards to that concern. He ascertained that absent this endeavor, more problems could occur in these areas; specifically in regards to land that is held privately. Acquiring land, with the assistance of these federal grants, could assist in averting problems being experienced with privately held lands, for example, with the Chignik Dip Net Fishery. 9:30:07 AM Co-Chair Green asked Senator Hoffman whether he was a member of the Committee's Natural Resources subcommittee. Senator Hoffman replied in the negative. 9:30:19 AM Co-Chair Green recalled that that subcommittee had raised questions regarding "the line of command" and other procedures associated with this funding. Further information would be sought. Senator Hoffman noted that, based upon the forthcoming information, an associated amendment might be developed. He requested that the Department of Natural Resources be present to respond to questions in this regard. Co-Chair Green reminded the Committee that amendments would be considered during the afternoon hearing on this bill. 9:31:22 AM Ms. Blaisdell requested that amendments be submitted in written form rather than through telephonic or email communication. Co-Chair Green asked Ms. Blaisdell whether the written amendments should be provided prior to the 4:00 PM hearing. Ms. Blaisdell responded that that would be welcome, time permitting. Senator Hoffman remarked that he was targeting noon as his amendment submittal deadline. [NOTE: the Version "Y" committee substitute was formally adopted after the following At Ease.] Co-Chair Green ordered the bill HELD in Committee. AT EASE 9:32:40 AM / 9:36:06 AM SENATE BILL NO. 46 "An Act making capital appropriations and appropriations to capitalize funds; and providing for an effective date." The bill was again before the Committee. Co-Chair Green removed her objection to adopting the committee substitute. There being no further objection, Committee Substitute Version "Y" was adopted as the working document. The bill was HELD in Committee. [NOTE: Additional action on this bill was conducted later in the meeting. See Time Stamp 5:00:22 PM.] 9:36:22 AM SENATE BILL NO. 46 "An Act making capital appropriations and appropriations to capitalize funds; and providing for an effective date." The bill was heard earlier in the meeting and was held to allow Committee members to prepare amendments to the Version "Y" committee substitute. Amendment #1: This amendment inserts a new Alaska Native Heritage Center component to the Grants to Named Recipients (AS 37.05.316) Budget Request Unit (BRU) of the Department of Commerce, Community and Economic Development on page 3, lines 30 and 31. This amendment also appropriates $500,000 general funds to the component. Senator Dyson moved for adoption. Co-Chair Green objected. Senator Dyson expounded on the Alaska Native Heritage Center and its displays depicting "all the major cultural aboriginal groups in Alaska." The Center is utilized for education purposes of the history and heritage of Alaska's first people. This funding would be utilized to upgrade existing exhibits and construct new exhibits to display artifacts currently held in storage. He understood this funding had been included in the Governor's FY 06 capital budget request. Co-Chair Green maintained her objection. 5:02:13 PM Senator Olson furthered that the Center has received funding from private sources and that the funding requested in this amendment is necessary to complete the project. Co-Chair Wilken commented that the Center is a benefit. However when initially funded, the intent was expressed that the facility would be self-supporting. A roll call was taken on the motion. IN FAVOR: Senator Hoffman, Senator Dyson, Senator Hoffman OPPOSED: Co-Chair Green Co-Chair Wilken, Senator Stedman ABSENT: Senator Bunde The motion FAILED (3-3-1) The amendment FAILED to be adopted. Amendment #2: This amendment inserts a new Local Boundary Commission, Chugiak Eagle River Detachment Study (HD [house district] 17-18) component to the Grants to Named Recipients (AS 37.05.316) BRU of the Department of Commerce, Community and Economic Development on page 3, lines 30 and 31. This amendment also appropriates $50,000 general funds to the component. Senator Dyson moved for adoption. Co-Chair Green objected. Senator Dyson explained that the community of Eagle River wished to organize but need a study conducted to determine whether it would be economically viable. An analysis was conducted the previous year but the funding was insufficient to provide a complete assessment. 5:05:21 PM Co-Chair Green asked the legislators requesting this. Senator Dyson listed himself, Representative Bill Stoltze, Senator Con Bunde and Representative Mike Hawker. Co-Chair Green asked the amount of funding remaining from the earlier effort. Senator Dyson answered $25,000. Co-Chair Green commented against the additional allocation. A roll call was taken on the motion. IN FAVOR: Senator Dyson, Senator Hoffman, and Senator Olson OPPOSED: Senator Stedman, Co-Chair Wilken, and Co-Chair Green ABSENT: Senator Bunde The motion FAILED (3-3-1) The amendment FAILED to be adopted. 5:06:54 PM Amendment #3: This amendment inserts a new Arctic Winter Games Team Alaska component to the Grants to Named Recipients (AS 37.05.316) BRU of the Department of Commerce, Community and Economic Development on page 3, lines 30 and 31. This amendment also appropriates $250,000 general funds to the component. Senator Olson moved for adoption. Co-Chair Green objected. Senator Olson described the international competition comprised of contestants from urban and rural communities. AT EASE: 5:07:56 PM / 5:08:35 PM Co-Chair Green noted the two groups seeking funding for the Games. She asked whether this amendment would provide funding for preparations to hold the event in Kenai or for expenses associated with the team representing the State. Senator Olson answered that this money would support the Alaska team itself. Co-Chair Green commented that a request for this purpose had not been submitted earlier. Co-Chair Wilken agreed that no representative of the Games had approached the legislature prior to this. He would not support the amendment, as more effort should have been made. A roll call was taken on the motion. IN FAVOR: Senator Hoffman, Senator Olson, and Senator Dyson OPPOSED: Co-Chair Wilken, Senator Stedman, and Co-Chair Green ABSENT: Senator Bunde The motion FAILED (3-3-1) The amendment FAILED to be adopted. Amendment 4A: This amendment inserts a new African American Historical Society Juneteenth Celebration component to the Grants to Named Recipients (AS 37.05.316) BRU of the Department of Commerce, Community and Economic Development on page 3, lines 30 and 31. This amendment also appropriates $30,000 general funds to the component. Accompanying explanatory language reads as follows. This would help fund the capital costs for the celebration of Juneteenth. The grant would provide funding for the tents, shelters, display units, exhibits, equipment and supplies necessary to continue their educational objectives during this public outreach celebration. This amendment also reduces the appropriation to the Department of Commerce, Community and Economic Development, Grants to Municipalities (AS 37.05.315) BRU, Muldoon Road, Tudor Road Sound Barrier Fence (HD 17-32) component on page 24, lines 3 - 6 from $600,000 general funds to $590,200 general funds. Accompanying explanatory language reads as follows. This project will construct a sound barrier fence between a major arterial street and local neighborhoods. (Project design has been funded and construction could occur in 2005.) Senator Hoffman moved for adoption. Co-Chair Green objected. Senator Hoffman explained that the African American Historical Society hosts the Juneteenth Celebration on the third Saturday in June to commemorate the abolition of slavery in the United States. This event has been celebrated in Anchorage for 30 years. 5:12:20 PM Senator Hoffman continued that the Society exists to promote and preserve the historical recognition and culture of the African Americans living in Alaska. Co-Chair Green maintained her objection. A roll call was taken on the motion. IN FAVOR: Senator Hoffman and Senator Olson OPPOSED: Senator Stedman, Senator Dyson, Co-Chair Wilken, and Co- Chair Green. ABSENT: Senator Bunde The motion FAILED (2-4-1) The amendment FAILED to be adopted. 5:14:24 PM Amendment 4B: This amendment inserts a new Russian Jack Elementary School Computer & Library Book Purchase component to the Grants to Named Recipients (AS 37.05.316) BRU of the Department of Commerce, Community and Economic Development on page 3, lines 30 and 31. This amendment also appropriates $20,000 general funds to the component. Accompanying explanatory language reads as follows. This funding would be used to purchase Apple eMacs to replace older machines, which cannot run today's powerful educational software. This would also be utilized for the purchase of more books and materials to upgrade their library collection. Senator Hoffman moved for adoption and overviewed the explanation statement. There being no objection, the amendment was ADOPTED. AT EASE: 5:14:48 PM / 5:15:07 PM 5:15:43 PM Amendment #5: This amendment increases the general fund allocation to the Department of Commerce, Community and Economic Development, Grants to Named Recipients (AS 37.05.316) BRU, Alaska Siberia Research Center, Inc. - Alaska Siberia WWII Memorial Park Construction (HD 7-11) component on page 4, lines 8 - 11 from $40,000 to $65,000. Accompanying explanatory language reads as follows. In the 5/2/05 work draft Version "F" there was $65,000 appropriated to the project which funds the Lend Lease Memorial Park project. In the 5/3/05 work draft Version "Y" this funding was reduced to $40,000 due to a technical drafting error by the legislative finance division. This amendment simply corrects this drafting omission. Co-Chair Wilken moved for adoption. Co-Chair Green objected for an explanation. Co-Chair Wilken explained the drafting error this amendment would correct. Without further objection, the amendment was ADOPTED. 5:17:01 PM Amendment #6: This amendment increases the general fund allocation to the Department of Commerce, Community and Economic Development, Grants to Named Recipients (AS 37.05.316) BRU, Mary Magdalene Home Alaska, Inc. - Transitional Housing Program Facilities (HD 17-32) on page 6 lines 30 - 33 from $250,000 to $263,500. Senator Dyson moved for adoption. Co-Chair Green objected for an explanation. Senator Dyson reminded that when the decision was made to not fund a separate project, $13,000 remained unallocated. This amendment would appropriate that amount to the Mary Magdalene Home project. Co-Chair Green asked if this addition would bring the total funding to the "discretionary amount" requested. Senator Dyson replied that it would not, as the $250,000 proposed appropriation is $50,000 less than requested. There being no further objection, the amendment was ADOPTED. 5:18:21 PM Amendment #7: This amendment increases the general fund allocation to the Department of Commerce, Community and Economic Development, Grants to Named Recipients (AS 37.05.316) BRU, Midnight Sun Council, Boy Scouts of America - Boy Scout Food Service component on page 7 lines 3 - 6 from $40,000 to $60,000. Accompanying explanatory language reads as follows. In the 5/2/05 work draft Version "F" there was $80,000 appropriated to the project. In the 5/3/05 work draft Version "Y" this funding was reduced to $40,000 due to a technical drafting error by the legislative finance division. This amendment simply corrects this drafting omission. Co-Chair Wilken moved for adoption and outlined the explanatory statement. The amendment was ADOPTED without objection. 5:18:57 PM Amendment #8: This amendment inserts a new Municipality of Anchorage - Anchorage School District/Eagle River High School Traffic Control & Turn Lanes (Veterans Memorial Highway) (HD 16- 18,32) component to the Grants to Municipalities (AS 37.05.315) BRU of the Department of Commerce, Community and Economic Development on page 8, lines 11 and 12. This amendment also appropriates $950,000 general funds to the component. Senator Dyson moved for adoption. Co-Chair Green objected. Senator Dyson informed that the allocation for this project should be to the Department of Transportation and Public Facilities rather than the Municipality of Anchorage. This project would be necessary once the high school is constructed, as the current road system would be "very dangerous". Co-Chair Green asked the location of the proposed project. Senator Dyson described the location of the school located in the election district represented by Senator Bunde. Co-Chair Green asked if this project could be included in another project planned for the Veterans' Memorial Highway. Senator Dyson replied it could not, as the other project is located north of this location. 5:21:45 PM Co-Chair Green asked the reason this funding request had not been submitted earlier. Senator Dyson attributed the delay to the number of other Department of Transportation and Public Facilities project funding requests. Co-Chair Green removed her objection to the adoption of the amendment with the understanding that the exact location of the proposed project is specified in the legislation. Co-Chair Green offered a friendly amendment to the amendment to appropriate the funding to the Department of Transportation and Public Facilities and make necessary conforming changes. There being no objection from the sponsor, the amendment was AMENDED. Without further objection Amendment #8, as amended, was ADOPTED. AT EASE 5:23:55 PM / 5:24:33 PM Amendment #9: This amendment inserts a new Bristol Bay Borough Community Matching Project component to the Grants to Municipalities (AS 37.05.315) BRU of the Department of Commerce, Community and Economic Development on page 8, lines 11 and 12. This amendment also appropriates $150,000 general funds to the component. This amendment also increases the general fund appropriation to the Department of Commerce, Community and Economic Development, Grants to Municipalities (AS 37.05.315) BRU, City of Unalaska - Boat Harbor (HD 37) component on page 13 lines 3 and 4 from $2 million to $4 million. This amendment also adds a new Togiak/Twin Hills Bridge Feasibility Study component to the Department of Transportation and Public Facilities and appropriates $150,000 general funds to the component. This amendment also increases the allocation to the Cold Bay Access Improvements (HD 37) component of the Surface Transportation Improvements BRU, Department of Transportation and Public Facilities, on page 58, lines 30 and 31 from $2 million to $2.5 million. This amendment also increases the general fund allocation to the Department of Education and Early Development, School Construction Grant Fund (AS 14.11.005) BRU, Dillingham Middle/High School construction and renovation - Dillingham City Schools (HD 38) component on page 83 lines 14 - 17 from $7 million to $9.5 million. Co-Chair Green moved for adoption. Co-Chair Green then offered a friendly amendment to the amendment to change "Bristol Bay Borough Community Matching Project" component to read "Bristol Bay Borough Community Mapping Project." This amendment to the amendment also deletes additional $500,000 general fund allocation to the Cold Bay Access Improvements component. This amendment to the amendment also adds a new Aleutians East Borough - Cold Bay Airport Terminal component to the Grants to Municipalities (AS 37.05.315) BRU, Department of Commerce, Community and Economic Development and appropriates $500,000 general funds to the component. AT EASE 5:25:29 PM / 5:26:20 PM Co-Chair Green continued to outline the friendly amendment to the amendment. Without objection the amendment was AMENDED. Senator Stedman objected to the amended amendment for further information on the City of Unalaska - Boat Harbor component. Co-Chair Green informed that upon review, this amount was included in an earlier committee substitute. Co-Chair Wilken asked whether the project expansion of the Little South America Boat Harbor. Senator Hoffman understood it was. Co-Chair Green noted the Members have discussed this project previously. There being no objection, Amendment #9 as amended was ADOPTED. 5:28:10 PM Amendment #10: This amendment adds a LKSD - The Peoples Learning Center component to the Department of Commerce, Community and Economic Development [BRU not specified] and appropriates $100,000 general funds to the component. Accompanying explanatory language reads, "Restores the Governor's original capital budget request." Senator Hoffman moved for adoption. Senator Hoffman reminded the Committee of the residential technical education facility located in Bethel. The amount of secured funds for this project total $15 million. Approximately $4 million additional funding is needed, although funding sources of most of the amount have been identified. This project is a collaboration of the City of Bethel, the Yukon-Kuskokwim Health Corporation, the Association of Village Council Presidents, the Chalista Corporation, the Alaska National Guard, the Lower Kuskokwim School District, the University of Alaska Kuskokwim Campus, the Regional Housing Authority, and the Coastal Village Regional Fund. 5:29:45 PM Co-Chair Green informed the Committee that this item was included in the Governor's proposed budget. There was no objection and Amendment #10 was ADOPTED. 5:30:19 PM Amendment #11: This amendment deletes the City of Hope - Community Safety and Development (HD 17-32) component of the Grants to Municipalities (AS 37.05.315) BRU, Department of Commerce, Community and Economic Development and $25,000 general fund appropriation on page 10, lines 18 - 20. This amendment also inserts a new Hope, Inc. - Community Safety and Development (HD 17-32) component to the Grants to Named Recipients (AS 37.05.316) BRU in the Department of Commerce, Community and Economic Development and appropriates $25,000 general funds to the component. Accompanying explanatory language reads as follows. The original request was made to "Hope, Inc.". During drafting, the name was changed to "City of Hope" and moved to "Grants to Municipalities. After discussion with the grants administrator at the Division of Community Advocacy, the original name "Hope, Inc.) was determined to be the correct one. Co-Chair Wilken moved for adoption. Co-Chair Green overviews the explanatory statement. The amendment was ADOPTED without objection. 5:31:01 PM Amendment #12: This amendment changes the title of the City of Homer - Homer Public Library Materials component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 10, lines 13 - 15 to "City of Homer - Public Library Construction". The $100,000 general fund appropriation does not change. Co-Chair Green moved for adoption and explained the language correction. There being no objection, Amendment #12 was ADOPTED. AT EASE 5:31:41 PM / 5:31:41 PM Amendment #13: This amendment deletes the Denali Borough - Anderson School/Septic Leach Field Replacement (HD 7-11) component and the Denali Borough - Cantwell School/Sprinkler System Fire Upgrade and New Well (HD 7-11) component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 10, lines 17 - 23. This amendment also increases the general fund appropriation to the Alaska Siberia Research Center, Inc. - Alaska Siberia WWII Memorial Park Construction (HD 7-11) component of the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 4, lines 8 - 11 from $40,000 to $105,200. This amendment also increases the general fund appropriation to the Morris Thompson Cultural and Visitors Center - Construction component of the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 7, lines 11 - 13 from $200,000 to $300,000. This amendment also inserts a new Ester - Volunteer Fire Department component to the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development and appropriates $125,000 general funds to the component. Accompanying explanatory language reads as follows. Partial funding for the Anderson School/Septic Leach Field Replacement and the Cantwell School/Sprinkler System Fire Upgrade and New Well projects totals $260,200 are deleted in this amendment. Full funding for these two projects are contained on page 77, lines 24 - 31 of the work draft. This amendment reallocates the $260,200 to the following three projects: Alaska Siberia Research Center $ 35,200 Morris Thompson Cultural Center 100,000 Ester Volunteer Fire Department 125,000 Co-Chair Wilken moved for adoption. Co-Chair Green objected. Co-Chair Wilken overviewed the amendment, which he sponsored on behalf of Senator Ralph Seekins. This amendment would have a net zero impact. AT EASE 5:32:34 PM / 5:32:57 PM The amendment was ADOPTED without objection. 5:33:21 PM Amendment #14: This amendment changes the title of the Kenai Peninsula Borough - Mobile Hydration Unit (HD 33-35), Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 14, lines 28 - 30 to read "Kenai Peninsula Borough/Bear Creek Fire Service Area - Mobil Hydration Unit (HD 33- 35)". The $71,500 general fund appropriation remains unchanged. Co-Chair Wilken moved for adoption on behalf of Senator Gary Stevens. There was no objection and Amendment #14 was ADOPTED. 5:33:36 PM Amendment #15: This amendment deletes the Kenai Peninsula Borough - Refurbish Kachemak Fire Truck (HD 33-35) component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development and $100,000 general fund appropriation on page 15, lines 9 - 11. Co-Chair Wilken moved for adoption of the amendment on behalf of Senator G. Stevens. The amendment was ADOPTED without objection. 5:34:02 PM Amendment #16: This amendment changes the title of the Kenai Peninsula Borough - Road Access to Utilities to Senior Housing Site (HD 33-35) component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 15, lines 12 - 16 to read "Kenai Peninsula Borough/Cooper Landing Senior Citizens Corp., Inc. - Road Access to Utilities to Senior Housing Site (HD 33-35)". The $71,000 general fund appropriation remains unchanged. Co-Chair Wilken moved for adoption. Without objection the amendment was ADOPTED. 5:34:17 PM Amendment #17: This amendment changes the title of the Kenai Peninsula Borough - Water Tender (HD 33-35), Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 15, lines 19 and 20 to read "Kenai Peninsula Borough/Kachemak Emergency Service Area - Water Tender (HD 33-35)". The $75,000 general fund appropriation remains unchanged. Co-Chair Wilken moved for adoption. There being no objective Amendment #17 was ADOPTED. 5:34:29 PM Amendment #18: This amendment changes the title of the Municipality of Anchorage - Anchorage School District/Gladys Elementary Supplies (HD 17-32) component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 18, lines 19-22 to read ?"Gladys Wood Elementary Supplies". The $10,000 general fund appropriation remains unchanged. This amendment also changes the Municipality of Anchorage - Kincaid Park Summer and Winter Recreational Improvements, Fields, Paving and Equipment (HD 17-32) component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 23, lines 18 - 23 to be a new component titled Kincaid Park Project Group - Kincaid Park Summer and Winter Recreational Improvements, Fields, Paving and Equipment (HD 17-32). The $480,000 general fund appropriation remains allocated to the project. This amendment also changes the Municipality of Anchorage - South Anchorage Sports Complex Ball Fields (HD 17-32) component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 24, lines 19 - 22 to be a new component titled American Legion Baseball Association - South Anchorage Sports Complex Ball Fields (HD 17-32). The $450,000 general fund appropriation remains allocated to the project. Co-Chair Green moved for adoption and explained the technical corrections. There being no objection Amendment #18 was ADOPTED. 5:35:12 PM Amendment #19: This amendment inserts a new bill section to read as follows. Sec. XX. DEPARTMENT OF FISH AND GAME. The sum of $50,000 is appropriated from the general fund to the Department of Fish and Game, Boars of Fisheries and Game, for Board of Game activities related to review of Tier II subsistence proposals for the fiscal year ending June 30, 2005. Co-Chair Wilken moved for adoption. Co-Chair Green objected for an explanation. Co-Chair Wilken read the language of the amendment and informed that Board of Game member, Ron Summerville, brought this request to his attention. Senator Dyson objected for further discussion. Committee Members were told that appropriations in this budget would be limited to construction projects and that funding for studies would not be considered. While he considered this proposed study to be valid and appropriate, he asked the criterion in determining which studies would receive funding. Senator Hoffman requested an explanation of what the proposed review is expected to accomplish. 5:36:47 PM MATT ROBUS, Director, Division of Wildlife Conservation, Department of Fish and Game, testified this item is actually a FY 05 supplemental budget request. The Board of Game, with assistance from the Department, is developing a system to improve the Tier II permit process for subsistence hunting. The Board determined that a series of public hearings held in various areas of the State should be held to inform people of the proposed changes and to receive input before final action is taken at the March 2006 Board of Game Meeting. This amendment would fund the expenses of holding these hearings. Senator Stedman asked if this item should be included as a capital project. 5:38:27 PM GINGER BLASDELL, Staff to Co-Chair Green, testified that the amendment would be included in the portion of this legislation that provides FY 06 supplemental appropriations. Similar amendment would be offered. Co-Chair Green stated the method of including supplemental capital appropriations in the following fiscal year capital budget is a historical practice. 5:39:27 PM Senator Hoffman asked whether the hearings could be completed by June 30, 2005, the end of the fiscal year. 5:39:37 PM Mr. Robus informed that the hearings had already been held and the expenses incurred. Final action was not taken at the March Board Meeting, as all considerations were not resolved. An additional Board of Game meeting is scheduled for June 2005 to continue the process. Co-Chair Green noted that this funding request would have been submitted as a FY 05 operating budget supplemental item if the need had been identified earlier. Senator Olson asked if hearings would be held at locations within the election district he represents. Mr. Robus replied that the proposed changes would be specific to the moose and caribou subsistence hunts in the Nelchina Basin of Southcentral Alaska. Therefore, the hearings have been primarily held in that region. Most of the State-issued subsistence hunting permits are granted for these hunts and the majority of controversies are centered in this area. If successful, the new system could serve as a pilot project for Tier II hunting in other areas. Senator Stedman objected to the adoption of this amendment. Senator Olson asked if additional travel would be planned for the following year. Mr. Robus was unsure. The intent is that regulations would be adopted at the June meeting. Senator Stedman removed his objection. Senator Dyson removed his objection. Without further objection, Amendment #19 was ADOPTED. 5:42:15 PM Amendment #20: This amendment inserts a new National Coastal Wetland Conservation Grant - Snyder Parcel component to the Department of Fish and Game on page 35 and appropriates $310,000 Other Funds to the component. Accompanying explanatory language reads as follows. The Snyder parcel is 135 acres of undeveloped wetland habitat on the Gustavus forelands. The parcel is used by waterfowl and shorebirds and provides important habitat for sandhill cranes. It adjoins the Dude Creek Critical Habitat Area (CHA), designated for the protection of sandhill crane habitat, and is of interest to the Department of Fish and Game as a potential addition to the CHA. Funding for the acquisition will come from a third National Coastal Wetland grant, and private donations. Title to the property will ultimately rest with the state. The federal grant will have a $104,000 match (25%) provided by The Nature Conservancy (TNC). Acquisition of this parcel is the third and final phase of the most biologically sensitive and least developable lands in Gustavus; it will purchase approximately 135 acres. This is a private parcel; the owner, John Snyder, contacted TNC with an offer to sell. The lands will be managed to complement adjacent habitats including the Dude Creek CHA. A further management objective is to allow continues public use of the lands for hunting, fishing, and recreation to the extent those uses are consistent with the goal of protecting wetlands and wildlife habitat. Senator Hoffman moved for adoption. He outlined the explanatory statement, pointing out that general funds would not be used. There being no objection Amendment #20 was ADOPTED. 5:43:23 PM Amendment #21: This amendment adds a new Bethel Youth Facility Security Improvements component to the Department of Health and Social Services on page 26 and appropriates $233,900 general funds to the component. Senator Hoffman moved for adoption of Amendment #21 and explained the need for these improvements. Co-Chair Green remarked that the proposed security improvements are a worthy project. There being no objection Amendment #21 was ADOPTED. 5:44:20 PM Amendment #22: This amendment increases the allocation to the Bethel Readiness Center New Construction - Phase 2 (HD 38) to the Department of Military and Veterans Affairs on page 38 and appropriates $8,062,500 federal funds and $2.5 million general funds to the component. Accompanying explanatory language reads as follows. The Governor had funded the $2.5 million match with ASLC [Alaska Student Loan Corporation] funds that were denied in this version of the capital budget. $1 million in other funds were kept but is not enough to match the $8,062,500 federal funds. This amendment adds the additional $1 million the Governor requested. Senator Hoffman moved for adoption and stressed that the Bethel Readiness Center is a very important project to the region. Co-Chair Green clarified that $8 million in federal funds would be received for this project. The amendment was ADOPTED without objection. 5:45:31 PM Amendment #23: This amendment adds a new Forest Legacy Federal Grant Program component to the Department of Natural Resources and appropriates $630,000 federal funds. Accompanying explanatory language reads as follows. These federal receipts have been approved under the Forest Legacy Federal Grant Program for a conservation easement for Aleknagik Natives Limited for over 20,000 acres of their land within Wood-Tikchik State Park, which includes both banks of the Agulowak River, a major salmon spawning area, and approximately 32 miles of shoreline along Lakes Aleknagik and Nerka. The Native allotments are in prime locations in the southern half of the park. Wood-Tikchik State Park is near the town of Dillingham in Southwest Alaska. The Governor's original budget request included $2,930,963 for three projects, which was not included in the work draft CS (FIN) for SB 46. The federal government has just completed their review of the project request and has approved $630,000 in funding to begin phase one for one of the projects, with the initial phase to begin in FY 06, resulting in this amended request. The other projects were not approved in this budget year. Senator Hoffman moved for adoption and overviewed the explanatory statement. There being no objection Amendment #23 was ADOPTED 5:46:33 PM AMENDMENT #24: This amendment adds a new Coastal Wetlands Grant - Nushagak Bay Watershed, phase 2 component to the Department of Natural Resources and appropriates $1 million federal receipts to the component. Senator Hoffman moved for adoption and noted this item was included in the Governor's FY 06 budget request. There being no objection Amendment #24 was ADOPTED. 5:47:16 PM Amendment #25: This amendment adds a new Petersburg North Harbor Deferred Maintenance and Transfer (HD 5) component to the Department of Transportation and Public Facilities, with intent language, and appropriates $2.5 million general funds to the component. The intent language reads as follows. It is the intent of the Legislature that the City of Petersburg enters into an agreement with the Department of Transportation and Public Facilities to accept full responsibility for ownership and maintenance of the North Harbor at the time of transfer. Senator Stedman moved for adoption, noting this item relates to the process of transferring ownership of boat harbors from the State to local municipalities. Funding for this transfer had been included in the Governor's proposed FY 06 budget utilizing a different fund source. AT EASE 5:48:20 PM / 5:49:08 PM Co-Chair Green remarked that the intent language is clear in stipulating that the City of Petersburg would assume ownership and responsibility for maintenance and repairs. There being no objection Amendment #25 was ADOPTED. 5:49:34 PM Amendment #26: This amendment corrects the House District designation of the Craig Roads component in the Congressional Earmarks BRU, Department of Transportation and Public Facilities on page 65, line 19 to reflect the project's location in House District 5. The $1 million allocation remains unchanged. Co-Chair Wilken moved for adoption. Co-Chair Green explained the technical change. There being no objection Amendment #26 was ADOPTED. 5:50:00 PM Amendment #27: This amendment inserts a new Bethel Courthouse Improvements component to the Alaska Court System and appropriates $825,000 general funds to the component. Accompanying explanatory language reads as follows. This capital request is one piece of two-part fix for the Bethel court facility. The second piece is a $92,000 operating budget increment to cover increased costs associated with additional space. This has been funded in both the Senate and House operating budgets. The court system currently rents 10,000 s.f. from the City of Bethel. The operating component will provide increased rent for an additional 2,600 s.f. to be constructed by the City. This capital component will allow the court system to make tenant improvements to the existing space. Bethel is a high-volume superior court location. Even though the population of the area is less than 20% of the population of Fairbanks, it had about 80% as many felony cases. Even though it is much smaller than either Palmer or Kenai, last year it had almost as many civil jury trials as Palmer and Kenai put together. This court has two superior court judges and two magistrates, and a judge from Fairbanks is frequently there to help with the caseload. In addition, the House and Senate operating budgets have approved an upgrade of one magistrate position to a district judgeship. However, the Bethel Courthouse currently has only one superior courtroom, one district courtroom (with room for only a six member jury), and a small hearing room. Moreover, the remainder of the space is inadequate. Changes proposed include adding two superior courtrooms, expanding and soundproofing the cramped jury deliberation room, fixing a number of security issues (for example, in-custody felony defendants must currently be transported through public areas), creating magistrate and law clerk offices, and expanding the clerk's office. The FY 06 request is for bid document preparation, project management and construction. Senator Hoffman moved for adoption and overviewed the explanatory statement. Co-Chair Green shared that she has received several telephone calls regarding this project. There being no objection Amendment #27 was ADOPTED. 5:50:55 PM Amendment #28: This amendment reduces the general fund appropriation to the Kenai Peninsula College Student Housing (HD 33-35) component of the University of Alaska on page 89, lines 4 and 5 from $7.5 million to $6 million. This amendment also reduces the general fund appropriation to the Kodiak College Vocational Technology Addition Phase I - Kodiak Island Borough (HD 36) of the University of Alaska, on page 89, lines 6 - 9 from $10 million to $8.5 million. This amendment also inserts a new Kachemak Bay Campus Addition component to the University of Alaska and appropriates $3 million. Co-Chair Wilken moved for adoption. Co-Chair Green explained the amendment noting it would have a net zero fiscal impact to the FY 06 budget. Senator Stedman clarified the affected campuses of the Kenai Peninsula College, the Kodiak College, and Kachemak Bay. There being no objection Amendment #28 was ADOPTED. 5:51:52 PM Amendment #29: This amendment deletes the Fairbanks Area, University Avenue/Geist Road/Johansen intersection project and the $3.5 million Alaska capital income fund appropriation to the project from Section 6. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES., on page 91, lines 7 and 8. This amendment also inserts a new Fairbanks, Wilbur Street Extension project in to Section 6 and appropriates $1.1 million to the project. This amendment also inserts a new Fairbanks, 2nd Avenue, Moore Street Realignment and New Airport Way Intersection project in to Section 6 and appropriates $2,550,000 to the project. Accompanying explanatory language reads as follows. These two projects are on the FMATS [Fairbanks Metropolitan Area Transportation Study] priority list and will work together with the currently funded upgrade of 2nd Avenue and Wilbur Street to fund all planned access/egress projects related to the Carlson Center/Growden Park/Fish Hatchery complex area. Co-Chair Wilken moved for adoption. Co-Chair Green objected. Co-Chair Wilken detailed the road changes and improvements proposed. AT EASE 5:52:35 PM / 5:53:08 PM Co-Chair Wilken offered a motion to amend the amendment to appropriate $1 million to the Wilbur Street Extension project and $2.5 million to the 2nd Avenue project. Without objection Amendment #29 was AMENDED and ADOPTED. 5:53:43 PM Amendment #30: This amendment deletes the language of Section 10. NATIONAL PETROLEUM RESERVE - ALASKA IMPACT GRANT PROGRAM; INTENT. (b), on page 92, lines 16 - 20 and inserts new language to read as follows. (b) The sum of $24,706,539, received by the National Petroleum Reserve - Alaska special revenue fund (AS 37.05.530) under 42 U.S.C. 6508 by August 31, 2005, is appropriated to the Department of Commerce, Community and Economic Development from capital project grants under the National Petroleum Reserve - Alaska impact grant program to the following municipalities for the purposes stated in the amounts set out: MUNICIPALITY PROJECT AMOUNT (1) North Slope Borough Social and cultural $275,880 study - phase 2 (2) North Slope Borough Wainwright youth 229,500 program (3) Nuiqsut Local government 468,000 operations/cultural coordinator (4) North Slope Borough Wainwright softball 35,000 field (5) Barrow City impound and 174,389 disposal site project (6) North Slope Borough Atqasuk energy 100,042 assessment (7) North Slope Borough Wainwright local 311,500 government operations (8) Barrow City Hall building 69,413 addition feasibility study (9) Nuiqsut Youth center operations 150,000 and maintenance (10) Atqasuk Atqasuk local 336,468 government operations (11) Barrow Roller rink renovation 63,556 feasibility study (12) North Slope Borough Utility master plan/ 106,221 emergency plan (13) North Slope Borough Misdemeanor probation 346,071 officer (14) North Slope Borough Fire equipment and 250,000 training (15) Barrow Barrow local 1,385,843 government operations (16) Nuiqsut Design/install 200,000 retractable boat ramp (17) North Slope Borough Continuing studies to 2,461,368 investigate wildlife/subsistence (18) North Slope Borough Oil spill response team 737,867 (19) North Slope Borough Police officers for 1,486,689 NPR-A villages (20) North Slope Borough Health, survival, and 654,426 sustainability of key subsistence resources (21) North Slope Borough Workforce development 3,729,451 program (22) North Slope Borough Mayor's job program 2,527,961 (23) North Slope Borough Police importation 1,101,512 combat program (24) North Slope Borough North Slope science 425,578 initiative (25) North Slope Borough Village capacity 968,182 building (26) North Slope Borough NPR-A technical 1,468,508 review team (27) North Slope Borough Allied health 3,400,000 training center (28) North Slope Borough Wainwright city office 38,114 renovation (29) Atqasuk Youth center addition 680,000 to community center (30) North Slope Borough Wainwright lagoon 525,000 boat launch (c) If the amount available for appropriation from the National Petroleum Reserve - Alaska special reserve fund (AS 37.05.530) under (b) of this section is less than $24,706,539, then each of the appropriations made by (b)(1) - (30) of this section is reduced in proportion to the amount of the shortfall. This amendment also stipulates a lapse date of June 30, 2006 for the appropriations made in Section 10(b)(1)-(13); a lapse date of June 30, 2007 for the appropriations made in subsections (14)-(16); a lapse date of June 30, 2008 for the appropriations made in subsections (17)-(26); and a lapse date of June 30, 2009 for the appropriation made in subsection (27). The appropriations made in subsections (28)-(30) lapse under AS 37.25.020. Co-Chair Wilken moved for adoption and outlined the projects intended to receive federal National Petroleum Reserve-Alaska (NPR- A) grant funds. The listing of projects would prioritize the projects. Senator Olson clarified that the lapse date for most of the appropriations is the end of FY 06. Co-Chair Wilken replied that the standard five-year lapse date would apply to most of the capital projects. Appropriations made for most of the operating expenses would lapse at the conclusion of the fiscal year. Other items have specified lapse dates. Senator Olson questioned whether adequate time would be allowed for implementation. 5:57:40 PM Co-Chair Wilken noted that the appropriations would not expire for 14 months. Senator Olson surmised the lapse date of June 30, 2006 would be too early to expend funds for capital projects. 5:58:11 PM Co-Chair Wilken explained that the designated monies should be expended in the fiscal year. Monies that would be carried forward would automatically do so until the specified lapse date. This would provide oversight for projects that currently have none. If at the conclusion of FY 06, the lapse date were insufficient, the affected community would be required to explain the situation and request an extension. 5:59:39 PM Senator Dyson appreciated Co-Chair Wilken's attempt. He asked the percentage of the total appropriation allocated for operating expenses. Co-Chair Wilken answered that 42 percent of the funding is designated to capital projects and 58 percent for operating expenditures. Co-Chair Wilken then pointed out that of the $24 million total NPR- A grant, $22 million would be appropriated to the North Slope Borough. He also noted the 21 percent administrative charge. Co-Chair Green understood the provisions of this amendment are intended to provide a review of the NPR-A grant program. Co-Chair Wilken affirmed. Appropriations made in this manner would allow for oversight of the expenditures. The intent is that the grant funds are expended on those communities impacted by oil development. Senator Stedman asked if the inclusion of funds intended for operating expenses are included in this capital budget due to delays. Co-Chair Wilken concurred. Previous appropriation of NPR-A grant funds has been included as a single line item with no specification of actual projects and programs. The language proposed in the amendment allocates the funding for the four communities impacted by activities in the NPR-A. Subsection (a) of Section 10 provides intent language that future NPR-A impact mitigation program grants be designated for this purpose. 6:03:20 PM Without objection Amendment #30 was ADOPTED. 6:04:00 PM Amendment #31: This amendment changes the name of the City of Wasilla sewer plant expansion project in subsection (e) of Section 43. HOUSE DISTRICTS 13-16., on page 113, line 6 to "septage facility". Co-Chair Green moved for adoption and explained the technical change. There being no objection, Amendment #31 was ADOPTED. 6:04:23 PM Amendment #32: This amendment deletes subsections (b) and (d) of Section 53. DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT., on page 120, lines 1 - 4 and 9 - 12. The language of the two subsections is identical and reads as follows. The sum of $900,000 is appropriated from the general fund to the Department of Commerce, Community and Economic Development for payment as a grant under AS 37.05.316 to the Alaska Housing Finance Corporation for construction of the cold climate housing research center. This amendment also inserts a new Cold Climate Housing Research Center - Cold Climate Building & Infrastructure Research & Test Facility component to the Grants to Named Recipients (AS 37.05.316) BRU, Department of Commerce, Community and Economic Development, on page 3 and appropriates $900,000 general funds to the component. Accompanying explanatory language reads as follows. In the 5/3/05 work draft version "Y" there were duplicate requests (sections (b) and (d)) of $900,000 for the construction of the Cold Climate Research Center. This amendment deletes one of the $900,000 appropriations and moves the funding to the Grants to Named Recipients (AS 37.05.316) portion of the work draft that begins on page three. This is consistent with previous appropriations made to the project. Co-Chair Wilken moved for adoption and explained the changes. There being no objection, Amendment #32 was ADOPTED. 6:05:11 PM Amendment #33: this amendment inserts a new Sport Fish Hatcheries component to the Department of Fish and Game on page 35 line 11 and appropriates $62,140,000 to the component. Accompanying explanatory language reads as follows. The state Department of Revenue would issue revenue bonds with a gross amount of $69,000,000 but the actual construction costs of the statewide hatcheries would be $62,140,000. The gross bond amount would have adjustments made for underwriter spread, true interest costs, debt service reserve fund and earnings. The $62.14 million in hatchery bond funds would be spent as follows: Interior Alaska - Fish presently stocked in interior Alaska are produced in Anchorage and transported via the road system. Currently, about 20% of the fish produced in the existing hatchery program go to Fairbanks and the surrounding areas. The imminent loss of heat at the existing Anchorage area hatcheries will drastically affect the interior-stocking program. Without warm water (which doubles the growth rate of fish), the hatcheries will not be able to produce fish in the sizes currently stocked in interior waters. A recent study has indicated that building a new hatchery in Fairbanks is the best way to remediate the problem. The proposed hatchery will at least double the existing fish production goals for this area, meeting projected demand over the next 25 years. It is estimated that the hatchery will cost $25 million, 15 million of which will be funded under the CIP. The balance of the monies will come from federal funds already secured or anticipated. Southcentral Alaska - The imminent loss of heat at the existing Anchorage area hatcheries will drastically affect the southcentral Alaska stocking program. Loss of heat at the existing hatcheries will not only decrease the number of fish planted throughout southcentral Alaska, but will decrease the number of sites that will be stocked. A recent study has indicated that building a new hatchery in Anchorage is the best way to remediate the problem. We propose to address this issue by constructing a new hatchery facility at the site of the existing Fort Richardson hatchery in Anchorage. Hatchery operations at the existing Elmendorf Hatchery in Anchorage will be shut down. The new hatchery facility will increase production by 50%, sufficient to meet projected demand over the next 25 years. We anticipate this hatchery will cost just over $45 million, the cost of which will be entirely covered under the proposed bond. Southeast Alaska - The Division of Sport Fish does not operate any hatchery facilities in southeast Alaska, but supports targeted private sector hatchery operations through cooperative agreements aimed at increasing sport fishing opportunities. Bond funds totaling $2.14 million will fund the following projects: $1.5 million to the City of Skagway to build a hatchery which they would operate; $0.5 million for deferred maintenance for the Crystal Lake Hatchery near Petersburg; and $140,000 for one time capital improvements by the Northern Southeast Regional Aquaculture Association (NSRAA) for Haines king salmon release. Co-Chair Wilken moved for adoption and objected to the motion to allow the Department of Fish and Game to explain the amendment. 6:05:42 PM KELLY KEPLER, Director, Division of Sport Fish, Department of Fish and Game, explained this amendment would authorize the issuance of bonds to support construction of hatchery facilities. Senator Hoffman asked the affect were the amendment not adopted. Mr. Kepler replied that the monies would not be expended. There being no objection, Amendment #33 was ADOPTED. 6:07:10 PM Amendment #34: This amendment changes the YMCA of Fairbanks - Van (HD 7-11) component of the Grants to Named Recipients (AS 37.05.316) BRU, Department of Commerce, Community and Economic Development on page 8, lines 9 and 10 to read "ASYMCA of Fairbanks - Van purchase and operation (HD 7-11)". The $50,000 general fund appropriation remains unchanged. Co-Chair Wilken moved for adoption and explained that this amendment proposes a technical change to reflect program as the armed services YMCA. There being no objection, Amendment #34 was ADOPTED. 6:07:49 PM Amendment #35: This amendment inserts a new subsection into Section 52. DEPARTMENT OF ADMINISTRATION., on page 119, following line 26 to read as follows. (c) The sum of $4,350,000 is appropriated from the general fund to the Department of Administration, commissioner's office, for distribution to state agencies to offset the increased chargeback rates for statewide services as identified in the statewide federal cost allocation plan. Co-Chair Green moved for adoption. Ms. Blaisdell explained this appropriation, plus the appropriation proposed in Amendment #36, would provide funding to offset some of the expenses incurred through delivery of centralized services to other State agencies that would otherwise be reimbursed by those agencies. Co-Chair Green remarked that inadequate funding has been allocated for these reimbursements. This amendment would allow departments to continue to receive centralized administrative services. There being no objection, Amendment #35 was ADOPTED. AT EASE 6:10:44 PM / 6:16:27 PM Co-Chair Green reiterated the intent of Amendment #35 in appropriating funding to all agencies for reimbursement of the cost of centralized services. Ms. Blaisdell stated that normally general funds would be appropriated directly to the agencies, and the agencies would reimburse the Department of Administration for the costs of the centralized services. Conversely, this amendment would allow the Department of Administration to provide the general funds to each agency based on a cost-allocation plan. A similar provision was adopted several years prior. She would verify the legality of this action. Co-Chair Green noted that this amendment is generally not allowed, although an exception would be made in this instance. 6:17:43 PM Amendment #36: This amendment inserts two new subsections into Section 20. FUND TRANSFERS., on page 96, following line 18 to read as follows. (d) The sum of $12,000,000 is appropriated from the general fund to the Alaska public building fund (AS 37.05.570). (e) The amount necessary to have an unobligated balance of $5,000,000 in the state insurance catastrophe reserve account in accordance with AS 37.05.289 is appropriated from the general fund to the state insurance catastrophe reserve account (AS 37.05.289). This amendment also deletes "$300,000" from subsection (b) of Section 52. DEPARTMENT OF ADMINISTRATION., on page 119, line 25 and inserts "$40,300,000". The amended language reads as follows. (b) The sum of $40,300,000 is appropriated from the general fund to the information services fund (AS 44.21.045(a)). Co-Chair Green moved for adoption. Ms. Blaisdell explained the $12 million appropriated to the Alaska public building fund would be distributed to those state agencies that participate in the public building fund. The monies would be utilized for maintenance expenses. Ms. Blaisdell next reminded that the State of Alaska is self- insured. The appropriation made in Sec 20(e) would be utilized for management costs. Ms. Blaisdell spoke to the fund transfer of $40.3 million to the information services fund. The information services fund is utilized to pay expenses including payroll associated with information services activities, communications and the enterprise technology fund. 6:19:46 PM Ms. Blaisdell clarified that the effective date of the provisions in the amendment should be July 1, 2005. Senator Stedman asked if the original dollar amount of $300,000 appropriated in Section 52(b) page 19 was a typographical error. Ms. Blaisdell affirmed. Co-Chair Green reminded the Committee of the discussions relating to this matter beginning six to eight weeks prior, in which it was determined that no more than 30 percent of the amount requested would be appropriated for the information services fund. Many of the participating agencies have received less than sufficient funding for this purpose for several years. There being no objection, Amendment #36 was ADOPTED. AT EASE 6:21:36 PM / 8:25:39 PM The bill was HELD in Committee.