SENATE BILL NO. 46 "An Act making capital appropriations and appropriations to capitalize funds; and providing for an effective date." This bill had been heard previously in the Senate Finance Committee. Amendments are considered to the working draft committee substitute, Version 24-GS1074\Y, unless otherwise noted. Amendment #64: This amendment increases the general fund appropriation made in subsection (B) of Section 32. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES., on page 102, lines 16 and 17, to the Department for emergency and nonroutine maintenance from $743,400 to $1,631,400. Accompanying explanatory language reads as follows. This increase is needed in the FY 05 Supplemental for emergency and non routine maintenance and is allocated for the following: $486,000 Susitna River Road, Trapper Creek $402,000 M.P. 13 Tok Cutoff Co-Chair Wilken moved for adoption. GINGER BLAISDELL, Staff to Co-Chair Green, stated the increased funding would be utilized to address some emergency projects revealed in the last few weeks. Co-Chair Green told of "gaping holes" in roads near Tok and Trapper Creek. The Department would have made these repairs and requested supplemental funding for the costs if the legislature had not been in session. Because this bill is still under consideration, it was deemed appropriate to include funding in its appropriation. There being no objection, Amendment #64 was ADOPTED. 7:14:24 PM Amendment #65: This amendment deletes reduces the general fund appropriation to the UAF - Biological and Computational Sciences Facility (HD [house district] 7-11) component of the University of Alaska on page 89, lines 14 through 16 from $32 million to $24.2 million. Co-Chair Wilken moved for adoption. Ms. Blaisdell clarified the amendment reduces the appropriation by $7.8 million. There being no objection, Amendment #65 was ADOPTED. Amendment #66: This amendment increases the appropriation to the Fairbanks Virology Laboratory Replacement (HD 1-40) component of the Department of Health and Social Services on page 88 lines 21 through 23 from $4.8 million to $24.2 million. The amendment indicates the funding source as Certificates of Participation fund code 1163. Accompanying explanatory language reads as follows. This project is the Department's number 1 priority. The amount of $4,800,000 is not sufficient to construct a lab. The original requested amount of $24,200,000 needs to be restored to the bill. Funds would be used for the design, construction and equipping of a new virology laboratory located on the University of Alaska Fairbanks campus. Virology laboratory functions are a vital component of public health. This is a service that the state simply cannot afford to live without. The existing virology lab is old, undersized, and unsafe. An independent report refers to the lab as "an accident waiting to happen". Co-Chair Wilken moved for adoption. Ms. Blaisdell outlined the explanatory statement. Co-Chair Green understood the Committee would receive separate legislation for consideration that would provide for this project. Ms. Blaisdell affirmed. 7:15:57 PM Senator Stedman requested clarification. Ms. Blaisdell explained that this amendment would increase the appropriation the amount requested in the Governor's proposed FY 06 capital budget, and change the funding source from general funds as originally proposed. Senator Stedman asked if this appropriation is in addition to the $4.2 million appropriated for a separate science facility. Ms. Blaisdell replied that the total appropriation for the two projects would be $48.4 million. The funding source of the $4.2 million appropriation is general funds. Co-Chair Green informed of separate legislation to provide for the construction of a virology laboratory utilizing certificates of participation. Senator Stedman requested further information regarding the certificates of participation funding source at a later time. Senator Hoffman questioned the reference to the project as located in house districts 1 through 40, although the next project listed, the Anchorage Integrated Science Facility, is classified as house districts 17 through 32. Co-Chair Green replied that the virology facility would be operated by the Department of Health and Social Services and would be utilized for all house districts. Senator Hoffman asked if the virology facility project would be calculated in the total appropriations for each district, specifically for the Fairbanks area districts. He suggested uniformity in comparison to other projects. Co-Chair Green responded that further information would be forthcoming. 7:20:48 PM Co-Chair Green presumed the determination was made based on the function of the building. The proposed virology laboratory would function statewide versus the University science facility, which would serve the University of Alaska Anchorage primarily. 7:21:20 PM CHERYL FRASCA, Director, Office of Management and Budget, Office of the Governor, suggested that to clarify that the project were "statewide in nature" "Fairbanks" could be deleted from the project title. The facility would be intended to service the entire state. Co-Chair Green stated that the amendment could be amended later if deemed necessary. Co-Chair Green announced that Amendment #66 was ADOPTED. 7:22:19 PM Amendment #67: This amendment changes the name of the Willow Creek State Recreation Area - Shallow Water Boat Launch and Winter Access Trailhead at Mile 49.7 (HD 13-16) component of the Department of Natural Resources on page 42, line 30 through page 43, line 3. The amended component reads, "Willow Creek State Recreation Area - Phase II: Parking lot at crude shallow water boat launch site at Mile 49.7." Co-Chair Wilken moved for adoption. Co-Chair Green stated this amendment was requested by Senator Charlie Huggins. There was no objection and the amendment was ADOPTED. 7:22:49 PM Amendment #68: This amendment deletes the Fairbanks North Star Borough - Chena River State Recreation Area / Extend Fire Control Line (HD 7-11) component and $184,000 general fund appropriation to the component from the Grants to Municipalities (AS 37.05.315) BRU, Department of Commerce, Community and Economic Development on page 14, lines 4 through 7. This amendment also inserts a new Chena River State Recreation Area / Extend Fire Control Line (HD 7-11) component to the Department of Natural Resources on page 39, line 13 and appropriates $184,000 general funds to the component. Accompanying explanatory language reads as follows. This amendment transfers the funding from the Fairbanks North Star Borough to the Department of Natural Resources, as the Chena River State Recreation Area is a state park. Co-Chair Wilken moved for adoption. Co-Chair Green overviewed the explanatory statement. There being no objection, Amendment #67 was ADOPTED. Amendment #69: This amendment reads as follows. 1. Amendment #5 and #13 created a slight imbalance: Amendment #13 should change the amount for the Alaska Siberia Research Center to $100,200 rather than $105,200. This correction creates the "net zero" reallocation of projects. 2. Point of clarification only: Amendment #30 does not reduce the total amount of the NPR-A impact grant program anticipated receipts it clarifies the anticipated distribution of the grants to affected communities. The difference of the amount of grant awards compared to the amount of the anticipated receipts is the amount that is distributed by statute to the Public Education Fund and the Power Cost Equalization fund. 3. Point of clarification only: Amendment #33 Sport Fish Hatcheries projects are contingent on the sale of the Revenue Bonds. The projects are funded in the amount of the revenue bonds. 4. Amendment #35 and #36: add the following intent: "It is the intent of the Legislature that the Department of Administration, Commissioner's Office distribute the general fund appropriation of $4,350,000 across appropriation lines to other state agencies to assist with the statewide services chargeback obligations." And "It is the intent of the Legislature that all state agencies will reimburse the funds as required by the Statewide Federal Cost Allocation Plan chargeback to the level that the funds have been capitalized for future statewide services needs." 5. Amendment #37 technical correction: Near the bottom of the amendment, where the Sec__ EFFECTIVE DATE (a) Section XX(a) is effective July 1, 2005 - the second (a) should have referenced "(c)". 6. Point of clarification only: Amendment #38 Marine highway fuel increase is appropriated directly to the Department of Transportation and Public Facilities, Marine Vessel Operations and not into the marine highway system fund. 7. Point of clarification only: Amendment #39 - the last allocation list should be $1,000,000 to the Cold Bay Airport Terminal Redevelopment (not Sand Point). 8. Clarification to the amended amendment #50 that the project title for $125,000 is for the "Arctic Winter Games Team Alaska" 9. Amendment #55 states "Municipality of Anchorage - 74th Ave Pedestrian Facilities - Arctic Boulevard to Chad St." and should state 76th Ave… 10. Amendments #52 through #56 were reallocating priority projects that were originally identified under Grants to Municipalities Page 24, lines 13-15. With the addition of amendments #52 - #56, Page 24, lines 13-15 are deleted. 11. Page 121, Sec 56(b), line 9 Delete: $2,723,800 Insert: $2,723,000 (corrects a mathematical error) 12. One section was mission from Section 61. CONSTITUTIONAL BUDGET RESERVE FUND. This section is required so that the Department of Revenue can balance the State's cash flow at the fiscal year end. Add: (c) Unrestricted interest earned on investment of the general fund balances for the fiscal year ending June 30, 2006, is appropriated to the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska). The appropriation made by this subsection is intended to compensate the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska) for any lost earnings caused by use of the fund's balance to permit expenditure of operating and capital appropriations in the fiscal year ending June 30, 2006, in anticipation of receiving unrestricted general fund revenue. The amount appropriated by this subsection may not exceed an amount equal to the earnings lost by the budget reserve fund as the result of the use of money from the budget reserve fund to permit expenditure of operating and capital appropriations in the fiscal year ending June 30, 2006, in anticipation of receiving unrestricted general fund revenue. 13. Page 123, Sec 61(c), line 16 Delete: $25,000 Insert: $167,000 14. Section 65. EFFECTIVE DATE. (a) include "Sections 4 and 5" (c) "Sections 1-5" is changed to "Sections 1-3" Co-Chair Wilken moved for adoption. Ms. Blaisdell stated this amendment corrects errors in amendments previously adopted by the Committee. She read the language of the amendment into the record. Ms. Blaisdell noted item #7 should read as follows. 7. Point of clarification only: Amendment #39 - the last allocation listed should be $1,000,000 to Sand Point. 7:26:36 PM Senator Olson requested clarification of item #7. Ms. Blaisdell explained the allocation of funds would be made to Sand Point. 7:27:32 PM Ms. Blaisdell continued reading the language of the amendments language. Without objection, Amendment #69 was ADOPTED. [No formal action was taken on the proposed amendment to the amendment. The Committee's intent is assumed that the amendment was amended.] 7:30:33 PM Amendment #70: This amendment deletes the language of Section 6. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES., on page 91, lines 1 through 16 and inserts a new bill section to read as follows. Sec. 6. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES. Subject to Sec. 62 of this Act, the sum of $62,000,000 is appropriated from the Alaska capital income fund to the Department of Transportation and Public Facilities for the following projects in the amounts stated, subject to reallocation among the projects under AS 37.07.080(e): AMOUNT From the General Fund McCarthy Road, major maintenance $2,000,000 Denali Borough, Stampede Road Improvements 5,000,000 Chena overflow bridge for gas pipeline DeLong Mountaion, port expansion EIS 2,000,000 Completion North Slope, Foothills West Road EIS 4,000,000 North Slope, Bullen Point EIS 5,000,000 Dalton Highway, surfacing upgrades 9,000,000 Dalton Highway, Washington Creek Bridge 3,500,000 Richardson Highway, highway passing lanes 7,500,000 Mile Post 265-341 Richardson Highway, Shaw Creek Bridge 2,500,000 Kenai Peninsula: Kalifornsky Beach Road 11,000,000 Rehabilitation Industrial Roads 7,000,000 Accompanying explanatory language reads as follows. Note: all of the above road projects are classified as "Resource Development Projects" and are using revenues from the interest earnings of the AMHESS settlement. Co-Chair Wilken moved for adoption. Co-Chair Wilken then offered a motion to amend the amendment to reduce the allocation to Industrial Roads from $7 million to $3.5 million and insert a new Wickersham Street Upgrade - Fairbanks project and allocate $3.5 million to that project. Co-Chair Green clarified the amendment to the amendment would have a net zero impact on the provisions of the amendment. Senator Hoffman asked the location of the industrial roads and which of those industrial road projects would be eliminated by the amendment of the amendment. 7:32:19 PM Ms. Blaisdell replied that most of the roads were included as projects in the Governor's proposed FY 06 capital budget. She detailed the location of each road listed in the amendment. Co-Chair Wilken and Ms. Blaisdell established the location of the roads. Co-Chair Green clarified that Senator Hoffman was inquiring about the industrial roads. Ms. Blaisdell explained that the classification of industrial roads is discretionary by the Department and are "high use roads" utilized by heavy equipment. 7:34:50 PM Co-Chair Green announced that the Committee amended Amendment #70, as proposed by Co-Chair Wilken. She requested the Department respond to Senator Hoffman's question. JOHN MACKINNON, Deputy Commissioner of Highways and Public Facilities, Department of Transportation and Public Facilities, was unable to immediately state which projects would be eliminated. Some of the funds proposed for this item are intended for "projects of opportunity that come along". The reduced amount would be adequate. Senator Hoffman requested identification of some industrial roads. 7:36:19 PM Mr. MacKinnon told of a suspended project on the Culver River Road, efforts undergoing on the "Pebble Copper" including reconnaissance engineering, preliminary environmental impact statement (EIS) activities and coordination work with Northern Dynasty. Senator Stedman clarified the allocation to the industrial roads item is a discretionary fund for use projects intended to expand resource development. Mr. MacKinnon affirmed the characterization. Co-Chair Green announced that Amendment #70 was ADOPTED. Ms. Blaisdell stated that although the amendment stipulates general funds as the funding source, the appropriation would be made from interest earnings from the commonly referred to Amerada Hess account of the Alaska Permanent Fund. Senator Hoffman called a point of order in that no action was taken on the motion to amend the amendment. Co-Chair Wilken moved for adoption of Amendment #70 as AMENDED. Without objection the amended amendment was ADOPTED. 7:37:45 PM Amendment #71: This amendment reads as follows. The following projects are appropriated under a new program classification called "Congestion Mitigation and Safety Initiative" Technical Change: Assign this program classification to the projects listed on page 47, lines 7-19 Add the following projects to this project classification: AMOUNT From the General Fund Dowling Road East $19,000,000 *Fairbanks, Wilbur Street Extension 1,000,000 *Fairbanks, 2nd Avenue, Moore Street 2,500,000 Realignment and New Airport Way Intersection Glenn Highway Corridor 30,500,000 Tudor Bragaw Intersection 7,000,000 *The two Fairbanks projects reflect the passage of Amendment #29 and are not intended to duplicate funding for these projects. Co-Chair Wilken moved for adoption. Co-Chair Green announced this amendment would be NOT OFFERED to defer to Amendment #71A. Amendment #71A: This amendment reads as follows. The following projects are appropriated under a new program classification called "Congestion Mitigation and Safety Initiative" Technical Change: Assign this program classification to the projects listed on page 47, lines 7-19 Add the following projects to this project classification: AMOUNT From the General Fund Dowling Road East $19,000,000 *Fairbanks, Wilbur Street Extension 1,000,000 *Fairbanks, 2nd Avenue, Moore Street 2,500,000 Realignment and New Airport Way Intersection Glenn Highway Corridor 30,500,000 Tudor Bragaw Intersection 7,000,000 Prince of Wales: Hollis to Klawock Pavement 5,000,000 Sitka: Rocky Guitierrez Airport Access 3,500,000 Improvements Fairbanks: Gaffney Road Upgrade 6,250,000 Fairbanks: Cartright Road Extension 3,650,000 Nome: City Streets, Phase 2 5,000,000 Juneau: Glacier Highway Road Extension 5,000,000 Kodiak: Rezanof Drive Rehabilitation 4,300,000 Lighting and Intersection Safety Improvements *The two Fairbanks projects reflect the passage of Amendment #29 and are not intended to duplicate funding for these projects. Co-Chair Green, sponsor of the amendment, amended the amendment to reduce the appropriation to the Kodiak project from $4.3 million to $1 million and insert a new Otmeloi Way Rehabilitation project and $3.3 million appropriation to that project. Co-Chair Wilken moved for adoption of the amendment as AMENDED. 7:39:09 PM Senator Hoffman asked whether the Governor requested funding for all the listed projects or whether some were included at the request of the House of Representatives. 7:39:21 PM Ms. Blaisdell listed the Dowling Road, Glenn Highway and Tudor Bragaw projects as included in the Governor's budget request. The two projects marked with an asterisk had been amended by an earlier amendment. The remaining projects included in the unamended amendment were proposed by the House of Representatives and the amendment to the amendment reflects intent of the Senate Finance Committee. Co-Chair Wilken pointed out that all the projects located in Fairbanks are included in the Fairbanks Metropolitan Area Transportation System (FMATS) "allocation for Fairbanks". Co-Chair Green restated the amendment to the amendment. Co-Chair Green asked if there was any objection to Amendment #71A, as amended. AT EASE 7:41:28 PM / 7:43:01 PM Co-Chair Green directed attention to Amendment #70 as amended and announced a "point of clarification" that the Wickersham Street Upgrade - Fairbanks project and corresponding $3.5 million appropriation should be deleted from that amendment and inserted into the language of Amendment #71A. Ms. Blaisdell informed that such changes would reduce the amount of the appropriation from the interest earnings of the fund source commonly referred to as Amerada Hess from $62 million to $58.5 million. Senator Hoffman asked the total appropriation made by Amendment #71A. Ms. Blaisdell listed the amount as $95.2 million. AT EASE 7:45:20 PM / 7:45:58 PM Co-Chair Wilken offered a motion to rescind action taken in the adoption Amendment #70 as amended. Without objection the action adopting the amendment was RESCINDED. Co-Chair Wilken offered a motion to amend Amendment #70, as amended, to reflect the reduction of the total appropriation amount. The amended amendment as amended reads as follows. Sec. 6. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES. Subject to Sec. 62 of this Act, the sum of $58,500,000 is appropriated from the Alaska capital income fund to the Department of Transportation and Public Facilities for the following projects in the amounts stated, subject to reallocation among the projects under AS 37.07.080(e): AMOUNT From the General Fund McCarthy Road, major maintenance $2,000,000 Denali Borough, Stampede Road Improvements 5,000,000 Chena overflow bridge for gas pipeline DeLong Mountaion, port expansion EIS 2,000,000 Completion North Slope, Foothills West Road EIS 4,000,000 North Slope, Bullen Point EIS 5,000,000 Dalton Highway, surfacing upgrades 9,000,000 Dalton Highway, Washington Creek Bridge 3,500,000 Richardson Highway, highway passing lanes 7,500,000 Mile Post 265-341 Richardson Highway, Shaw Creek Bridge 2,500,000 Kenai Peninsula: Kalifornsky Beach Road 11,000,000 Rehabilitation Industrial Roads 3,500,000 7:47:08 PM Senator Hoffman understood the interest earnings of that account is approximately $30 million annually and asked if the undertaking of the projects would therefore be made over three fiscal years. Ms. Blaisdell affirmed. Senator Hoffman asked which projects would be constructed first. Mr. MacKinnon replied that a schedule was yet to be made. He predicted the upgrades to the Dalton Highway would begin as soon as possible. The majority of the projects would be started in the summer of 2006. 7:48:20 PM Senator Hoffman remarked that the funds would not be available until three fiscal years had lapsed. The projects could not be undertaken without funding. He asked the timeframe of the projects. Mr. MacKinnon indicated that construction would be scheduled to "meet the cash flow." Senator Hoffman again asked the prioritization of the proposed projects. Mr. MacKinnon listed the Foothills West Road EIS and the Bullen Point EIS as priorities. The Department would consult with the Murkowski Administration to determine further prioritization. Co-Chair Green announced that Amendment #71A, as amended, was AMENDED. [Note: It is assumed that the Committee's intent is that the amendment to the amendment is the aforementioned insertion of the Wickersham Street Upgrade - Fairbanks project and $3.5 million general fund appropriation. It is assumed that the Committee's intent was that Amendment #71A, as twice amended, was ADOPTED.] [Note: It is assumed that the Committee's intent is that the motion to AMEND Amendment #70, as amended, was incorporated. It was assumed that the Committee's intent is that Amendment #70, as twice amended, was ADOPTED.] Amendment #72: This amendment increases the amount of the appropriation made in subsection (a) of Section 28. DEPARTMENT OF NATURAL RESOURCES., on page 101, lines 6 through 8 from $36,902,700. The amended language reads as follows. (a) The sum of $43,350,400 is appropriated from the general fund to the Department of Natural Resources, fire suppression activity, for operating costs for the fiscal year ending June 30, 2005. Co-Chair Wilken moved for adoption. The amendment was ADOPTED without objection. Amendment #73: This amendment increases the general fund appropriation to the Aircraft and Vessel Repair and Maintenance (HD 1-40) component of the Department of Public Safety on page 43, lines 10 and 11 from $1.2 million to $1.8 million. Accompanying explanatory language reads as follows. This amendment restores partial funding requested in the Governor's capital budget. This project allow the department to overhaul and repair department aircraft airframes, landing gear and engines to ensure that aircraft are airworthy, safe and dependable. This is necessary so that the department can carry out its public safety, law enforcement, and search and rescue responsibilities. This project also allows for some of the needed repairs, conversions, servicing and maintenance for the larger patrol vessels as well as the smaller vessels to ensure their safe and dependable operations during FY 06 and beyond. Vessels are used for commercial fisheries enforcement and other trooper duties including search and rescue missions. Without adequate funding for repair and maintenance, the department likely will not be able to maintain all aircraft and vessels at an appropriate level, and would have to take some of these out of serve. This will significantly curtail the department's enforcement, search and rescue, and incident response capabilities. Co-Chair Wilken moved for adoption. Ms. Blaisdell overviewed the explanatory statement. 7:50:54 PM Senator Olson understood Ms. Blaisdell to suggest that overhauls to airplane engines at a cost of $600,000 would be undertaken in one year. 7:51:38 PM DAN SPENCER, Director, Division of Administrative Services, Department of Public Safety, testified that the entire $600,000 would not be utilized to fund aircraft-related projects. He listed airframe overhauls of amphibian vessels, engine overhauls, other modifications, as well as funding set aside for emergency repairs. There being no objection, Amendment #73 was ADOPTED. Amendment #74: This amendment increases the appropriation to the manufacturing extension program made in subsection (a) of Section 14. DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT., on page 93, line 30 through page 94, line 4, from $1.2 million to $1.5 million and designates the funding source of the additional $400,000 as Business License & Corporation Filing Fees and Taxes. Accompanying explanatory language reads as follows. Description: This amendment will provide full funding for Alaska participation in the National Manufacturer's Extension Program (MEP). The national program aims to give a competitive edge to small businesses through overcoming known barriers to success for small manufacturers including limited budgets, lack of in-house expertise, and lack of access to the newest technologies. The national program has assisted more than 149,000 firms through over 400 MEP centers whose sole purpose is to assist small manufacturers in process improvement, application of technology and business practices. Communities are anxious to participate in this program because a "virtual store" is a viable way to expose their products to market and raise the local economy. This program opens those communities to a nationwide network of expertise in how to improve their product, the delivery of their product and their other business practices. The General Accounting Office found that the MEP had a positive effect on performance in areas of profits, sales, product quality, workplace technology, productivity, and customer satisfaction. In addition to the federal and state funds, the communities will contribute "in kind". Co-Chair Wilken moved for adoption. Co-Chair Green outlined the explanatory statement. There being no objection, Amendment #74 was ADOPTED. 7:53:18 PM Amendment #75: This amendment increases the general fund appropriation to the Statewide Facilities Maintenance (HD 1-40) component of the Department of Public Safety on page 44, lines 7 and 8 from $200,000 to $500,000. Accompanying explanatory language reads as follows. This amendment restores funding to the amount requested by the Governor. The department has 17 facilities around the state that need repair and maintenance funding. The department has only received repair and maintenance funding twice in the last ten years, and some of the repairs for these facilities have reached the point where it need[s] to be addressed as soon as possible. This includes heating and electrical repairs, significant roof repairs to the Anchorage hangar, and other deferred maintenance issues. Co-Chair Wilken moved for adoption. Co-Chair Green noted the locations of the proposed projects would be statewide. There being no objection, Amendment #75 was ADOPTED. 7:53:52 PM Amendment #76: This amendment inserts a new subsection to Section 22. OFFICE OF THE GOVERNOR., on page 98, following line 18 to read as follows. (d) The sum of $500,000 is appropriated from the general fund to the Office of the Governor, executive office, for work related to the state gas pipeline and to bringing North Slope natural gas to market, and other oil and gas projects for the fiscal years ending June 30, 2005 and June 30, 2006. This amendment also provides for an effective date of July 1, 2004 for the provision in the new subsection. Co-Chair Wilken moved for adoption. Co-Chair Green gave a brief explanation There was no objection and the amendment was ADOPTED. 7:54:23 PM Amendment #77: This amendment inserts a new Municipality of Anchorage - Raspberry Road Extension - Minnesota Drive to Rovenna Street component to the Grants to Municipalities (AS 37.05.315) BRU, Department of Commerce, Community and Economic Development on page 8, lines 11 and 12 and appropriates $2.4 million general funds to the component. Accompanying explanatory language reads as follows. MOA will match the state funds in the amount of $1,550,000. This minor arterial is a missing transportation link and the municipality plans to construct the Rovenna Street to Arctic Boulevard link. Construction funding for the State's larger project to connect Raspberry Road to Dowling Road in this area is not expected before 2010. In 2003, the project was a high priority of the MOA 70/30 program, which has been discontinued. The residents of the area of this project support it wholeheartedly but only if both the State and the Municipal sections of the extension are done at the same time. The Municipal section is up for design and construction and the design and construct for the State extension should happen at the same time. This project serves to relieve congestion and is necessary to complete the long-term plan to connect Raspberry and Dowling for a much needed additional East-West corridor. Co-Chair Wilken moved for adoption. AT EASE 7:54:35 PM / 8:03:40 PM There being no objection, Amendment #77 was ADOPTED. Amendment #78: This amendment inserts a new Municipality of Anchorage - Pavement Rehabilitation Projects, 50/50 Matching Grant component in to the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 8, lines 11 and 12 and appropriates $2,275,000 general funds to the component. Accompanying explanatory language reads as follows. The MOA will match the state funds for a total of $1,000,000. The combined amounts will fund approximately 10 MOA projects area-wide. Co-Chair Wilken moved for adoption. The amendment was ADOPTED without objection. Amendment #79: This amendment inserts a new Municipality of Anchorage - Strawberry Road/Jewel Lake Road Intersection Improvements component in to the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 8, lines 10 and 11, and appropriates $1.3 million general funds to the component. Accompanying explanatory language reads as follows. This project will include signalization, channelization, and pedestrian improvements at the intersection of Strawberry Road and Jewel Lake Road. The municipality is providing matching funds for the Strawberry Road portion, which is municipally owned. Co-Chair Wilken moved for adoption. Co-Chair Green announced that Amendment #79 was WITHDRAWN. [NOTE: This Amendment was re-considered later.] Co-Chair Green announced that Amendment #80 was WITHDRAWN. [NOTE: This Amendment was re-considered later.] Co-Chair Green announced that Amendment #81 was WITHDRAWN. [NOTE: This Amendment was re-considered later.] Co-Chair Green announced that Amendment #82 was WITHDRAWN. [NOTE: This Amendment was re-considered later.] AT EASE: 8:04:44 PM / 8:05:23 PM Amendment #79: This amendment inserts a new Municipality of Anchorage - Strawberry Road/Jewel Lake Road Intersection Improvements component in to the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 8, lines 10 and 11, and appropriates $1.3 million general funds to the component. Accompanying explanatory language reads as follows. This project will include signalization, channelization, and pedestrian improvements at the intersection of Strawberry Road and Jewel Lake Road. The municipality is providing matching funds for the Strawberry Road portion, which is municipally owned. Co-Chair Wilken moved for adoption. Co-Chair Green overviewed the explanatory statement. Senator Hoffman requested an explanation of the municipality- provided matching funds. 8:06:40 PM JAMES ARMSTRONG, Staff to Co-Chair Wilken, informed of the recent bond issuance by the Municipality of Anchorage. Revenues generated from these bonds would be appropriated to match the State appropriation. 8:07:18 PM Co-Chair Green asked if the ratio of municipal funding to State funding would be equal Mr. Armstrong understood this to be so. Without objection the Amendment #80 was ADOPTED. 8:07:41 PM Amendment #80: This amendment inserts a new Municipality of Anchorage - Pintail Street at Huffman Road Safety Improvements component in to the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 8, lines 10 and 11 and appropriates $490,000 general funds to the component. Accompanying explanatory language reads as follows. This project will construct safety and channelization improvements on Pintail Street. Improvements are expected to include pavement, a northbound right-turn lane onto Huffman Road, and street lighting. Project design has been funded. The project will improve safety. Co-Chair Wilken moved for adoption. The amendment was ADOPTED without objection. Amendment #81: This amendment inserts a new Municipality of Anchorage - Flooding and Glaciations Projects, 50/50 Matching Grant component in to the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 8, lines 10 and 11 and appropriates $500,000 to the component. Accompanying explanatory language reads as follows. The MOA will match the state funds for a total of $1,000,000. The combined amounts will fund approximately 18 MOA projects area-wide. Co-Chair Wilken moved for adoption. There being no objection, the amendment was ADOPTED. 8:08:06 PM Amendment #82: This amendment inserts a new Municipality of Anchorage - Pedestrian Safety Projects, 50/50 Matching Grant component in to the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 8, lines 10 and 11 and appropriates $500,000 general funds to the component. Accompanying explanatory language reads as follows. The MOA will match the state funds for a total of $1,000,000. The combined amounts will fund approximately 13 MOA pedestrian safety projects area-wide. Co-Chair Wilken moved for adoption. Without objection the amendment was ADOPTED. 8:08:24 PM Amendment #83: This amendment inserts a new bill section to read as follows. Section X. DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT. The sum of $275,000 is appropriated from the general fund to the Department of Commerce, Community and Economic Development for a grant to the Atwood Foundation to assist with the review of the CDQ Program including state regulations. This amendment also provides an effective date of May 10, 2005 for FY 05 and FY 06 for the added section. Senator Hoffman announced that the amendment would be NOT OFFERED. AT EASE 8:08:55 PM / 8:09:49 PM Amendment #84: This amendment inserts a new Inuit Circumpolar Conference - Alaska component to the Grants to Named Recipients (AS 37.05.316 BRU, Department of Commerce, Community and Economic Development on page 3, lines 30 and 31 and appropriates $150,000 general funds to the component. Senator Olson moved for adoption. There being no objection the amendment was ADOPTED. Amendment #84 Part II: This amendment deletes the City of Unalakleet - Unalakleet Equipment Purchase and Repair (HD 40) component from the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 12, lines 31 through 33, and deletes the $75,000 general fund appropriation to the component. This amendment also inserts a new Inuit Circumpolar Conference - Alaska component in to the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 3, lines 30 and 31, and appropriates $75,000 to the component. Co-Chair Green announced this amendment would be NOT OFFERED. AT EASE 8:10:21 PM / 8:12:26 PM Amendment #85: This amendment inserts a new Alaska Works Partnership Pipeline Training Equipment component in to the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 3, lines 30 and 31, and appropriates $1.5 million to the component. The funding source is not indicated. Accompanying explanatory language reads as follows. Alaska Works Partnership desires to participate in the Alaska Technical and Vocational Education Program (TVEP) by increasing the contribution from .10% to .130% for pipeline training and equipment needs. This increase should raise an additional $1.5 million per year for federally registered jointly administered labor/management training trusts in Alaska. Co-Chair Green announced this amendment would be NOT OFFERED. Amendment #86: This amendment increases the appropriation to the City of Delta Junction - Road Improvements component in the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development on page 9, lines 14 and 15 from $100,000 to $300,000. The funding source of the additional amount is not specified. Co-Chair Wilken moved for adoption. Co-Chair Green noted the increase of $200,000 to this project. There being no objection, Amendment #86 was ADOPTED. 8:12:38 PM Amendment #87: This amendment increases the appropriation to the Chickaloon Fire Service Corp. - Equipment and Training (HD 7-11) component of the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development, on page 5, lines 13 through 15 from $30,000 to $55,000. The funding source of the additional amount is not specified. Co-Chair Wilken moved for adoption. Co-Chair Green noted the increase of $25,000 to this project. There being no objection, Amendment #87 was ADOPTED. 8:12:53 PM Amendment #88: This amendment reads as follows. Department of Commerce, Community and Economic Development Grants to Municipalities $500,000 is appropriated to the Department of Commerce, Community and Economic Development, Office of the Commissioner, as a grant to the City of Galena for the engagement of experimental legal and technical analysis in the preparation of a series of required white papers to address public concerns and regulation requirements for the proposed mini-nuclear power plant at Galena. Co-Chair Wilken moved for adoption. Co-Chair Green noted a friendly amendment to the amendment, of which she is the sponsor, to delete "experimental" and insert "expert". No Committee action is required and the amendment was AMENDED. Ms. Blaisdell furthered that "Office of the Commissioner" should also be deleted from the language of the amendment. She then outlined the amendment. Without objection the amended amendment was ADOPTED. [The intent of the Committee is assumed that the deletion suggested by Ms. Blaisdell was made to the language of the amendment.] 8:14:12 PM Amendment #89: This amendment inserts a new Cook Inlet Tribal Council - Development of Delancey Street and Hchanlyut component to the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 3, lines 30 and 31, and appropriates $100,000 to the component. The funding source is not specified. Co-Chair Wilken moved for adoption. Co-Chair Green announced this amendment would be WITHDRAWN. Amendment #90: This amendment inserts a new City of Valdez - Harbor Improvements and Maintenance component in to the Grants to Municipalities BRU, Department of Commerce, Community and Economic Development, on page 8, lines 10 and 11, and appropriates $500,000 to the component. The funding source is not specified. Accompanying explanatory language reads as follows. This appropriation will in essence turn over the operation of the Valdez City Harbor to the city. Co-Chair Green announced this amendment would be NOT OFFERED. 8:14:31 PM Amendment #91: This amendment inserts a new Alaska Loggers Association Retirement Plan and Trust (for payment to the Pension Benefit Guaranty Corporation) component in to the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 3, lines 30 and 31, and appropriates $500,000 general funds to the component. Co-Chair Wilken moved for adoption. The amendment was ADOPTED without objection. Amendment #92: this amendment increases the general fund appropriation to the Facilities Deferred Maintenance and Critical Repairs (HD 1-40) component of the Department of Transportation and Public Facilities on page 46, lines 7 through 9, from $1.25 million to $4 million. This amendment also inserts a new Statewide: Airport Lease Lots Development component to the Department of Transportation and Public Facilities on page 45, line 32, and appropriates $2 million general funds to the component. Co-Chair Wilken moved for adoption. Ms. Blaisdell outlined the amendment. Senator Hoffman asked what airports would be involved in the second component of the amendment. 8:15:43 PM NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Facilities, testified that several rural airports would be appropriate for the development of lease lots, including those located at Barrow, Deadhorse, Nome, Birchwood, Bethel, Willow, Sitka, Hoonah, and Haines. Land in the selected locations would be cleared, graded and otherwise prepared for development by private investments. 8:16:28 PM Co-Chair Green asked if the airports would subsequently become income producing. Ms. Slagle answered yes. Senator Olson questioned the demand for the land located near the Haines airport. 8:16:56 PM Ms. Slagle replied that some land could be developed for aircraft hangers. 8:17:22 PM There being no objection, Amendment #92 was ADOPTED. 8:17:31 PM Amendment #93: This amendment increases the appropriation to the AHFC Birch Park Window Replacement (HD 7-11) component of the Alaska Housing Finance Corporation BRU, Department of Revenue, on page 44, lines 25 and 26, from $650,000 to $1,323,000 other funds. Accompanying explanatory language reads as follows. This amendment restores the full funding request for the Birch Park Window Replacement project. The project utilized Corporate (AHFC) funds to replace all the windows at Birch Park I and Birch Park II in Fairbanks. Replacement of these windows will reduce energy loss and increase comfort for the residents. These windows need to be replaced to maintain the structural integrity of the buildings. The new windows will be commercial grade with standardized hardware. This project will lower routine maintenance costs and provide for health and safety issues i.e. fire egress and security. Co-Chair Wilken moved for adoption. Co-Chair Green clarified the changes made to the amendment before it was submitted for consideration. Co-Chair Green announced the amendment was ADOPTED. Amendment #44: This amendment inserts a new subsection into Section 22. OFFICE OF THE GOVERNOR., on page 98, line 9 to read as follows. (a) Section 8(a), ch. 6, SLA 2005, is amended to read: (a) The sum of $375,000 is appropriated from the general fund to the Office of the Governor for direct support of national efforts to open the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development, and other oil and gas and natural resource development projects, for the fiscal years ending June 30, 2005, and June 30, 2006. New Text Underlined This amendment then renumbers the existing subsections of Section 22 accordingly. Accompanying explanatory language reads, "Description: This extends the purpose of the appropriation." This amendment was tabled at the previous hearing. Co-Chair Wilken offered a motion to withdraw the motion to adopt the amendment. Without objection the amendment was WITHDRAWN. Amendment #85: This amendment inserts a new Alaska Works Partnership Pipeline Training Equipment component in to the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 3, lines 30 and 31, and appropriates $1.5 million to the component. The funding source is not indicated. Accompanying explanatory language reads as follows. Alaska Works Partnership desires to participate in the Alaska Technical and Vocational Education Program (TVEP) by increasing the contribution from .10% to .130% for pipeline training and equipment needs. This increase should raise an additional $1.5 million per year for federally registered jointly administered labor/management training trusts in Alaska. Co-Chair Green had announced earlier in the meeting that this amendment would not be considered. Senator Hoffman asked the reason for this action and whether the State appropriation would garner federal funding to "bring in substantial training dollars to the State." Co-Chair Green replied that she had not received adequate information on the merits of the proposal. Senator Hoffman requested the Department of Labor and Workforce Development respond to questions on the amendment. 8:19:41 PM GUY BELL, Assistant Commissioner, Department of Labor and Workforce Development, testified that the Technical Vocational Education Program is a fund derived from employee contributions. These contributions are statutorily limited to .10 percent of an employee's earnings. The funds are distributed to various entities and would be insufficient to fund the new component. Senator Hoffman stressed that the training would be necessary to provide jobs constructing the proposed natural gas pipeline. Mr. Bell reiterated that increasing the percent withheld from employee earnings would require statutory changes. Mr. Bell also noted the appropriation would not secure federal funding, only State funds would be involved. Amendment #45: This amendment adds "and other oil and gas and natural resource development projects" to subsection (a) of Section 22. OFFICE OF THE GOVERNOR., on page 98, lines 9 through 12. The amended subsection reads as follows. (a) The sum of $125,000 is appropriated from the Alaska Permanent Fund Corporation receipts to the Office of the Governor for direct support of national efforts to open the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development, and other oil and gas and natural resource development projects, for the fiscal years ending June 30, 2005, and June 30, 2006. Accompanying explanatory language reads, "Description: This expands the purpose of the appropriation." A motion to adopt the amendment was tabled at the previous hearing. Co-Chair Wilken reoffered his motion for adoption. He read the language of the amendment into the record. 8:24:04 PM Co-Chair Green clarified this language would not duplicate language adopted in a separate amendment. Ms. Blaisdell affirmed. There being no objection, Amendment #45 was ADOPTED. Amendment #52: This amendment inserts a new Fraternal Order of Alaska State Troopers (FOAST) Photo/Video Project Program Implementation component to the Grants to Named Recipients BRU, Department of Commerce, Community and Economic Development on page 3, lines 30 and 31 and appropriates $50,000. The fund source is not specified. [Note: A motion to adopt the amendment was tabled at the previous hearing.] Co-Chair Wilken moved for adoption. At Co-Chair Green's request he outlined the amendment. There being no objection, Amendment #52 was ADOPTED. 8:25:16 PM Amendment #53: This amendment inserts a new City of Adak - Adak Arctic Shuttle Pre-Feasibility Study component to the Grants to Municipalities (AS 37.05.315) BRU, Department of Commerce, Community and Economic Development on page 8, lines 11 and 12 and appropriates $50,000 to the component. The fund source is not specified. [Note: A motion to adopt the amendment was tabled at the previous hearing.] Co-Chair Wilken moved for adoption. There being no objection, Amendment #53 was ADOPTED. AT EASE 8:25:42 PM / 8:34:59 PM Co-Chair Green announced that Amendment #63, which was tabled at the previous hearing, would be reviewed and possibly amended. Amendment #83: This amendment inserts a new bill section to read as follows. Section X. DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT. The sum of $275,000 is appropriated from the general fund to the Department of Commerce, Community and Economic Development for a grant to the Atwood Foundation to assist with the review of the CDQ Program including state regulations. This amendment also provides an effective date of May 10, 2005 for FY 05 and FY 06 for the added section. [Note: Senator Hoffman announced earlier in the meeting that this amendment would not be offered and no action was taken on the amendment.] Senator Olson, at the direction of Co-Chair Green, offered a motion to rescind Committee action taken on Amendment #83 and moved to adopt the amendment. Without objection the amendment was ADOPTED. Co-Chair Green understood that Amendment #83 would have a FY 06 effective date. Senator Olson affirmed. 8:36:57 PM Co-Chair Green directed attention to information distributed to members [copy not provided.] She described the information as "a letter, a copy of a packet of letters that are the result of an adverse decision." ART CHANCE, Director, Labor Relations, Department of Administration, testified that the State lost in arbitration, a dispute with the teachers unit at the Mt. Edgecumbe school involving compensation for a preparatory period during the workday. The school schedule had been changed to include this additional period and the arbitrator ruled that the teachers must be compensated for the additional hours they were required to work. A decision was made to maintain the schedule for the remainder of the school year. As a result, approximately $170,000 in additional funding is needed. The class schedule would be changed for the next school year. Co-Chair Green remarked that the information was provided as a proposed amendment. It was not her intent to offer the amendment because such a precedent should not be set. 8:40:30 PM Mr. Chance informed of the statutory requirement that the Department report this information to the legislature, as it implicates monetary terms for consideration at the discretion of the legislature. The possibility that the arbitration ruling could be reversed in court was considered and deemed unlikely by the Department of Law. He stated, "Absent your telling us that you disapprove under Section 215 of [indiscernible], we are bound by the lawful award of the arbitrator." Co-Chair Green avowed, "We do object to paying this." AT EASE 8:41:40 PM / 8:48:53 PM Amendment #45: This amendment adds "and other oil and gas and natural resource development projects" to subsection (a) of Section 22. OFFICE OF THE GOVERNOR., on page 98, lines 9 through 12. The amended subsection reads as follows. (a) The sum of $125,000 is appropriated from the Alaska Permanent Fund Corporation receipts to the Office of the Governor for direct support of national efforts to open the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development, and other oil and gas and natural resource development projects, for the fiscal years ending June 30, 2005, and June 30, 2006. Accompanying explanatory language reads, "Description: This expands the purpose of the appropriation." [Note: This amendment was adopted earlier in the meeting.] Co-Chair Wilken offered a motion to rescind action previously taken in adopting the amendment. There being no objection, the action in adopting the amendment was RESCINDED. Amendment #95: This amendment changes the language of subsection (a) of Section 22. OFFICE OF THE GOVERNOR., on page 98, lines 9 through 12. The amended language reads as follows. (a) The sum of $125,000 is appropriated from the general fund to the Office of the Governor for direct support of national efforts to open the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development, and other oil and gas and natural resource development projects, for the fiscal years ending June 30, 2005, and June 30, 2006. Accompanying explanatory language reads, "This expands the purpose of the appropriation." Co-Chair Green noted this language would replace the language of Amendment #45. There being no objection, Amendment #95 was ADOPTED. Amendment 94: This amendment changes the funding sources of appropriations made in Section 21, GAS PIPELINE, on page 96, line 19, through page 98, line 8, from general funds and Alaska Permanent Fund Corporation receipts, to general funds exclusively. Co-Chair Wilken moved for adoption. Co-Chair Green outlined the amendment. Co-Chair Wilken noted the appropriation is for activities intended to prepare for a natural gas pipeline. 8:49:55 PM Senator Hoffman asked if the only change is the funding source. Co-Chair Green affirmed the Alaska Permanent Fund Corporation receipts would be replaced with general funds. There being no objection, Amendment #94 was ADOPTED. 8:50:30 PM Senator Olson clarified that the effective date of Amendment #83 should be May 10, 2005. AT EASE 8:51:08 PM / 8:52:40 PM Senator Olson further reiterated that the effective date of May 10, 2005 applies to the fiscal years ending June 30 2005, and June 30, 2006. Co-Chair Green deemed that the clarification was adopted. 8:53:11 PM Co-Chair Green announced the conclusion of consideration of amendments to the operating budget. Ms. Blaisdell requested the Committee grant authority to the Division of Legislative Finance and the Division of Legal and Research Services to make any necessary technical and conforming changes. Co-Chair Green affirmed, for the record, that this is the intent of the Committee. The bill was HELD in Committee.