SENATE BILL NO. 18 "An Act making appropriations, including capital appropriations and other appropriations; making appropriations to capitalize funds; and providing for an effective date." Co-Chair Kelly MOVED to REPORT SB 18 out of committee with individual recommendations. 10:21:31 AM AT EASE 10:22:09 AM RECONVENED Co-Chair Kelly withdrew his previous motion. Co-Chair Kelly MOVED to ADOPT the proposed committee substitute for SB 18, Work Draft 28-GS1798\P (Martin, 4/3/13). Co-Chair Meyer OBJECTED for discussion. SUZANNE ARMSTRONG, STAFF, SENATOR KEVIN MEYER, discussed the major changes in the committee substitute. She reported that a thorough review of the numbers section of the bill was performed that resulted in an initial excess of $65 thousand. She pointed out that two projects were added to Section 1. Ms. Armstrong cited Page 12, lines 8-10: Department of Commerce, Community and Economic Development Juneau Airport Snow Removal Equipment Facility $3,000,000 General Funds Ms. Armstrong explained that, without the funding, Juneau was in danger of losing federal receipts and reimbursement for future equipment, purchases and replacement. Ms. Armstrong cited Page 30, lines 16-18: Department of Education and Early Development Kwethluk K-12 Replacement, School Design, Planning, Foundation (HD 36) $25,008,100 General Funds (REA Fund) Ms. Armstrong noted that the appropriation reflected the commitment of the legislature to fulfill the Kasayulie School Settlement agreement. The funding was sufficient to begin school construction. The intent was to secure the remainder of the funds in FY 2015. Ms. Armstrong remarked that there were no changes to Sections 4 and Sections 7 that contained the FY 2013 Supplemental Capital and Operating budgets. Ms. Armstrong turned to the language section of the bill. She cited Section 17, Page 88, lines 10-16: Sec. 17. UNIVERSITY OF ALASKA. (a) The proceeds from the sale of the Diplomacy Building by the University of Alaska are appropriated to the University of Alaska for the purchase and improvement of the Bragaw Office Complex in Anchorage. (b) The proceeds of the revenue bonds issued by the University of Alaska for the purchase and improvement of the Bragaw Office Complex in Anchorage are appropriated to the University of Alaska for the purchase and improvement of the Bragaw Office Complex in Anchorage. Ms. Armstrong stated that Section 17 was a new section and was added at the request of the University of Alaska and Senator Kelly's office. Ms. Armstrong referenced page 90, lines 17-18: (d) The sum of $618,300, is appropriated from the general fund to the regional educational attendance area and small municipal school district school fund (AS 14.11.030). Ms. Armstrong noted that the item was removed from the fund capitalization Section 21 to Section 22, the Fund Transfer section. The item was a fund transfer. 10:28:01 AM Ms. Armstrong mentioned that there were several legislative reapproriations requests related to various Senate districts. The reappropriations were added to the bill and did not result in an additional expenditure. Co-Chair Meyer interjected that he accommodated reappropriation requests because they did not add to expenditures. 10:28:34 AM AT EASE 10:29:24 AM RECONVENED Vice-Chair Fairclough shared that the community of Hoonah had urged support of a medical facility in the amount of $1.9 million in matching funds, and she wondered whether the funding was included in the proposed budget. Ms. Armstrong replied that the request was granted and included on Page 104, line 20 of the legislation. Ms. Armstrong turned to the spreadsheet, "Multi-year Agency Summary, 2013-04-03" prepared by the Legislative Finance Division (copy on file). She reported that the total capital budget amounted to $1.9 billion. She broke down the total amount as follows: $836 million in unrestricted general funds, $152 million in designated general funds, $78 million in other funds, and $928 million in federal funds. Senator Meyer interjected that the total budget amounted to $2 billion. Ms. Armstrong indicated that $2 billion included total agency operations. Fund Capitalizations, Debt Service, and Special Appropriations were not included in the total of $1.9 billion. Co-Chair Meyer MOVED to ADOPT Amendment 1 (28-GS1798\P) (Martin, 4/4/13). Vice-Chair Fairclough OBJECTED for discussion. OFFERED IN THE SENATE BY SENATOR MEYER TO: CSSB 18(FIN), Draft Version "P" Page 22, following line 15: Insert new material to read: APPROPRIATION GENERAL ITEMS FUND Fairbanks Community Food Bank - 65,000 65,000 Vehicle Replacement (HD 1-5)" Adjust fund sources and totals accordingly. Page 101, following line 1: Insert a new subsection to read: "(r) The unexpended and unobligated balance, estimated to be $3,504,825, of the appropriation made in sec. 7, ch. 29, SLA 2008, page 21, lines 30 - 32 (Anchorage, Mountain Air Drive/Hillside Drive extension- $4,500,000) is reappropriated to the Department of Commerce, Community, and Economic Development for payment as a grant under AS 37.05.315 to the Municipality of Anchorage for improvements and safety upgrades at the intersection on Goldenview Drive from Rabbit Creek to Romania Drive." Ms. Armstrong explained Amendment 1. She offered that a statewide appropriation of $65 thousand added to a statewide food bank organization appropriation was incorrect. The amount of $65 thousand was included in the amendment as a separate item and reappropriated for the Fairbanks Community Food Bank. The original appropriation was reduced by $65 thousand. The $65 thousand addressed the $65 thousand excess in the numbers section of the bill. Vice-Chair Fairclough removed her objection. There being NO further OBJECTION, it was so ordered. Co-Chair Meyer shared that the Fairbanks Food Bank was a separate entity from the main food bank in Anchorage. Ms. Armstrong added that the amendment also included a reappropriation from one road project to another road project. Senator Dunleavy MOVED to ADOPT Amendment 2. Vice-Chair Fairclough OBJECTED for discussion. Offered in the Senate by Senator Dunleavy TO: CSSB 18 (FIN), Draft Version "P" Page 14, on lines 20 through line 23: Delete the entire sentence "It is the intent of the legislature that this appropriation be used only for the specific purpose, and that any funds remaining may not be appropriated for any other borough project." Page 14, on lines 29 through line 32: Delete the entire sentence "It is the intent of the legislature that this appropriation be used only for the specific purpose, and that any funds remaining may be reappropriated only to the Warm Storage Fire Station on Four Mile Road and may not be appropriated for any other borough project." Ms. Armstrong detailed that the Mat-Su Borough sent a memo requesting removal of the language from the legislation. The projects were part of other legislation that stipulated any reappropriation was subject to legislative approval. The borough thought the language was unnecessary and redundant. Vice-Chair Fairclough removed her objection. There being NO further OBJECTION, it was so ordered. Senator Hoffman distributed a letter from the executive director of the Yukon-Kuskokwim Health Corporation, Gene Petola (copy on file) regarding the elimination of $5 million for the Village Safe Water Protection Projects for inclusion in the record. Ms. Armstrong stated that the program originally received funding in FY 2013 for research and development opportunities and new technologies. 10:37:27 AM Senator Hoffman concurred and explained that the project was attempting to discover ways to make the Village Safe Water systems more effective and less costly. The authorization to continue to expend the funds could potentially save the state millions of dollars. 10:38:14 AM AT EASE 10:41:34 AM RECONVENED Co-Chair Kelly moved Conceptual Amendment 1. He cited Section 49, Page 110. He communicated that Section 49 required referencing the effective date of the Supplemental appropriations listed in Section 4 and Section 7. Co-Chair Meyer objected for discussion. Ms. Armstrong explained that Karen Rehfeld, Director, Office of Management and Budget, Office of the Governor, pointed out that the legislation failed to provide the earlier effective date of April 14, 2013 for the supplemental budget items. Co-Chair Meyer removed his objection. There being NO further OBJECTION, it was so ordered. Co-Chair Meyer shared that the capital budget process was very difficult with less money available. He thanked everyone involved. Senator Hoffman thanked Co-Chair Meyer for the funding for the Kwethluk School, one of the Kasayulie School Settlement projects. Vice-Chair Fairclough spoke to the budget process. She appreciated the "good public policy and process" that moved the budget forward. She remarked that the budget addressed the needs of Alaska in a "responsible and responsive way" in a climate of budget short falls. 10:48:52 AM Co-Chair Meyer commented that the goals of the capital budget were to maintain the states existing assets, finish projects that were already started, and fund critical projects throughout the state. Co-Chair Meyer removed his objection. There being NO OBJECTION, CSSB 18 (FIN) 28-GS1798\P was adopted. Vice-Chair Fairclough stated her commitment to find funding for the University of Alaska's engineering buildings in FY 2014. Co-Chair Meyer agreed, and stated his support but felt that the $109 million costs were too high to include in the budget. He hoped to find a way to keep the engineering colleges moving forward. Co-Chair Kelly MOVED to REPORT CSSB 18 (FIN) as amended out of committee with individual recommendations. There being NO OBJECTION, it was so ordered. SB 18 was REPORTED out of committee with a "do pass" recommendation.