HOUSE FINANCE COMMITTEE APRIL 21, 1993 1:30 P.M. TAPE HFC 93 - 114, Side 2, #000 - end. TAPE HFC 93 - 115, Side 1, #000 - end. TAPE HFC 93 - 115, Side 2, #000 - #457. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:30 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT Ken Erickson, Aid to Senator Pearce; Riley Snell, AIDEA, Anchorage, Alaska; John Olson, AIDEA, Anchorage, Alaska; Cheryl Frasca, Director, Division of Budget Review, Office of Management and Budget, Office of the Governor; Ron Lind, Plans, Programs and Budget Director, Administrative Services, Department of Transportation and Public Facilities; Newton Chase, Facilities Section Chief, Division of Administrative Services, Department of Health and Social Services; David Teal, Director of Administrative Services, Department of Labor; Guy Bell, Director of Administrative Services, Department of Commerce and Economic Development; C.E. Swackhammer, Deputy Commissioner, Department of Public Safety; Arthur Snowden, III, Administrative Director, Alaska Court System. SUMMARY INFORMATION SB 171 An Act relating to the contracting and financing authority of the Alaska Industrial Development and Export Authority, giving approval of the issuance of the authority's revenue bonds, and delaying the termination date of the authority's business assistance program; and providing for an effective date. CS SB 171 (FIN) was held in Committee for further consideration. 1 HB 60 An Act making appropriations for capital projects; and providing for an effective date. HB 60 was held in Committee for further consideration. SENATE BILL 171 "An Act relating to the contracting and financing authority of the Alaska Industrial Development and Export Authority, giving approval of the issuance of the authority's revenue bonds, and delaying the termination date of the authority's business assistance program; and providing for an effective date." KEN ERICKSON, AID TO SENATOR PEARCE, offered to answer questions of the Committee. RILEY SNELL, AIDEA, ANCHORAGE, ALASKA, stated that if SB 171 was enacted, it would achieve four things: Section I of the bill gives legislative approval to the Alaska Industrial Development and Export Authority (AIDEA) to authorize the issuance of revenue bonds up to $40 million dollars and to finance the acquisition, design, and construction of public use aircraft fueling facilities located at the Anchorage International Airport. Section II of the bill gives legislative approval to AIDEA to authorize the issuance of bonds up to $50 million dollars to finance the acquisition, design and construction of a port facility located at Point MacKenzie in order to further the development and operation of a direct iron ore processing facility. Section III of the bill gives legislative approval to AIDEA to authorize the issuance of bonds up to $50 million dollars to finance the acquisition, design and construction of a seafood processing, storage, and loading project located in Anchorage. Section IV of the bill extends the sunset date of AIDEA's Business Assistance Fund to July 1, 1996 from the current sunset date of July 1, 1993. Mr. Snell added that all the projects have pay-back provisions during the time in which AIDEA uses their credit to finance these projects. In return for the use of the credit, AIDEA will receive full reimbursement of the cost of the project plus an established interest percentage. 2 Co-Chair MacLean questioned if AIDEA revenue would be used for the legislation. Mr. Snell explained that AIDEA bonds are recognized by rating agencies to be revenue bonds generated by the Authority. Often, these bonds are called general obligation bonds and will be marketable. Co-Chair MacLean asked if these same requests were before the House Finance Committee last year. Mr. Snell noted the legislation did exist last year, although adjournment occurred before it was addressed. He added, there are statutory safeguards to determine if the projects are feasible. 1. Projects must be financially and economically feasible. 2. Participants must have the financial strength to pay back the debt. 3. AIDEA warrants the overall commitment to undertake the project. 4. The Authority is required to undertake an extensive credit analysis of the participant and provide a market analysis. Co-Chair MacLean asked why rural areas rarely receive funds from AIDEA. Mr. Snell pointed out that the Authority has had projects scattered across the State, Red Dog being the largest project located in the North West Arctic Borough. He added, AIDEA is sensitive to the capital needs of rural Alaska and is committed to doing a better out-reach job in rural area. Representative Martin asked why the state owned airports are bonded rather than owned. Mr. Snell explained the structure. AIDEA can issue tax exempt debt. The market has not witnessed current interest rates for many years, which creates a favorable inner trade environment to use the debt capacity. Governmental ownership is important. Representative Brown referenced the MIDREX project and asked the risks AIDEA would assume in underwriting the project. Mr. Snell stated that MIDREX would be obligated to pay their debt payments through their parent company. He added, if the financial strength of an investment is of concern, a parent corporation guarantee is necessary to underwrite the issuance. Currently, the proposed plan is promised to be compatible with land use planning. Mr. Snell reiterated that AIDEA is cooperatively working with the Mat-Su Borough in order to complete the necessary analysis. 3 Co-Chair MacLean recommended that the Anchorage airport improvements be handled through the International Airport Revolving Loan Fund. Mr. Snell noted complications exist with the current debt obligation on the tank farm which was issued by AIDEA. Representative Brown questioned the developer's motivation to bring ore from South America to Alaska. Mr. Snell stated there is a substantial need for natural gas and a concentrate will be produced through the steel mills. Cook Inlett represents a captive market for natural gas. There is a substantial market for the developer. Extensive surveys looking for such a product have been completed. Representative Brown questioned the status of the seafood component. Mr. Snell noted that the developer has signed the first supply contract and is in final negotiations with potential customers. Progress has been made to obtain equity requirements necessary. Representative Brown asked if the project would compete with other Alaska facilities in Dutch Harbor. Mr. Snell commented that the component will compliment the current fishing industry, although there is no information on how the fish tax allocation will occur. Harold Benedict is the principle administrator of the Alaska Seafood Center. He has not had a lot of experience in the industry but has hired professional people to help assemble the project. Representative Brown questioned the long term capacity of AIDEA. Mr. Snell noted that AIDEA should have substantial remaining capacity with the proposed legislation and offered to provide the Committee with that information. Representative Brown understood that AIDEA's capacity was running out. Representative Brown asked for a list of other potential competitors for the AIDEA revenue. Representative Hoffman stated that the Rural Development Initiative Fund (RDIF) does not adequately address the needs of rural Alaska. He asked that more funds be included in that fund so that rural Alaska might receive more economic development incentive. Mr. Snell stated that RDIF has statutory underties to the Department of Community and Regional Affairs (DCRA). In order for AIDEA to participate with DCRA, they are required to use the Business Assistance Program. The $500 thousand dollar initial investment allowed AIDEA to leverage a total loan value of $2.5 million dollars. Representative Hoffman and Representative Brown asked for more time to consider the proposed legislation in order to offer amendments to further assist the RDIF request of $5 million dollars. 4 (Tape Change HFC 93-115, Side 1). Co-Chair Larson noted that SB 171 would be HELD in Committee for further consideration. HOUSE BILL 60 "An Act making appropriations for capital projects; and providing for an effective date." Co-Chair MacLean provided the Committee with a copy of work draft, CS HB 60 (FIN), #8-GH1039\E dated 4/21/93. She noted her intent to review the cut sheet which lists the reductions to the Governor's amended budget. The legislation totals: $18,863.9 Total general funds which include mental health trust funds, general fund match and program receipts. $496,660.3 Federal and other funds. $677,524.2 Total for all funds in the bill. The Governor's budget as amended was $267,496.4 million dollars. Schools have been removed and will be funded through the House Finance Committee substitute for HB 63. The ISTEA - Department of Transportation and Public Facilities has abandoned the Borough Transfer Program for the current fiscal year. The Commissioner established that some boroughs are not capable to assume the responsibilities. She added, the Village Safe Water program will receive over $26.4 million dollars for thirty-nine needed projects. An additional $16.1 million dollars will be provided for water and sewer projects and will qualify for the 50% Municipal Match Program. The proposed budget adds $4.2 million dollars of designated grant money based on Mental Health Board lists to community based services and will continue the Department of Health and Social Services competitive grant program. CHERYL FRASCA, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, offered to review the work draft for the Committee. She added, agency reallocations are not yet reflected in the proposed draft. DEPARTMENT OF ADMINISTRATION 5 Representative Grussendorf referenced the Pioneers' Homes Repair and Renovation component and asked for further information. Co-Chair MacLean replied FY 93 determination figures were being used. Representative Therriault asked if the full allocation would be distributed to all the Pioneer Homes. Ms. Frasca advised the funding would cover all costs for all districts. DEPARTMENT OF REVENUE DEPARTMENT OF EDUCATION Co-Chair MacLean stated that all school construction grant projects were deleted and added to the school bill. Representative Brown noted funding for Intelligent Dialing System and Data Processing Enhancement and asked if they were priorities for the Administration. Ms. Frasca acknowledged they were. Ms. Frasca explained that the Administration is requesting increased staff to help update records. Representative Hoffman questioned the Borrower Records Imaging component for $50 thousand dollars. Ms. Frasca stated the funds would allow imagining records for the Student Loan Corporation. This is a pilot project provided by the Department of Administration to standardize all projects. DEPARTMENT OF HEALTH AND SOCIAL SERVICES Representative Brown asked if federal funds were included for the General Computer\Communications. Ms. Frasca said it included general funds and mental health funds. There is an additional computer system included which is federally funded. Co-Chair MacLean stated that the General Computer\Communications had been reduced to the bare essential to match federal dollars. Ms. Frasca said the package would include upgrades to the existing computer system and the purchase of additional computers. NEWTON CHASE, FACILITIES SECTION CHIEF, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, noted the funds would include a general upgrade to the hardware computer systems and the designs used. DEPARTMENT OF LABOR DAVID TEAL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR, addressed the Workers' Compensation Records component 6 stating that $300 thousand dollars would be used for imaging. Co-Chair MacLean asked why the Department was requesting an additional $83 thousand dollars for Imaging Consulting Services. Mr. Teal stated the allocation would complete a contract with Texas Instruments for imaging consulting services. Representative Parnell asked if public access to records would be affected. Mr. Teal replied they would be improved. Each record would not be xeroxed, but instead would be available through imaging. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT GUY BELL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, responded to Representative Martin's question regarding the ARDORS. He pointed out a fiscal note exists which the House Finance Committee approved for the amount of $250 thousand dollars which would be part of the operating budget. The $97 thousand dollar allocation would be for a project to target economic development in the regions. DEPARTMENT OF MILITARY AND VETERAN AFFAIRS Representative Brown noted that the State Trooper detachment was not included in the component. Co-Chair MacLean pointed out, trooper move-outs were in excess of budget projections. DEPARTMENT OF NATURAL RESOURCES Representative Brown asked if general fund or 470 fund allocation dollars had been used for the Contaminated Cleanup/Assessment. Ms. Frasca replied, 470 funds. Co-Chair MacLean noted that the Parks Stations Improvements component had been merged into the Repair Renovation Park facility component. DEPARTMENT OF FISH AND GAME DEPARTMENT OF PUBLIC SAFETY Representative Parnell noted his concern with the reduction to the Aircraft Equipment/Overhaul/Repairs component. Co- Chair MacLean noted the House recommended the cut. C.E. SWACKHAMMER, DEPUTY DIRECTOR, DEPARTMENT OF PUBLIC SAFETY, stated the reduction will affect the priority list at which time specific vessels will not be repaired. Representative Parnell asked if the Vigilant would be affected by the cut. Mr. Swackhammer replied all cuts would 7 be for the fleet size up to the 65' class. (Tape Change, HFC 93-115, Side 2). DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES RON LIND, PLANS, PROGRAMS BUDGET DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated the length of service varies for the class of equipment. Some of the vehicles are up to eight years old. Two percent of federal money ($4 million dollars) was spent on planning and research activities. Representative Martin asked if $5 million dollars would be sufficient for the American Disabilities Act general funds. Mr. Lind noted, before the State is finished with this requirement, the State will be spending $40 - $50 million dollars. A good faith demonstration should be made to address the highest priority. Representative Navarre questioned the reduction to the Kenai Spur road. Mr. Lind noted this was an error on the part of DOTPF. The initial review showed that a previous appropriation of federal money was available for that road. The scope or work will not be changed by the reduction. Representative Navarre pointed out that the project was scheduled for FY 89 and to date there has only the surveying has been completed. DEPARTMENT OF ENVIRONMENTAL CONSERVATION DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS DEPARTMENT OF CORRECTIONS Representative Parnell questioned the deferred maintenance in the Department of Corrections budget. Co-Chair MacLean replied it was merged with the Statewide Renewal and Replacement Fund. UNIVERSITY OF ALASKA Co-Chair MacLean pointed out that the School Construction Fund addresses deferred maintenance. These concerns will be removed from the capital budget. Representative Navarre asked why the Contaminated Site Assess/Cleanup component was removed. Co-Chair MacLean emphasized in order to cut the capital budget. Representative Parnell shared Representative Navarre's concern. Co-Chair MacLean suggested that an amendment be proposed to address their concern. 8 ALASKA COURT SYSTEM Representative Parnell asked what would be eliminated with the $2.4 million dollar reduction to the Alaska Court System. Co-Chair MacLean stated, the agency had overhead administrative costs. Representative Navarre asked why the Court Technology Enhancements component to upgrade the computer system was reduced. He emphasized the request was low. Ms. Frasca noted that last session the Legislature approved last session $400 thousand dollars for Court System computer enhancement. She added none of the data processing systems in the State are fully funded. Representative Navarre argued that the Court System is further behind than other governmental agencies and he recommended fully funding it. Representative Parnell agreed with Representative Navarre. ART SNOWDEN, ADMINISTRATIVE DIRECTOR, ALASKA COURT SYSTEMS, stated that last year the Governor requested $880 thousand dollars for court system technology. At that point, there had been no technology awarded to the Courts for the previous ten years. The Governor agreed to provide half the allocation last year and promised the remaining amount this year. Mr. Snowden explained the money would be used to provide computers for rural courts. There are fifty-six court locations which need to tie into the master court system to make necessary information available. LEGISLATURE HB 60 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 3:25 P.M. HOUSE FINANCE COMMITTEE APRIL 21, 1993 1:30 P.M. TAPE HFC 93 - 114, Side 2, #000 - end. TAPE HFC 93 - 115, Side 1, #000 - end. TAPE HFC 93 - 115, Side 2, #000 - #457. CALL TO ORDER 9 Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:30 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT Ken Erickson, Aid to Senator Pearce; Riley Snell, AIDEA, Anchorage, Alaska; John Olson, AIDEA, Anchorage, Alaska; Cheryl Frasca, Director, Division of Budget Review, Office of Management and Budget, Office of the Governor; Ron Lind, Plans, Programs and Budget Director, Administrative Services, Department of Transportation and Public Facilities; Newton Chase, Facilities Section Chief, Division of Administrative Services, Department of Health and Social Services; David Teal, Director of Administrative Services, Department of Labor; Guy Bell, Director of Administrative Services, Department of Commerce and Economic Development; C.E. Swackhammer, Deputy Commissioner, Department of Public Safety; Arthur Snowden, III, Administrative Director, Alaska Court System. SUMMARY INFORMATION SB 171 An Act relating to the contracting and financing authority of the Alaska Industrial Development and Export Authority, giving approval of the issuance of the authority's revenue bonds, and delaying the termination date of the authority's business assistance program; and providing for an effective date. CS SB 171 (FIN) was held in Committee for further consideration. HB 60 An Act making appropriations for capital projects; and providing for an effective date. HB 60 was held in Committee for further consideration. SENATE BILL 171 "An Act relating to the contracting and financing 10 authority of the Alaska Industrial Development and Export Authority, giving approval of the issuance of the authority's revenue bonds, and delaying the termination date of the authority's business assistance program; and providing for an effective date." KEN ERICKSON, AID TO SENATOR PEARCE, offered to answer questions of the Committee. RILEY SNELL, AIDEA, ANCHORAGE, ALASKA, stated that if SB 171 was enacted, it would achieve four things: Section I of the bill gives legislative approval to the Alaska Industrial Development and Export Authority (AIDEA) to authorize the issuance of revenue bonds up to $40 million dollars and to finance the acquisition, design, and construction of public use aircraft fueling facilities located at the Anchorage International Airport. Section II of the bill gives legislative approval to AIDEA to authorize the issuance of bonds up to $50 million dollars to finance the acquisition, design and construction of a port facility located at Point MacKenzie in order to further the development and operation of a direct iron ore processing facility. Section III of the bill gives legislative approval to AIDEA to authorize the issuance of bonds up to $50 million dollars to finance the acquisition, design and construction of a seafood processing, storage, and loading project located in Anchorage. Section IV of the bill extends the sunset date of AIDEA's Business Assistance Fund to July 1, 1996 from the current sunset date of July 1, 1993. Mr. Snell added that all the projects have pay-back provisions during the time in which AIDEA uses their credit to finance these projects. In return for the use of the credit, AIDEA will receive full reimbursement of the cost of the project plus an established interest percentage. Co-Chair MacLean questioned if AIDEA revenue would be used for the legislation. Mr. Snell explained that AIDEA bonds are recognized by rating agencies to be revenue bonds generated by the Authority. Often, these bonds are called general obligation bonds and will be marketable. Co-Chair MacLean asked if these same requests were before the House Finance Committee last year. Mr. Snell noted the legislation did exist last year, although adjournment 11 occurred before it was addressed. He added, there are statutory safeguards to determine if the projects are feasible. 1. Projects must be financially and economically feasible. 2. Participants must have the financial strength to pay back the debt. 3. AIDEA warrants the overall commitment to undertake the project. 4. The Authority is required to undertake an extensive credit analysis of the participant and provide a market analysis. Co-Chair MacLean asked why rural areas rarely receive funds from AIDEA. Mr. Snell pointed out that the Authority has had projects scattered across the State, Red Dog being the largest project located in the North West Arctic Borough. He added, AIDEA is sensitive to the capital needs of rural Alaska and is committed to doing a better out-reach job in rural area. Representative Martin asked why the state owned airports are bonded rather than owned. Mr. Snell explained the structure. AIDEA can issue tax exempt debt. The market has not witnessed current interest rates for many years, which creates a favorable inner trade environment to use the debt capacity. Governmental ownership is important. Representative Brown referenced the MIDREX project and asked the risks AIDEA would assume in underwriting the project. Mr. Snell stated that MIDREX would be obligated to pay their debt payments through their parent company. He added, if the financial strength of an investment is of concern, a parent corporation guarantee is necessary to underwrite the issuance. Currently, the proposed plan is promised to be compatible with land use planning. Mr. Snell reiterated that AIDEA is cooperatively working with the Mat-Su Borough in order to complete the necessary analysis. Co-Chair MacLean recommended that the Anchorage airport improvements be handled through the International Airport Revolving Loan Fund. Mr. Snell noted complications exist with the current debt obligation on the tank farm which was issued by AIDEA. Representative Brown questioned the developer's motivation to bring ore from South America to Alaska. Mr. Snell stated there is a substantial need for natural gas and a concentrate will be produced through the steel mills. Cook 12 Inlett represents a captive market for natural gas. There is a substantial market for the developer. Extensive surveys looking for such a product have been completed. Representative Brown questioned the status of the seafood component. Mr. Snell noted that the developer has signed the first supply contract and is in final negotiations with potential customers. Progress has been made to obtain equity requirements necessary. Representative Brown asked if the project would compete with other Alaska facilities in Dutch Harbor. Mr. Snell commented that the component will compliment the current fishing industry, although there is no information on how the fish tax allocation will occur. Harold Benedict is the principle administrator of the Alaska Seafood Center. He has not had a lot of experience in the industry but has hired professional people to help assemble the project. Representative Brown questioned the long term capacity of AIDEA. Mr. Snell noted that AIDEA should have substantial remaining capacity with the proposed legislation and offered to provide the Committee with that information. Representative Brown understood that AIDEA's capacity was running out. Representative Brown asked for a list of other potential competitors for the AIDEA revenue. Representative Hoffman stated that the Rural Development Initiative Fund (RDIF) does not adequately address the needs of rural Alaska. He asked that more funds be included in that fund so that rural Alaska might receive more economic development incentive. Mr. Snell stated that RDIF has statutory underties to the Department of Community and Regional Affairs (DCRA). In order for AIDEA to participate with DCRA, they are required to use the Business Assistance Program. The $500 thousand dollar initial investment allowed AIDEA to leverage a total loan value of $2.5 million dollars. Representative Hoffman and Representative Brown asked for more time to consider the proposed legislation in order to offer amendments to further assist the RDIF request of $5 million dollars. (Tape Change HFC 93-115, Side 1). Co-Chair Larson noted that SB 171 would be HELD in Committee for further consideration. HOUSE BILL 60 "An Act making appropriations for capital projects; and providing for an effective date." 13 Co-Chair MacLean provided the Committee with a copy of work draft, CS HB 60 (FIN), #8-GH1039\E dated 4/21/93. She noted her intent to review the cut sheet which lists the reductions to the Governor's amended budget. The legislation totals: $18,863.9 Total general funds which include mental health trust funds, general fund match and program receipts. $496,660.3 Federal and other funds. $677,524.2 Total for all funds in the bill. The Governor's budget as amended was $267,496.4 million dollars. Schools have been removed and will be funded through the House Finance Committee substitute for HB 63. The ISTEA - Department of Transportation and Public Facilities has abandoned the Borough Transfer Program for the current fiscal year. The Commissioner established that some boroughs are not capable to assume the responsibilities. She added, the Village Safe Water program will receive over $26.4 million dollars for thirty-nine needed projects. An additional $16.1 million dollars will be provided for water and sewer projects and will qualify for the 50% Municipal Match Program. The proposed budget adds $4.2 million dollars of designated grant money based on Mental Health Board lists to community based services and will continue the Department of Health and Social Services competitive grant program. CHERYL FRASCA, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, offered to review the work draft for the Committee. She added, agency reallocations are not yet reflected in the proposed draft. DEPARTMENT OF ADMINISTRATION Representative Grussendorf referenced the Pioneers' Homes Repair and Renovation component and asked for further information. Co-Chair MacLean replied FY 93 determination figures were being used. Representative Therriault asked if the full allocation would be distributed to all the Pioneer Homes. Ms. Frasca advised the funding would cover all costs for all districts. 14 DEPARTMENT OF REVENUE DEPARTMENT OF EDUCATION Co-Chair MacLean stated that all school construction grant projects were deleted and added to the school bill. Representative Brown noted funding for Intelligent Dialing System and Data Processing Enhancement and asked if they were priorities for the Administration. Ms. Frasca acknowledged they were. Ms. Frasca explained that the Administration is requesting increased staff to help update records. Representative Hoffman questioned the Borrower Records Imaging component for $50 thousand dollars. Ms. Frasca stated the funds would allow imagining records for the Student Loan Corporation. This is a pilot project provided by the Department of Administration to standardize all projects. DEPARTMENT OF HEALTH AND SOCIAL SERVICES Representative Brown asked if federal funds were included for the General Computer\Communications. Ms. Frasca said it included general funds and mental health funds. There is an additional computer system included which is federally funded. Co-Chair MacLean stated that the General Computer\Communications had been reduced to the bare essential to match federal dollars. Ms. Frasca said the package would include upgrades to the existing computer system and the purchase of additional computers. NEWTON CHASE, FACILITIES SECTION CHIEF, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, noted the funds would include a general upgrade to the hardware computer systems and the designs used. DEPARTMENT OF LABOR DAVID TEAL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR, addressed the Workers' Compensation Records component stating that $300 thousand dollars would be used for imaging. Co-Chair MacLean asked why the Department was requesting an additional $83 thousand dollars for Imaging Consulting Services. Mr. Teal stated the allocation would complete a contract with Texas Instruments for imaging consulting services. Representative Parnell asked if public access to records would be affected. Mr. Teal replied they would be improved. Each record would not be xeroxed, but instead 15 would be available through imaging. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT GUY BELL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, responded to Representative Martin's question regarding the ARDORS. He pointed out a fiscal note exists which the House Finance Committee approved for the amount of $250 thousand dollars which would be part of the operating budget. The $97 thousand dollar allocation would be for a project to target economic development in the regions. DEPARTMENT OF MILITARY AND VETERAN AFFAIRS Representative Brown noted that the State Trooper detachment was not included in the component. Co-Chair MacLean pointed out, trooper move-outs were in excess of budget projections. DEPARTMENT OF NATURAL RESOURCES Representative Brown asked if general fund or 470 fund allocation dollars had been used for the Contaminated Cleanup/Assessment. Ms. Frasca replied, 470 funds. Co-Chair MacLean noted that the Parks Stations Improvements component had been merged into the Repair Renovation Park facility component. DEPARTMENT OF FISH AND GAME DEPARTMENT OF PUBLIC SAFETY Representative Parnell noted his concern with the reduction to the Aircraft Equipment/Overhaul/Repairs component. Co- Chair MacLean noted the House recommended the cut. C.E. SWACKHAMMER, DEPUTY DIRECTOR, DEPARTMENT OF PUBLIC SAFETY, stated the reduction will affect the priority list at which time specific vessels will not be repaired. Representative Parnell asked if the Vigilant would be affected by the cut. Mr. Swackhammer replied all cuts would be for the fleet size up to the 65' class. (Tape Change, HFC 93-115, Side 2). DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES RON LIND, PLANS, PROGRAMS BUDGET DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated the length of service varies for the class of equipment. Some of the vehicles are up to eight 16 years old. Two percent of federal money ($4 million dollars) was spent on planning and research activities. Representative Martin asked if $5 million dollars would be sufficient for the American Disabilities Act general funds. Mr. Lind noted, before the State is finished with this requirement, the State will be spending $40 - $50 million dollars. A good faith demonstration should be made to address the highest priority. Representative Navarre questioned the reduction to the Kenai Spur road. Mr. Lind noted this was an error on the part of DOTPF. The initial review showed that a previous appropriation of federal money was available for that road. The scope or work will not be changed by the reduction. Representative Navarre pointed out that the project was scheduled for FY 89 and to date there has only the surveying has been completed. DEPARTMENT OF ENVIRONMENTAL CONSERVATION DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS DEPARTMENT OF CORRECTIONS Representative Parnell questioned the deferred maintenance in the Department of Corrections budget. Co-Chair MacLean replied it was merged with the Statewide Renewal and Replacement Fund. UNIVERSITY OF ALASKA Co-Chair MacLean pointed out that the School Construction Fund addresses deferred maintenance. These concerns will be removed from the capital budget. Representative Navarre asked why the Contaminated Site Assess/Cleanup component was removed. Co-Chair MacLean emphasized in order to cut the capital budget. Representative Parnell shared Representative Navarre's concern. Co-Chair MacLean suggested that an amendment be proposed to address their concern. ALASKA COURT SYSTEM Representative Parnell asked what would be eliminated with the $2.4 million dollar reduction to the Alaska Court System. Co-Chair MacLean stated, the agency had overhead administrative costs. Representative Navarre asked why the Court Technology Enhancements component to upgrade the computer system was 17 reduced. He emphasized the request was low. Ms. Frasca noted that last session the Legislature approved last session $400 thousand dollars for Court System computer enhancement. She added none of the data processing systems in the State are fully funded. Representative Navarre argued that the Court System is further behind than other governmental agencies and he recommended fully funding it. Representative Parnell agreed with Representative Navarre. ART SNOWDEN, ADMINISTRATIVE DIRECTOR, ALASKA COURT SYSTEMS, stated that last year the Governor requested $880 thousand dollars for court system technology. At that point, there had been no technology awarded to the Courts for the previous ten years. The Governor agreed to provide half the allocation last year and promised the remaining amount this year. Mr. Snowden explained the money would be used to provide computers for rural courts. There are fifty-six court locations which need to tie into the master court system to make necessary information available. LEGISLATURE HB 60 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 3:25 P.M. 18