HOUSE FINANCE COMMITTEE May 9, 1997 3:10 P.M. TAPE HFC 97-133, Side 1, #000 - end. TAPE HFC 97-133, Side 2, #000 - end. TAPE HFC 97-134, Side 1, #000 - end. TAPE HFC 97-134, Side 2, #000 - end. CALL TO ORDER Co-Chair Hanley called the House Finance Committee meeting to order at 3:10 p.m. PRESENT Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Representative Mulder Representative Grussendorf Representative Kelly Co-Chair Hanley was absent from the meeting. ALSO PRESENT Representative Scott Ogan; Mark Boyer, Commissioner, Department of Administration; Dugan Petty, Director, Division of General Services, Department of Administration; Sharon Barton, Director, Division of Administrative Services, Department of Administration; Annalee McConnell, Director, Office of Management and Budget, Office of the Governor; John Bitney, Alaska Housing Finance Corporation; Mitchell Gravo, Lobbyist, Frontier Building; Bob Bilden, Legislative Audit Division; Keith Gerken, Architect, Division of General Services, Department of Administration; Nancy Slagle, Director, Division of Administrative Services, Department of Transportation and Public Facilities; Diane Kaplan, Alaska Native Heritage Center; Guy Bell, Director, Division of Administrative Services, Department of Commerce and Economic Development. SUMMARY SB 107 "An Act making and amending capital and other appropriations and to capitalize funds; and providing for an effective date." SB 107 was HELD in Committee for further consideration. SB 178 "An Act giving notice of and approving a lease-purchase agreement by the Department of Administration for an office building in Anchorage; relating to the financing of the lease-purchase agreement; and providing for an effective date." CSSB 178 (FIN) am was reported out of Committee with a "do pass" recommendation and with three fiscal impact notes, one by the Department of Revenue and two by the Department of Administration, all dated 5/2/97. SENATE BILL NO. 178 "An Act giving notice of and approving a lease-purchase agreement by the Department of Administration for an office building in Anchorage; relating to the financing of the lease-purchase agreement; and providing for an effective date." DUGAN PETTY, DIRECTOR, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION reviewed changes to CSSB 178 (FIN)am. He noted that CSSB 178 (FIN)am: * Does not have certificates of participation involved in the financing of the Bank of America Building; * Requires the Alaska Housing Finance Corporation (AHFC) to purchase the building; * Requires that the building be leased to the state of Alaska for offices; * Establishes a maximum purchase price of $35,700,700 million dollars, which includes costs associated with lease buy-outs; * Incorporates a municipal property tax amendment; and * Includes intent language, requiring sufficient public parking be available. Mr. Petty compared the Bank of America Center purchase and the lease proposal from the Frontier Building Limited Partnership. The lease proposal was presented by TRF Pacific for the Frontier Building Limited Partnership. He noted that the proposal by TRF Pacific would provide lease space at $1.92 a square foot. He observed that leasing would not be accompanied by a net present value savings. MARK BOYER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION stated that the Governor and Administration support the acquisition of the Bank of America building. He noted that as long as the purchase occurs within the dividend agreement that there will be no impact to AHFC's bond rating. Representative Kohring expressed concern that the legislative use of AHFC funds may be beyond the dividend limit. Commissioner Boyer stressed that broader discussion would be welcomed regarding the legislation's impact on the AHFC dividend agreement. BOB BILDEN, DIVISION OF LEGISLATIVE AUDIT stated that the acquisition of the Bank of America building is in the best interest of the state of Alaska. He maintained that assumptions use by the Department of Administration are valid and relevant. He observed that the assumptions are based on the worst case scenario. Co-Chair Therriault referred to a letter from the Division of Legislative Audit, dated 5/8/97 (copy on file). Mr. Bilden stated that it appears that the appropriation from AHFC would be within the dividend limits. Co-Chair Therriault pointed out that according to the letter from the Legislative Auditor, that the "amendment to a cash acquisition only further enhances the deal." Representative Kohring expressed concern with the legislation's impact on AHFC's bond rating. Representative Grussendorf referred to a memorandum from the Office of Management and Budget, dated 5/9/97 (copy on file). He observed that the Administration estimates that proposed expenditures from AHFC dividends are $5.7 million dollars over the dividend agreement. He added that the Administration's letter indicated that they do not support a plan for AHFC to purchase the building and rent it to the state for $1 dollar. He noted that the Administration's preference is for the state to purchase the building out-right. Commissioner Boyer stated that the additional requirement for the purchase of the Bank of America building would exceed the dividend amount. He concluded that the legislation could adversely affect AHFC's bond rating. He questioned if the legislative intent is to place a smaller amount of AHFC receipts into the general fund then is expressed in the operating and capital budgets. He noted that the Administration has made commitments to rating agencies and the world investment community to not take more than $103 million dollars in FY 98. MITCH GRAVO, LOBBYIST, FRONTIER BUILDING asserted that the legislation would blow a $37.5 million dollar hole into AHFC's bond and credit rating or that the state would have to transfer general fund dollars into the capital or operating budgets. He maintained that the legislation would disrupt the Anchorage rental market. He asserted that Anchorage property tax payers will have to pay $500 thousand dollars more as a result of the purchase. Mr. Gravo provided the Committee with a firm, noncontingent offer for a long term lease (copy on file). He maintained that the proposal would save the state $514 thousand dollars in lease payments in the next year. The offer is open until June 15, 1997. Co-Chair Therriault summarized that, according to the Legislative Auditor, the question at hand is do we stop leasing now and buy a building or do we continue to lease for another 25 years and then buy a building. He added that the Auditor's objections to the proposal from the Frontier building would still be applicable. ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR noted that the AHFC dividend available for expenditure is $133.2 million dollars. She noted that draft appropriations total $77.6 million dollars in the front section of the operating bill and $61.2 million dollars in various capital and operating budget items. She spoke in support of the purchase of the Bank of America building. She cautioned that AHFC dividend expenditures not exceed $133.2 million dollars. She observed that there are a number of projects that the legislature proposed to fund with AHFC corporate receipts that the Administration has proposed be funded with Alaska Industrial Development and Export Authority (AIDEA) dividends. She stated that an additional $25 million dollars will be available to the general fund from the settlement of a pipeline tariff case. She maintained that the draw on the AHFC dividend can be reduced. She summarized that there would have to be an adjustment somewhere. She added that oil prices are higher than anticipated. She concluded that the purchase of the Bank of America building can be accomplished. Representative Martin observed that the purchase would save $3 - $4 million general fund dollars annually. Ms. McConnell spoke in support of the purchase but reiterated concerns that AHFC dividends remain within the $133 million dollar limit. Representative Grussendorf asked for a comparison between an out- right purchase and a lease purchase. McConnell stated that there would be some advantage to an out-right purchase. KEITH GERKEN, ARCHITECT, DIVISION OF GENERAL SERVICES, DEPARTMENT OF ADMINISTRATION pointed out that HB 236 was reviewed as a lease purchase. When compared to the cost of continued leasing over the next 50 years, the cash purchase would save $219 million dollars and a lease purchase would save $154 million dollars. A 40 year net present value in savings with a lease-purchase would be $36.6 million dollars and a cash purchase would be $71.5 million dollars. With the assumption of higher rental rates the net present value of 40 years with financing is $54 million dollars and $89 million dollars with cash. Representative Kohring questioned if a bond could be floated through AHFC for the purchase. JOHN BITNEY, ALASKA HOUSING FINANCE CORPORATION summarized that the legislative intent directs AHFC to institute a cash purchase. He stated that there is no allowance in the legislation to cover the debt service cost. (Tape Change, HFC 97-133, Side 2) Mr. Bitney assured the Committee that AHFC would take any action needed to protect the Corporation's credit rating. Mr. Gerken noted that Mr. Fauske indicated that there will be sufficient time for negotiation. Representative Davies asked if it would be possible for AHFC to purchase the building and transfer ownership to the state of Alaska. Mr. Bitney noted that ownership of the building would make a difference in the financing structure. If the state retains ownership, a debt financing arrangement could be issued. Representative Martin observed that AHFC has the flexibility to restructure the purchase at a later date. Representative Martin MOVED to report CSSB 178 (FIN)am out of Committee with individual recommendations and the accompanying fiscal notes. Representative Foster OBJECTED for purposes of discussion. Representative Foster observed that there is limited parking. He expressed reservations for the purchase. Representative Davies responded that the state will save money from the purchase. Representative Martin pointed out that there will be a $3 - $4 million dollar annual lease cost savings. Co-Chair Therriault stressed that the Division of Legislative Audit has reviewed the calculations used by the Department of Administration. Representative Kohring suggested that the legislature be moved to the building in order to justify the purchase. He stressed that this could be the initiating point, in which the capitol could be moved. He expressed concern that AHFC's bond rating could be jeopardized. Representative Davies pointed out that there has been no suggestion that the purchase was motivated by an intent to move the legislature. He stressed that the state is purchasing a large block of space for public employees that are now in spaces that are quite expensive. He noted that between $1 and $5 million dollars will be saved annually by the purchase. A roll call vote was taken on the MOTION to MOVE CSSB 178 (FIN)am from Committee. IN FAVOR: Davies, Grussendorf, Moses, Davis, Kelly, Martin, Mulder, Therriault, Hanley OPPOSED: Foster, Kohring The MOTION PASSED (9-2). CSSB 178 (FIN) am was reported out of Committee with a "do pass" recommendation and with three fiscal impact notes, one by the Department of Revenue and two by the Department of Administration, all dated 5/2/97. Co-Chair Therriault stated that he supported the legislation based on the estimated savings to the state. SENATE BILL NO. 107 "An Act making and amending capital and other appropriations and to capitalize funds; and providing for an effective date." Co-Chair Hanley provided members with Amendment 1 (copy on file). He explained that the amendment represents changes to the Municipal Capital Matching Grants program. He emphasized that the amendments have been requested by the communities receiving the projects. He noted that his staff reviewed the individual requests. Co-Chair Hanley MOVED to adopt Amendment 1. There being NO OBJECTION, it was so ordered. Representative Mulder MOVED to adopt Amendment 2 (copy on file). Co-Chair Hanley noted that Amendment 2 is a reappropriation of discretionary money to District 20. Representative Martin stated that the appropriation for the Chester Creek project was in excess of the amount needed. He spoke in support of the amendment. Representative Davies expressed concern with the appropriation. Representative Mulder noted that the Municipality of Anchorage does not object to the reappropriation. There being NO OBJECTION, Amendment 2 was so ordered. Co-Chair Hanley MOVED to adopt Amendment 3 (copy on file). He explained that the amendment would add "and pedestrian plaza" to a previous appropriation. There being NO OBJECTION, it was so ordered. Representative Kohring MOVED to adopt Amendment 4 (copy on file). He explained that the amendment would retain the interest on $9 million dollars appropriated for development of coal deposits in the Matanuska-Susitna Valley. Representative Grussendorf spoke in support of the amendment. There being NO OBJECTION, it was so ordered. Representative Foster MOVED to adopt Amendment 5 (copy on file). Co-Chair Hanley explained that the amendment is a technical language change for a municipal matching grant. There being NO OBJECTION, it was so ordered. Co-Chair Hanley MOVED to adopt Amendment 6 (copy on file). He explained that the amendment would delete section 46, added by the Senate. Section 46 would repeal previous appropriations. He explained that the language would capture projects that have not been completed. He pointed out the Department of Transportation and Public Facilities has a repealer for a number of capital projects. There being NO OBJECTION, it was so ordered. Representative Martin MOVED to adopt Amendment 7 (copy on file). He explained that the amendment would decrease the authorization for the Anchorage Airport project. He stated that the authorization is not necessary due to a lapse in FY 97 funding. In response to a question by Representative Davies, Co-Chair Hanley explained that the amendment pertains to the development of the C concourse at the Anchorage Airport. He observed that debate is occurring in regards to the connection of adjacent offices. Representative Mulder observed that the original C concourse relocation project was approved by the airline carriers in 1996. Subsequently, The Airline Technical Subcommittee recommended that the project not go forward by a vote of 15 of 26. It takes 18 out of 26 "no" votes for a project to be dismissed. Representative Davies expressed concern that the decision should be made by the operators. A roll call vote was taken on the MOTION to adopt Amendment 7. IN FAVOR: Davis, Foster, Grussendorf, Kelly, Kohring, Martin, Mulder, Therriault, Hanley OPPOSED: Davies Representative Moses was absent from the vote. The MOTION PASSED (9-1). Representative Foster MOVED to adopt Amendment 8 (copy on file). He explained that the amendment is a reappropriation of funds into the same district. There being NO OBJECTION, it was so ordered. Representative Martin MOVED to adopt Amendment 9 (copy on file). Representative Mulder OBJECTED. Amendment 9 would insert a RFP grant of $600 thousand dollars, to be funded by AHFC stripper well receipts for home energy conservation and weatherization programs for energy efficient home building education and technical assistance. The amendment would also delete lines 28 - 37 on page 45. Lines 28 0 37 on page 45 contain a $300 thousand dollar grant to the Alaska Craftsman Home Program and a $300 thousand dollar grant to Energy Rate Homes of Alaska. Representative Mulder MOVED to AMEND Amendment 9 by deleting the deletion of lines 28 - 37 on page 45. Representative Martin OBJECTED. He stressed that Amendment 9 follows the original intent for use of stripper well funding, without the amendment to the amendment. He maintained that the amendment to the amendment would take funding from AHFC. He emphasized that Amendment 9 would allow flexibility for AHFC to maximize dollars through competition. Representative Mulder pointed out that the Alaska Craftsman Home Program and Energy Rated Homes of Alaska have been in business for many years. (Tape Change, HFC 97-134, Side 1) Representative Martin spoke against the amendment to Amendment 9. He asserted that the Alaska Craftsman Home Program and Energy Rated Homes of Alaska are in trouble for improper use of past grants. Co-Chair Hanley summarized that these groups received grants from a competitive bid released by the Governor. Mr. Bitney explained that there were two designated grants approved by the Legislature in FY 97. One grant was to the Alaska Craftsman Home Program. The other grant was awarded to Energy Rated Homes of Alaska. Subsequent to the legislative session, the grants were released through a competitive solicitation. The Alaska Craftsman Home Program was awarded $300 thousand dollars through competitive bid. The grant to Energy Rated Homes of Alaska was split into two pieces; $155 was awarded to Energy Rated Homes of Alaska and $145 thousand dollars was awarded to Building Science Network. To date, no funds have been awarded to Energy Rated Homes of Alaska as part of the grant. The Alaska Craftsman Home Program has signed a grant agreement and was advanced $45 thousand dollars. He explained that subsequent billings are supplied to charge against the grant. Co-Chair Therriault maintained that the passage of SB 55 would allow the Governor flexibility to handle the grant. He asserted that there will be funds for the Governor to go through a competitive RFP if he feels that either of the designated grantees has not followed through with their FY 97 agreement. Mr. Bitney clarified that the Building Science Network is proceeding with their grant and is expected to expend the full amount of the grant. In response to a question by Co-Chair Hanley, he explained that AHFC has not received a work plan from the Alaska Craftsman Home Program. He noted that there were no classes on- going through the winter. Representative Mulder stressed that there were subsequent actions that contributed to the delay of the bid. He asserted that the work program would have been approved if there had not been delays. Mr. Bitney noted that the grants were awarded on September 11, 1996. The work plan was signed before the end of the calendar year. Representative Mulder stated that the Alaska Home Craftsman Program received authorization for a workshop schedule on May 5, 1997. Mr. Bitney noted that AS 18.56.850 states that the Corporation is required to have an alaska craftsman home program and an energy rated homes of Alaska program. He noted that two non-profit organizations have incorporated these names. He questioned if these two non-profits are the program once they have received a designated grant. He noted that there is an administrative question of who is responsible and what the grantees should be doing. Representative Davies noted that classes were offered at $350 dollars per class. He stated that there are funds remaining from the combination of the grants and the collection of fees from prior years. He asked how much of this money is available to the Alaska Craftsman Home Program. Mr. Bitney stated that the class costs move than $400 hundred dollars per person. He stated that the Alaska Craftsman Home Program has accumulated a fairly substantial cash reserve through these activities. Representative Davies expressed concern that these surpluses have not been reappropriated. He stated that these funds could be used to offer more classes. A roll call vote was taken on the MOTION to adopt the amendment to Amendment 9. IN FAVOR: Davis, Davies, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley OPPOSED: Martin, Grussendorf Representative Moses was absent from the vote. The MOTION PASSED (8-2). There being NO OBJECTION, Amendment 9 was adopted. Representative Foster MOVED to adopt Amendment 10 (copy on file). He explained that the amendment would reappropriate money within the same community. There being NO OBJECTION, it was so ordered. Co-Chair Therriault MOVED to adopt Amendment 11 (copy on file). He explained that the amendment would consolidate two Mental Health Trust Authority projects for renovation and construction in Fairbanks and Anchorage in order to increase flexibility. There being NO OBJECTION, it was so ordered. Co-Chair Hanley provided members with Amendment 12 (copy on file). He noted that the amendment was divided into A, B, C, & D. Co-Chair Hanley MOVED to adopt Amendment 12A. He explained that the amendment would make some technical adjustments and extend some lapse dates in the Department of Community and Regional Affairs. There being NO OBJECTION, it was so ordered. Co-Chair Hanley MOVED to adopt Amendment 12B. He noted that the amendment would extend lapse dates on the Education Fund for the Department of Military and Veterans Affairs. There being NO OBJECTION, it was so ordered. Co-Chair Hanley MOVED to adopt Amendment 12C. He explained that the amendment would extend approximately $18 thousand dollars for the Fetal Alcohol Syndrome/Fetal Alcohol Effect and Child Abuse Task Force administrative and travel costs. There being NO OBJECTION, it was so ordered. Co-Chair Hanley did not move to adopt Amendment 12D. He noted that the amendment would appropriate additional funding for the Public Defender Agency. ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR spoke in support of Amendment 12D. She emphasized the agency's limited ability to control expenditures due to increased caseloads. She observed that Amendment 12D would allow an anticipated lapse within Tax Appeals to would allow and increase without additional funding in the supplemental. SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION clarified that the Public Defender Agency is short $89 thousand dollars in FY 97. Representative Davies MOVED to adopt Amendment 12D. A roll call vote was taken on the MOTION. IN FAVOR: Davies, Davis, Grussendorf, Moses OPPOSED: Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-7). Co-Chair Hanley MOVED to adopt Amendment 13 (copy on file). He explained that the amendment would correctly identify the Unincorporated Matching Grant Program in the Department of Community and Regional Affairs. The legislation identifies this program under the Department of Administration. There being NO OBJECTION, it was so ordered. Co-Chair Hanley MOVED to adopt Amendment 14 (copy on file). He explained that the amendment changes language to comply with the Alaska Drinking Water Fund. There being NO OBJECTION, it was so ordered. Co-Chair Hanley MOVED to adopt Amendment 15 (copy on file). He explained that the amendment is a net zero cost. He stated that the amendment would allow the Department of Transportation and Public Facilities flexibility in the prior year match. There being NO OBJECTION, it was so ordered. NANCY SLAGLE, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES explained that the Senate identifies projects by programs. Within each of these areas there is money for ineligible costs that may occur during a construction project. She clarified that the distribution of funds was unequitable. She stated that the intent is that all projects have a comparable amount for ineligible costs. There was no Amendment 16. Representative Grussendorf MOVED to adopt Amendment 17 (copy on file). Co-Chair Hanley OBJECTED. Amendment 17 would reappropriate $440 thousand AHFC dollars to the Department of Public Safety for deferred building maintenance at the Department of Public Safety Training Academy. Representative Grussendorf emphasized that the number of women in law enforcement has increased. He noted that, due to the lack of accommodations, only 5 - 6 women can attend each class. Co-Chair Hanley stressed that the AHFC dividend has reached its spending level. A roll call vote was taken on the MOTION to adopt Amendment 17. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION PASSED (3-8). Representative Grussendorf MOVED to adopt Amendment 18 (copy on file). Amendment 18 would appropriate $250 thousand dollars from the Commercial Fishing Revolving Loan Fund to the Department of Community and Regional Affairs for the AYK Salmon Marketing Program. He explained that the amendment would create economic opportunities and increase employment in areas experiencing a glut of chum salmon. Co-Chair Hanley questioned how the appropriation would affect the Commercial Fishing Revolving Loan Fund. GUY BELL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT clarified that a surplus of $377 thousand dollars is projected for the Commercial Fishing Revolving Loan Fund. If the money is not expended it would be available for appropriation in FY 99. A roll call vote was taken on the MOTION. IN FAVOR: Davies, Grussendorf, Therriault OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Moses, Mulder, Hanley The MOTION PASSED (3-8). Representative Davies MOVED to adopt Amendment 19 (copy on file). He explained that the amendment would appropriate $100 thousand dollars to the Department of Administration for technology improvement grants. He spoke in support of the amendment. A roll call vote was taken on the MOTION. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). Representative Grussendorf MOVED to adopt Amendment 20 (copy on file). Representative Mulder OBJECTED. Amendment 20 would appropriate $350 thousand dollars to the Department of Commerce and Economic Development for economic development matching grants. Representative Grussendorf explained that grants would be used for economic development and leveraging private and other funds for economic activity. Grants are limited to $50 thousand dollars per individual business. He clarified that Alaska Industrial Development and Export Authority (AIDEA) funds would be leveraged. Co-Chair Hanley noted that the AIDEA dividend has been used in the operating budget. A roll call vote was taken on the MOTION to adopt Amendment 20. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION PASSED (3-8). Representative Davies MOVED to adopt Amendment 21 (copy on file). Amendment 21 would add $966 thousand dollars to the Department of Community and Regional Affairs for Rural Development Grants. The funding source would be AIDEA dividends. He emphasized that the program is highly competitive. There is a $50 thousand dollar grant limit in FY 97. The Department of Community and Regional Affairs funded 29 grants at $800 thousand dollars. These grants leveraged $10 million additional dollars. A roll call vote was taken on the MOTION to adopt Amendment 21. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION PASSED (3-8). Representative Davies MOVED to adopt Amendment 22 (copy on file). He explained that the amendment would allow for state participation in the Alaska Native Commission Report Implementation Planning. (Tape Change, HFC 97-134, Side 2) Representative Davies spoke in support of Amendment 22. A roll call vote was taken on the MOTION to adopt Amendment 22. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION PASSED (3-8). Representative Davies MOVED to adopt Amendment 23 (copy on file). Co-Chair Hanley OBJECTED. Representative Davies explained that the amendment would appropriate $800 thousand dollars for a Native Heritage Center in Anchorage. He noted support from the municipality of Anchorage. He emphasized that 11 of 13 Native corporation have contributed $1.7 million dollars. He spoke in support of the amendment. The funding source would be through AIDEA dividends. Co-Chair Hanley acknowledged that the amendment would fund a good project. He emphasized the need to close the fiscal gap. Representative Grussendorf complained that projects that would aid economic development and opportunity are not being funded. He stressed that the Native Heritage Center would provide economic potential. DIANE KAPLAN, ALASKA NATIVE HERITAGE CENTER emphasized the level and extent of participation by the Native community. She stressed that private companies have committed over $1 million dollars. She noted that the congressional delegation is working on a $2.8 million dollar federal appropriation. She asserted that it is critical that the state show some level of support for the project to obtain federal dollars. She observed that the Center would enhance tourism in Anchorage. Co-Chair Hanley asked if $200 or $300 thousand dollars would show a state effort. Ms. Kaplan stated that an appropriation of that level would send a message that the state supports the project. Co-Chair Hanley noted that the state appropriated $400 - $500 thousand dollars for planning five years ago. Ms. Kaplan explained that the funding was spent for site preparation. A city initiative rejected the site for the Native Heritage Center. In response to a question by Representative Martin, Ms. Kaplan noted that AIDEA has not been involved in the project. Ms. Kaplan noted the need for a Native cultural center. A roll call vote was taken on the MOTION to adopt Amendment 23. IN FAVOR: Davies, Grussendorf, Moses, Mulder OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault, Hanley The MOTION FAILED (4-7). Representative Davies MOVED to adopt Amendment 24. He explained that the amendment would delete $50 thousand dollars for the Circumpolar Agriculture Conference and add $50 thousand dollars for Head Start repairs. A roll call vote was taken on the MOTION to adopt Amendment 24. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). ADJOURNMENT The meeting adjourned at 6:02 p.m. **FIN130AM