HOUSE FINANCE COMMITTEE March 7, 2000 1:50 P.M. TAPE HFC 00 - 62, Side 1 TAPE HFC 00 - 62, Side 2 TAPE HFC 00 - 63, Side 1 TAPE HFC 00 - 63, Side 2 TAPE HFC 00 - 64, Side 1 CALL TO ORDER Co-Chair Mulder called the House Finance Committee meeting to order at 1:50 p.m. PRESENT Co-Chair Mulder Co-Chair Therriault Representative Foster Vice Chair Bunde Representative Grussendorf Representative Austerman Representative Moses Representative J. Davies Representative Phillips Representative G. Davis Representative Williams ALSO PRESENT David Teal, Director, Legislative Finance Division; Kurt Parkan, Deputy Commissioner, Department of Transportation and Public Facilities; Denny DeWitt, Staff, Representative Mulder; Jeff Bush, Deputy Commissioner, Department of Community and Economic Development; Tom Lawson, Director, Administrative Services, Department of Community and Economic Development. SUMMARY HB 312 An Act making and amending appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17©, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date. Amendments were heard for the following departments: Department of Transportation and Public Fac. Department of Environmental Conservation Department of Natural Resources Department of Administration Community and Economic Development HB 312 was HELD in Committee for further consideration. Amendments for the following departments were addressed: Department of Transportation and Public Facilities HB 313 An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date. HB 313 was HEARD and HELD in Committee for further consideration. HOUSE BILL NO. 312 "An Act making and amending appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES Representative Austerman MOVED to ADOPT DOT-1C: Delete: Department of Corrections Administration and Operations Inmate programs $600.000 GENERAL FUND Add: Department of Corrections Administration and Operations Inmate programs $600.000 PFDF Add: Department of Transportation and Public Facilities BRU: Statewide Highways & Aviation Component: Maintenance Needs $600.000 GENERAL FUND The intent of the legislature is that the funds be used to open and maintain the Kalsin Bay Maintenance Station, maintain the Chitina Maintenance Station, the Circle Airport, Circle Hot Springs Airport, Wiseman Airport, the Ruby Poorman Road, and other roads and maintenance stations as this funding permits. Co-Chair Mulder explained that the amendment replaces general funds with Permanent Fund Felon Funds. These are reallocated back to the Department of Transportation and Public Facilities. Representative J. Davies questioned if support services would be affected. Co-Chair Mulder thought that support services were addressed. Representative J. Davies expressed concern that there has not been a general discussion of all of the maintenance stations to set priorities. There are other regionally important roads that are not receiving sufficient support. He felt that the department should be free to prioritize the statewide needs. Co-Chair Mulder acknowledged his remarks and noted that the public wants reductions without jeopardizing maintenance. Discussion ensued regarding the importance of various roads in the state. Representative Phillips spoke in support of the amendment. She observed that maintenance is easier in areas with paved roads. Representative G. Davis questioned the ability of communities to provide private contractors. Co-Chair Mulder emphasized that the amendment is as flexible as possible. He explained that there is a new BRU. Representative Austerman acknowledged that maintenance could be contracted on many state roads. There being NO OBJECTION, Amendment DOT-1C was adopted. DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION clarified that a new BRU is being created. Representative Austerman MOVED to ADOPT Amendment DOT-1D: Highways and Aviation Central Region Highways and Aviation $350,000 SDPR Representative Williams OBJECTED. Representative Austerman observed that the amendment would allow the collection of tolls on the Whittier Road. The collected fees would be used for operations. KURT PARKAN, DEPUTY COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES explained that the department intends to begin collection on April 1, 2001. The fees would be sufficient to maintain the staging areas and the area leading up to the tunnel in the upcoming year. He provided details regarding the maintenance costs. Maintenance of the staging area would be similar to a small rural airport. There are 10 miles that will require a higher level of maintenance. In response to a question by Co-Chair Mulder, Mr. Parkan observed that a private contractor maintains the road out to the GSI site. No other maintenance is currently occurring. Once the tunnel is open there will be vehicle traffic. Representative G. Davis noted that there are 10 existing miles and 2 new miles of road and questioned who has maintained these to date. Mr. Parkan explained that the 10 miles on the Girdwood road is not being maintained during the winter. The department would hire a position and a half to maintain the area. There are two people working on the Bear Valley side. The department anticipates that it will take intense effort to keep the area open. The contractor who built the tunnel will maintain the tunnel for two years. There is no one responsible to maintain the staging area. In response to a question by Representative J. Davies, Mr. Parkan estimated the maintenance cost at $450 thousand dollars. Toll collections are estimated at $350 thousand dollars, which would leave a general fund need of $100 thousand dollars. A portion of the project on the Whittier side is ineligible for the use of tolls for maintenance. Co-Chair Mulder explained that the estimated general fund need is $500 thousand dollars and the amendment is for $600 thousand dollars. The intent is to include the general fund portion in the maintenance budget. Representative J. Davies asked if tolls are statutory designated program receipts. Co-Chair Mulder responded that "we are pushing the envelope on this one, at this point in time." Representative J. Davies asked to be a co-author as his Amendment DOT-6 was substantially similar. There being NO OBJECTION, it was so ordered. In response to a question by Representative Austerman, Mr. Parkan observed that the cost would be $3 million dollars for the total project: tunnel, staging area and roads leading up to the staging area. Total income projection for the first two years from tolls is $2.3 million dollars a year based on $15 dollars per round trip per vehicle. Buses would pay $105 dollars for a round trip. Funding for tunnel operations will come from federal dollars and tolls. Tolls and general funds would pay for the road and staging areas. Representative Austerman observed that the estimated date for operation of the toll is April 1, 2001. Mr. Parkan explained that the department felt that the users needed sufficient time to notify users. Co-Chair Mulder questioned if the toll could be collected earlier. Mr. Parkan clarified that the toll would have to be implemented through regulation. He added that regulations are being formulated. It takes at least three months to formulate the regulations. Revenues collected in FY01 should be sufficient to maintain the road. Additional tolls would go toward the full cost once the contract with the construction contractor is over. Tunnel maintenance costs were included in the construction contract. Representative Williams noted that the city of Whittier does not have the infrastructure in place to support the tunnel. He compared the cost of rail travel to the cost of the tunnel. Mr. Parkans pointed out that there was discussion with the tourist industry. Co-Chair Mulder questioned if the toll would be comparable to the cost of rail. Mr. Parkan responded that it would be cheaper to drive. Co-Chair Mulder stressed that statutory designated program receipts could help offset other maintenance cost. Mr. Parkan stressed that tolls from the Whittier tunnel could only be used for the tunnel. He did not believe that tolls could be diverted as a federal match. Representative Williams maintained that according to the toll agreement toll revenues could be used for federal matching funds. Mr. Parkan observed that there would not be excess funds to cover the cost. Maintenance costs for the first two years are part of the construction costs. The total cost is $3 million dollars. The estimated toll collection is $2 million dollars. He did not anticipate excess tolls. Representative Williams questioned why the toll could not be collected earlier, so that excess could be collected for maintenance use. Co-Chair Mulder asked Mr. Parkan to find out if an immediate toll collection could be used for other purposes. Vice Chair Bunde questioned who would benefit from supplementing the toll. Mr. Parkan clarified that the department will assume complete responsibility for the tunnel. The railroad does not follow the tunnel. Vice Chair Bunde observed that non-Alaskan companies would benefit by the state supplement to the toll. There being NO OBJECTION, Amendment DOT-1D was adopted. Representative Austerman WITHDREW Amendment DOT-1. Representative J. Davies MOVED to ADOPT Amendment DOT-4: Delete: Administration and Support Central Region Support Services $726,100 GF Add: Administration and Support Northern Region Support Services $778,100 GF Representative Williams OBJECTED. Representative J. Davies spoke in support of the amendment. He acknowledged additional funds approved by the Committee, but expressed concern that funds could not be used for administration and support. Co-Chair Mulder noted that Amendment DOT-1C would cover administration and support. Ms. Slagle responded that the Department of Transportation and Public Facilities would have flexibility to use the funds on administrative support if there were funds remaining. Representative J. Davies WITHDREW Amendment DOT-4. Representative Grussendorf WITHDREW Amendment DOT-5. Representative J. Davies WITHDREW Amendment DOT-6. (TAPE CHANGE, HFC 00 - 62, SIDE 2)  DEPARTMENT OF ENVIRONMENTAL CONSERVATION Representative J. Davies MOVED to ADOPT DEC-1: Delete Food Safety and Sanitation $3,142,200 total Add Food Safety and Sanitation $3,501,000 total Environmental Health Officer II Environmental Health Technician II Anchorage Environmental Health Technician II Juneau Environmental Health Officer III Bethel Environmental Health Officer III Dutch Harbor Travel/Contractual/Equipment and Supplies Adds $358.8 GENERAL FUND Representative Williams OBJECTED. Representative J. Davies observed that the amendment would add $358 thousand dollars in general funds. The addition would allow the Food Safety and Sanitation program to conduct inspections of food and daycare establishments once a year. Inspections are currently conducted less than once a year. Fees have gone up while inspection frequency has gone down. Representative J. Davies referred to HB 304. This legislation would create a clean water administrative fund from revenue bonds to provide the match for clean water projects. Approximately $600,00 thousand dollars in general funds would be freed for other use. Representative Williams spoke against the amendment. He acknowledged that the state is not inspecting as frequently as it should. He maintained that the program is broken. He observed that the department worked on the problem, but did not report back to the subcommittee. He maintained that it is a management, not a money, problem. He asserted that time is being spent on writing reports not on conducting inspections. Co-Chair Mulder observed that a shift is occurring. He maintained that time is needed to allow the program to settle. He stated that he is reluctant to add more people to the program at this time. Representative J. Davies questioned the new direction. He observed that general funds were replaced with program receipts. The mission or direction has not changed. The funding was shifted to restaurant operators. Co-Chair Mulder argued that people are paying for services that they did not previously pay for. He maintained that the public needs time to be accustomed to paying a fee. Representative J. Davies maintained that closing the fiscal gap by reducing services and requiring the people to pay more is the wrong direction. Representative Williams reiterated that the program is broken and that nothing has been done to improve it. He did not think that additional inspectors would help. Representative J. Davies recalled discussions with the department regarding inspections. He noted that the department requested an increment for more inspectors. The net result was that $300 thousand dollars more a year would be needed to maintain yearly inspections. The subcommittee rejected the request. Discussions occurred during FY00 regarding transference of the program to municipalities. Municipalities rejected the proposal and the subcommittee concluded that the program should remain with the state. The House Finance Committee did not accept program receipts and the program received further cuts in the other body. He maintained that the program is not broken: it is inadequate. Representative Williams disagreed with Representative J. Davies' comments. Representative J. Davies noted that the Subcommittee adopted a letter of intent: It is the intent of the legislature that a portion of the general funds savings which result form the passage of HB 304 be appropriated to the Department of Environmental Conservation, Division of Environmental Health, Food Safety and Sanitation Component to fund increased frequency of inspections at regulated facilities throughout the state. Representative J. Davies MOVED to AMEND Amendment DEC-1 to conceptually state that appropriation is dependent on passage of HB 304 or the passage of the senate companion. There being NO OBJECTION, it was so ordered. Representative Moses stressed that an inspector was removed from Dutch Harbor, the biggest fishing port in the nation. He maintained that Dutch Harbor product became tainted in the minds of the Japanese when the inspector was removed. A roll call vote was taken on the motion. IN FAVOR: Austerman, Davies, Grussendorf, Moses OPPOSED: Bunde, Davis, Foster, Williams, Therriault, Mulder Representative Phillips was absent from the vote. The MOTION FAILED (4-6). DEPARTMENT OF NATURAL RESOURCES Representative J. Davies MOVED to ADOPT Amendment DNR-1 Add: Parks and Recreation Management $230 general fund Parks Management $50 GFPR Vice Chair Bunde OBJECTED. Representative J. Davies maintained that reductions were driven by the majority allocation. The reduction in Parks and Recreation Management will result in the closure of 15 percent of the state parks. He observed that 80 percent of park use is by Alaskans. Vice Chair Bunde disagreed that the reduction would prevent public access to recreational lands. He reiterated that every department must take reductions. Representative J. Davies responded that people want this type of management. People want to be able to get into these areas to recreate. He disagreed with the notion that the state cannot afford the service. Representative Moses commented that parks are an essential part of our economy. He suggested that tourists notice how our park stations look. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses, Davis OPPOSED: Austerman, Bunde, Foster, Williams, Therriault, Mulder Representative Phillips was not present for the vote. The MOTION FAILED (4-6). DEPARTMENT OF ADMINISTRATION Co-Chair Mulder noted that Amendment DOA-15, which passed on 3/6/00, should have been in the Group Health component. Representative J. Davies MOVED to Rescind the adoption of DOA-15. There being NO OBJECTION, it was so ordered. Representative J. Davies MOVED to AMEND Amendment DOA-15 to add the component Group Health, funded by Benefit Systems receipts. There being NO OBJECTION, it was so ordered. There being NO OBJECTION, amended Amendment DOA-15 was adopted as amended. Co-Chair Mulder MOVED to ADOPT Amendment DOA-16: Page 2, following line 31 Insert: This appropriation to the Information Services Fund capitalizes a fund and does not lapse. DENNY DEWITT, STAFF, REPRESENTATIVE MULDER explained that the Information Services Fund appropriation has been in the language section. The fund was moved to the number section, but needs to be retained without a one-year lapse. The amendment conforms the appropriation to its current use. There being NO OBJECTION, it was so ordered. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT Representative Austerman MOVED to ADOPT Amendment CED-1. Delete: Department of Community and Economic Development Community Assistance and Economic Development Community and Business Development Delete $219.9 in general fund program receipts Add: Department of Community and Economic Development Community Assistance and Economic Development Community and Business Development (Tourism Development program) Add $50.0 in general funds Add $20.0 in general fund program receipt authority (from MIA certificate program) This amendment directs the Department of Community and Economic Development to recommit to the Made in Alaska contract and program receipt authority. The department chose to allocate recommended reductions to the tourism program within this component to this contractual line item. The program receipt authority was basically an empty fund source due to the transfer of functions - which formerly garnered contributions - to the QTA. There was no discussion at the subcommittee level of the MIA program. This fund source change recommendation would leave the following budget from all fund sources: Add $149.9 GF Representative Austerman explained that the amendment would clarify funding for the Made in Alaska program. Co-Chair Therriault explained that the subcommittee relied on an empty appropriation. Tourism Business Development MRAD Personal Services $ 415.3 Personal Services $371.8 Personal Svcs. $3,410.1 Contractual 42.9 Travel 42.3 Travel 284.0 Commodities 12.0 Contractual 105.6 Contractual 594.1 Grants 60.0 Commodities 14.0 Commodities 50.6 QTA (new component) 4,877.2 Equipment 7.5 Total $5,407.4 Total $533.7 Grants $6,520.9 Add: Department of Community and Economic Development Community Assistance and Economic Development Community and Business Development  (TAPE CHANGE, HFC 00 - 63, SIDE 1)  Co-Chair Therriault continued to explain Amendment CED-1. He noted that the Made in Alaska program brings in $20 thousand dollars in program receipts. The amendment is a net zero. JEFF BUSH, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT explained that reductions in program receipts correlate to the transfer of functions to the new marketing contract. There being NO OBJECTION, Amendment CED-1 was adopted. Co-Chair Therriault MOVED to ADOPT Replacement Amendment CED-1A: Delete Department of Community and Economic Development Executive Administration and Development Administrative Services 45.7 General Funds Department of Community and Economic Development Alaska Seafood Marketing Institute (ASMI) $104.3 GFPR Add: Community and Economic Development Community Assistance And Economic Development Community And Business Development $150.0 GF Co-Chair Therriault explained that the general funds were taken from two positions that did not have a general fund component. The mineral specialists were the only area the department could take the general fund reduction, which was not the Subcommittee's intent. The amendment would use unutilized program receipt authority from the Alaska Seafood Marketing Institute and general funds from Administrative Services to reinstate the positions. He emphasized that ASMI would not utilize the receipt authority. TOM LAWSON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT discussed the impact of Amendment Replacement CED-1A, which would be an unallocated reduction. He agreed that there is $104.3 thousand dollars in over authorization for ASMI. Total general funds for the department are $2.3 million dollars. There being NO OBJECTION, Replacement Amendment CED-1A was adopted. Co-Chair Therriault explained Amendment CED-1B: Delete Department of Community and Economic Development Executive Administration and Development Administrative Services 50. I/A Department of Community and Economic Development Community Assistance & Economic Development QTA Contract 50. I/A Co-Chair Therriault explained that the Subcommittee failed to track money from the Alaska Marine Highway System Fund for placement of the ferry schedule in the state tourism planner. Co-Chair Therriault MOVED to ADOPT Amendment CED-1B. There being NO OBJECTION, it was so ordered. Representative J. Davies MOVED to ADOPT Amendment CED-2: Department of Community & Economic Development Executive Administration & Development Commissioner's Office $111.7 GF Representative Austerman OBJECTED. Representative J. Davies explained that the amendment would restore the deputy commissioner position. Mr. Bush stated that the Anchorage deputy commissioner position would be deleted without the amendment. The department supports the amendment. He emphasized the importance of the deputy commissioner position to address rural and Native Alaskan issues. Representative J. Davies maintained that the position was authorized by HB 40 and felt that its elimination would go against the agreements made in passage of HB 40. Co-Chair Therriault recalled that the specialist position created in HB 40 was in the Governor's Office. Representative Grussendorf stressed concern by rural areas in regards to the merger of the Department of Community and Regional Affairs and the Department of Commerce and Economic Development. Discussion ensured regarding the position of Rural Advocate in the Office of the Governor. Representative J. Davies recalled that a commitment was made to retain a deputy commissioner position to continue the focus on rural issues. In response to a question by Co-Chair Therriault, Mr. Bush observed that there are two deputy commissioners. The other deputy commissioner oversees regulatory agencies, commerce agencies, legislative and budgetary issues and sits on 6 boards and commissioners. After a brief at ease, Representative J. Davies MOVED to Table Amendment CED-2. There being NO OBJECTION, it was so ordered. Representative J. Davies MOVED to ADOPT Amendment CED-3: Add: Department of Community & Economic Development Community Assistance & Economic Development QTA Contract $441.0 GF Delete: Department of Community & Economic Development Tourism Tourism Development $441.0 GF Representative J. Davies spoke in support of Amendment CED- 3. The amendment would restore funding for the Tourism Planning and Development program at the current level. He observed that the Division of Tourism is in limbo. He pointed out that there are services that need to be done on a statewide level with a state focus, which would not fit within the transfer to a private contractor. He questioned the effect of not funding the amendment on the Division of Tourism. Mr. Bush noted that the Division's activities would be reduced by $441 thousand dollars. Planning and development functions would be greatly reduced or eliminated. A planner position that focuses on transportation and land use, a development specialist that focuses on rural tourism development and an administrative clerk, which responds to requests would be eliminated. There would be two positions remaining. One would oversee the marketing contract and work with the qualified trade association. The other position would be responsible for the remaining development and planning functions. Mr. Bush explained that the deletion was partially due to the fiscal note associated with HB 40. The fiscal note assumed an increment in the tourism budget of over $400 thousand dollars. The increment was not added into the department's budget. The amendment would restore the status quo. The Subcommittee's recommendation would take money from the state's planning and development functions and use it to increase the tourism-marketing contract. Representative J. Davies summarized that the amendment would retain the status quo. Mr. Bush agreed that it would be close to the status quo. He noted that the Qualified Trade Association does not have professional staff to do planning. Co-Chair Therriault observed that there are other positions that can help run these activities. Mr. Bush acknowledged that Amendment CED-1 would add back some of the positions. He emphasized that the budget would still be $441 thousand dollars short. A roll call vote was taken on the motion. IN FAVOR: A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses, Phillips, Williams OPPOSED: Davis, Foster, Austerman, Therriault, Mulder Vice Chair Bunde was absent from the vote. Representative J. Davies WITHDREW Amendment CED-4. Representative J. Davies MOVED to ADOPT Amendment CED-5: Delete: Department of Community & Economic Development Community Assistance & Economic Development QTA Contract $916.7GF Add: Department of Community & Economic Development Community Assistance & Economic Development International Trade & Market Development $916.7GF Representative Austerman OBJECTED. Representative J. Davies explained that the amendment would restore money that was taken out of the International Trade Division. This amendment would maintain an Alaskan presence in Japan and Korea and retain nine positions that were eliminated. He stressed the importance of these positions. He felt that business development would be lost without the amendment. Mr. Bush stated that the reduction would eliminate the state of Alaska's ability to do any trade in these markets. Nine of the 12 people that do international trade would be eliminated, leaving only 3 positions. He emphasized the importance of having state positions to support these markets. The offices in Japan and Korea would be closed. He pointed out that over 70 percent of the state's total export or over $2 billion dollars annually go to these markets. A trade coordinator would remain. It would be difficult to reestablish confidence in the foreign markets if these positions are eliminated. Representative Grussendorf observed that there is no distinction between business and government in these markets. Private businessmen are not received without state support. These countries do not have a private sector. Vice Chair Bunde stressed that the program is a public subsidy of private business. He pointed out that reductions are being made in important health and social programs. Co-Chair Mulder acknowledged that in many Fareast countries the private and public sectors are intertwined, but pointed out that Korea closed its Anchorage office. He emphasized that discussions with business groups doing business in the markets did not indicate that they would be adversely affected. Representative Grussendorf stressed that Alaska exports to the markets. He reiterated the importance of state participation. Co-Chair Mulder stated that the groups that are the most impacted by international trade should be the rallying point for this component. He noted that these have not indicated that the function is important. Representative Grussendorf commented that perhaps they were not aware of the reduction. Representative Moses reminded the Committee that a major specialty processing plant is going into Anchorage and it is going to need help to be successful. He voiced frustration with the proposed cuts. He expressed concern that cuts are "putting a strangle hold on our economy." He emphasized that reductions could be taken from the legislative budget. Representative Phillips tabulated that the cost to keep the Korean and Japanese office open would be $365 thousand dollars. She suggested that the question could be divided. She asked what other trade offices would be kept open. Mr. Bush responded that Taiwan was kept open and a small contract with Sakhalin Island was retained. Representative Phillips noted that 75% of the trade staff would be cut. Representative J. Davies indicated that he had received a number of faxes from companies that would be affected by the reduction. (TAPE CHANGE HFC 00 - 63, SIDE 2).    Representative J. Davies pointed out that the state collects a business tax and emphasized that it is important for government to provide infrastructure. Representative Williams maintained that large companies doing business in Japan do not take advantage of the service that the office provides. He estimated that large companies would take their own experts with them to navigate foreign markets. He spoke against the amendment. A roll call vote was taken on the motion. IN FAVOR: Davis, Grussendorf, Moses, Phillips, Davies OPPOSED: Foster, Williams, Austerman, Bunde, Mulder, Therriault The MOTION FAILED (5-6). Representative Grussendorf MOVED to ADOPT Amendment CED-6. Vice Chair Bunde OBJECTED. Add: Development Executive Administration & Development Administrative Services $125.0 GF Representative Grussendorf stated that the amendment would restore funding for the Alaska Legal Services. He stressed the important of the component to Alaska's poor. He noted that 40 percent of the clientele are rural and Native. Eligible individuals cannot make more than $12 thousand dollars to be for the service. Lawyers work for only $70 dollars an hour. There are over 900 outstanding cases. Representative J. Davies added that the Alaska Legal Services operates in eight areas of the state. They operate very efficiently and provide cost effective service. It provides help to those who cannot get help through the justice system. These people are dedicated and talented. They won 89 of the 112 cases taken to the Supreme Court. Representative Grussendorf added that it assists the court system by aiding those that would not otherwise know their rights. Co-Chair Therriault clarified that a portion of their funding comes outside of the state's grant. Representative Grussendorf acknowledged that there are federal funds. He observed that the reduction would cut three attorneys. A person must be at the poverty level to receive services. Representative Phillips questioned why it was under the Department of Community and Economic Development. Mr. Bush explained that there are occasions when the agency ends up in disputes against the Department of Law. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses, Bunde OPPOSED: Austerman, Davis, Foster, Phillips, Williams, Therriault, Mulder The MOTION FAILED (4-7). Representative J. Davies MOVED to ADOPT Amendment CED-7: Add: Department of Community & Economic Development Occupational Licensing Occupational Licensing $896.0 GF/PR Representative J. Davies spoke in support of the amendment. This will give the Occupational Licensing Division additional expenditure authority for the following: 1) $200,000 for legal services, 2) $50,000 for board travel, 3) $140,000 for the "Colleagues in Caring Project", 4) $106,000 for Architects, Engineers, and Land Surveyors Licensing. Last year, the finance committee put a cap on the expenditure level in the front section of the budget, which resulted in a $400,000 cut. The amendment would restore that amount. He observed that architects, engineers, and land surveyors are willing to pay for the service. Co-Chair Therriault observed that the department's FY00 request was $5,458,000 million dollars. The subcommittee authorized $5,519,000 million dollars. He noted that the department was fully funded. The amendment would give excess authorization and would fund increments. He disagreed with statements that there was a cut in FY00. Co-Chair Mulder observed that the Division of Occupational Licenses has received authority to set and increase fees. The legislature is held accountable for raises in fees. In FY00, a limit was placed on fees. He maintained that a cap is appropriate for legislative oversight. Representative J. Davies acknowledged that the Administration has set limits on travel, which restricts board activities. He questioned why groups that want to have their fees increased should be denied. In response to a question by Co-Chair Mulder, Mr. Bush explained that the Colleagues in Caring Project is a national program. The Board requested funding. Co-Chair Mulder questioned why all nurses would be required to participate. He asked why board members do not pay for their own travel. Mr. Bush responded that board members serve as volunteers and give up their professional time. The boards are requesting the authorization. Co-Chair Mulder questioned if the members or the boards are requesting the activities. Mr. Bush felt that the membership is in sync with the boards on a number of the issues. Representative J. Davies argued in support of the amendment. He observed that he has received requests from participants in support of the amendment. After a brief recess Representative J. Davies observed that there had been discussions about addressing the problems in other legislation. Representative J. Davies WITHDREW Amendment CED-7. Representative J. Davies MOVED to ADOPT Amendment CED-8: Page 4, add new BRU after line 26: Renters' Equivalency Rebate $300,000 GF Representative J. Davies spoke in support of the amendment. Seniors receive an exemption on their property tax. The Renters' Equivalency Rebate program extends a similar exemption to seniors and disabled veterans that rent their homes. In 1998, there were 976 rebates sent to senior citizens and 105 to disabled veterans. The average payment was $277 dollars. The state has not reimbursed municipalities for the rebate in recent years. Co-Chair Mulder OBJECTED. He noted that the program was not funded in FY00. He conceded that there is merit to the program but stressed that it would be a mistake to add the program back at this point. Representative Grussendorf spoke in support. He stressed that the renter pays the cost of the property tax in their rent. Vice Chair Bunde noted that Alaska has the highest percentage growth of citizens over 85 years of age. He questioned how many would be on the program. Mr. Bush stated that there were 11,011 recipients in 1999. The rebate is pro rated based on the number of applicants. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses, Williams OPPOSED: Austerman, Bunde, Davis, Foster, Phillips, Mulder Co-Chair Therriault was absent from the vote. The MOTION FAILED (4-6). Representative Moses MOVED to ADOPT Amendment CED-9: Add: Power Cost Equalization $9,500,000 AIDEA Dividend Co-Chair Mulder OBJECTED. Representative Moses spoke in support of the amendment. He stressed that the savings of inexpensive power should be shared throughout the state. Co-Chair Mulder pointed out that the AIDEA dividend is obligated for debt payment. He expressed support for funding of PCE, but emphasized that there needs to be a long-term solution. He observed that there was an attempt to use National Petroleum Reserve-Account (NPR-A) funds for PCE in FY00. He felt that PCE should have a greater priority for NPR-A funds than a bowling alley or a teen center. He emphasized plans for a long-term solution, which would work with the housing authorities to piece together an endowment. He emphasized that sharing of the resource is appropriate. Long-term economic development in rural areas depends on transportation and affordable energy. Representative Grussendorf recalled that the decision was made to provide power cost equalization in perpetuity to areas that could not fit under the statewide energy plan. (TAPE CHANGE, HFC 00 - 64, SIDE 1)  Representative Grussendorf observed that those that were not policy makers at the time have lost track of the original commitment. He noted that the commitment was made that hydro projects would pay 5% and the money would be put in a revolving fund. Commitments were made to rural areas that could not access hydropower or natural gas. He stressed the need for a long-range solution. Representative Austerman spoke in support of a long-term solution and stated that he would not support use of AIDEA funds until a long-term solution is resolved. Representative Moses maintained that it is time to "walk the walk". Co-Chair Mulder observed that unless the issue is forced it never happens. He maintained that the time has come and that there is an available pool of money to set an endowment. Representative Williams stated that he would vote against the amendment because a plan is being developed (to provide an endowment). Co-Chair Mulder noted that there is $15.7 million dollars in other funds in the language section. Representative Moses observed that the PCE appropriation in the supplemental was cut in half. Co-Chair Mulder noted that the reduction was taken in the other body. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses, Foster OPPOSED: Austerman, Bunde, Davis, Phillips, Williams, Mulder Co-Chair Therriault was absent from the vote. The MOTION FAILED (4-6). HB 312 and HB 313 were HELD in Committee for further consideration. Adjournment The meeting adjourned at 6:15 p.m.