HOUSE FINANCE COMMITTEE April 27, 2000 9:40 A.M. TAPE HFC 00 - 137, Side 1 TAPE HFC 00 - 137, Side 2 TAPE HFC 00 - 138, Side 1 TAPE HFC 00 - 138, Side 2 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 9:40 a.m. PRESENT Co-Chair Mulder Co-Chair Therriault Representative Foster Vice Chair Bunde Representative Grussendorf Representative Austerman Representative G. Davis Representative J. Davies Representative Phillips Representative Williams Representative Moses was not present for the meeting. ALSO PRESENT Representative Eric Croft; Kurt Parkan, Deputy Commissioner, Department of Transportation and Public Facilities; Annalee McConnell, Director, Office of Management and Budget, Office of the Governor; Dan Spencer, Director, Division of Administrative Services, Department of Administration; Karla Schofield, Deputy Director, Accounting, Legislative Affairs Agency; Denny DeWitt, Staff, Representative Mulder. SUMMARY CS SB 192(FIN) am An Act making and amending appropriations and reappropriations; 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. HCS CS SB 192 (FIN) was reported out of Committee with a "do pass" recommendation. CS FOR SENATE BILL NO. 192(FIN) am "An Act making and amending appropriations and reappropriations; 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." Co-Chair Therriault provided members with work draft, 1- GS2043\N, Utermohle, 4/26/00 (copy on file). He explained that the proposed committee substitute was amended to correct duplications and incorrect reappropriation language. Section 19, page 68 was deleted. This was a duplication of updated language under the Governor's Office in section 45, page 78 and the Legislature in section 47, page 78. Reappropriation language in section 58 (page 85) was corrected to state: Sec. 58. ELECTION DISTRICT 24. (a) Section 38(a), ch 2, FSSLA 1999 is amended to read: (a) The sum of the unexpended and unobligated balance of the appropriation made in sec. 62(a)(3), ch 139, SLA 1998 (Boys & Girls Club for Muldoon Clubhouse - $39,531) is reappropriated to the Department of Community and Economic Development [REGIONAL AFFAIRS] for payment as a grant under AS 37.05.315 [AS 37.05.316] to the Municipality of Anchorage for South Fork Fire Department [FOR] equipment and land acquisition (b) The unexpended and unobligated balance of that portion of the appropriation made by sec. 62(a), ch. 139, SLA 1998, that was awarded as a grant to the Anchorage Neighborhood Health Center (50,000) is reappropriated (1)One-half to the Department of Community and Economic Development as a grant under AS 37.05.315 to the Municipality of Anchorage as a grant under AS 37.05.316 for the Northeast Community Council to develop an area park master plan: and (2)One-half to the Department of Health and Social Services for payment as a grant under AS 37.05.316 to the Anchorage Boys and Girls Club, Eagle River facility for tenant improvements, program development, and the purchase of equipment and supplies. Co-Chair Therriault explained that there was also duplicated language for the Department of Environmental Conservation Unalaska's reappropriation between section 49 (page 80) and section 66 (page 91). The duplicative language was deleted from section 66 in the proposed committee substitute. He pointed out that section 54, Kiawock reappropiation under the Department of Environmental Conservation (page 83) would also be deleted due to duplication. Insert new bill sections to read: * Sec. A. MEDICAID SERVICES. (a) Section 43, ch. 84, SLA 1999, page 42, lines 17 - 18, is amended to read: Council on Domestic Violence and Sexual Assault 9,832,800 GF (b) Section 43, ch. 84, SLA 1999, page 31, line 23, is amended to read: Purchased Services 391,138,400 GF (c) Section 43, ch. 84, SLA 1999, page 33, line 33, is amended to read: State Health Services 72,530.500 GF (d) Section 3, ch. 85, SLA 1999, page 5, line 27, is amended to read: State Health Services 4,979,700 (e) Section 43, ch. 84, SLA 1999, page 31, lines 3 - 5, is amended to read: by the amount reappropriated by this subsection. (h) The sum of $540,000 is reappropriated from the unexpended and unobligated balance of general funds appropriated by sec. 43, ch. 84, SLA 1999, page 33, line 33, as amended by (c) of this section (State Health Services - $72,530,500) to the Department of Health and Social Services for Medicaid services for the fiscal year ending June 30, 2001. The amount of general funds appropriated by sec. 43, ch. 84, SLA 1999, page 33, line 33, as amended by (c) of this section, is reduced by the amount reappropriated by this subsection. (i) The sum of $460,000 is reappropriated from the unexpended and unobligated balance of general funds/mental health appropriated by sec. 3, ch. 85, SLA 1999, page 5, line 27, as amended by (d) of this section (State Health Services - $4,979,700) to the Department of Health and Social Services for Medicaid services for the fiscal year ending June 30, 2001. The amount of general funds/mental health appropriated by sec. 3, ch. 85, SLA 1999, page 5, line 27, as amended by (d) of this section, is reduced by the amount reappropriated by this subsection. * Sec. B. Section A of this Act takes effect immediately under AS 01.10.070(c). Co-Chair Therriault observed that the amendment is a fund source switch, which would free up money for the Department of Transportation and Public Facilities match. Co-Chair Mulder explained that the appropriation utilizes Temporary Assistance to Needy Families funds from the FY01 budget. There being NO OBJECTION, Amendment 1 was adopted. Representative Austerman MOVED to ADOPT Amendment 2. Co- Chair Therriault OBJECTED for the purpose of discussion. Larsen Bay Water Storage Tank Replacement 150.0 GF Representative Austerman explained that the condition is critical. Following the December 6th, 1999 earthquake that centered on the Kodiak Island region, registering 7.0 on the Richter scale (HRV), the community water tank in the village of Larsen Bay deteriorated completely. Presently they are piping in water through a temporary system that doesn't allow for filtering. This puts the village in a state of noncompliance with the Surface Water Treatment Rule. Co-Chair Therriault explained that he would maintain his objection. He noted that there are no extra funds since funding was used for pupil transportation. Co-Chair Mulder asked to HOLD the amendment until the end of the meeting. Representative Austerman WITHDREW the amendment for discussion later in the meeting. Co-Chair Mulder MOVED to ADOPT Amendment 3. Add a new section to read: *Sec -. ANCHORAGE INTERNATIONAL AIRPORT CONSTRUCTION. (a) The amount earned by the investments authorized by AS 37.15.410 and AS 37.15.420 of the International Airports Construction Fund for the period February 28, 1999 to June 30, 2001, after any payment required under U.S.C. 148, not to exceed $ 18,140,000, is appropriated from the International Airports Construction Fund to the Department of Transportation & Public Facilities for construction costs of the Anchorage International Airport Terminal Redevelopment Project. (b) The appropriation in section (a) is contingent upon approval by the signatory airlines in accordance with the Anchorage International Airport operating agreement. Representative J. Davies noted that the amendment was a duplication of Amendment 29. Amendment 29 was sponsored by Co-Chair Mulder and Representative J. Davies. Amendment 3 was WITHDRAWN. Representative J. Davies WITHDREW Amendment 4. Representative J. Davies MOVED to ADOPT Amendment 5. Co- Chair Mulder OBJECTED. Amendment 4 would add a new section: Sec. ____ Learning Opportunity Grants. The sum of $6,430,222 is appropriated from the general fund to the Department of Education and Early Development for payment as grants to each school district in an amount equal to the school district's adjusted average daily membership multiplied by $30.60, as Learning Opportunity Grants to pay the costs of supplemental student instructional programs to improve student performance on the high school graduation examination or benchmark examinations for the fiscal year ending June 30. 2001. Representative J. Davies stressed that the net effect would be an addition of $630 thousand dollars. The increment would hold most urban school districts harmless for the shift of adjusted ADM. It would also increase the amount of money available for rural school districts. Some of the rural school districts were cut by a third through the new ADM adjustments to the grant program. Co-Chair Mulder commented that the funding was not provided for in the operating budget. He stated that the spending plan would not work if the amendment were adopted. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Phillips, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies observed that pioneer homes were funded as recommended by the Governor's amendment. He WITHDREW Amendment 6. Representative J. Davies MOVED to ADOPT Amendment 7. Co- Chair Mulder OBJECTED. Representative J. Davies noted that the Amendment 7 appropriates $450,000 from the general fund to the Department of Administration for the City of Kenai. The appropriation funds the Kenai Coastal Trail/Bluff Restoration project. The trail is in danger due to erosion Co-Chair Therriault suggested that the City of Kenai should have considered the use of their municipal matching grant for the item. A roll call vote was taken on the motion to adopt Amendment 7. IN FAVOR: Grussendorf, Davies OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the meeting. The MOTION FAILED (2-7). Representative J. Davies MOVED to ADOPT Amendment 8. Co- Chair Therriault OBJECTED. Department of Transportation and Public Facilities Section 1, Page 19, line 26 is amended to read: Kenai: Nikiski Emergency Escape Route Rehabilitation (ED 9) Under Appropriation Items Insert: "450,000" Under General Funds Insert: "450,000" Representative J. Davies explained that a single-lane gravel road is the only alternative road from the area. This appropriation would upgrade the road from a single-lane to a two-lane road. A roll call vote was taken on the motion to adopt Amendment 8. IN FAVOR: Grussendorf, Davies OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the meeting. The MOTION FAILED (2-7). Representative J. Davies MOVED to ADOPT Amendment 9. Co- Chair Therriault OBJECTED. Department of Education and Early Development Page 4, after line 18 insert the following project: Museum Collection Preservation-Modification and Renovation of Storage (ED 3-4) $295,600 Representative J. Davies spoke in support of Amendment 9. The project was begun in FY 93. It was only partially funded in FY 94. Additional storage space would be provided. Co- Chair Therriault noted that the project was on the list, but that there were not enough funds. A roll call vote was taken on the motion to adopt Amendment 9. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT amended Amendment 10. Co-Chair Mulder OBJECTED. Department of Revenue Sec. 1, page 18, line 20 Alaska Housing Finance Corporation (AHFC) Low Income Weatherization $5.4 million dollars ($1.4 million federal receipts & $4.0 million Corp. receipts) Representative J. Davies spoke in support of the amendment. The program has been one of the more successful in terms of providing energy efficiency. The item can reduce the demand on Power Cost Equalization. Co-Chair Therriault spoke in support of the program and noted that funds for the program have doubled over the last year. The item received $1 million in state funds in FY00. It would receive $2 million dollars in FY01. Co-Chair Mulder clarified that the total appropriation is $3.4, of which $2 million dollars are corporate receipts and $1.4 million dollars are in federal funds. A roll call vote was taken on the motion to adopt Amendment 10. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT Amendment 11. Co- Chair Mulder OBJECTED. Sec. ___ DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT The sum of $602,900 is appropriated from the general fund to the Department of Education and Early Development, Schools for the Handicapped, for the educational cost of children placed in out-of-state residential treatment for the fiscal year ending June 30,2000. Representative J. Davies discussed Amendment 11. He explained that the amendment would fund educational costs of children placed in out-of-state residential treatment schools for the handicap. There are 56 children in the custody of either the Division of Family and Youth Services or the Division of Juvenile Justice that would benefit from these services. Co-Chair Mulder noted that the amendment would fund a supplemental request. He explained that the supplemental request has exceeded the allocation by $9 million dollars. He acknowledged that the costs would need to be paid in the FY01 budget. Representative J. Davies pointed out that part of the purpose of a supplemental budget is to deal with unforeseen disasters. He emphasized that it does not make sense to push caseload driven expenses out of the budget because of the cost of natural disasters. A roll call vote was taken on the motion to adopt Amendment 11. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT Amendment 12. Co- Chair Mulder OBJECTED. Statewide Highways and Aviation Maintenance ($971.4)HWCF Statewide Highways and Aviation Maintenance $971.4 GF Central Highways and Aviation (528.6) HWCF Central Highways and Aviation 528.6 GF Representative J. Davies spoke in support of the amendment. The Highway Working Capital Fund (HWCF) is made up of money agencies have contributed to replace vehicles that have reached the ends of their useful lives. The appropriation of $1.5 million from the HWCF would impact the cash flow of this fund. All departments including the Department of Transportation and Public Facilities will either have to delay replacement of vehicles or finance replacements. Financing costs would be spread as a cost to the fund, resulting in increased charges for all departments. If the Department of Transportation and Public Facilities does not receive an appropriation for $1.5 million dollars, the department would be unable to reopen maintenance stations and would have to close additional maintenance stations and some rural airports. Co-Chair Mulder spoke against the amendment. He observed that the Highway Working Capital Fund is available for appropriation. He concluded that vehicles would be leased instead of purchased. He stressed that it was a choice between opening maintenance stations and buying new vehicles and acknowledged that the issue would have to be revisited in the next year. Representative J. Davies pointed out that it costs more to lease vehicles and that the fund was created to allow agencies to save money. Representative G. Davis cautioned that it would be a bad precedent to rob from the Fund. A roll call vote was taken on the motion to adopt Amendment 12. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Amendment 13 was HELD. Amendment 14 was WITHDRAWN as unnecessary. Representative J. Davies MOVED to ADOPT Amendment new 15. (h) The sum of $100,000 is appropriated from statutory designated program receipts (AS 37.05. 146(b)(3)). to the Department of Administration, office of public advocacy for operating costs for the fiscal year ending June 30. 2000. Co-Chair Mulder stated that he is a co-sponsor of the amendment. He explained that the funding source would be fees received by the Office of Public Advocacy (OPA) for management of public guardian accounts. If this amendment is not approved OPA might not be able to pay all vendors in a timely manner, which may undercut its ability to continue to secure contractual services at a rate substantially below the market rate for private attorney There being NO OBJECTION, Amendment 15 was adopted. Representative J. Davies MOVED to ADOPT Amendment 16. Co- Chair Therriault OBJECTED. Department of Corrections Facility Maintenance, Repair, Replacement and Renovation (ED) 400.0 GF Department of Education and Early Development Museum Collection Preservation - Modification And Renovation of Storage Area (ED 80) 295.6 GF Department of Health and Social Services Deferred Maintenance, Renewal, Replacement And Equipment (ED 99) 157.3 GF Department of Military and Veterans' Affairs Military Youth Academy Dining Hall Upgrades and Safety Improvements (ED 23) 249.2 GF Department of Transportation and Public Facilities Facilities Deferred Maintenance and Critical Repairs 700.0 GF Representative J. Davies spoke in support of Amendment 16. The amendment groups deferred maintenance issues. He stressed that there will be more costly repairs in the future if the deferred maintenance is not addressed. Co-Chair Therriault noted that the House funded deferred maintenance for the Department of Corrections at $600 thousand dollars. A roll call vote was taken on the motion to adopt Amendment 16. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Amendment 17 was HELD. Representative J. Davies MOVED to ADOPT Amendment 18. Co- Chair Therriault OBJECTED. Department of Transportation and Public Facilities Harbor Deferred Maintenance 400.0 GF Airport Deferred Maintenance 400.0 GF Highway Deferred Maintenance 700.0 GF Representative J. Davies noted that the amendment would fund specific deferred maintenance needs that are only partially met. Co-Chair Therriault spoke against the amendment. A roll call vote was taken on the motion to adopt Amendment 18. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT Amendment 19. Co- Chair Therriault OBJECTED. AHFC Chugach View Renovation $2,000,000 AHFC Eyak Manor Renovation $1,600,000 AHFC Senior & Statewide Deferred Maintenance and Renovation $975,000 Representative J. Davies spoke in support of Amendment 19. He noted that the amendment would fund three of the highest priority projects for the Alaska Housing Finance Corporation (AHFC). They would be paid for with AHFC bond funds issued under their GO authority. Co-Chair Therriault spoke against the amendment. He noted that funding was restored in the FY00 budget and added that they are attempting to include the projects in a bond package. He noted that there is $1,522,200 dollars in the budget for statewide-deferred maintenance. Representative J. Davies WITHDREW Amendment 19. Representative Grussendorf MOVED to ADOPT Amendment 20 as amended. Co-Chair Mulder OBJECTED. Department of Transportation & Public Facilities Marine Transportation Projects Section 1, page 34, insert after line 21 Add project: Alaska Marine Highway System: Sitka Shuttle Vessel $6,900,000 Federal Receipts Representative Grussendorf spoke in support of the amendment.   (TAPE CHANGE, HFC 00 - 137, SIDE 2) Representative Grussendorf noted that federal funds could be used for the appropriation. Representative Williams spoke in support of the amendment. Co-Chair Mulder questioned if additional federal authorization would result in other items being bumped off the list. Representative Grussendorf responded that there are always projects that are unable to go forward. Representative Austerman spoke in support. He maintained that a fast ferry would be a logical step for the ferry system in Southeast Alaska. Vice Chair Bunde spoke in opposition. Representative J. Davies stressed that the vessel is a critical part of the Southeast Transportation Plan. Representative G. Davis spoke in support. He observed that a fast ferry could provide savings. He questioned if the ferry had been designed. Vice Chair Bunde pointed out that savings would only be achieved if an older slower boat, with more crew, were eliminated. KURT PARKAN, DEPUTY COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES provided information on the amendment. He noted that the department received $31 million dollars in federal authorization for FY00. The department requested $69.0 million dollars in federal authorization for FY01 and is prepared to go out for a RFP within a couple of months. The estimated cost is $38 million dollars. The project is in the Statewide Transportation Improvement Program (STIP) plan. Mr. Parkan explained that authorization would allow the project to continue. The department would be able to capture federal funding without loss of other projects. Co-Chair Therriault observed that the federal match has been reduced. Co-Chair Mulder asked if another vessel would go off line. Mr. Parkan could not identify which vessel would go off- line. The Plan depends on the shuttle vessels. Co-Chair Mulder expressed concern that the number of vessels would not be reduced. Mr. Parkan emphasized that the department cannot prove their ability unless the first vessel is built. Representative J. Davies pointed out that older vessels cannot be removed unless there are new vessels to replace them. Representative Austerman agreed and emphasized the need to complete the first step. Representative Grussendorf stressed that the tides in the Sergius Narrows create difficulties with passage. The fast ferry could alleviate problems with passage during low tides. A roll call vote was taken on the motion to adopt Amendment 20. IN FAVOR: Davies, Davis, Grussendorf, Williams, Austerman OPPOSED: Bunde, Foster, Phillips, Mulder, Therriault Representative Moses was absent from the vote. The MOTION FAILED (5-5). Representative J. Davies MOVED to ADOPT Amendment 21. Co- Chair Mulder OBJECTED. *Sec. . EXXON VALDEZ OIL SPILL RESTORATION FUND. (a) The legislature finds that (1) as a result of the judgment entered by the United States District Court in the criminal case United States of America v. Exxon Shipping Company and Exxon Corporation, No. A90-015 CR. the state received $50,000,000 in restitution "to be used by the State of Alaska... exclusively for restoration projects. within the State of Alaska, relating to the 'Exxon Valdez' oil spill": (2) the money received by the state in restitution is held in the "Exxon Valdez oil spill restoration fund," established by the Department of Revenue, to implement the judgment; and (3) the appropriation in (b) of this section is made in order to achieve the purposes set out in the court's restitution order described in (1) of this subsection. (b) The unappropriated and unobligated balance of income accrued on or before June 30, 2001. in the fund described in (a)(2) of this section is appropriated to the Department of Fish and Game for the purpose of restoring. replacing, or enhancing resources or services injured or lost as a result of the Exxon Valdez oil spill through a multiple-year project to provide for coordination among the Department of Fish and Game, the Department of Environmental Conservation, the Exxon Valdez Oil Spill Trustee Council, the North Pacific Research Board, and similar entities, of fisheries and contaminants research and monitoring projects financed or carried out by those entities in this state and the North Pacific waters. * Sec. -. LAPSE PROVISION. The appropriation made by sec. (b) of this Act is for a capital project and lapses under AS 3 7.25.020. Representative J. Davies explained that the amendment would appropriate some of the interest and unobligated balance of the $50 million dollars in the EVOSS Fund to the Department of Fish and Game to continue the efforts of restoration. The Department of Fish and Game would coordinate with the Department of Environmental Conservation and the Trustee Council to carry out long-term projects. Co-Chair Mulder expressed concern that the language is nebulous. He stated that he would not be as reluctant to support specific projects and emphasized that EVOSS funds are limited. Representative J. Davies argued in support. He suggested a conceptual amendment to bring specific projects to the Legislative Budget and Audit Committee. Co-Chair Mulder agreed that the request could be presented to the Legislative Budget and Audit Committee without additional authorization. In response to a question by Representative G. Davis, Co- Chair Mulder estimated that there is $250 thousand dollars in interest. Co-Chair Therriault agreed that if the amendment were not adopted that specific projects could be brought to the Legislative Budget and Audit Committee for consideration. Representative J. Davies observed that the Legislative Budget and Audit Committee has become increasingly reluctant to approve projects without legislative direction. He added that the conceptual amendment would give clear direction to the Legislative Budget and Audit Committee. A roll call vote was taken on the motion to adopt Amendment 21. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT Amendment 22. Co- Chair Mulder OBJECTED. Add a new section to read: * Sec. . DEPARTMENT OF HEALTH AND SOCIAL SERVICES. (a) The sum of $1. 119.400 is appropriated to the Department of Health and Social Services. MatSu Youth Facility for FY2001 operating costs from the unexpended and unobligated balance of the interest and income appropriated to the Alaska Railroad Corporation by sec. 145(b), ch. 208, SLA 1990, as added by sec. 56, ch. 100, SLA 1997. and as amended by sec. 40(b). ch 2. FSSLA 1999 (Matanuska-Susitna Borough - $900,000 for economic development). (b) The sum of $1,119,400 that was appropriated from the general fund to the Department of Health and Social Services, juvenile justice, for the Mat-Su Youth Facility in a section of CCS HB 312 is repealed and reappropriated to the Department of Education and Early Development, early development, head start grants, for the fiscal year ending June 30, 2001. Representative J. Davies explained that the purpose of the amendment is to make headway on Head Start funding. He noted that general funds would be freed for statewide Head Start projects. Co-Chair Mulder argued against the amendment. He observed that the Matsu Youth facility would be opened. He acknowledged that the Governor's request was not fully funded. There has been level funding for three consecutive years. Representative J. Davies pointed out that the amendment would be a net zero. Fewer than 30 percent of the eligible children are being reached. A roll call vote was taken on the motion to adopt Amendment 22. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT Amendment 23. Co- Chair Therriault OBJECTED. Add new sections to read: * Sec. . ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY. The sum of $4,200,000 that was declared available for appropriation b~' the board of directors of the Alaska Industrial Development and Export Authority as a one-time additional fiscal year 2000 dividend from the unrestricted balance in the Alaska Industrial Development and Export Authority revolving fund (AS 44.88.060) is appropriated in sec. of this Act. (Cite section below) * Sec. -. POWER COST EQUALIZATION. The sum of $4,200,000 is appropriated from the Alaska Industrial Development and Export Authority revolving fund (AIDEA) (AS 44.88.060) to the power cost equalization and rural electric capitalization fund (AS 42.45.100). (This section needs to be referenced in the lapse provisions for capitalizing a fund.) Representative J. Davies explained that the amendment would appropriate AIDEA funds available through a one-time dividend to a capitalization fund for Power Cost Equalization. Co-Chair Therriault observed that the AIDEA dividend funds were used to cover pupil transportation. ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR clarified that the amendment was prepared before funding was directed to pupil transportation. She spoke in support of an endowment. Representative J. Davies WITHDREW Amendment 23. Representative Phillips spoke in support of additional funding for the PCE endowment. Representative J. Davies MOVED to ADOPT Amendment 24. Co- Chair Therriault OBJECTED. Add to Page 3 Line 22 (Department of Community and Economic Development): Rural Power Systems Upgrades 540,000 CF (ED99) Representative J. Davies noted that the legislature has appropriated general funds for Rural Power Systems upgrades in SLA 92, 93, 95, 96 and 97. These funds have been used to match other state, local and federal funds to complete projects in many rural communities. This appropriation equates to $45.0 thousand dollars each for projects in 12 rural communities. Participation by the Denali Commission ($7.8 million) helps expedite a longstanding state program to complete electrical system upgrades. Improvements include: re-sizing generators, re-balancing of electrical loads, line loss assessments, line extensions, powerhouse construction and other electrical generation and distribution system repairs or upgrades which bring the systems into compliance with National Electric Code and Rural Utilities Services standards, prevent hazardous conditions and enhance system reliability. Co-Chair Therriault observed that the Denali Commission does not require a match. He pointed out that there is approximately $1.4 million dollars in the budget for some state participation. He argued that there is already state participation. Representative J. Davies acknowledged that there is limited state participation but argued that additional help is necessary to make the cost of providing power in rural Alaska more efficient. A roll call vote was taken on the motion to adopt Amendment 24. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder Representative Moses was absent from the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT Amendment 25. Co- Chair Therriault OBJECTED. Add after Page 3 Line 22 Department of Community and Economic Development: Alternative Energy Program (ED99) 150,000 GF Representative J. Davies explained the amendment. The appropriation will be used in conjunction with $4.3 million dollars in U.S. Department of Energy grants for the development of wind/fuel cell hybrid systems and battery storage applications in rural Alaska. He noted that this would be the appropriate place to continue the effort to obtain energy. He observed that the state will need to continue funding for PCE absence a technological breakthrough and maintained that this is the appropriate place to provide funds. Co-Chair Therriault pointed out that the $150 thousand dollars is not needed to capture federal funds. There is still $200 to $250 thousand dollars remaining from FY00. A roll call vote was taken on the motion to adopt Amendment 25. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault Co-Chair Mulder and Representative Moses were absent from the vote. The MOTION FAILED (2-7). Representative J. Davies MOVED to ADOPT Amendment 26. Co- Chair Therriault OBJECTED. Sec. ____ The sum of $1,361,300 is appropriated from the general fund to the Department of Education and Early Development for the child care subsidy program for the fiscal year ending June 30, 2001. Representative J. Davies explained that this amendment would provide funding to address the projected waitlist of families eligible for childcare assistance in FY01. He noted that the waitlist is substantial and that the appropriation would bring the wait to almost zero. He added that if help is not available that some individuals would need to turn to welfare. A roll call vote was taken on the motion to adopt Amendment 26. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault Co-Chair Mulder and Representative Moses were absent from the vote. The MOTION FAILED (2-7). Amendment 27 was WITHDRAWN. Representative J. Davies MOVED to ADOPT Amendment 28. There was OBJECTION. Insert a new bill section to read: *Sec A. NATIONAL PETROLEUM RESERVE - ALASKA IMPACT GRANT PROGRAM. The amount received by the National Petroleum Reserve - Alaska special revenue fund (AS 37.05.530) under 42 U.S.C. 6508 during the fiscal year ending June 30, 2001, is appropriated to the Department of Community and Economic Development for the fiscal year ending June 30, 2001, for grants under the National Petroleum Reserve - Alaska impact program." Representative J. Davies stressed that the language was in the Senate version. Co-Chair Therriault explained that the intent is to require the actual list of projects that would be funded from the NPRA account. Representative Grussendorf observed that there are a number of revenues that come to municipalities in lieu of taxes. He stressed that this item is being singled out for different treatment. Co-Chair Mulder observed that discussions with the Senator from Kotzebue resulted in discussion of a 50/50, local/statewide, approach to the revenues. Representative J. Davies stressed that the intent is to help local communities that are impacted. The funds are not viewed as statewide impact funds. He noted that other communities are not asked to use their impact funds to benefit the state. Congress provided the money as a local impact. A roll call vote was taken on the motion to adopt Amendment 28. IN FAVOR: Austerman, Williams, Davies, Grussendorf OPPOSED: Bunde, Davis, Foster, Kohring, Therriault, Mulder Representative Moses was absent from the meeting. The MOTION FAILED (4-6). (CHANGE, HFC 00 - 138, SIDE 1)  Co-Chair Mulder MOVED to ADOPT Amendment 29. Co-Chair Therriault OBJECTED for the purpose of discussion. Add a new section to read: *Sec -. ANCHORAGE INTERNATIONAL AIRPORT CONSTRUCTION. (a) The amount earned by the investments authorized by AS 37.15.410 and AS 37.15.420 of the International Airports Construction Fund for the period February 28, 1999 to June 30, 2001. after an payment required under U.S.C. 148, not to exceed $ 18,140,000, is appropriated from the International Airports Construction Fund to the Department of Transportation & Public Facilities for construction costs of the Anchorage International Airport Terminal Redevelopment Project. (b) The appropriation in section (a) is contingent upon approval by the signatory airlines in accordance with the Anchorage International Airport operating agreement. Co-Chair Mulder observed that the amendment was co-sponsored by Representative J. Davies. He explained that the allows the airport authority to expend the interest income from the bonds for the cost of the on-going project. It is contingent on support of the signatory airlines at the airport. Vice Chair Bunde stated that he would support the amendment with the conditional approval by the signatory airlines. Representative J. Davies pointed out that the money would accrue to the project and that the scope is not changed. The amendment does not cause an increase in contribution by any of the operating airlines. There being NO OBJECTION, Amendment 29 was adopted. Representative J. Davies MOVED to ADOPT Amendment 30. Co- Chair Mulder OBJECTED. Add a new section to read: *Sec. Department of Health and Social Services The sum of $700,000 is appropriated from general funds to the Department of Health and Social Services for the Infant Learning Program for the fiscal year ending June 30, 2001. Representative J. Davies explained that the amendment would support the Infant Learning Program. The conference committee on the Operating budget funds the Governor's requested increment of $700,000 GF to eliminate the wait list for this program with interagency Receipts. The source of the funds is the recent 5-year Fetal Alcohol Syndrome/Fetal Alcohol Affect federal grant obtained by Senator Ted Stevens. He stressed that the concern is the shift in the funding source. • The children on the Infant Learning Program wait list are 50% delayed and do not tend to have FAS. • Alaska has one of the nation 's highest estimated rates of alcohol-related risk factors and a high rate of births where alcohol was present during pregnancy. • The purpose of the new federal grant is not to use the funds to supplant state general funds but provide funds for a statewide, comprehensive FAS prevention, intervention and service delivery project. Much needs to be done to address this entirely preventable cause of birth defects to Alaska's children. Co-Chair Mulder acknowledged that funding was redirected from the FAS program. Representative J. Davies stressed that the concern is with the funding source not the amount. He stressed that prevention can save over a million dollars in a child's lifetime. Insert a new section after section 69 (effective dates) as follows: Representative J. Davies noted that the appropriation is not fully funded. Mr. Spencer observed that there would be enough funds to get started. He noted that the department can identify a shortfall as the project proceeds. There being NO OBJECTION, Amendment 32 was adopted. Representative Williams MOVED to ADOPT Amendment 33. Co- Chair Therriault OBJECTED for the purpose of discussion. Sec. 1 Dept of Transportation & Public Facilities Page 19, line 8 Alaska Marine Highway System: Overhaul, Rehabilitation, and Mandatory Training 4,800,000 Representative Williams explained that the appropriation supports annual vessel overhaul and shore facility maintenance programs - ($450,000). He argued that the cut in vessel maintenance would be spread across the fleet and hasten the continued deterioration of the aging ships. He noted that the remaining $150,000 thousand dollars is for Standards for Training, Certification and Watchkeeping (STCW) that would be reduced by a third ($150,000). The Alaska Marine Highway System is on a fixed schedule to ensure compliance with STCW regulations by the February 1, 2002 deadline. Failure to achieve fleet-wide STCW certification would jeopardize crew certification needed to meet summer service requirements in 2002. Co-Chair Therriault noted that the item is currently flat- funded at last year's level. He maintained his objection. A roll call vote was taken on the motion to adopt Amendment 33. IN FAVOR: Davies, Davis, Grussendorf, Williams OPPOSED: Bunde, Foster, Phillips, Austerman, Mulder, Therriault Representative Moses was absent from the meeting. The MOTION FAILED (4-6). Representative J. Davies MOVED to ADOPT Amendment 34. Co- Chair Therriault OBJECTED. Department of Natural Resources Section 1, page 17, line 16 insert: Seismic Data & Interpretation $60.0 GF Representative J. Davies explained that the amendment would place $60 thousand dollars in the Oil and Gas Division to purchase seismic data. This is the only source of funding for the Division to obtain data used to evaluate gas and oil potential independent of the industry. A roll call vote was taken on the motion to adopt Amendment 34. IN FAVOR: Austerman, Williams, Davies, Grussendorf OPPOSED: Bunde, Davis, Foster, Kohring,Therriault, Mulder Representative Moses was absent from the meeting. The MOTION FAILED (4-6). Representative J. Davies MOVED to ADOPT Amendment 35. Co- Chair Therriault OBJECTED. Amendment 35 would add projects to the list of projects authorized with AHFC bonds or general funds under HB 281. The appropriation would take the first 10 projects under school construction and finish the major maintenance list for the Department of Education and Early Development. The funds would come from the Constitutional Budget Reserve Account. He maintained that it would be cost effective to use money that is only earning 5 percent interest. A roll call vote was taken on the motion to adopt Amendment 35. IN FAVOR: Austerman, Williams, Davies, Grussendorf OPPOSED: Bunde, Davis, Foster, Kohring, Therriault, Mulder Representative Moses was absent from the meeting. Co-Chair Mulder MOVED to ADOPT Amendment 36. Add to Department of Transportation and Public Facilities Anchorage Metropolitan Area Transportation Study (AMATS) Projects Section 1, Page 28, insert after line 21 Anchorage: C Street Phase II International Airport Road - Diamond Boulevard Reconstruction 13,000,000 Federal Receipts Co-Chair Mulder explained that there are projects within the Anchorage allocation that are soft in terms of being able to be delivered to the street in time. The department requested authorization to begin the International Airport Road- Diamond Boulevard Reconstruction if another project is not ready. Representative J. Davies pointed out that the amendment would allow the next project that is ready to be funded if Page 7, line 5: maintenance, and depreciation costs related to space of covered buildings managed under an agreement with the Department of Administration." The appropriations to DOT/PF made by the Senate in the operating budget are incompatible with this legislation. The intent was to operate and maintain state buildings in a more businesslike, cost-effective manner, and to begin addressing the extensive backlog of deferred maintenance problems. The diversion of funds from the Public Building Fund for other purposes means the loss of a large part of the money collected to begin addressing these deferred maintenance problems, resulting in continued deterioration of the facilities. Some of these problems are urgent, including facilities that right now have leaking roofs and window vapor seals. This use of funds to subsidize the DOT/PF operating budget would also clearly be contrary to AS 3 7.07.080(e) which requires that the agency providing the service (the Public Building Fund) must charge for the services based on actual costs or a cost allocation method. Representative J. Davies maintained that the appropriation is an inappropriate use of the Public Building Fund. A roll call vote was taken on the motion to adopt Amendment 13. IN FAVOR: Davies, Grussendorf OPPOSED: Austerman, Bunde, Foster, Kohring, Williams, Mulder, Therriault Representatives Davis and Moses were absent from the meeting. The MOTION FAILED (2-7). Representative J. Davies MOVED to ADOPT Amendment New 17. Representative J. Davies noted that the amendment would ensure that products are safely consumed and suggested that it is a cost-effective project. Representative G. Davis spoke in support of the amendment. Representative Williams added his support for the amendment. Add to the Department of Environmental Conservation Environmental Health Food Safety Lab. Dividend Relocation Programming and Site Planning 240.0 AHFC There being NO OBJECTION, Amendment New 17 was adopted. Co-Chair Therriault MOVED to ADOPT Amendment 37 - Intent Language: It is the intent of the legislature that the Statewide Library Electronic Doorway appropriation be placed within the operating budget in future fiscal years. Cook Inlet Information Management and Monitoring System $315,000 is contingent upon the department entering into a Memorandum of Agreement with the Municipality of Anchorage to share the use of the Tudor Road Maintenance Site, $200,000 is appropriated for the costs related to the transfer of this facility from the Department of Military and Veterans Affairs to the Department of Transportation and Public Facilities. It is the intent of the legislature to spend $188,800 for the Snowmobile Trails Development grants program. This grant program was funded in FY00 and it is the intent of the legislature to continue funding it through FY01. The legislature recommends that $136,800 of the funds will be used for grants, and $52,000 will be used to administer the grants program. It is the intent of the legislature that $149,500 of this appropriation be used for the department's top priority and $40,000 be used for Breathalyzer equipment. It is the intent of the legislature that the appropriation for the Small Business Development Program be placed in the operating budget in future fiscal years. Co-Chair Therriault noted that the amendment adopts Senate intent language. Representative J. Davies MOVED to AMEND Amendment 37: Change "breathalyzer equipment" to "breath alcohol analysis equipment". He explained that the amendment would allow the use of different brands through the adoption of generic language. There being NO OBJECTION, it was so ordered. Representative Phillips MOVED to ADOPT Amendment 38. Organization Grants to Cities (AS 29.05.180(a) Adak Incorporation Grant $50,000 Representative Phillips noted that the community is entitled to the state grant upon incorporation. There being NO OBJECTION, it was so ordered. Co-Chair Mulder MOVED to ADOPT Amendment 39: Page 76, section 40, line 19 change the reference from HB 304 to HB 418. He observed that the bill site was incorrect. There being NO OBJECTION, Amendment 39 was adopted. Co-Chair Mulder MOVED to ADOPT Amendment 40: Delete section 24. DENNY DEWITT, STAFF, REPRESENTATIVE MULDER explained that the amendment would be to delete section 24(a). He observed that the language was inserted to authorize additional funding to Occupational Licensing for FY00. He noted that similar language is in the legislation for FY01. Both sections have immediate effective dates. If the legislation were signed subsequent to the operating budget it would disallow funding for FY00. Co-Chair Mulder restated his motion to strike section 24(a). There being NO OBJECTION, Amendment 40 was adopted. Co-Chair Therriault MOVED to ADOPT Amendment 41 Page 78, line 20, through page 80, line 16: Delete all material and insert: Sec. 47. LAPSE REAPPROPRIATIONS. (a) The unexpended and unobligated balances, after the reappropriations made by (b) - (i) of this section, of the appropriations made in sec. 43, ch. 84, SLA 1999, page 50, line 19 (Budget and Audit Committee - $6,196,100), and sec. 43, ch. 84, SLA 1999, page 50, line 24 (Legislative Council - $19,710,100) are reappropriated to the Legislative Council for administrative services for the fiscal year ending June 30, 2001. (b) The unexpended and unobligated balances, not to exceed a total of $250,000, of the appropriation made in sec. 43, ch. 84, SLA 1999, page 50, line 19, and allocated on page 50, line 20 (Legislative Audit - $2,602,000) and of the appropriation made in sec. 43, ch. 84, SLA 1999, page 50, line 24, and allocated on page 50, line 25 (Salaries and Allowances - $4,162,100) are reappropriated to the Legislative Budget and Audit Committee for a comprehensive study conducted by or for the Legislative Budget and Audit Committee to evaluate in-state residential educational alternatives. The study is to be delivered to the legislature on or before January 15, 2001. (c) The unexpended and unobligated balances of the appropriation made in sec. 43, ch. 84, SLA 1999, page 50, line 19, and allocated on page 50, line 20 (Legislative Audit - $2,602,000) and of the appropriation made in sec. 43, ch. 84, SLA 1999, page 50, line 24, and allocated on page 50, line 25 (Salaries and Allowances - $4,162,100) that are not reappropriated by (h) of this section, are reappropriated to the Legislative Budget and Audit Committee for operating costs for the Legislative Budget and Audit Committee for the fiscal year ending June 30, 2001. Co-Chair Therriault noted that language regarding the legislative carry-forward had an incorrect account reference. KARLA SCHOFIELD, DEPUTY DIRECTOR, ACCOUNTING, LEGISLATIVE AFFAIRS AGENCY explained that the amendment references the correct appropriation to capture the carry-forward. There being NO OBJECTION, Amendment 41 was adopted. Co-Chair Mulder MOVED to ADOPT Amendment 42. Insert new bill sections to read: Sec. A. MATANUSKA-SUSITNA BOROUGH AND ALASKA RAILROAD CORPORATION. (a) The unexpended and unobligated balance of the appropriation made by sec. 145(a), ch. 208, SLA 1990, as amended by sec. 55, ch. 100, SLA 1997 (Alaska Railroad Corporation - $9,000,000), is reappropriated (1) one-half to the Department of Community and Economic Development for payment as a grant under AS 37.05.3 15 to the Matanuska-Susitna Borough for Point MacKenzie port development and associated rail line improvements within the borough; and (2) one-half to the Alaska Railroad Corporation for the purchase of locomotives, rolling stock, and associated equipment and rail line improvements in the Matanuska-Susitna Borough, to facilitate the development of coal deposits in the Matanuska-Susitna Valley. (b) The unexpended and unobligated balance of the appropriation made by sec. 145(b), ch. 208, SLA 1990, added by sec. 56, ch. 100, SLA 1997, as amended by sec. 40(b), ch. 2, FSSLA 1999 (Alaska Railroad Corporation), is reappropriated (1) one-half to the Department of Community and Economic Development for payment as a grant under AS 37.05.315 to the Matanuska-Susitna Borough for Point MacKenzie port development and associated rail line improvements within the borough; and (2) one-half to the Alaska Railroad Corporation for the purchase of locomotives, rolling stock, and associated equipment and rail line improvements in the Matanuska-Susitna Borough, to facilitate the development of coal deposits in the Matanuska-Susitna Valley. (c) The interest and income earned by the Alaska Railroad Corporation from the investment or deposit of the amounts appropriated under (a)(2) and (b)(2) of this section shall be deposited into the general fund on July 1 of each fiscal year. * Sec. B. The appropriations made by sec. A(a)(2) and A(b)(2) of this Act are for capital projects and lapse under AS 37.25.020. Co-Chair Therriault explained that the language in the senate version was quite open in regards to general economic development. The amendment was tightened to speak specifically to the Matanuska-Susitna Borough for Point MacKenzie port development and associated rail line improvements within the borough. The interest would accrue to the general fund. Representative Grussendorf pointed out the original funds came out of the Railbelt Energy Fund. He maintained that there was an understanding that funding would go to energy related projects. The original intent was to fund coal- generating activities. Co-Chair Therriault clarified that the feasibility of developing coal deposits in the MatSu hinges on development of the port. Representative G. Davis OBJECTED. He observed that there is a major coal loading facility in Seward and questioned the need for another one. Representative J. Davies concurred with Representative G. Davis. Co-Chair Mulder explained that the borough is attempting to leverage federal funds. He felt that the economic development would benefit the entire state. (TAPE CHANGE, HFC 00 - 138, SIDE 2)  A roll call vote was taken on the motion to adopt Amendment 42. IN FAVOR: Austerman, Bunde, Foster, Phillips, Williams, Therriault, Mulder OPPOSED: Davis, Davies, Grussendorf, Representative Moses was absent from the meeting. The MOTION PASSED (7-3). Co-Chair Therriault noted that the Legislative Finance Division would be instructed to utilize the AHFC dividend before expending general funds. Representative J. Davies questioned if the committee would take public testimony. Co-Chair Therriault stated that the Committee would not schedule public testimony. He noted that individual legislators would have time to hear from their constituents before the issue reached the House floor. Vice Chair Bunde MOVED to report HCS CSSB (FIN) out of Committee as amended. HCS CS SB 192 (FIN) was reported out of Committee with a "do pass" recommendation. ADJOURNMENT The meeting was adjourned at 1:05 p.m.