MINUTES  HB 375 & HB 377 CONFERENCE COMMITTEE  May 07, 2004  7:09 AM  TAPES  CC-04 # 2, Side A CC-04 # 2, Side B   CALL TO ORDER  Co-Chair Lyda Green convened the meeting at approximately 7:09 AM. PRESENT  Senator Lyda Green, Chair Senator Gary Wilken Senator Lyman Hoffman Representative John Harris, Vice Chair Representative Bill Williams Representative Eric Croft Also Attending: DAVID TEAL, Director, Division of Legislative Finance; KATHRYN DAUGHHETEE, Director Division of Administrative Services, Department of Law; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Natural Resources; Attending via Teleconference: There were no teleconference participants. SUMMARY INFORMATION  HB 375-APPROP: OPERATING BUDGET/LOANS/FUNDS HB 377-APPROP:MENTAL HEALTH BUDGET The Committee addressed conferrable items from the Department of Administration, Department of Environmental Conservation, Department of Fish and Game, the Department of Law, /// CS FOR HOUSE BILL NO. 375(FIN) am "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; and providing for an effective date." SENATE CS FOR CS FOR HOUSE BILL NO. 375(FIN) am S(brf sup maj fld S) "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; and providing for an effective date." AND CS FOR HOUSE BILL NO. 377(FIN) "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." SENATE CS FOR CS FOR HOUSE BILL NO. 377(FIN) "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." [Note: Items refer to motion sheets (copies on file). "House" and "Senate" refer to the committee substitute version passed by each body. "Amount" refers to the change to the amount proposed in the Governor's Amended budget request.] Department of Administration Item: # 1 Appropriation: Centralized Administrative Services Allocation: Finance Description: Reduce general funds by 5% Version: House plus $135,100 Amount: -$100,000 general funds Representative Harris moved for adoption and it was ADOPTED without objection. Item: # 2 Appropriation: Centralized Administrative Services Allocation: Finance Description: Add statutory designated program receipts (SDPR) for additional startup costs of Central Travel Office Version: House Amount: $0 Item: # 3 Appropriation: Centralized Administrative Services Allocation: Labor Relations Description: Reduce general funds by 10% Version: House Amount: -$96,100 general funds Item: #4 Appropriation: Centralized Administrative Services Allocation: Purchasing Description: Reduce overall total budget to FY 03 Actual level Version: House Amount: -$18,800 general funds Item: #5 Appropriation: Centralized Administrative Services Allocation: Retirement and Benefits Description: Reduce Travel and Commodities Version: House Amount: -$68,300 Group Ben -126,900 P/E Retire -48,800 Teach Ret Item: #6 Appropriation: Centralized Administrative Services Allocation: Group Health Insurance Description: Eliminate Travel Authorization Version: House Amount: -$22,200 Group Ben Representative Harris moved for adoption and items 2 through 6 were ADOPTED without objection. Item: #7 Appropriation: Leases Allocation: Leases Description: Add general fund to fund additional leasing costs at $2 million level Version: House minus $385,900 Amount: $385,900 general funds Note: The House position is intended to avoid and FY 05 supplemental appropriation and allow the transfer of lease funding to agencies in order to encourage actions to reduce lease costs. See items 14 and 15. Representative Harris moved for adoption. Senator Hoffman asked if a FY 05 supplemental appropriation would be anticipated. Representative Harris responded that the Department does not anticipate such, but qualified the situation could change. The item was ADOPTED without objection. Item: #8 Appropriation: Leases Allocation: Lease Administration Description: Reduce Lease Administration to FY 03 Total level Version: House Amount: -$31,900 general funds Item: #9 Appropriation: Legal and Advocacy Services Allocation: Office of Public Advocacy Description: Decrease for prioritization and correction of billing and payment issues Version: House Amount: -$50,000 general funds Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #10 Appropriation: Legal and Advocacy Services Allocation: Office of Public Advocacy Description: Establish full funding for a Social Services Specialist II for the Anchorage Wellness Court Version: Senate Amount: $0 Item: #11 Appropriation: Legal and Advocacy Services Allocation: Public Defender Agency Description: Cut Governor's request for $810,000 for projected caseload increase by approximately 20% Version: Senate Amount: $0 Item: #12 Appropriation: Violent Crimes Compensation Board Allocation: Violent Crimes Compensation Board Description: Add general fund grants to compensate for the loss of PFD Fund and PFD Crim funding sources Version: Senate Amount: $0 Representative Harris moved for adoption. Representative Croft objected to the adoption of Items #10 and #12. He emphasized the importance of the Wellness Court and the significant progress made to the program over the past five years. The Violent Crimes Compensation Board is also vital and would not receive $152,000 under the motion. Co-Chair Green reminded that the motions would appropriate the amounts requested by the Governor. The House amounts would increase funding. The Administration has indicated the programs could be operated within the existing budget. Representative Croft countered that the loss of Permanent Fund Dividends funds would reduce overall funding to the Violent Crimes Compensation Board. The House version would restore the loss of funds utilizing general funds. Representative Harris moved to accept Item #11 and leave Items #10 and #12 open. There was no objection and Item #11 was ADOPTED. Item: #13 Appropriation: Agencywide Description: Salary and benefit adjustments for employees of Labor, Trades, and Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non- covered Executive, Legislative and Judicial Branches Version: Senate Amount: $62,300 general funds 1,100 Fed Rcpts 31,300 Other funds Note: $200 of general funds appropriated for salary adjustments in DMV [Division of Motor Vehicles] is a technical error. Source should be RSS [Receipt Supported Services]. Acceptance of correction implied. Representative Harris moved for adoption. DAVID TEAL, Director, Division of Legislative Finance, explained the technical error to the funding sources. The Office of Management and Budget submitted allocation recommendations that would have exceeded the amount of funds available in some funding sources. Co-Chair Green noted this was based on information received by the Senate after the House of Representatives had considered the budget. The item was ADOPTED without objection. Item: #14 Appropriation: Leases Allocation: Leases Description: Conditional Language Version: House Language: The money appropriated by this appropriation may be distributed to state departments and agencies to pay the cost of leasing space occupied by the department or agency. Note: See items #7 and #15 Item: #15 Appropriation: Leases Allocation: Leases Description: Intent Version: House Language: It is the intent of the legislature that the department transfer funding for all leases to occupying agencies during FY 05. Note: See items #7 and #14 Representative Harris moved for adoption and the items were ADOPTED without objection. The Department of Administration budget was therefore closed with the exception of Items #10 and #12. Department of Environmental Conservation Item: #1 Appropriation: Administration Allocation: Office of the Commissioner Description: Restore decrement for additional travel savings Version: House Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #2 Appropriation: Administration Allocation: Information and Administrative Services Description: Restore Homeland Security Position Version: Senate Amount: $80,500 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #3 Appropriation: Administration Allocation: Information and Administrative Services Description: Restore decrement for travel Version: House Amount: $0 Item: #4 Appropriation: Environmental Health Allocation: Environmental Health Director Description: Restore decrement for travel Version: House Amount: $0 Item: #5 Appropriation: Environmental Health Allocation: Laboratory Services Description: Restore decrement for additional travel savings Version: House Amount: $0 Item: #6 Appropriation: Environmental Health Allocation: Drinking Water Description: Begin phase-out of Drinking Water Class C Program Version: House Amount: -$45,900 general funds Item: #7 Appropriation: Environmental Health Allocation: Solid Waste Management Description: Begin phase-out of Solid Waste Class 3 Program Version: House Amount: -$75,000 general funds Item: #8 Appropriation: Environmental Health Allocation: Air Director Description: Restore decrement for travel Version: House Amount: $0 Item: #9 Appropriation: Environmental Health Allocation: Air Quality Description: Restore decrement for additional travel savings Version: House Amount: $0 Item: #11 Appropriation: Water Allocation: Facility Construction Description: Restore decrement for additional travel savings Version: House Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #10 Appropriation: Water Allocation: Water Quality Description: Cut Governor's "Raindrops to Oceans" increment Version: Senate Amount: -$50,000 general funds Representative Harris moved for adoption. Representative Williams stated support for this action. Representative Croft asked if this motion would restore funding to the program. Co-Chair Green replied the funding would be restored. The item was ADOPTED without objection. Item: #12 Appropriation: Agencywide Description: Salary and benefit adjustments for employees of Labor, Trades and Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non- covered Executive, Legislative and Judicial Branches. Version: Senate Amount: $3,500 general funds 1,400 Fed Rcpts 2,800 Other funds Representative Harris moved for adoption. Co-Chair Green informed that this reflects information received in by the Senate after the House of Representatives had passed the appropriation legislation. Without objection the item was ADOPTED. All conference items for the Department of Environmental Conservation were CLOSED. Department of Fish and Game Item: #1 Appropriation: Commercial Fisheries Allocation: Southeast Region Fisheries Management Description: Deny Governor's general fund decrement and PCNs Version: Senate Amount: $0 Item: #2 Appropriation: Commercial Fisheries Allocation: Southeast Region Fisheries Management Description: Fully fund PERS increase Version: Senate Amount: $167,900 Cm Fish Ln Item: #3 Appropriation: Commercial Fisheries Allocation: Southeast Region Fisheries Management Description: Replace general funds with CFRLF [Commercial Fisheries Revolving Loan Fund] Version: Senate Amount: -$149,600 general funds $149,600 Cm Fish Ln Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #4 Appropriation: Commercial Fisheries Allocation: Southeast Region Fisheries Description: Decrement Test Fish Receipts Version: House Amount: -$102,800 Test Fish Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #5 Appropriation: Commercial Fisheries Allocation: Central Region Fisheries Management Description: Deny Governor's general fund decrement and PCNs Version: Senate Amount: $0 Item: #6 Appropriation: Commercial Fisheries Allocation: Central Region Fisheries Management Description: Fully fund PERS increase Version: Senate Amount: $206,100 Cm Fish Ln Item: #7 Appropriation: Commercial Fisheries Allocation: Central Region Fisheries Management Description: Replace general funds with CFRLF Version: Senate Amount: -$191,900 general funds $191,900 Cm Fish Ln Representative Harris moved for adoption and these items were ADOPTED without objection. Item: #8 Appropriation: Commercial Fisheries Allocation: Central Region Fisheries Management Description: Decrement Test Fish Receipts Version: House Amount: -$71,300 Test Fish Representative Harris moved for adoption and this item was ADOPTED without objection. Item: #9 Appropriation: Commercial Fisheries Allocation: AYK Region Fisheries Management Description: Deny Governor's general fund decrement and PCNs Version: Senate Amount: $0 Item: #10 Appropriation: Commercial Fisheries Allocation: AYK Region Fisheries Management Description: Fully fund PERS increase Version: Senate Amount: $140,000 Cm Fish Ln Item: #11 Appropriation: Commercial Fisheries Allocation: AYK Region Fisheries Management Description: Add CFRLF from DEC & DCED ($184,400 & $196,800) & I/A [inter-agency receipts] funding from Sport Fish Version: Senate Amount: $0 Item: #12 Appropriation: Commercial Fisheries Allocation: AYK Region Fisheries Management Description: Replace general funds with CFRLF Version: Senate Amount: -$144,500 general fund $144,500 Cm Fish Ln Item: #13 Appropriation: Commercial Fisheries Allocation: AYK Region Fisheries Management Description: Add general funds to purchase and operate SONAR in the Porcupine River Version: Senate Amount: $0 Item: #14 Appropriation: Commercial Fisheries Allocation: Westward Region Fisheries Management Description: Deny Governor's general fund decrement and PCNs Version: Senate Amount: $0 Item: #15 Appropriation: Commercial Fisheries Allocation: Westward Region Fisheries Management Description: Fully fund PERS increase Version: Senate Amount: $223,800 Cm Fish Ln Item: #16 Appropriation: Commercial Fisheries Allocation: Westward Region Fisheries Management Description: Replace general funds with CFRLF Version: Senate Amount: -$189,000 general funds $189,000 Cm Fish Ln Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #17 Appropriation: Commercial Fisheries Allocation: Westward Region Fisheries Management Description: Decrement Test Fish Receipts Version: House Amount: -$173,000 Test Fish Representative Harris moved for adoption. Representative Croft noted this is the third decrement of Test Fish receipts and asked how the decrements differ. Mr. Teal explained that Test Fish receipts are funds generated from the contracting of commercial fishers to provide samples and other survey information. Representative Croft asked why three decrements are necessary, rather than one decrement to make the reduction. Co-Chair Green explained the accounting separations for each regional office. Mr. Teal affirmed. The item was ADOPTED without objection. Item: #18 Appropriation: Commercial Fisheries Allocation: Headquarters Fisheries Management Description: Deny Governor's general fund decrement and PCNs Version: Senate Amount: $0 Item: #19 Appropriation: Commercial Fisheries Allocation: Headquarters Fisheries Management Description: Fully fund PERS increase Version: Senate Amount: $81,100 Cm Fish Ln Item: #20 Appropriation: Commercial Fisheries Allocation: Headquarters Fisheries Management Description: Replace general funds with CFRLF Version: Senate Amount: -$73,600 general funds $73,600 Cm Fish Ln Item: #21 Appropriation: Commercial Fisheries Allocation: Headquarters Fisheries Management Description: Fund change to free up RSS to fully fund the PERS increase in the Commercial Fish Entry Commission appropriation Version: Senate Amount: -$120,000 Cm Fish Ln $120,000 Rcpt Services Item: #22 Appropriation: Commercial Fisheries Allocation: Fisheries Development Description: Deny Governor's general fund decrement and PCNs Version: Senate Amount: $0 Item: #23 Appropriation: Commercial Fisheries Allocation: Fisheries Development Description: Fully fund PERS increase Version: Senate Amount: $96,500 Cm Fish Ln Item: #24 Appropriation: Commercial Fisheries Allocation: Fisheries Development Description: Replace general funds with CFRLF Version: Senate Amount: -$81,900 general funds $81,900 Cm Fish Ln Item: #25 Appropriation: Sport Fisheries Allocation: Sport Fisheries Description: Increase F&G funding to correspond with an increase in I/A in Commercial Fisheries/AYK Region Fisheries Management Version: Senate Amount: $0 Item: #26 Appropriation: Sport Fisheries Allocation: Sport Fisheries Habitat Description: Fully fund PERS increase Version: Senate Amount: $5,900 Cm Fish Ln Item: #27 Appropriation: Administration and Support Allocation: Commissioner's Office Description: Fully fund PERS increase Version: Senate Amount: $18,000 Cm Fish Ln Item: #28 Appropriation: Administration and Support Allocation: Administrative Services Description: Fully fund PERS increase Version: Senate Amount: $45,500 Cm Fish Ln Item: #29 Appropriation: Administration and Support Allocation: Boards of Fisheries and Game Description: Fully fund PERS increase Version: Senate Amount: $21,000 Cm Fish Ln Item: #30 Appropriation: Administration and Support Allocation: Advisory Committees Description: Fully fund PERS increase Version: Senate Amount: $10,700 Cm Fish Ln Item: #31 Appropriation: Administration and Support Allocation: State Subsistence Description: Fully fund PERS increase Version: Senate Amount: $9,300 Cm Fish Ln Item: #32 Appropriation: Administration and Support Allocation: EVOS [Exxon Valdez Oil Spill] Trustee Council Description: Fund the Gulf Ecosystem Monitoring Program ($742,100) & increase FY 05 Fed Auth by $148,300 Version: Senate Amount: $890,400 general funds Item: #33 Appropriation: Commercial Fisheries Entry Commission Allocation: Commercial Fisheries Entry Commission Description: Fully fund PERS increase Version: Senate Amount: $120,000 Rcpt Svcs Item: #34 Appropriation: Agencywide Description: Salary Description: Salary and benefit adjustments for employees of Labor, Trades and Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non- covered Executive, Legislative and Judicial Branches. Version: Senate Amount: $3,900 general funds 4,000 Fed Rcpts 23,000 Other funds Representative Harris moved for adoption and these items were ADOPTED without objection. Item: #35 Appropriation: Commercial Fisheries Allocation: Headquarters Fisheries Management Description: Conditional Language Version: Senate Language: The amount allocated for Headquarters Fisheries Management includes the unexpended and unobligated balance on June 30, 2004, of the Department of Fish and Game, Commercial Fisheries Entry Commission, program receipts from licenses, permits and other fees. Item: #36 Appropriation: Administration and Support Allocation: Fish and Game State Facilities Rent Description: Conditional Language Version: Senate Language: The amount allocated for Fish and Game State Facilities Rent includes the unexpended and unobligated balance on June 30, 2004, of the Department of Fish and Game, Commercial Fisheries Entry Commission, program receipts from licenses, permits and other fees. Item: #37 Appropriation: Commercial Fisheries Entry Commission Allocation: Commercial Fisheries Entry Commission Description: Conditional Language Version: Senate Language: The amount allocated for Fish and Game State Facilities Rent includes the unexpended and unobligated balance on June 30, 2004, of the Department of Fish and Game, Commercial Fisheries Entry Commission, program receipts from licenses, permits and other fees. Item: #38 Appropriation: Sport Fisheries Allocation: Assert/Protect State's Rights Description: Structure Change Version: Senate Note: Senate moved Assert/Protect State's Rights allocation to Sport Fisheries Appropriation Representative Harris moved for adoption and the items were ADOPTED without objection. All conference items for the Department of Fish and Game were CLOSED. Senator Hoffman commented that the Conference Committee "did a fairly decent job on Fish and Game." Department of Law Item: #1 Appropriation: Criminal Division Allocation: First Judicial District Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #2 Appropriation: Criminal Division Allocation: First Judicial District Description: Reduce travel by 25% Version: House plus $12,000 Amount: -$12,000 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #3 Appropriation: Criminal Division Allocation: Second Judicial District Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #4 Appropriation: Criminal Division Allocation: Second Judicial District Description: Reduce travel by 25% Version: House plus $8,900 Amount: -$8,800 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #5 Appropriation: Criminal Division Allocation: Third Judicial District: Anchorage Description: Deny Victims for Justice increment request Version: House Amount: -$125,000 general funds Representative Harris moved for adoption. Representative Croft objected and noted this is another instance of reducing funding for victims of violent crimes. The amount of funding involved is insignificant, but would be leveraged "for a huge impact on the lives of victims". The Court Watch program ensures that the judicial system adequately recognizes the constitutional rights of victims. The Conference Committee should not be "singling out victims". Co-Chair Green countered that no one is singling out victims. The Senate approved appropriations in the amounts requested by the Governor. The Departments have attested these programs could be "fully operated to the extent necessary". Representative Harris clarified that adoption of the House of Representatives allocation, as proposed in the motion, would reduce the amount requested by the Governor by $25,000. Additional clarification ensued. Co-Chair Green indicated she did not object to the adoption of the House appropriation amount. The motion to adopt Item #5 was withdrawn and the item was LEFT OPEN. Item: #6 Appropriation: Criminal Division Allocation: Third Judicial District: Anchorage Description: Deny 3 new Prosecutors - Violent Crimes, Special Assault, Property Crimes Units Version: Senate Amount: $0 Item: #7 Appropriation: Criminal Division Allocation: Third Judicial District: Anchorage Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED. Co-Chair Green commented this is a significant amount of funding to the Department to "shore up" the budget and improve programs. She was convinced that the Department could address the functions of all the auxiliary programs within the "confines of their budget" through the adoption of this item. Representative Harris furthered that the House of Representatives had denied $383,600 to Item #6 and $37,600 to Item #7. Item: #8 Appropriation: Criminal Division Allocation: Third Judicial District: Anchorage Description: Reduce travel by 25% Version: House plus $11,000 Amount: -$11,100 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #9 Appropriation: Criminal Division Allocation: Third Judicial District: Anchorage Description: AMD: Juvenile Delinquency positions and funding from Human Services to Criminal Division (3rd Jud: Anc and 4th Jud) Version: Senate Amount: $236,000 general funds Note: If 9=S, then 38=S Item: #10 Appropriation: Criminal Division Allocation: Third Judicial District: Outside Anchorage Description: Deny 1 new Kenai Prosecutor Version: Senate Amount: $0 Item: #11 Appropriation: Criminal Division Allocation: Third Judicial District: Outside Anchorage Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption Representative Harris relayed that the Attorney General "was strong-arming me for a long period of time." The items were ADOPTED without objection. Item: #12 Appropriation: Criminal Division Allocation: Third Judicial District: Outside Anchorage Description: Reduce travel by 25% Version: House plus $14,500 Amount: -$14,600 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #13 Appropriation: Criminal Division Allocation: Fourth Judicial District Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #14 Appropriation: Criminal Division Allocation: Fourth Judicial District Description: Reduce travel by 25% Version: House plus $28,600 Amount: -$28,700 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #15 Appropriation: Criminal Division Allocation: Fourth Judicial District Description: AMD: Juvenile Delinquency positions and funding from Human Services to Criminal Division (3rd Jud: Anc and 4th Jud) Version: Senate Amount: $150,400 general funds Item: #16 Appropriation: Criminal Division Allocation: Criminal Justice Litigation Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Representative Croft asked the Division of Legislative Finance the cumulative impact of the restored funding to the Department of Law. Mr. Teal directed attention to the top row of the Department of Law motion spreadsheet [copy on file], listing the total funding change to the Governor's budget request of all items. He listed the net reduction as $28,700. He qualified this figure represents the amounts agreed upon by the House and Senate, but did not include the travel expense reductions. He was unable to state the total increase to the Department. The amount would be nearer to the amount requested by the Governor. Representative Croft commented to the appearance of a restoration of significant funding, yet the total is a reduction. Co-Chair Green informed that time would be allowed to review the net funding changes. Without objection the items were ADOPTED. Item: #17 Appropriation: Criminal Division Allocation: Criminal Justice Litigation Description: Reduce travel by 25% Version: House plus $12,600 Amount: -$12,600 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #18 Appropriation: Criminal Division Allocation: Criminal Appeals/Special Litigation Component Description: Deny 1 Misdemeanor Appeals Attorney, 1 Post Conviction Relief Attorney Version: Senate Amount: $0 Item: #19 Appropriation: Criminal Division Allocation: Criminal Appeals/Special Litigation Component Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #20 Appropriation: Criminal Division Allocation: Criminal Appeals/Special Litigation Component Description: Reduce travel by 25% Version: House plus $10,500 Amount: -$10,400 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #21 Appropriation: Civil Division Allocation: Deputy Attorney General's Office Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #22 Appropriation: Civil Division Allocation: Deputy Attorney General's Office Description: Reduce travel by 25% Version: House plus $3,500 Amount: -$3,500 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #23 Appropriation: Civil Division Allocation: Deputy Attorney General's Office Description: Delete portion of personal services funding Version: Senate Amount: $0 Item: #24 Appropriation: Civil Division Allocation: Collections and Support Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #25 Appropriation: Civil Division Allocation: Collections and Support Description: Reduce general fund amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #26 Appropriation: Civil Division Allocation: Collections and Support Description: Reduce travel by 25% Version: House plus $3,000 Amount: -$2,900 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #27 Appropriation: Civil Division Allocation: Commercial and Fair Business Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #28 Appropriation: Civil Division Allocation: Commercial and Fair Business Description: Reduce general fund amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #29 Appropriation: Civil Division Allocation: Commercial and Fair Business Description: Reduce travel by 25% Version: House plus $4,300 Amount: -$4,200 general fund Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #30 Appropriation: Civil Division Allocation: Environmental Law Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #31 Appropriation: Civil Division Allocation: Environmental Law Description: Reduce general fund amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #30 Appropriation: Civil Division Allocation: Environmental Law Description: Reduce travel by 25% Version: House plus $5,500 Amount: -$5,500 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #33 Appropriation: Civil Division Allocation: Human Services Section Description: Allow 1 new CINA paralegal in Fairbanks and deny other costs added into original increment request Version: Senate Amount: $0 Item: #34 Appropriation: Civil Division Allocation: Human Services Section Description: Deny 1 new Juvenile Delinquency Attorney Version: Senate Amount: $0 Item: #35 Appropriation: Civil Division Allocation: Human Services Section Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #36 Appropriation: Civil Division Allocation: Human Services Section Description: Reduce general fund amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption Representative Croft objected and asked if the intent of Item #34 is to hire another attorney position. Co-Chair Green affirmed, and listed these components would fund a new paralegal position located in Fairbanks, a new Juvenile Delinquency Attorney and to restore funding for retirement and other personal services rates. This would reduce funding for the Department's reorganization process. Representative Croft commented to the number of new attorney positions added. He requested a list of the number of new attorneys would be hired as a result of Conference Committee action. Co-Chair Green estimated that funding for a total of 20 attorneys and six personal positions were included in the Governor's original budget request. KATHRYN DAUGHHETEE, Director, Division of Administrative Services, Department of Law, testified that the Department requested 16 new attorney positions for both the Criminal and Civil divisions. Representative Croft asked for clarification that funding for all 16 positions was "conferencable". Ms. Daughhetee replied that the proposed Conference Committee actions would restore funding for the positions; however, the potential of an unallocated reduction could impact the ability to fully fund all the requests included in the Governor's proposed budget. The reduction in funding for travel could be a factor. Representative Harris suggested he could offer a motion to adopt the House of Representatives allocation for these items, which would eliminate the funding approved by the Senate. Representative Croft questioned the cumulative impact of the addition of 16 attorney positions represents a "fairly dramatic reversal", although the increments are small. Representative Harris understood that most of the new attorney positions are to address children's issues. The items were ADOPTED without objection. Item: #37 Appropriation: Civil Division Allocation: Human Services Section Description: Reduce travel by 25% Version: House plus $6,500 Amount: -$6,500 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #38 Appropriation: Civil Division Allocation: Human Services Section Description: AMD: Juvenile Delinquency positions and funding from Human Services to Criminal Division (3rd Jud: Anc and 4th Jud) Version: Senate Amount: -$236,000 general funds Note: If 38=S, then 9=S Item: #39 Appropriation: Civil Division Allocation: Human Services Section Description: AMD: Juvenile Delinquency positions and funding from Human Services to Criminal Division (3rd Jud: Anc and 4th Jud) Version: Senate Amount: -$150,400 general funds Note: If 39=S, then 15=S Item: #40 Appropriation: Civil Division Allocation: Labor and State Affairs Description: Deny 2 new Labor and State Affairs Attorneys Version: Senate Amount: $0 Item: #41 Appropriation: Civil Division Allocation: Labor and State Affairs Description: Allow 80% general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #42 Appropriation: Civil Division Allocation: Labor and State Affairs Description: Reduce general fund amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #43 Appropriation: Civil Division Allocation: Labor and State Affairs Description: Reduce travel by 25% Version: House plus $1,900 Amount: -$1,800 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #44 Appropriation: Civil Division Allocation: Natural Resources Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #45 Appropriation: Civil Division Allocation: Natural Resources Description: Reduce travel by 25% Version: House plus $2,800 Amount: -$2,800 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #46 Appropriation: Civil Division Allocation: Oil, Gas and Mining Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #47 Appropriation: Civil Division Allocation: Oil, Gas and Mining Description: Reduce general fund amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #48 Appropriation: Civil Division Allocation: Oil, Gas and Mining Description: Reduce travel by 25% Version: House plus $11,300 Amount: -$11,300 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #49 Appropriation: Civil Division Allocation: Opinions, Appeals and Ethics Description: Deny 1 new attorney - Indian Law Version: Senate Amount: $0 Item: #50 Appropriation: Civil Division Allocation: Opinions, Appeals and Ethics Description: Deny 1 new attorney - Human Services Appeals Version: Senate Amount: $0 Representative Harris moved for adoption. Senator Hoffman asked the intent of the new attorney for Indian Law. Representative Harris deferred to the Department of Law. Representative Croft had the same question for the proposed human services appeals attorney position in Item #50. Ms. Daughhetee replied that some functions within the Opinions, Appeals and Ethics Section of the Department are related to Indian law and other functions are related to the State Ethics Act. Issues involving ethics surface regularly; agencies require advice in complying with the Act. Additional attorneys are necessary to address both functions. Senator Hoffman asked which area of the State the additional attorney would serve. Ms. Daughhetee stressed the matter is not a regional issue whatsoever. Representative Croft asked what duties the Human Services Appeal attorney position would assume. Ms. Daughhetee replied this attorney would handle, on a statewide basis, "child in need of aid" (CINA) cases raised to the appellate level through the Human Services Section. The appellate process for CINA cases is significantly different than the regular workload and an attorney with appellate experience better handles those cases that are appealed. Representative Croft questioned the $135,600 cost of hiring an attorney for Human Services appeals, compared to the cost of $112,000 to hire an attorney for Indian Law. Ms. Daughhetee explained that the different funding requests reflect the staggered hire dates anticipated. Some positions would be filled October first, and others July first. Representative Croft objected to the adoption of Items #49 and #50. Senator Hoffman requested that Item #49 be left open for further consideration. Representative Harris moved to leave open Item #49 and Item #50, and the items were LEFT OPEN without objection. Item: #51 Appropriation: Civil Division Allocation: Opinions, Appeals and Ethics Description: Reduce travel by 25% Version: House plus $3,100 Amount: -$3,200 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #52 Appropriation: Civil Division Allocation: Statehood Defense Description: Allow 80% of general funds requested for change to retirement and other personal services rates Version: Senate Amount: $0 Item: #53 Appropriation: Civil Division Allocation: Statehood Defense Description: Reduce general fund amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #54 Appropriation: Civil Division Allocation: Statehood Defense Description: Reduce travel by 25% Version: House plus $1,100 Amount: -$1,000 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #55 Appropriation: Administration and Support Allocation: Office of the Attorney General Description: Remove funding for Associate Attorney II/Press Secretary Version: House Amount: -$61,700 general funds Representative Harris moved for adoption. Representative Croft objected for an explanation. He asked if the proposal would add or remove the requested press secretary position. Representative Harris replied the requested position would be removed. Representative Croft removed his objection. The item was ADOPTED without objection. Item: #56 Appropriation: Administration and Support Allocation: Office of the Attorney General Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #57 Appropriation: Administration and Support Allocation: Office of the Attorney General Description: Reduce general funds amount used for section head reorganization Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #58 Appropriation: Administration and Support Allocation: Office of the Attorney General Description: Reduce travel by 25% Version: House plus $3,000 Amount: -$2,900 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #59 Appropriation: Administration and Support Allocation: Administrative Services Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #60 Appropriation: Administration and Support Allocation: Administrative Services Description: Reduce travel by 25% Version: House plus $1,000 Amount: -$1,000 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #61 Appropriation: Administration and Support Allocation: Legislation/Regulations Description: Deny 1 new Legislation and Regulations Attorney Version: Senate Amount: $0 Item: #62 Appropriation: Administration and Support Allocation: Legislation/Regulations Description: Allow 80% of general funds requested for changes to retirement and other personal services rates Version: Senate Amount: $0 Representative Harris moved for adoption. Representative Croft objected and asked for an explanation of the need for the requested new position. Ms. Daughhetee responded this new position would assist the Department with the high volume of the Section. Currently only one attorney undertakes all the duties. The volume is too much for Deborah Behr, the existing attorney. Representative Croft asked for clarification that this position handles the legislation drafted by legislators. Ms. Daughhetee corrected that this position drafts legislation proposed by the administration. This attorney also reviews legislation drafted by the legislature. Representative Croft asked if a staggered hire dates for this position are a factor in the differing funding amounts requested for the new attorney positions. Ms. Daughhetee affirmed the anticipated hire date is July 1. Representative Croft pointed out that the legislature is not in session in July, and suggested the Human Resources Attorney could be hired in July and this position could be filled later in the year. Ms. Daughhetee relayed the Attorney General's opinion that this position must be filled in July because only one attorney assumes the entire workload for this section. Other sections have several staff and the addition of three new staff at once would be difficult to accomplish. Representative Croft maintained his objection. Senator Hoffman asked for clarification that currently one attorney position exists in the Legislation/Regulations Section. Ms. Daughhetee corrected that Deborah Behr is the lead attorney and that one other attorney position is in the Section. Senator Hoffman clarified that two attorneys currently operate in the Section and that the Department anticipates a caseload increase of one-third. Ms. Daughhetee affirmed. Co-Chair Green noted that pending legislation would require overview of several "major components" because the regulations are outdated. This is very time consuming. Other legislation would be primarily regulatory overview and would implement new systems. In discussion with the Department, she learned that the likelihood that all 16 new attorney positions would be filled by a certain date is uncertain. Rather the intent is to hire 16 new attorneys within the next year. She was "delighted" that the Department as well as the Alaska State Troopers are making efforts to "get a handle on some of the issues." She therefore did not question this funding request. Representative Croft asked if the Chair intended to hold the item open for further consideration. Co-Chair Green answered, "no". Representative Croft commented that the 16 new positions would add approximately $1.5 million to the budget. This particular item would cost $150,000 and would not be for prosecution activities, but rather to increase services for the legislature. Providing this funding for the Victims for Justice program would save money. He was unsure why the Department prioritized the needs in this manner, but suggested the needs should be prioritized differently. A roll call was taken on the motion. IN FAVOR: Representative Williams, Senator Wilken, Representative Harris, Chair Green OPPOSED: Representative Croft, Senator Hoffman The motion PASSED (4-2) The items were ADOPTED. CC-04 # 2, Side B 7:56 AM Item: #63 Appropriation: Administration and Support Allocation: Legislation/Regulations Description: Reduce travel by 25% Version: House plus $1,400 Amount: -$1,400 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #64 Appropriation: Agency-wide Unallocated Reduction Allocation: Agency-wide Unallocated Reduction Description: Agency-wide unallocated reduction Version: Senate Amount: -$100,000 general funds Item: #65 Appropriation: Agencywide Description: Salary and benefit adjustments for employees of Labor, Trades and Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non- covered Executive, Legislative and Judicial Branches Version: Senate Amount: $79,000 general funds 300 Fed Rcpts 43,400 Other funds Representative Harris moved for adoption and the items were ADOPTED without objection. This closed all conference items for the Department of Law except Items #5, #49 and #50. Department of Military and Veterans Affairs Item: #1 Appropriation: Agencywide Description: Salary and benefits adjustment for employees of Labor, Trades Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non-covered Executive, Legislative and Judicial Branches Version: Senate Amount: $12,300 general funds 14,900 Fed Rcpts 6,300 Other funds Representative Harris moved for adoption and the item was ADOPTED without objection. All conference items for the Department of Military and Veterans Affairs were CLOSED. Department of Natural Resources Item: #1 Appropriation: Resource Development Allocation: Commissioner's Office Description: Deny funding for Deputy Commissioner Position Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #2 Appropriation: Resource Development Allocation: Administrative Services Description: Reduce Administrative Services approx 10% Version: House Amount: -$56,000 general funds Item: #3 Appropriation: Resource Development Allocation: Information Resource Management Description: Reduce Information Resource Management approx 10% Version: House Amount: -$80,000 general funds Item: #4 Appropriation: Resource Development Allocation: Oil & Gas Development Description: Advance the State's oil and gas initiatives Version: House Amount: -$566,800 general funds $566,800 Pfund Rcpt Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #5 Appropriation: Resource Development Allocation: Alaska Coastal Management Program Description: Deny initiative for coordination and expedited permit reviews for resource development projects Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #6 Appropriation: Resource Development Allocation: Large Project Permitting Description: Switch funding support for Large Project Permitting (general funds to LDIF) Version: House Amount: -$102,300 general funds $102,300 State Land funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #7 Appropriation: Resource Development Allocation: Office of Habitat Management and Permitting Description: AMD Replace unrealized I/A receipts and SDPR Authorization to fulfill workload requirements Version: Senate Amount: $637,800 general funds -445,800 I/A Rcpts -192,000 Stat Desig Representative Harris moved for adoption. Senator Hoffman asked for an explanation. Mr. Teal reminded that the habitat functions were transferred from the Department of Fish and Game to the Department of Natural Resources, and that a number of funding sources could be reallocated within the Department of Fish and Game, but would be "troublesome" to reallocate to a different agency. Fish and Game funds and other funding sources are limited to fish and game activities. Therefore, the Department of Natural Resources did not "inherit" all the funding necessary to perform the duties of the habitat functions. This item would replace the funding that did not transfer with the functions. Senator Hoffman understood that if the Division of Habitat had remained within the Department of Fish and Game, this extra expense would not be incurred. Mr. Teal affirmed. Senator Hoffman furthered that the transfer from the Department of Fish and Game to the Department of Natural Resources would cost the State $640,000 in FY 05. Co-Chair Green commented that the funding reallocated within the Department of Fish and Game serves a purpose. The item was ADOPTED without objection. Item: #8 Appropriation: Resource Development Allocation: Claims, Permits & Leases Description: Reduce claims, permits and leases approx 10% Version: House Amount: -$271,000 general funds 271,000 Pfund Rcpt Representative Harris moved for adoption. Representative Croft objected. Asked for clarification of the use of permanent fund receipts for this item and Item #4. Mr. Teal explained that the funding source would more properly be classified as permanent fund revenue, the receipts from the earnings of the Fund. The funds would be allocated to these items before the dividends are calculated. Representative Croft asked if the funds are the earnings reserve account or the corporate account. Mr. Teal replied these are the same monies used to fund the operations of the Permanent Fund Corporation. Representative Croft understood the funds are taken from the earnings of the Fund, "but sort of one removed". Mr. Teal affirmed the funds are removed from the revenue account before net income of the Fund is computed for the purposes of determining dividend amounts. Representative Croft asked the rationale for appropriating $270,000 for this purpose. Representative Harris responded that the legislature appropriated 25 percent of the royalties from oil development. The Claims, Permits and Leases, and the Oil and Gas Development allocations are intended to increase oil development. Representative Croft totaled the Permanent Fund Receipts appropriation to Items #4 and #8 at between $830,000 and $850,000. Mr. Teal affirmed. Representative Croft remarked he should have objected to the adoption of Item #4. The functions are more appropriately funded with general funds. Representative Harris informed that funds have been appropriated from the Permanent Fund Receipts account for this purpose for "years". Co-Chair Green furthered this would be a continuation of previous funding methods for the "expansion, attention to, and hopeful increase of monies deposited into the Permanent Fund". It has been determined that this is an appropriate use of the funds. Representative Croft commented that with concern, he witnessed this process start and then expand, and that it should "at least slow down or stop". He recalled the initial arguments supporting the process of utilizing Permanent Fund revenues for oil and gas development activities, but disagreed it should be continued. Co-Chair Green charged that Representative Croft's position is contrary to previous discussions he has had with regard to the continued expansion and attention paid to resource development. Senator Hoffman asked Mr. Teal if Claims, Permits and Leases was funded with Permanent Fund revenues in the FY 04 budget. Mr. Teal responded that the allocations of both Item #4 and Item #8 utilized Permanent Fund receipts; however, these motions would increase the amount. He would advise as the total amount of Permanent Fund receipts appropriated to the Department of Natural Resources in FY 04. Co-Chair Green ordered Item #8 HELD OPEN. She understood the allowable allocation of Permanent Fund revenues is 25 percent of the effort. Item: #9 Appropriation: Resource Development Allocation: Title Acquisition & Defense Description: Reduce Title Acquisition and Defense approx 10% Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #10 Appropriation: Resource Development Allocation: Water Development Description: Switch funding support for Water Development (General funds to RSS) Version: House Amount: -$300,000 general funds 300,000 Rcpt Svcs Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #11 Appropriation: Resource Development Allocation: Geological Development Description: Reduce Geological Development by approx 10% Version: Senate Amount: $0 Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #12 Appropriation: Resource Development Allocation: Agricultural Development Description: Delete funding for virus free seed potato project Version: House plus $50,000 Amount: -$70,000 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #13 Appropriation: Resource Development Allocation: Agricultural Development Description: Fund change to general funds for operations Version: House Amount: $619,600 general funds -619,600 Agric RLF Representative Harris moved for adoption. Representative Croft asked if this is a funding change to the Agricultural Revolving Loan Fund. Representative Harris clarified the funds would be changed from the loan fund and replace with general funds. This is an attempt to avoid depleting the revolving fund and allow it to stabilize. Representative Croft supported the change. The item was ADOPTED without objection. Item: #14 Appropriation: Resource Development Allocation: Agricultural Development Description: Increase personal services authorization for the Organic program Version: Senate Amount: $60,000 Agric RLF Item: #15 Appropriation: Resource Development Allocation: Agricultural Development Description: Increase activities for Alaska Grown marketing Version: Senate Amount: $150,000 Agric RLF Item: #16 Appropriation: Resource Development Allocation: Agricultural Revolving Loan Program Administration Description: Spend ARLF on Mt. McKinley Meat Plant Version: Senate Amount: $1,500,000 Agric RLF Note: Senate position includes correction of technical error; moves appropriation from agricultural development allocation Representative Harris moved for adoption. Representative Croft clarified that the funding source change of Item #13 "returned" funds to the Agricultural Revolving Loan Fund and these three items would appropriate additional funds. Representative Harris replied that the funds allocated in Item #16 would return to the revolving loan fund through receipts from the operations of the Plant. Co-Chair Green informed that the McKinley Meat Plant had been overseen by the Department of Corrections for approximately six year. Within the past seven months, the function has been returned to the Department of Natural Resources, Division of Agriculture. This transfer did not include a provision to allow the Division to make transactions of the sales of products and purchase of products. This item would allow for this. This is a technical transaction. Representative Croft clarified the funds would be withdrawn from the revolving loan fund for operation costs, then restored to the fund through income generated by the Plant. Co-Chair Green affirmed. Representative Croft did not object to the adoption of this item. Representative Harris informed that this item is the request of the director of the Division of Agriculture. The item was ADOPTED without objection. Item: #17 Appropriation: Resource Development Allocation: Development - Special Projects Description: AMD: Scientific Assessments for resource development Version: House Amount: $0 Item: #18 Appropriation: Fire Suppression Allocation: Fire Suppression Preparedness Description: Deny funding to restore Heavy Air Tanker contract Version: House Amount: -$250,000 general funds Representative Harris moved for adoption. Co-Chair Wilken objected and asked for an explanation of scientific assessments for resource development in Item #17. NICO BUS, Administrative Services Manager, Division of Support Services, Department of Natural Resources, testified the $150,000 would be utilized for studies on the North Slope for the development of a natural gas pipeline, the National Petroleum Reserve-Alaska (NPR-A), and other subjects. Co-Chair Wilken asked if this allocation is in addition to the $10 million appropriated in the FY 04 supplemental budget. Mr. Bus answered this is a separate item. Representative Harris suggested the two appropriations could be combined. Mr. Bus replied that the other project would be reduced if the projects were combined. Representative Harris asked what the assessments would study. Mr. Bus responded the projects would study the impacts of a natural gas pipeline would have on wildlife. Representative Harris asserted such studies have been undertaken for the past 20 years. Mr. Bus continued the projects are in coordination with the North Slope Borough with the intent to support development activities and address the federal Endangered Species Act, caribou crossings and timber issues. He had additional information available. AT EASE 8:09 AM / 8:10 AM Co-Chair Wilken requested no action be taken on Item #17 at this time to allow for further review. There was no objection and the item was LEFT OPEN. Representative Croft asked if the result of Item #18, as proposed, would restore or eliminate funding for the project. Representative Harris responded the House of Representatives version would provide the amount requested by the Governor. The Senate version would have provided an additional $250,000. Item #18 was ADOPTED without objection. Item: #19 Appropriation: Agencywide Description: Salary and benefit adjustments for employees of Labor, Trades and Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non- covered Executive, Legislative and Judicial Branches Version: Senate Amount: $13,600 general funds 4,300 Fed Rcpts 27,100 Other funds Representative Harris moved for adoption. Co-Chair Green reiterated this reflects information that was not available until after the House of Representatives approved a budget. Item: #8 (continued) Appropriation: Resource Development Allocation: Claims, Permits & Leases Description: Reduce Claims, Permits, and Leases approx 10% Version: House Amount: -$271,000 general funds 271,000 Pfund Rcpt [Note: This item was considered earlier in the meeting and held open.] Mr. Teal answered the earlier query, explaining that the Department of Natural Resources utilized $2.8 million Permanent Fund corporate receipts in FY 04. Both Items #4 and #8 utilized these receipts, and the items would incur an increase of $837,000 for FY 05. Senator Hoffman asked the amount expended in FY 04 the amount anticipated would be expended in FY 05. Mr. Teal responded that in FY 04, $54.7 million of Permanent Fund Corporate receipts were expended. This includes approximately $50 million for Permanent Fund operations. Items #4 and #8 would increase the amount by $837,000. Co-Chair Green remarked upon the increased effort in developing oil and gas resources this year, which most legislators have been supported of. Representative Croft asked the consequences of adopting the Senate version in funding these items. He did not want to hamper the efforts of the natural gas pipeline project. Mr. Teal replied the Senate version would provide the same amount of funding utilizing general funds rather than Permanent Fund receipts. Representative Croft commented on the "creep" of the use of the Permanent Fund earnings. Most Alaskans are unaware this occurs. "This is an addiction we need to wean ourselves of, or at least slow down on." Representative Harris asked if Representative Croft recommended that all the earnings of the Fund should be utilized for dividends and cease allocating the constitutionally allowed 25 percent allotted to fund development activities. Representative Croft offered to hold debate on the subject. Representative Harris declined but asserted that some of the Permanent Fund earnings should be used to increase development of oil and gas. Representative Croft agreed but countered that the earnings of the Permanent Fund should not be used for government functions without "that political decision being made". Co-Chair Green asserted that a thorough debate on the appropriateness of utilizing Permanent Fund receipts for "a very discreet function" has occurred in the committee process. The use of these funds as "served us very well." Utilizing these funds to increase the amounts contributed directly to the Permanent Fund should be undertaken. She announced that debate on whether the use of these funds for development activities would not continue. All efforts should be made to balance the budget "with an array" of funding sources, and this use of funds conveys the legislature's intent to expand development. Senator Hoffman asked if a specific function could be identified in which the increased Permanent Fund receipts allocation would be used. Mr. Teal deferred to Mr. Bus. Senator Hoffman repeated his question asking what functions the increment would be used to fund, and whether the use of the funds and the functions would be clear to the public. Mr. Bus replied that the Permanent Fund receipts would be utilized to fund "all the activities that generate the revenue", although not a specific position or increment. The efforts of existing staff positions generate receipts, 25 percent of which is deposited into the Permanent Fund. To fund those staff positions, a portion of the earnings of the Permanent Fund are allocated to the Department to pay administrative costs. Representative Croft expressed concern that the process of allocating Fund receipts began with the funding of the Permanent Fund Corporation, a decision he supported, and expanded to fund the dividend program, which he partially supported. However, the receipts are now used to fund general "obligations" of the Department of Natural Resources, which he questioned. A roll call was taken on the motion to adopt Item #8. IN FAVOR: Representative Williams, Senator Wilken, Representative Harris, Chair Green OPPOSED: Representative Croft, Senator Hoffman The motion PASSED (2-4) The item was ADOPTED. All conference items for the Department of Natural Resources except Item #17 were closed. Department of Revenue Item: #1 Appropriation: Agencywide Description: Salary and benefit adjustments for employees of Labor, Trades and Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non- covered Executive, Legislative and Judicial Branches Version: Senate Amount: $3,500 general funds 86,900 Fed Rcpts 101,000 Other funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #2 Appropriation: Permanent Fund Corporation Description: Conditional Language Co-Chair Green announced this item would be HELD OPEN. Item #1 for the Department of Revenue was CLOSED. Department of Transportation and Public Facilities Item: #1 Appropriation: Appropriation Allocation: Allocation Description: Appropriation Structure Version: Senate Amount: $0 Note: House - 3 Appropriations: Highways, Aviation & Facilities; International Airports; Marine Highway System Senate - 5 Appropriations: Administration & Support; Design, Engineering & Construction; Highways, Aviation & Facilities; International Airports; Marine Highway System Representative Harris moved for adoption. Representative Croft requested clarification. Co-Chair Green explained this relates to the structure of the budget and the motion is to adopt the Senate version, which contains five appropriations, rather than the three proposed in the House version. Representative Croft asked the rationale for five appropriations instead of three. Co-Chair Green replied this would categorize appropriations by functions, as well as three main categories. The Department stated this method would be simpler to manage for its purposes. Representative Croft clarified this is a recommendation of the Department. Co-Chair Green affirmed and detailed. Representative Croft removed his objection. The item was ADOPTED without objection. Item: #2 Appropriation: Agencywide Description: Salary and benefit adjustments for employees of Labor, Trades and Crafts (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non-covered Executive, Legislative and Judicial Branches Version: Senate Amount: $196,500 general funds 11,400 Fed Rcpts 479,200 Other funds Representative Harris moved for adoption. Co-Chair Green reiterated this reflects information received when the Senate considered the operating budget. Without objection the item was ADOPTED. All conference items for the Department of Transportation and Public Facilities were CLOSED. Alaska Court System Item: #1 Appropriation: Alaska Court System Allocation: Appellate Courts Description: Deny increase for JRS, PERS, and Benefit rate increase Version: Senate Amount: $0 Item: #2 Appropriation: Alaska Court System Allocation: Trial Courts Description: Deny increase for JRS, PERS, and Benefit rate increase Version: Senate Amount: $0 Item: #3 Appropriation: Alaska Court System Allocation: Trial Courts Description: Delete costs for 1 judgeship due to sunset provision at the end of FY 04 (judge, secretary, 3 clerks) Version: Senate Amount: $0 Item: #4 Appropriation: Alaska Court System Allocation: Trial Courts Description: Court Coordinated Resources Project Version: Senate Amount: $0 Item: #5 Appropriation: Alaska Court System Allocation: Trial Courts Description: Restore first 2 months of FY 05 for 1 judgeship (judge, secretary, 3 clerks) Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #6 Appropriation: Alaska Court System Allocation: Trial Courts Description: Allow increased lease expense for Unalaska Version: House Amount: $100,000 general funds Item: #7 Appropriation: Alaska Court System Allocation: Trial Courts Description: Allow Fairbanks Courthouse 5th floor operations Version: House Amount: $65,000 general funds Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #8 Appropriation: Alaska Court System Allocation: Trial Courts Description: Court Coordinated Resources Project Version: Senate Amount: $148,500 GF/MH 122,100 MHTAAR Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #9 Appropriation: Alaska Court System Allocation: Trial Courts Description: To address anticipated caseload Version: Senate minus $200,000 Amount: $1,000,000 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #10 Appropriation: Alaska Court System Allocation: Administration and Support Description: Deny increase for JRS, PERS, and Benefit rate increase Version: Senate Amount: $0 Item: #11 Appropriation: Commission on Judicial Conduct Allocation: Commission on Judicial Conduct Description: Deny increase for changes to retirement and other personal services rates Version: Senate Amount: $0 Item: #12 Appropriation: Commission on Judicial Conduct Allocation: Commission on Judicial Conduct Description: Allow office space rent increase Version: Senate Amount: $0 Item: #13 Appropriation: Commission on Judicial Conduct Allocation: Commission on Judicial Conduct Description: Allow vacancy rate funding for 2-person office Version: Senate Amount: $0 Representative Harris moved for adoption and the items were ADOPTED without objection. Item: #14 Appropriation: Judicial Council Allocation: Judicial Council Description: Cost efficiency reduction of executive staff and associated overall budget Version: House Amount: -$80,600 general funds Representative Harris moved for adoption and the item was ADOPTED without objection. Item: #15 Appropriation: Agencywide Description: Salary and benefit adjustments for employees of Labor, Trades and Crafts Unit (Local 71); PSEA for Correctional Officers Unit; PSEA for State Troopers; non- covered Executive, Legislative and Judicial Branches Version: Senate Amount: $315,700 general funds Representative Harris moved for adoption and the item was ADOPTED. All conference items of the Alaska Court System were CLOSED. ADJOURNMENT  Co-Chair Lyda Green adjourned the meeting at 08:24 AM