MINUTES{PRIVATE }   SENATE FINANCE COMMITTEE   7 March 1997   9:40 a.m.      TAPES    SFC-97, Tape 50, Sides A and B CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 9:40 a.m. PRESENT In addition to Co-chair Pearce, Senators Sharp, Phillips, Donley and Adams were present when the meeting convened. Senator Torgerson arrived immediately thereafter. Fred Fisher, Director, Division of Administrative ALSO ATTENDING: Services, Department of Law; Dan Spencer, Budget Analyst, Office of Management and Budget, Office of the Governor; Remond Henderson, Director, Division of Administrative Services, Department of Community and Regional Affairs; Nancy Slagle, Director, Division of Administrative Services, Department of Transportation and Public Facilities; Dean Guaneli, Chief Assistant Attorney General, Legal Services Section, Criminal Division, Department of Law; Barbara Ritchie, Deputy Attorney General, Civil Division, Department of Law; Guy Bell, Director, Division of Administrative Services, Department of Commerce and Economic Development; Randy Welker, Legislative Auditor, Division of Legislative Audit; Nico Bus, Chief Financial Officer, Division of Administrative Services, Department of Military and Veteran's Affairs; and aides to committee members and other members of the legislature. Craig Tillery, Assistant Attorney General, VIA TELECONFERENCE: Environmental Section, Civil Division, Department of Law testified via teleconference from Anchorage. SUMMARY INFORMATION SB 83 SUPPLEMENTAL & OTHER APPROPRIATIONS SB 83 was HEARD and HELD in committee for further consideration. FY 97 supplemental requests for the Departments of Administration, Health and Social Services, Law, Military and Veterans Affairs, Corrections, Transportation and Public Facilities, Community and Regional Affairs, and Commerce and Economic Development were discussed by the above-listed individuals. SENATE BILL NO. 83 "An Act making an appropriation for management fees for the constitutional budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska); and providing for an effective date." Co-chair Pearce introduced the continued overview of supplemental requests for FY 97. She pointed to new materials that had come to the committee, including a February 27 letter with a number of amendments. DEPARTMENT OF FISH AND GAME DAN SPENCER, BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, explained that the supplemental request for $115,000 would take money lapsed by the Department of Fish and Game (DFG) that was originally encumbered; the encumbrance was removed at the request of the legislative auditor. He added that the money was in the general fund and available, and would be primarily used to pay the Department of Law (DOL) for costs arising from defense of a suit against DFG. FRED FISHER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF LAW, detailed that DOL had incurred costs for outside expert witness fees and was hoping for help from DFG in covering the costs. The supplemental item was the response to the request on behalf of DOL. Senator Adams asked whether the reappropriations would cover the cost of all the on-going litigation. Mr. Fisher responded no; DOL was absorbing a substantial portion of the costs, and it was not charging DFG for DOL attorney costs. The item would cover expert witness fees and some paralegal staff costs. Senator Sharp verified that the reappropriation was general funds and related to the Division of Commercial Fisheries. DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, addressed the $1.5 million supplemental request for Power Cost Equalization (PCE). He detailed that the item was a result of increases in fuel prices and increases in the PCE rate as set by the Alaska Public Utilities Commission (APUC). The item would allow the program to continue to be funded at the 85 percent level. The full cost was estimated at $21.8 million. The current level of funding was $17 million; the $1.5 million request would bring the total to $18.5 million, or 85 percent of the full cost. Co-chair Pearce queried the percentage increase in fuel prices. Mr. Henderson replied that the percentage varied depending on the location of the communities. Some areas experienced increases as high as 50 percent. Co-chair Pearce verified that the additional appropriation would keep the rate at 85 percent for the fiscal year. She queried the governor's PCE request for the FY 98 budget. Mr. Henderson answered that the current request was for $17 million. There had been consideration of requesting an increment, but he believed the decision had been made not to fund it. He stated that the total would remain at $17 million. Co-chair Pearce asked whether the department would be paying at the 85 percent rate. Mr. Henderson replied that the program would continue paying at the 85 percent level; the department anticipated that the increased rates were not permanent. There would be re-evaluation in the next fiscal year about whether to ask for a supplemental or to remain at the same level. Co-chair Pearce queried the effect in the communities if the legislature did not fund the additional money for PCE. Mr. Henderson answered that the utilities would either fold or pass the cost to the consumer. He did not think the utilities could afford to absorb the increase. Co-chair Pearce asked when the state would be paying at the 85 percent pro-rationing rate. Mr. Henderson believed the level began in FY 96, but was not sure. Co-chair Pearce wondered whether there were delinquencies in payments to local utilities because of the 85 percent pro- rationing. Mr. Henderson replied that there had been increases in rates. He added that other eligible cost considerations went into the increased rates besides fuel prices; the expansion in growth as customers and communities grew also caused increases. Senator Adams noted that the percentage level in the past had been 100 percent. He added that the effect of electric rates could be obtained from APUC. Co-chair Pearce asked whether the pro-rationing decision was driven by a budget decision made by the legislature or by the administration. Mr. Henderson did not know. Senator Sharp verified that the appropriation was from the general fund to the PCE capitalization fund. Mr. Henderson noted the good news: increases in gas prices also meant revenue for the state. The discussed item was part of the bad news, in addition to the supplemental request for the Department of Transportation and Public Facilities (DOT/PF) for the marine highway system. Certain programs such as the ferries and PCE were impacted substantially when gas prices rose. He pointed out that the net effect to the treasury was obviously good. Senator Adams(?) thought it was good that the state could afford the $1.5 million for PCE. Senator Sharp queried the balance of the PCE account set up three years prior. Mr. Henderson answered that the balance at the end of FY 97 would be $32 million. Senator Torgerson asked how much of the $1.5 million item was directly attributed to fuel. Mr. Henderson answered that the majority of the request was attributed to fuel increases, with a very small percentage for other costs. DEPARTMENT OF LAW Co-chair Pearce noted that the next item was a replacement section for judgment and claims for DOL. She pointed to backup with a [judgment] list and asked for new items to be highlighted, noting a letter dated February 27. Mr. Fisher replied that the new items were item 14, Eckhart v. SFEC ([Alaska] Commercial Fisheries Entry Commission) on the general fund list and item 2 on the "Other Fund Sources" list, Eddy v. Department of Administration Public Employee Retirement System (PERS). He offered to provide additional information about any case. Mr. Spencer (?) added that the first item on the non-general-fund list was the result of a previous discussion before the committee; the item was amended. In addition, two of the transmitted amendments had additional judgments and claims. Co-chair Pearce asked whether the committee would like more information on the claims. She queried the Copper River Highway consent decree. She referred to a March 6 letter regarding the $44,500 item. NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, explained that the department was requesting funding to implement the Copper River Highway consent decree. The agreement was reached related to Clean Water Act violations and was signed in March 1996. She referred to specific dates for implementation of certain portions of the agreement within the consent decree. She stressed that some of the dates were coming up soon, especially in the area of planning. In addition, according to the consent decree, if the department did not meet the timeframes, it became subject to penalties of $1,000 per day or a return to litigation. Ms. Slagle detailed that the request included $43,500 for restoration-plan development; $170,000 for actual restoration of river banks, including re-vegetation and erosion prevention; $201,000 for historic issues, including stabilization of buildings located on the highway; and $30,000 for training, required in the consent decree because of requirements of the Clean Water Act. Co-chair Pearce asked whether there had been an appropriation for part of the item the year prior. CRAIG TILLERY, ASSISTANT ATTORNEY GENERAL, ENVIRONMENTAL SECTION, CIVIL DIVISION, DEPARTMENT OF LAW (via teleconference), responded that $20,000 had been appropriated the year before for the attorney fees. He noted that several other aspects of the case had been completed, including some of the public-service announcements. The current request would represent a second stage of the two described items that were due by the end of the construction season. The third phase of funding would be slated for the next legislative session. He agreed with Ms. Slagle that the current items had to be completed. Co-chair Pearce recalled a prior discussion regarding all the elements of the settlement, including the dollar amounts. She asked that the preview be made available to the committee, with phasing and timelines as well. Mr. Tillery responded that he had the information and would make it available. Co-chair Pearce mentioned the expected timeline of the supplemental bill. Senator Sharp asked whether the requested document would cover all the phases. Co-chair Pearce agreed. She remembered objecting to one phase of the project related to giving money to an environmental group, which was no longer listed. Mr. Tillery explained that the item had been funded the prior year. Ms. Slagle noted that the item was a reduction from the previous year because the department had absorbed some of the costs within the agency. She referred to public-service announcements. Co-chair Pearce asked what the announcements communicated. Mr. Tillery described the video communicating compliance with the law (testimony largely unintelligible). Senator Torgerson questioned the language. Mr. Tillery defined "stabilization" (largely unintelligible). There was a discussion about what was being planned. Mr. Tillery stated that both the master plan and stabilization would be covered by the $201,000. Co-chair Pearce turned attention to the DOL judgments. She asked for details regarding the Cleary case. DEAN GUANELI, CHIEF ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES SECTION, CRIMINAL DIVISION, DEPARTMENT OF LAW, testified regarding items 17 to 23. He detailed that the Cleary case was a class- action lawsuit involving prisoners' rights. There were two lawsuits: a main lawsuit involves all prisoners in all of the state's facilities; a separate lawsuit involved women prisoners and challenged the department's treatment of women as a separate class. Because of potential conflicts between the two, the court appointed separate counsel for the women prisoners. Over time, three law firms had been involved in representing the women prisoners: Perkins Coie (based in Anchorage), the Northwest Women's Law Center (based in Seattle), and William Oberly (local counsel for the Northwest Women's Law Center). He reported that the primary firm was currently Perkins Coie and that there would not be so many different firms submitting attorney fees requests. Mr. Guaneli stressed that "fairly modest amounts" of attorney fees were being asked for representing a large number of clients. The law firms had responsibility under the court's order to not only represent the classes of prisoners they were assigned to represent, but to receive phone calls from prisoners, investigate their complaints, and bring justified complaints before the court. There had been a great deal of work done for roughly 300,000 separate clients. He thought the total amount of around $86,000 for the year was modest given the amount of work. Mr. Guaneli noted that there had been some success with the case and that the court had ruled in the clients' favor. Senator Sharp asked what rights had been violated. Mr. Guaneli replied that the Cleary lawsuit was mostly about overcrowding in the state's prisons. He explained that for the main part of the lawsuit, there was a finding that the state was in contempt of court for violating population limits (to date, the state had not paid any of the contempt fines). For the women's suit, the primary complaint had been that the facilities and programs available to women were inadequate compared to those available to men. The women's class of prisoners was the fastest growing class in Alaska's prisons; although the department tried hard, because there were little pockets of women in all the facilities, it had been difficult to provide programs for the women. Mr. Guaneli explained that the state needed and had been pursuing a women's facility. The attorneys had been pressing for a women's facility with rehabilitative services equivalent to those available to men. Senator Sharp questioned how much had been approved for attorney fees the year prior for the Cleary case. Mr. Guaneli replied that the total amount was approximately $119,000; the amount was down to $86,000 for the current year. Senator Donley asked what other project besides the women's facility was important for the Department of Corrections (DOC). Mr. Guaneli opined that the primary problem in DOC was overcrowding, so anything that could impact crowding would be paramount. He added that DOC was pushing for a women's facility and believed there was a related $2.3 million supplemental request. Co-chair Pearce reported that in the DOC subcommittee, she had asked what "overcrowding" meant. She believed part of the definition was related to how the facilities were built. She did not know what standard the court used when it decided that prisons were overcrowded. She had asked for details by facility. She claimed that DOC had not made use of all the opportunities provided by the legislature in terms of community residential center (CRC) beds and other options for incarceration, particularly of less dangerous prisoners. She asked whether DOL worked with DOC to help it determine how to utilize the facilities it already had. Mr. Guaneli believed DOC had been making better use of the CRC beds over the past years. He explained that DOL received a daily count sheet from DOC showing how many people were in each facility and how many were in the halfway-house beds. When DOL noticed that halfway-house beds were not being filled as much, it discussed the issue with DOC, including reviewing the criteria used to assign beds. He added that the legislature had given a fair amount of additional money to DOC for more halfway-house beds, which have been created at a quick rate. He opined that DOC felt that its obligation to public safety meant it had to carefully consider the criteria used to place prisoners in halfway houses, as the population represented a slightly greater danger to the public. Unless DOC was careful, the public backlash created by someone escaping and committing a crime would force the department to cut back on the number of halfway-house beds. He believed usage of halfway-house beds was between 90 and 95 percent of available beds. Co-chair Pearce noted that the budget documents available to the committee did not show 90 to 95 percent usage. She queried the legal requirement that the state provide programs for incarcerated prisoners. Mr. Guaneli responded that the Alaska Constitution contained a requirement that the penal administration be based on a number of factors, including the principle of reformation. The requirement had been interpreted by Alaska courts to mean that DOC must at least make some effort towards rehabilitation, which did not mean that the department could not impose certain criteria (such as timing of programs). BARBARA RITCHIE, DEPUTY ATTORNEY GENERAL, CIVIL DIVISION, DEPARTMENT OF LAW, provided details regarding item 14 on the list. She noted that the Eckert case had been covered; for technical reasons, one item was for attorney fees and one for costs. Co-chair Pearce pointed out that a response had been made available to the committee about a question in an earlier meeting regarding allowing permits while eligibility was being determined. Senator Sharp thought the letter said that a person could continue fishing as long as their case was in appeal. Ms. Ritchie replied that interim-use permits were allowed in Alaska statute as interpreted by the Alaska Supreme Court. She noted discussion with Bruce Twomley at the Alaska Commercial Fisheries Entry Commission (CFEC) about the issue; CFEC issued interim-use permits to an applicant pending final determination of the application, including court proceedings. Ms. Ritchie moved to item 15: attorney fees to be paid regarding a suit brought against the Lieutenant Governor for the alleged irregularities in the 1994 gubernatorial election. The lower court prevailed in summary judgment and the Alaska Supreme Court reversed in part and remanded. The case was eventually resolved and resulted in legislation that clarified state law to conform with federal law related to the issue of voter-incentive programs. The superior court awarded the amount of attorney fees. The plaintiffs appealed to the state supreme court, claiming the amount was too small. They had requested $200,000 in fees and costs, and the superior court awarded $25,000. She noted that the plaintiffs were public-interest litigants, about which there had been questions in a previous committee hearing. She did not think the plaintiffs would get any less than the amount. She recommended paying the amount so that additional interest would not accrue. Co-chair Pearce noted the letter about public-interest litigants. Ms. Ritchie directed attention to the next case: $18,186 plus interest for Winter Telecom Inc. v. Alaska Court System for attorney fees to be paid to Hedlen, Brinnan and Hyderman; James Brinnan, lawyer for Winter Telecom. The matter arose out of a dispute for the supply and distribution of a telephone system for the new court building in Anchorage. The state supreme court upheld the award to Anchorage Telephone Utility (ATU) but disapproved of the method used by the court system for making the award and awarded the protester their actual costs and attorney fees in bringing their protest against the court system. The court issued the memorandum of judgment, which did not have precedential value. The court system challenged the award unsuccessfully. Ms. Ritchie skipped over the Cleary items. She pointed to the next case, Richards v. State of Alaska. Sharon and Ronald Richards sued the state for breach of contract, fraud, and failure to release a mortgage. They had purchased almost 300 acres of agricultural land from the state at the Two Rivers auction in 1981. The parcel was on former Alaska Mental Health Trust Authority (AMHTA) land; in June of 1990, the Richards made the final payment on the land under the land-sale contract with the state, and requested patent. In July 1990, while the state was processing the request, Judge Green entered a preliminary injunction in the mental health trust case, precluding the state from issuing the patent to all affected parcels, including the discussed parcel. The Richards filed suit for $3 million in August 1993. There was a lot of motion practice in the case, with the state prevailing on some issues and other issues left unresolved. A settlement had been reached for nuisance value. She listed a series of items that would resolve the litigation, including that the Richards would quit claim to their interest in the parcel (valued between $65,000 and $75,000). Remaining debt would be canceled in exchange for the parcel; the state would relieve the Richards of borough tax obligations, and pay the Richards $13,000 (the amount in the judgment). She noted that the most troublesome aspect legally was the breach-of- contract claim. [SFC-97, Tape 50, Side B] Senator Sharp asked whether there were similar cases pending related to mental health trust lands. Ms. Ritchie replied that the department had considered the issue; it did not want to open the door to other similar cases. She noted that the people in the particular case were litigious. A senator asked whether the people were right in their claim and whether they were entitled to the 300 acres. He asked whether the court ruled against the state on the issue of breach of contract. Ms. Ritchie replied that DOL did not think there were damages as large as $3 million. The court rejected the state's argument, based on the doctrine of temporary impossibility to perform the contract; the state argued that that should protect the state from the breach-of-contract claim. The court ruled against the state on the point, but it also ruled that the burden was on the Richards to show that the delay in the ability to perform the contract was unreasonable in light of the contract between the parties. The Richards would be entitled to rescission of the contract and restitution if the burden was met through trial. She noted that in the settlement, the state would get the land back. Co-chair Pearce noted that Section 8 would be amended with the Department of Administration and two small appropriations. Mr. Spencer detailed that the amendments for Section 8 were the result of additional bills in the legislature. He stated that Section 11 (additional ratifications) had gone through the process. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT Co-chair Pearce directed attention to the March 5 letter and items for the Department of Commerce and Economic Development (DCED). GUY BELL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, spoke to the $60,000 request to cover costs associated with implementing the response to the Southeast mill closure in October the previous year. The governor had appointed a group to coordinate the response and address problems arising because of the mill closure. The department hired a temporary position in Ketchikan to serve as the administrative support person and coordinate the response. Initially, the position was expected to last two to three months, but turned out to be necessary through the end of the fiscal year. The supplemental appropriation would help cover the cost of the position, travel costs for the position, and bringing other people from other places in Southeast to Ketchikan to provide training. For example, people from locations in Washington State that had experienced similar mill closures have been invited to train Alaskan personnel on procedures and local, state, and federal coordination. The item would also pay for basic contractual costs associated with the new temporary office in Ketchikan. Finally, $15,000 would fund targeted professional-services contracts for technical assistance, business-plan assistance, and assistance in getting the required state and federal permits for value-added projects. Co-chair Pearce asked whether the special assistant to the department would spend time on the projects as well as the community liaison position. Mr. Bell responded that the special assistant to the department was assigned to be the overall coordinator for the project because she was familiar with the community of Ketchikan. He added that she continued to be heavily involved, and he thought she would continue to be involved through the fiscal year. The department hoped a more permanent program would be in place and run by DCED under the name of "CERT." The effort would be a long-term state and federal partnership to address the impacts of the mill closure. The special assistant would then return to her position as special assistant to the commissioner of DCED. Co-chair Pearce noted that DOL had requested the deletion of an encumbrance in Section 6(a). Mr. Fisher detailed that the deletion request was in response to concerns expressed by the legislature regarding the potential need of a three-fourth majority vote. Legislative Legal Services had provided the opinion that the three-fourths vote could be required because the appropriation was made from the Constitutional Budget Reserve (CBR). The department reviewed other options available to the legislature in order to address the concern. He noted that another concern was compliance with the legislative auditor's interpretation of encumbrance rules. He pointed out that there would be a future supplemental request or ratification appropriation to resolve audit findings related to the validity of the department's FY 96 oil and gas litigation encumbrances. Any significant changes in the litigation schedule or other changes in oil and gas budget requests could result in the need for supplemental appropriations in FY 98 and subsequent years. He understood that the auditors were willing to consider the approach. Co-chair Pearce stated that she wanted the legislature to take direction and advice from its own auditor related to the section. She did not think the need for a three-quarters majority vote would be an impediment. RANDY WELKER, LEGISLATIVE AUDITOR, DIVISION OF LEGISLATIVE AUDIT, explained that there was disagreement between himself and DOL on whether the original encumbrance was or was not valid when the money was encumbered at the end of FY 96 to spend in FY 97. He opined that the encumbrance was not valid; DOL believed it was. He suggested that if the encumbrance was not valid, the appropriation would have to be completed, either through the three-quarters vote or a general fund supplemental. The completion would be technical. The legislature had the choice of either ignoring the appropriation, since the money had been spent and would not affect funds in the general fund or in the CBR as far as cash balances. He noted that about $1 million remained unexpended on the encumbrance, but it was expected to be spent by the end of the fiscal year. He reiterated that the technical completion of the sequence of events would be to approve an appropriation; whether to do so or not would be a legislative policy call. Mr. Welker referred to comments made by DOL about discontinuing the practice. He preferred to have the commitments in place regardless of whether the appropriation was withdrawn. Co-chair Pearce pointed to a request to add to Section 6(3). Mr. Fisher explained the item related to the Medicaid provider fraud unit. Based on the casework that the unit was currently processing, all of the general fund receipts had not been generated to meet match requirements for FY 97. As a result, the department was asking for a net-zero transfer of general fund authority from program to receipts to general fund match. The other piece associated with the issue was that the department received a request from the Office of the Inspector General of the U.S. Department of Health and Human Services strongly suggesting that now and in the future the state pursue appropriations of unrestricted general fund match rather than program receipts as a funding source for the program. He also pointed out that the federal government's approval of the Medicaid provider fraud unit was contingent upon ongoing state receipt of Medicaid funds. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS Co-chair Pearce called attention to a last item listed in the March 5 letter. Mr. Spencer noted that the proposed amendment was referred to in the letter dated March 7, 1997 and was a technical amendment striking a few words. The original amendment specified that premiums would be paid through the Federal Emergency Management Agency (FEMA); in fact, the funds would not be paid through FEMA, but would be paid directly to the insurance program. NICO BUS, CHIEF FINANCIAL OFFICER, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF MILITARY AND VETERAN'S AFFAIRS, detailed that the request would allow about 86 residents of the area impacted by the Southcentral flood to buy a good group insurance policy for floods. The program was a pilot program allowed by the federal government and would cost $200 (per resident) for three years of flood insurance. He noted that he personally paid $50 per month and believed the program to be a good deal. The 86 people allowed to participate would receive premiums and then pass them on. Co-chair Pearce pointed to the letter received March 7; the first section would be a new one for the Alaska Aerospace Development Corporation (AADC), with two subsections, a $5 million grant and receipt of federal funds. Mr. Bell explained that the appropriation was initially requested in the governor's capital budget. He noted that the dollar amount was the same but the language had changed somewhat. The reason for the change to a supplemental capital appropriation request was that AADC had projected beginning construction on the project in May to take full advantage of the construction season. The $28 million represented the full amount required to construct the Kodiak launch complex; initial launches were anticipated for the following summer to fall. Mr. Bell detailed that the language was written in two sections because of discussions with DOL. A statute (AS 37.17.090(k)) stipulated that the Alaska Science and Technology Foundation (ASTF) could make a grant to AADC for the complex, subject to appropriation. The Department of Law had given the verbal opinion that there had to be a specific item of appropriation; the amendment would give that specific appropriation authority. The second part of the section was the exact language found in the capital appropriation request for $18 million in federal receipts from the U.S. Air Force, the expenditure authority for the $5 million grant from the ASTF endowment, and $5 million in additional corporate receipts representing interest earnings and other private contributions to the project. He noted that the $5 million in additional corporate receipts was a projected amount. Co-chair Pearce recalled a press release the day before announcing the grant at $4.9 million. Regarding the subsection (a) language, she referred to an ASTF board vote to make the award contingent upon receipt of the federal $18 million portion. She thought the supplemental language should match the board's language. Mr. Bell responded that the issue had been discussed with DOL and the executive director of ASTF. He explained that the capital appropriation as currently written would effectively be a direct appropriation from the ASTF endowment to AADC, without being a grant. The amendment would require that the item continue to be a grant and fall under the conditions of the grant as made by the foundation. The contingent language was implied, indicating that the item was a grant. He noted that the language requested could be added as intent language, but stressed that indicating that the item was a grant would continue the contingency. Co-chair Pearce wanted it to be clear that the contingency existed. Mr. Bell added that there was language for the item making it retroactive to the present fiscal year so that the ASTF board would not have to go through the process of awarding the grant again. Co-chair Pearce moved to the next requested amendments, beginning with reductions for the Department of Administration (DOA). Mr. Spencer detailed that the amendments to Section 1 and Section 5 were both based on new projections by DOA and the Department of Health and Social Services (DHSS). Both were reductions. For DOA, Section 1(a) would be reduced by $25,000 and Section 1(b) would be reduced by $69,700. Co-chair Pearce noted another claim by DOL for $1,200 for a lease associated with Marty Ferrel (?) (Section 6). She asked for detail regarding technical corrections. Mr. Spencer listed technical corrections: The first technical correction had already been discussed · related to the $17.2 for flood insurance. An additional miscellaneous claim from the Department of · Corrections for $945,000. A Section 13 technical correction (discussed during the · supplemental for the Marine Highway System) to appropriate the funding to the marine highway system fund. Sections 16 and 18, related to the Kodiak launch complex. · Co-chair Pearce referred to the Revised Program-Legislative (RPL). Mr. Spencer informed the committee that the RPL issue was unresolved and that it was not clear what the legislature wanted as ground rules for what was an RPL or supplemental appropriation. For example, for one of the RPLs for the Department of Education that had been approved at the last committee meeting, the department did not have the funds in hand. On the other hand, the department had the funds in hand for the other federal receipt RPLs that were not approved or even voted on in committee, but could not distribute them to the local school districts until receiving approval or applying the 45-day rule. He did not want to see good projects die because of timing issues or get delayed because of money problems. He noted that the backup had been previously presented to the Legislative Budget and Audit Committee and to Legislative Finance and could be made available to the committee. Co-chair Pearce stated that the RPLs would be discussed at a future committee meeting. She referred to discussions in the Legislative Budget and Audit Committee meeting. She thought there was a question related to the RPLs connected with the 45-day rule; since the RPLs affected departmental budgets, it was not clear whether the departments should come before the committee or wait for the supplemental process in the finance committees. The Division of Legislative Finance had been asked to make a judgment regarding the issue, especially related to time-sensitive projects. She referred to confusions. She noted that the committee had the back-up material and that the committee would hear the RPLs like normal supplemental requests. She promised that the committee would work towards ground rules related to RPLs. She understood that some items would be more urgent because of timing issues. ADJOURNMENT The meeting was adjourned at 11:00 a.m.