GENERAL SUBJECT(S): SB 30 OPERATING BUDGET APPROPRIATIONS: Front Section The following overview was taken in log note format. Tapes and handouts will be on file with the Senate Finance Committee through the 21st Legislative Session, contact 465-2618. After the 21st Legislative session they will be available through the Legislative Library at 465-3808. Time Meeting Convened: 9:02 A.M. Tape(s): SFC-99 #30, Side A (000 - 589) Side B (589 - 185) PRESENT: X Senator Parnell X Senator Adams X Senator Torgerson X Senator P. Kelly X Senator Donley X Senator Green X Senator Leman X Senator Phillips X Senator Wilken ALSO PRESENT: DAN SPENCER, Budget Analyst, Office of Management and Budget; TOM LAWSON, Director, Division of Administrative Services, Department of Commerce and Economic Development; LARRY DIETRICK, Program Manager, Prevention and Emergency Response Program, Department of Environmental Conservation; KEVIN BROOKS, Director, Division of Administrative Services, Department of Fish and Game; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Natural Resources; DAVID TEAL, Director, Division of Legislative Finance; GINGER BLAISDELL, Fiscal Analyst, Division of Legislative Finance; aides to committee members and other members of the Legislature. LOG SPEAKER DISCUSSION 000 CO-CHAIR PARNELL Called the meeting to order. DAN SPENCER Budget Analyst, Office of Management and Budget was invited to join the committee. Review of FY00 Operating Budget - Front Section Analysis. Section 1: Governor, Alaska Housing Finance Corporation (Presence of Senator Green noted at 9:10 a.m.) Mr. Spencer explained subsection (a) transfer of unexpended and unobligated amount of AHFC unrestricted revenue available for appropriation, by the direction of the AHFC board to the Alaska Debt Retirement Fund for fiscal years ending June 30, 1999 and June 30, 2000. Previous years the balance had been transferred to the general fund. Subsection (b) would appropriate earnings related to AHFC to AHFC as corporate receipts, to be then allocated to their revolving fund, housing assistance loan fund and senior housing revolving fund. Subsection (c) identified the amount of corporate receipts within the revolving load fund to be used by the AHFC for housing loan programs not subsidized by AHFC corporate receipts. Section 2: Governor, Alaska Permanent Fund Corporation Subsection (a) would appropriate necessary funds from the Permanent Fund Earnings Reserve Account for the dividend program and other uses. Subsection (b) appropriated the amount needed for inflation-proofing from the Earnings Reserve Account to the principal of the Permanent Fund. Subsection (c) approporiated twenty-five percent or fifty percent of mineral lease rentals, royalties, royalty sales to the principal of the Permanent Fund. Subsection (d) appropriated any interest earned in FY 00 from mineral lease rentals, royalties, royalty sales while the revenue was held in trust, escrow or otherwise before received by the State to the principal of the Permanent Fund. Section 3: Governor, Alaska Public Utilities Commission Reappropriated the June 30, 1999 balance of APUC receipts to the Alaska Public Utilities Commission for FY00 expenditures. FY00 estimate is $400.0. Section 4: Governor, Alaska Science and Technology Foundation This section would reappropriate the balance of June 30, 1999 in the Alaska Science and Technology Endowment Earnings Reserve to the Alaska Science and Technology Foundation to award as grants under AS 37.17.030(d) for FY00. 148 TOM LAWSON Director, Division of Administrative Services, Department of Commerce and Economic Development was invited to join the committee. Section 5: Governor, Alaska Seafood Marketing Institute This appropriated the June 30, 1999 balance of FY99 general fund receipts from the salmon marketing tax from the seafood marketing assessment (AS 16.51.120) for FY00 ASMI expenditures. Section 6: Governor, Budget Reduction Requiring Legislation - Longevity Bonus Eligibility If legislation introduced by the Governor (HB 55 and SB 40) to place income limits on longevity bonus eligibility were approved by the Legislature operating appropriations would be reduced. 169 SENATOR DONLEY Asked for a short at ease. 9:15 a.m. 170 CO-CHAIR PARNELL Reconvened meeting at approximately 9:16 a.m. Asked Mr. Spencer to explain sections a little more clearly. 173 MR. SPENCER Continued and indicated that Mr. Lawson was more appropriate to respond. MR. LAWSON He explained the carry forward from 1998 to 1999 does not have all the numbers. For FY 2000 between $200 and $500 thousand. Will know exact figures in about another month. CO-CHAIR PARNELL Asked about the carry forward. MR. LAWSON Advised the co-chair that they do not know yet. MR. SPENCER Continued with Section 6: Governor, Budget Reduction Requiring Legislation - Longevity onus Eligibility He explained that this would show up as a fiscal note on the bill. There are perhaps two or three fiscal notes. The budget reductions would enact a fiscal note. It would require separate legislation. This would make it clear that it was a budget reduction; that is the reason it is in this bill. SENATOR DONLEY Commented on "boiler plate". Is this an implementation of a change that occurred somewhere else? Begged a better description. MR. SPENCER There are various ways to take into account certain legislation. Can be built into the budget by the executive branch or the Legislature. Does not have to happen either way, however. Can also be done by fiscal note and savings would show up at the end of the year. They are putting it in the front section so it will be clear to everyone. Placed in the back section Longevity Bonus would look like it was going down. CO-CHAIR PARNELL Does this then reflect a policy call? MR. SPENCER Yes. Section 7: Governor, Constitutional Budget Reserve Fund (a) would provide for the general fund sub accounts to be repaid by the CBR and exclude pure general fund. Subsection (b) would allow the State to cover any shortfall in unrestricted revenues available for the appropriation in FY00 from the CBR. This amount would be appropriated to the general fund from the CBR according to balancing language. Subsection (c) stipulated that appropriations made by (a) and (b) of this section would be made under Article IX, section 17(c). CO-CHAIR PARNELL Asked if the limit was set at $701 million? MR. SPENCER Yes. SENATOR DONLEY Asked for further clarification of the amount. MR. SPENCER Further comments. No one knows the exact amount at this stage. Section 8: Governor, Disaster Relief Fund Appropriated Federal receipts received for disaster relief to the disaster relief fund. Approximately $9,000.0 has been included in Federal funds in the Department of Military and Veterans' Affairs in the back section of the bill. Section 9: Governor, Federal and other Program Receipts (a) was standard language that provides for additional funding authority for Federal and other program receipts through the Legislative Budget and Audit Committee process. It would not restrict the LB&A committee to particular fund source consideration., Subsection(b) was standard language that if Federal or other program receipts were grater than appropriated then the appropriations from the State funds (general funds) may be reduced if the reductions are consistent with applicable Federal statutes. Subsection (c) was standard language that if Federal and other receipts are less than the amount appropriated the appropriation would be reduced by the amount of the shortfall. He referred to SB 28, which would deal with section (a) that they discussed last week. Section (b) says you may not spend more than you have. Section (a) is different in the current year budget. They are opening this section up to various other program receipts. SENATOR LEMAN Would this trigger an additional State match? Is this a possibility? MR. SPENCER He explained that the general rule is that revised programs are based on additional Federal receipts if they had match in a supplemental. This does not only apply to general funds and could be other funds. SENATOR LEMAN What about disaster monies? What are some examples of other funds that may not have matches or we may be shifting from other State general fund matching sources? MR. SPENCER Narcotics Task Force from Feds with State match; Division of Governmental Coordination has no match requirements; some RPL's in the past like CSED; general fund over budget. SENATOR LEMAN Does this enable us to accept Federal monies and make commitment of a supplemental, for example western Alaska Fish Disaster? MR. SPENCER Disaster is a good example. The reason being because there are State funds committed to this disaster fund. He explained the difference in what is expected to be needed and what is available. Five days were required to notice the Governor for a special session needed for disaster. The most that he is familiar with is to present a supplemental to the Legislature. Most Federal funds that come in if they have match requirements would be identified. There is a formal process requiring a separate notification to the Legislature. SENATOR ADAMS Fisheries receipts (page 10). Referred to section 8(c) and said this would be changed if passed under other legislation. MR. SPENCER Section 10: Governor, Federal Subsistence Funds He said he would like to call Kevin Brooks from the Department of Fish and Game to answer any questions. SENATOR TORGERSON MR. SPENCER Subsection (a) indicated that $11,000.0 Federal funding was appropriated to the US Department of Interior and US Department of Agriculture for the State of Alaska. Alaska's receipt of the funding is contingent on the Legislature adopting a constitutional amendment for ratification by Alaska voters to allow a rural subsistence priority. Subsection (b) stated that if subsection (a) was satisfied, the Federal receipts are appropriated to the Department of Fish and Game to help implement a unified subsistence management system and provide support to decision-making groups in that effort. If Alaska meets the June 1, 1999 contingency as outlined in subsection (a) the appropriation would be allocated as follows: $3,000.0 to the Board of Fisheries, Board of Game, regional advisory councils and local advisory committees; and $8,000.0 for biological research, monitoring and management to ensure yield and to improve utilization of fish and wildlife for subsistence, commercial and support purposes. Subsection (c) stated that if the June 1, 1999 contingency requirement were not met the allocations outlined in subsection (b) would be proportionately reduced. SENATOR PHILLIPS Asked about $11 million on subsistence. Is it going to be our own people enforcing the law or Federal people? KEVIN BROOKS Director, Division of of Administrative Services, Department of Fish and Game was invited to join the committee. Responded to Senator Phillips regarding the $11 million. If they do not use the money the Feds will use it with their own people. SENATOR PHILLIPS Will State people assist the Federal government in enforcing these funds? MR. BROOKS Has spoken with Senator Torgerson who has their budget. Not something the department can turn their backs on. SENATOR PHILLIPS Reiterates his question. Are we going to let the Feds enforce this? Will the State participate? MR. BROOKS Would feel more comfortable in deferring to the Commissioner. SENATOR PHILLIPS Asks question be posed to the Commissioner and the answer be provided to the committee. SENATOR LEMAN Was the Legislature adopting the measure? What happens if the voters do not vote for this? Could the Supreme Court remove it from the ballot or rewrite the amendment? Do they need to repay the $11 million? MR. BROOKS Advised the committee that he was not prepared to answer the question at this time. Will have the department respond via the Task Force. What are trigger mechanisms for the $11 million? This requires an amount of discussion. They do have to have a constitutional amendment now regardless of the thresholds that have to be overtaken. CO-CHAIR PARNELL Asked that the department respond to these posed questions by Senator Leman. SENATOR LEMAN He suggest they could perhaps be answered at the subcommittee level. SENATOR TORGERSON Advised that these questions have been posed to the subcommittee and will answer to the committee in full when the discussions have been completed. Is the $11 million a one-time deal? MR. BROOKS He responded saying it was an occurring event. SENATOR ADAMS Asked that his bill on subsistence be waived to this committee so it could be discussed simultaneously. MR. SPENCER Continued his explanation. Section 11: Governor, Fish and Game Enforcement Subsection (a) appropriated to the Fish and Game fund the amount of criminal fines, penalties and forfeitures imposed and collected under AS 16.05.195 from the general fund. Subsection (b) said the Public Safety and Law amounts are for increased enforcement, investigation and prosecution of State Fish and Game laws. If receipts are less than the amount appropriated the appropriations would be reduced proportionately. SENATOR WILKEN Requested a three to five year reflection of fines. SENATOR ADAMS Asked that the breakdown also include what goes to the Department of Law. MR. SPENCER Section 12: Governor, Four Dam Pool Transfer The section made the necessary appropriation from the Four Dam Pool Transfer Fund to the Southeast Energy Fund, the Power Cost Equalization and Rural Electric Capitalization Fund, and the Power Project Fund. The estimated amount available for transfer from the Four Dam Pool for FY00 was $9,493.7. CO-CHAIR PARNELL Why is there a significant increase for FY00? MR. SPENCER Does not know. SENATOR ADAMS Indicated that money was taken on an annual basis for repairs and needs an update. SENATOR LEMAN Asked about the FY98 - FY99 funds that were transferred. MR. SPENCER Advised he would have to get back to the committee. CO-CHAIR PARNELL There is a significant increase so would appreciate the requested information being presented to the committee. MR. SPENCER Section 13: Governor, Information Services Fund This section appropriated statutory designated program receipts to the Information Services Fund for the Department of Administration, Division of Information Services telecommunication services. Statutory designated program receipts are reflected in the Department of Administration budget as $55.0 I/A Receipts. Section 14: Governor, Insurance and Bond Claims - Catastrophe Reserve Account. There was a variety of purposes that this fund operated under. Some of the funding is being used as an interim for Y2K. SENATOR ADAMS Asked about judgments? MR. SPENCER Said this was also related to Court activities. He will have backup regarding these activities as soon as possible. Section 15: Governor, Insurance Fees - Reappropriation. He noted this was not a new section. It reappropriated the June 30, 1999 balance of FY 99 general fund program receipts (insurance fees) under AS 21.06.250 for FY00 Department of Commerce and Economic Development, Division of Insurance operating costs. A safe estimate for the FY00 carry forward was $1,500.0. Section 16: Governor, Land Disposal Appropriated general fund receipts in the fiscal years ending June 30, 2000 and June 30, 2001 from land sales at Naukati Bayon Prince of Wales Island (not to exceed $50.0) and Vallenar Bay on Gravina Island (not to exceed $200.0) to the Department of Natural Resources for land sale preparation costs. Timing is not known and therefore this section is included in the front section rather than the back section. CO-CHAIR PARNELL Questioned as to why it is not in the back section. Asked for an explanation. MR. SPENCER Timing of the receipts is uncertain. It is in the front section so it does not get lost in the shuffle. Would not fit in back section under specific listings. CO-CHAIR PARNELL Will have to work on this one. MR. SPENCER Section 17: Governor, Marine Highway System Fund. This was a general fund appropriation to the Alaska Marine Highway System fund. The amount of the transfer can be found in the Marine Highway Stabilization Fund component of the DOT/PF budget. He noted that it was a little bit up from FY 99. Not sure of the difference. SENATOR TORGERSON Is the interest on the fund normally appropriated? MR. SPENCER Did not know the answer. Section 18: Governor, Motor Fuel Tax. This section appropriated estimated amounts from the unreserved special accounts in the general fund to the general fund to be available operating funding from the following sources: $23,924.5 for the special highway fuel tax account; and $5,400.0 for the special aviation fuel tax account. he income was based on the existing eight cents per gallon tax. It was noted that the amounts were estimates. Did not believe they would have to do this. They had considered dropping this section a few years ago. CO-CHAIR PARNELL Why was this based on an eight-percent increase? MR. SPENCER It was consistent with what had been done in the past. Section 19: Governor, Occupational Licensing - Reappropriation Would reappropriate the June 30, 1999 balance of FY99 general fund program receipts (occupational licensing fees) for FY00 Department of Commerce and Economic Development, Division of Insurance operating costs. FY00 estimate approximately $1,000.0. CO-CHAIR PARNELL Asked if this was an increase in the Department of Commerce, Occupational License budget? MR. SPENCER If this pertained to above the amount in the back section, yes. CO-CHAIR PARNELL Asked why? TOM LAWSON Recalled to join the committee. He explained that it was being done this way because money brought in by the fees was in excess. Rather than roll it into general funds they rolled it back into the department budget. This was done by language in the front section. MR. SPENCER Introduced the following two Sections and advised that Mr. Larry Dietrick would speak to them. Section 20: Governor, Oil and Hazardous Substance Release Prevention Account Section 21: Governor, Oil and Hazardous Substance Release Response Account. (Tape #30, side A switch to side B at log 589 at 9:45 a.m.) LARRY DIETRICK Program Manager, Prevention and Emergency Response Program, Department of Environmental Conservation was invited to join the committee. (pause while documents handed out) Subsection (1) said the prevention mitigation account received money recovered from parties responsible for containment and cleanup of oil or other hazardous substances, as well as fines, penalties or damages as a result of prevention measures. The Governor did not include this estimated amount, which was approximately $5,618.8. Subsection (2) said the prevention account contained appropriations from the special account in the general fund to the OHSRPR fund from the three-cent surcharge collected in the general fund during the prior year. FY00 deposits are appropriated from the general fund for FY00 expenditures.) CO-CHAIR PARNELL Asked if he would address particularly subsection 2? Would like to know about the $5.6 million? Asked that Mr. Dietrick to get back on this matter to the committee. He said he was having difficulty in getting required information, and further noted that the departments were not prepared. Will have to have another meeting because of this situation but would rather avoid having to have another meeting. 563 MR. DIETRICK Section 21: Governor, Oil and Hazardous Substance Release Response Account Subsection (1) The response mitigation account received money recovered from parties responsible for containment and cleanup of oil or other hazardous substances, as well as fines, penalties or damages as a result of emergency response measures. The Governor did not include the estimated amount of $416.1. Subsection (2) This response account contains appropriations from the special account in the general fund to the OHSRPR fund from the two cent surcharge collected in the general fund during the prior year. This surcharge is only required when the balance of the SHSRRA dropped below $50 million. CO-CHAIR PARNELL Will have same questions as section 21. MR. SPENCER Section 22: Governor, Performance Measures. The Governor's intent language requests that the goals, strategies and performance measures be stated in a separate resolution. There was concern that the appropriations bill may not conform to Article II, Section 13 which required that appropriations bills be confined to appropriations. He thinks this is a good idea but looking for right way from Legislature. CO-CHAIR PARNELL Would not support the legislation as is. SENATOR TORGERSON Comments. MR. SPENCER Section 23: Governor, Real Estate Surety Fund The balance of the real estate surety fund that exceeds $500.0 is appropriated to the Department of Commerce and Economic Development, Division of Occupational Licensing for purposes related to the real estate surety fund for the fiscal year ending June 30, 2000. It was noted that the statute clearly states that amounts in the fund may not exceed $500.0 and amounts in excess of $250.0 may be appropriated for real estate educational purposes. At this point, he said he would have to defer to the Department of Commerce. Unable to answer specific questions. TOM LAWSON Rejoined the committee. CO-CHAIR PARNELL He said he was trying to get more money for the department. Asked for an explanation as to how money is restricted and if they are complying with the statute. How will the funds be used? MR. LAWSON Funds are only used for a surety intent and he referred to statutory language for the surety fund. This lapsed excess balance to be used in the surety fund. Annually, they draw money out of the fund and spend it based on the guidance as set out by law for education, as well as for claims, all within the realm of the real estate world. There was a statutory cap of $500,000. SENATOR DONLEY Stated it would be reasonable to get rid of the statutory cap. Mr. Lawson said they have to deal with a huge issue because revenue only comes in every two years. Fund was set up to pay for claims as well as to pay for educational purposes. Dealing with limited statutory language which really limits them because of cash flow. Would like to see the cap raised so they would not be in a box trying to balance the cash flow for high and low years. MR. SPENCER Section 24: Governor, Retained Fees The language addressed the need to appropriate vendor compensation and/or bankcard services fees that were not directly appropriate by the State for vendors or banking institutions that collect fees on behalf of the State. These originated from fish and game fishing, hunting and trapping license sales where the vendor retained a portion of the sale instead of the vendor submitting the full collection and the State reimbursing the vendor for expenses related to selling licenses. The agencies should be directed to include these fees in their annual budget requests. For example fish and game licenses. Fees being retained by vendors. Section 25: Governor, Safety Advisory Council - Reappropriation This reappropriated Safety Council program receipts no expended in FY99 to be carried forward into FY00 for the Governor's safety conference. FY00 estimated $100.0. Section 26: Governor, Salary and Benefit Adjustments This was FY00 pay increases for University of Alaska employees. The (unknown) amount is the net amount for three items: salary adjustments, health benefit adjustments and changes in contribution rates for the Public Employees Retirement System. It was seen in two places. The front section bargaining units; back section funding for the University. Would ordinarily have the costs of any bargaining unit agreements for any costs introduced. Would propose an amendment to show the costs. Does not have an agreement yet to show the amounts. SENATOR ADAMS Asked if there was a time line for settlement of the bargains? MR. SPENCER Did not have a time line. Practical time line is just in time to get a bargain. Section 27: Governor, Salmon Enhancement Tax Appropriated general fund salmon enhancement tax receipts to the Department of Commerce and Economic Development for payment in FY00 to qualified regional aquaculture associations. The amount is not included in the operating budget general fund spending totals. It is "pass-through" money. He explained that this appropriates tax from the general fund to regional associations. Section 28: Governor, Shared Taxes and Fees This appropriated general funds to the Department of Revenue in the amounts necessary to refund local governments their share of taxes and fees collected for payment in FY99. It was noted that FY98 $22,199.6, FY99 and FY00 are anticipated to be a similar amount. He said the amounts necessary should be appropriated. The change was made during the Hickel administration. Section 29: Governor, State Debt and Other Obligations Subsection (a) interest on revenue anticipation notes is appropriated from the general fund to the Department of Revenue for payment of interest on notes. Subsection (b) amount required to be paid by the State for principal and interest on State bonds is appropriated from the general fund to the State bond committee for payment on those bonds. Subsection (c) $5,739.1 from the general fund to the Alaska Debt Retirement Fund. Subsection (d) $16,287.8 from the Debt Retirement Fund for trustee fees and lease payments related to certificates of participation for real property. Subsection (e) $2,518.0 from the Debt Retirement Fund for payment of debt service and trustee fees on general obligation bonds. Subsection (f) $2,877.5 from the International Airports Revenue Fund for payment of debt service and trustee fees on international airport revenue bonds. Subsection (g) $71,788.1 from the Debt Retirement Fund ($26,258.6) and School Fund ($45,529.5) to the Department of Education for State aid for costs of school construction.debt retirement fund. He explained how the debt retirement fund is calculated. Usually there is some amount of carry forward in this fund. Anticipated there will be an amendment soon. There have been a couple of changes. International Airport fund. Fluctuations under section (g). SENATOR WILKEN Asked the difference in debt retirement fund and school fund. MR. SPENCER School fund - cigarette tax used for maintenance and construction. Debt retirement fund - general funds. SENATOR ADAMS All schools need assistance, not just urban schools. Schools in rural Alaska should be considered for some of this money. MR. SPENCER Section 30: Governor, State Training and Employment Program The State Training and Employment Program is funded from the Employment and raining Program Account that is funded by a contribution of one-half of one percent from each employee's wages. Unspent balances must be lapsed from this account into the unemployment compensation fund. For FY99 this language was changed so that unspent balances must be lapsed from this account into the employment assistance and training program account. FY00 estimated at $400.0. CO-CHAIR PARNELL Asked if this is something done statutorily or is it a policy call? MR. SPENCER Underwent changes last year. Section 31: Governor, Statutory Budget Reserve If unrestricted revenues are less than necessary for FY00 appropriations, the amount necessary to balance revenue and general fund appropriations is appropriated to the general fund from any balance that may be available from the Statutory Budget Reserve Fund. There is no real impact from this section. Does not know why it is still in there. CO-CHAIR PARNELL Perhaps some money could be found! MR. SPENCER Section 32: Governor, Storage Tank Assistance Fund This would appropriate from the OHSRPR Fund, prevention account (non-general fund) to the Storage Tank Assistance Fund. For FY98 language was included that allowed the Legislature to capitalize the storage tank assistance fund with any general fund registration fees collected on underground petroleum storage tanks or tank systems. In SLA 98 the language was changed so that the fees collected would be considered unrestricted general fund revenue and would be replaced with $200.0 from the oil and hazardous substance release prevention account. SENATOR DONLEY Has many questions regarding this section but will not bring up now. MR. SPENCER Section 33: Governor, Student Loan Program The amount from student loan borrowers of the Alaska Commission on Postsecondary Education that was assessed for loan origination fees for the fiscal year ending June 30, 2000, is appropriated to the origination fee account within the student loan fund of the Alaska Student Loan Corporation. SENATOR DONLEY Asked to go back to section 31. Why is this not an important section? (Brief at ease at 10:15 a.m., tape 30, Side B, log 369.) CO-CHAIR PARNELL Reconvened meeting. MR. SPENCER Explained origination fee account for section 31. Section 34: Governor, Teacher Certification - Reappropriation This reappopriates the June 30, 1999 balance of FY99 teacher certification general fund receipts from certification fees under AS 14.20.020(c) for FY00 teacher certificatin expenditures. FY00 estimate was $100.0. CO-CHAIR PARNELL Why were amounts not included in front or back section? MR. SPENCER Doesn't know. CO-CHAIR PARNELL Asked that the matter be looked into. MR. SPENCER Will provide answer to the committee. Section 35: Governor, Test Fishery Receipts FY99 balance of commercial fisheries test fishing operations receipts from the harvest and sale of crab are appropriated to the Department of Fish and Game or operations of the shellfish onboard observer program in the Division of Commercial Fisheries Management and Development for FY00. KEVIN BROOKS Was asked to Rejoin the committee. This is in the front section due to some timing problems with Department of Revenue. It involves putting employees (seasonal) on vessels to observe. Includes 50 seasonal positions. Problem is that the observers will be incurring costs prior to the test fisheries. There were two basic fisheries they were dealing with. Use monies from the test fisheries incurred in the spring for this. SENATOR WILKEN Why is amount zero? MR. BROOKS He said the amount was zero because it is dependent on price. $2.7 was specific in the budget. MR. SPENCER Section 36: Governor, Value-added Timber Sales Appropriation was not to exceed $250.0 general fund receipts generated in fiscal years ending June 30, 2000 and June 30, 2001 from value- added timber sales in Southeast and in the Tanana Valley to the Department of Natural Resources. The appropriation amount was not included in the total of the Governor's appropriation bill. CO-CHAIR PARNELL Requested Nico Bus to join committee. NICO BUS Administrative Services manager, Division of Support Services, Department of Natural Resources was invited to join the committee. He explained sections 36 and 37. Explained why they were not part of the back section. MR. SPENCER Sections 37, 38 and 39 refer to lapse dates. He concluded his presentation to the committee. SENATOR WILKEN Section 39(b) explanation. MR. SPENCER He said it referred to section 1(a), the AHFC bond bill passed by the Legislature last year. $9 million was needed in FY 99 estimate. They had to reach in retroactively. SENATOR WILKEN Section 39(b) MR. SPENCER Responds. If they did not go back and retroactively take the monies, they would go back into the general fund rather than debt retirement. AHFC provides an annual dividend set out for debt. SENATOR LEMAN Page 9, line 4 of bill. MR. SPENCER Is sure the amount is correct. Budget amendments are due in a couple of weeks and will have some. There were a number of questions the committee had. Apologized that he did not have all the necessary information for the committee. He said he had a list of questions that the committee would like answered and will be able to do so at a later time if the committee required. At best he tried to guess where the questions would be today. CO-CHAIR PARNELL Budget amendments. He said they were looking at some deletions as advised by the Governor for FY 2000 budget. MR. SPENCER Confirmed $15 million in reductions. SENATOR PHILLIPS $15 million from prior year reductions? MR. SPENCER $15 million for FY 2000. CO-CHAIR PARNELL Thanked Mr. Spencer and department staff for their presentation. Adjourned meeting at approximately 10:30 a.m. Tape number 30, side B at log number 185. SENATE FINANCE COMMITTEE LOG NOTES 02/17/99 Page 1