- Associated Press - Tuesday, April 22, 2014

JUNEAU, Alaska (AP) - One of the last big pieces to be resolved before lawmakers wrap up their work is the capital budget.

The House began taking up amendments Monday. Sunday was supposed to mark the end of the legislative session, but ran long after the House and Senate failed to find agreement on an education plan.

Capital spending in the budget, as it left the House Finance Committee early Monday, was about $2.2 billion. But that did not include additional education funding, which House and Senate negotiators were trying to reach consensus on.

It includes $20 million for the Susitna-Watana hydro projects, twice what the Senate included. Some lawmakers have questioned additional funding for the proposed south-central Alaska mega-project, given the state’s pursuing a major gas line project, and an effort to strip the money was rejected on the House floor. Gov. Sean Parnell requested $42.7 million for the project between this year and next, with all but $10 million contingent upon the Alaska Energy Authority, or AEA, securing land access agreements for project studies. That agreement was announced earlier this month.

The bill revised funding for a new power plant at the University of Alaska Fairbanks, trimming $13 million that a committee aide said wasn’t expected to be needed for the next couple years for debt service. In all, the funding package for the new plant totals $232 million, a mix of state funds and $157.5 million in anticipated bond revenue. Part of the bonding is expected to come through the Alaska Municipal Bond Bank Authority; a companion bill that would raise the borrowing limit of the authority passed the Legislature.

The bill retained language that the University of Alaska implement a utility surcharge or raise tuition, but the total brought in annually cannot exceed $2 million. There was the expectation that the funding and fuel savings resulting from construction of a new plant would help offset university revenue bond debt service for the project.

The bill also retained money included in the Senate version intended to complete the state library, archives and museum building in Juneau and an engineering building at the University of Alaska Anchorage.

It also reflected a proposed withdrawal of $3 billion from the constitutional budget reserve to address the state’s pension obligation. Such authorization is expected to need a three-fourths vote of each chamber.

The bill also includes $4.6 million for renovations at the Atwood state office building in Anchorage. The money would come from right-of-way lease rentals to the Department of Natural Resources and is meant to allow the agency to conform to new office space standards and reduce the amount of space it needs, Parnell budget director Karen Rehfeld said.

It also included a $2 million reappropriation within the Department of Law for the state’s share of “interim remedial actions to protect the health, safety, and welfare of the people in the North Pole area.” Attorney General Michael Geraghty is working on a three-way agreement to study what can be done to address the sulfolane groundwater contamination at North Pole, including the potential for extending the public water system to affected properties, chief assistant attorney general Steve Mulder said.

The reappropriation would be contingent upon a cost-share agreement between the state, Flint Hills Resources Alaska LLC and Williams Alaska Petroleum, according to the budget language. The state recently sued Flint Hills Resources, the current owner of a North Pole refinery, and former owner Williams Alaska, over the contamination.

The bill also provides $500,000 to the department of health for the Play Every Day campaign, aimed at encouraging kids to be active and fighting obesity.

The House, in a floor amendment, removed $10,000 for the governor’s office for providing information “about the potential effects of a ballot proposition.” Rehfeld has said the money was for officials to speak or make presentations at forums, like the public hearings the lieutenant governor is required to hold on ballot initiatives. But lawmakers were still uneasy with the language.

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