Legislature(2005 - 2006)HOUSE FINANCE 519
03/22/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB67 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 66 | ||
| = | HB 67 | ||
HOUSE BILL NO. 66
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.
HOUSE BILL NO. 67
An Act making appropriations for the operating and loan
program expenses of state government, for certain
programs, and to capitalize funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date.
1:49:47 PM
Co-Chair Chenault noted that the current amendments would be
addressing language changes to HB 67. He pointed out the
committee substitute had been adopted at a previous meeting.
Representative Kelly anticipated additional amendments. Co-
Chair Chenault acknowledged that there are amendments
scheduled for the next Committee meeting, addressing the
budget. He explained the anticipated process and that the
bill would be moved from Committee next week.
1:54:01 PM
DEPARTMENT OF ADMINISTRATION
Co-Chair Chenault MOVED to ADOPT DOA #1, carry forward
language for Centralized Administrative Services. (Copy on
File). Vice Chair Stoltze OBJECTED.
SHARON KELLY, STAFF, REPRESENTATIVE MIKE CHENALUT,
reiterated that the amendment was carry forward language to
be used for the Centralized Administrative Services (CAS)
and Department leases. The Department is requesting carry
forward language for the services. Standard language
requires rates to take into account prior years over and
under collections.
Vice Chair Stoltze WITHDREW his OBJECTION.
Representative Croft OBJECTED. He asked clarification if it
would be interagency receipt carry forward. He understood
that if the change does not occur, the Department would not
be able to correctly bill for that fiscal year. Ms. Kelly
acknowledged that was correct.
Representative Croft WITHDREW his OBJECTION. There being NO
further OBJECTIONS, the DOA #1 was adopted.
Co-Chair Meyer MOVED to ADOPT DOA #2, which would make a
fund change in the amount of $212.6 thousand dollars. Co-
Chair Chenault OBJECTED for discussion purposes.
Ms. Kelly pointed out that the amendment provides a
technical change for FY06 credit card rebates and that have
no contractual spending restrictions. Representative Croft
questioned why there would be a charge for that.
1:57:47 PM
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that the requirements for statutory designated
program receipts are contractually restricted for specific
purposes. They are received from a third party but there is
no contractual requirement built in. It amounts to a rebate
that the State can use in any way.
Representative Croft asked if the money was being spent
within Centralized Services. Mr. Teal replied that it was.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DOA #2 was adopted.
Co-Chair Meyer MOVED to ADOPT DOA #3, which would provide a
fund change in the amount of $6.8 thousand dollars. He
added that the amendment provides a technical correction to
the FY06 retirement system, funding source. (Copy on
File).
2:00:26 PM
Representative Hawker inquired the initial error. Mr. Teal
responded that many of the technical amendments address
costs associated with the Public Employees Retirement System
(PERS). The Governor originally submitted language, using
FY05 funds to cover costs. The Subcommittees did not
address that language. When agencies make amendments to the
number sections of the bill, they were able to adjust some
but also left money, which could not be used for that
purpose; it became a double fix. DOA #3 attempts to fix it
for a third time.
There being NO OBJECTION, DOA #3 was adopted.
2:02:59 PM
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT
Representative Kelly MOVED to ADOPT COM #1. (Copy on File).
Representative Croft OBJECTED for discussion purposes.
Ms. Kelly explained that replacement language allows the
agency to carry forward the entire unexpected balance.
There had been another amendment, which was not as clear as
COM #1. He reiterated that the amendment makes the bill's
language more clear with the proposed deletion. It does not
include capital funds. Mr. Teal interjected that the amount
resulted solely from business licenses.
2:04:17 PM
Representative Croft commented that the Legislature attempts
to budget for what is appropriate to spend during the fiscal
year. He questioned why the appropriate amount had not been
budgeted.
Mr. Teal responded that the qualified trade association
contracts still gets to spend $2 million dollars of business
license receipts. They have general funds as well as
business license receipts. There is no other carry forward
language for business license receipts in the bill. There
is approximately $300 thousand dollars of unspent business
license receipts from FY05. By changing the language, it
authorizes spending of the carry forward first and that no
more money would be spent in FY06.
Representative Croft understood that the effect would be to
not spend any more during FY06 and then starting FY07 with
an additional carry forward. The idea is to place as much
business license receipt funds into qualified trade
association contracts. Mr. Teal pointed out that this was a
request made by the agency, as there are un-used business
license receipts. The corporate fees were added to the
business license receipts. They had a $1 million dollars or
so in corporate receipts that are not typically spent, which
usually lapse to the general fund. Rolling those two
together eliminated the shortage. It would carry forward
into FY07.
2:08:15 PM
Representative Croft WITHDREW his OBJECTION. There being NO
further OBJECTION, COM #1 was adopted.
Representative Kelly MOVED to ADOPT COM #2, which would
create a new appropriation. Co-Chair Chenault OBJECTED for
discussion purposes.
Ms. Kelly explained that the amendment would create a new
appropriation for the Community Development Quota (CDQ)
program. Receipts generated by the CDQ and Banking programs
are indistinguishable in the budget because receipts from
both programs are classified as RSS and are in a single
appropriation. Creating a separate appropriation for the
CDQ Program ensures that RSS generated from Banking and
Securities activity cannot be used to support the CDQ
program.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, COM #2 was adopted.
2:09:47 PM
Representative Kelly MOVED to ADOPT COM #3, which would add
$101.9 thousand dollars to the Banking and Securities
component. (Copy on File). Co-Chair Chenault OBJECTED for
discussion purposes.
Representative Croft requested further information. Ms.
Kelly clarified that the increment would provide funding for
the new Community Development Quota Manager position created
in FY05. The position consults directly with the
Commissioner on high profile CDQ group policy issues and is
the primary point person for the newly created CQE program.
If creation of a new Community Development Quota
appropriation is approved, the increment would go to the new
appropriation.
Representative Hawker asked why how such an "ordinary job
position" was not included in the Subcommittee process and
asked if Representative Kelly endorsed the amendment.
Representative Kelly responded that the position had been
eliminated and then was followed by a compelling defense for
adding it back. He asked that the Department testify
regarding the need.
2:12:05 PM
JO ELLEN HANRAHAN, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF COMMERCE, COMMUNITY & ECONOMIC
DEVELOPMENT, explained that the position is for a CDQ
manager. The CDQ program has grown rapidly over time. A
second person is needed that has a level of management
ability above and beyond what has been previously needed.
The CDQ manager will be a key player in representing
Alaska's needs in the Magnuson-Stevens Act reauthorization
process, which begins in March 2005. That Act and its
changes has significant implications for the CDQ program and
Alaska's fisheries. It is anticipated that there will be an
increased role for the State with the CDQ groups. She
stressed that it is a critical position for the Department.
It would be fee-generated program.
Representative Hawker inquired if there was any doubt that
receipts would be sufficient to fund the position. Ms.
Hanrahan replied that the funds would be adequate.
Co-Chair Meyer asked what the CDQ program does and how that
relates to the new act. Ms. Hanrahan explained that the
program was developed in 1992 for Western Alaska to increase
economic development and in response to fishing issues in
that area. Since then, those groups have been allocated
fishery quotas throughout the season. It began with pollack
and has increased to Pacific cod and crab. She did not know
a lot about the history of that program.
Ms. Hanrahan pointed out that the Magnuson Stevens Act would
begin reauthorization in March 2005, which will have
sufficient implications on Alaska's regional fishing
council.
2:17:02 PM
Co-Chair Meyer inquired if the position had been filled.
Ms. Hanrahan responded that because it is such a critical
situation, a position was left vacant and then hired.
Co-Chair Meyer asked if there was any possibility of general
funds being used to fund the position. Ms. Hanrahan
explained it is a fee-generating program and would be paid
through those fees.
Representative Kelly wanted to guarantee that the request
would not reflect a further request by the Department for
the upcoming budget.
2:18:39 PM
Representative Hawker questioned why there had been a
budgeted vacant position. Ms. Hanrahan explained that it is
anticipated that if these changes were implemented, the
Department would need to fill the position.
In response to Representative Weyhrauch regarding the CQE,
Ms. Hanrahan explained it is the Community Quota Entity
(CQE) Program. That program replicates the CDQ program in
other parts of the State, because the program has been so
successful.
2:19:56 PM
Representative Kelly understood that the intent was not to
add another position but to use the other vacant position.
He was not aware of "putting the position back" while
filling the other position.
Representative Weyhrauch thought that there was a CDQ
coordinator on staff for the Department. He understood that
the request would cover the additional level of work
required because of implications from the Act. Ms. Hanrahan
stated that was exactly what happened. The position that
managed the program previously, was a Development Specialist
and defined at a lower level. With the growth of the
program, there exists a need for the higher-level management
position in order to adequately represent Alaska.
2:22:14 PM
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, COM #3 was adopted.
2:22:37 PM
DEPARTMENT OF EDUCATION & EARLY DEVELOPMENT
Co-Chair Meyer MOVED to ADOPT DEED #1, which would add
$185.9 general fund dollars to Boarding Home Grants; add
$1.1 thousand general fund dollars to Youth in Detention;
add $7.89 general fund dollars to Special Schools. (Copy on
File). Co-Chair Chenault OBJECTED for discussion purposes.
Co-Chair Meyer explained that the youth detention and
boarding home grant areas had been overlooked. Ms. Kelly
agreed, pointing out that they are not formula funded
programs.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DEED #1 was adopted.
Representative Hawker inquired if the request was necessary
for fiscal year 2005 or 2006. Ms. Kelly explained that it
was FY06 operating money and that the formula programs had
been funded during the fast track supplemental.
2:24:28 PM
Co-Chair Meyer pointed out that a $400 million dollar
windfall had been added to the education fund. The proposed
items had been forgotten.
2:25:30 PM
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Co-Chair Meyer MOVED to ADOPT DEC #1, which would add $46
thousand dollars from Exxon Valdez Oil Spill Settlement
money for a position in the Commissioner's office. (Copy on
File). Co-Chair Chenault OBJECTED for discussion purposes.
Ms. Kelly pointed out that the request would help to fully
fund an important position.
KURT FREDRIKSSON, ACTING DEPUTY COMMISSIONER, OFFICE OF THE
COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION,
explained that the requested amount would be Exxon Valdez
oil spill funding money, which would allow the Commissioners
Office to engage the council at a critical juncture with
respect to restoring continued damages from the spill. He
noted lingering oil found on some of the beaches in Price
Williams Sound. There is a lot of work now happening and
the requested funding provides the staff needed in the
Commissioner's Office to help with that work.
The Governor's original request included an increment for
development of State ocean strategies.
2:27:09 PM
Representative Hawker interjected a technical correction
that the appropriation should be $46 thousand dollars not
$46 million dollars. Mr. Frederickson acknowledged that was
correct.
Representative Hawker inquired why the Subcommittee had not
discussed the matter. Mr. Frederickson replied that the
Governor had introduced it as an amended item and noted that
the Trustee Council approved the request.
2:27:58 PM
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DEC #1 was adopted.
2:28:21 PM
DEPARTMENT OF FISH & GAME
Representative Holm MOVED to ADOPT F&G #1, which would add
language clarifying that the Department would receive fair
market value, including price adjustments, if applicable,
for all test fisheries contracts. (Copy on File). Co-Chair
Chenault OBJECTED for discussion purposes.
Representative Holm testified that the intent language was
added to allow the Department to negotiate for the full
market value for all test fish catches. Putting a
requirement in the contract to retroactively adjust the
price for test fishery sales would be beneficial.
Co-Chair Chenault pointed out statewide frustration in that
industry.
2:30:08 PM
TOM LAWSON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF
COMMUNITY AND ECONOMIC DEVELOPMENT, interjected that there
are departmental goals being reached. There had been a
thorough discussion during subcommittee regarding the
circumstances. The Department strives to get full market
value for the fishery. He noted addressing language in the
supplemental. One issue is that the Department is "forced"
to do cost recovery to fund various Department programs. He
mentioned that "down the road", it could be beneficial to
replace that receipt money with general fund dollars.
Co-Chair Chenault asked if the State had attempted to get
market value for that fish. Mr. Lawson did not know; but
did understand that the Department always attempts to
receive market value. Last year, there was only one bidder.
Harvesting occurred at a different time than usual and it
was a serious low price.
2:32:21 PM
Co-Chair Chenault inquired if ten cents ($.10) a pound was
realistic or if the amount really fluctuates. Mr. Lawson
acknowledged that the price does fluctuate depending on the
fishery and that ten cents a pound was low.
Vice-Chair Stoltze asked if cost recovery was
interchangeable.
Representative Weyhrauch interjected facts regarding the
test fisheries versus a cost recovery fisheries. He pointed
out that cost recovery had been going on for the last twelve
years. (Inaudible)
Vice Chair Stoltze asked if the price was usually under
market value. Representative Weyrauch replied that
sometimes it is above and depends on the time of year that
fishing occurs. The intent language attempts to run the
fishery more like a business.
2:36:00 PM
Representative Croft agreed it is important to tackle this
problem. In a pure test fishery, the State would not want
waste and would be selling the test fish to recoup recovery
costs. He thought that selling fish at ten cents a pound
could destabilize the market.
Representative Croft added that the amendment provides an
in-between approach for dealing with extra fish and paying
for cost recovery. Mr. Lawson acknowledged that the
Department clearly understands the intent of the language.
Representative Croft worried about the unintended
consequences as the amendment intends to provide fair market
value when fish are sold.
Representative Weyhrauch thought that might raise an issue.
Cost recovery fisheries are implemented to reduce the
Department's overhead costs relative to managing particular
fisheries.
2:39:10 PM
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, F&G #1 was adopted.
2:39:28 PM
DEPARTMENT OF HEALTH & SOCIAL SERVICES
Representative Hawker MOVED to ADOPT HSS #1, which would
provide a funding change in the amount of $.7 thousand
general fund dollars. (Copy on File). Representative
Weyhrauch OBJECTED.
Representative Hawker explained that the amendment provides
a technical correction for funding sources for the FY06
retirement system cost increases amounting to a $700 dollar
adjustment.
Representative Weyhrauch WITHDREW his OBJECTION. There
being NO further OBJECTION, HSS #1 was adopted.
2:40:36 PM
DEPARTMENT OF MILITARY & VETERANS AFFAIRS
Representative Foster MOVED to ADOPT DMVA #1. (Copy on
File). Co-Chair Chenault OBJECTED for discussion purposes.
CRAIG CAMPBELL, ADJUTANT GENERAL, COMMISSIONER, DEPARTMENT
OF MILITARY & VETERANS AFFAIRS, stated that the amendment
represents the Governor's requested structure combining four
appropriations. It was the intent of the subcommittee to
adopt the Governor's requested structure, but the structure
change was not incorporated into the draft bill.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DMVA #1 was adopted.
Representative Foster MOVED to ADOPT DMVA #2, which would
add $594,700 general fund dollars to the National Guard
Military Headquarters. (Copy on File).
2:41:57 PM
Co-Chair Chenault OBJECTED for purposes of discussion.
Commissioner Campbell pointed out that there had been an
audit done on the State contribution versus the federal
match. In the last ten years, it was found that it had not
been done properly and that the State owed more money. The
requested amount would take care of last year's correction.
The federal government agreed that if the adjustment were
made by the State, they would not be fined for past years.
Representative Croft asked if the amount would be for FY05
or FY06. General Campbell replied that it was for FY05 and
was included in the FY06 budget.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DMVA #2 was adopted.
2:43:18 PM
Representative Foster MOVED to ADOPT DMVA #3, which would
add $62,900 general fund dollars to the National Guard
Military Headquarters. (Copy on File). Co-Chair Chenault
OBJECTED for discussion purposes.
General Campbell explained that the request covers
telecommunication basic service charges. Within the
Anchorage armory, there is both a federal and State system.
The request pays for the Department of Administration's
telephone service at the Anchorage Armory.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DMVA #3 was adopted.
2:44:07 PM
DEPARTMENT OF NATURAL RESOURCES
Representative Kelly MOVED to ADOPT DNR #1, which would
provide a $176 thousand federal receipt increment to the
Resource Development large project-permitting component.
(Copy on File). Vice-Chair Stoltze OBJECTED for the purpose
of discussion.
NICO BUS, ACTING DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF NATURAL RESOURCES, explained that
the request of $176 thousand dollars would be used for an
inter-agency personal agreement. The Bureau of Land
Management (BLM) is willing to pay for the employees at the
Department of Natural Resources without oversight.
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, DNR #1 was adopted.
Representative Kelly MOVED to ADOPT DNR #2, which would add
an increment of $192.1 thousand receipt supported services
dollars to Parks Management. (Copy on File). Co-Chair
Meyer OBJECTED for the purpose of discussion.
Mr. Bus explained that the amendment would provide $192.1
thousand dollars for receipt support services to pay for a
recently completed and implemented station for park rangers.
It was a Governor's amended request. Some of the park
rangers were reclassified and upgraded because they do law
enforcement.
2:47:22 PM
Representative Hawker asked which receipts would be
authorized. Mr. Bus replied the park camping fees and all
receipts collected by the parks.
Representative Hawker inquired if the current fee structure
was sufficient to cover the costs or would the fee structure
need to be raised. Mr. Bus understood that the projected
fees would cover the costs.
Vice-Chair Stoltze questioned the reclassification. Mr. Bus
explained that the rangers will continue in their same
positions and that the retirement system would remain as it
is.
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, DNR #2 was adopted.
2:48:51 PM
Representative Kelly MOVED to ADOPT DNR #3, which would
provide a funding change in the amount of $99.4 thousand
dollars from Parks & Resources Access to Parks Management
component. (Copy on File). Co-Chair Meyer OBJECTED for
purposes of discussion.
Mr. Bus explained that only the programs generating receipts
would be able to use program receipts. The Department of
Natural Resources requested the receipt-supported services
(RSS) in an allocation that does not generate RSS. The
amendment exchanges general funds and RSS between
allocations in order to meet the requirement of AS
37.05.144.
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, DNR #3 was adopted.
2:50:05 PM
DEPARTMENT OF PUBLIC SAFETY
Co-Chair Meyer MOVED to ADOPT DPS #1, which would amend
language in Section #23. (Copy on File). Co-Chair Chenault
OBJECTED for the purpose of discussion.
Ms. Kelly pointed out that the amendment recognizes the
change in monetary terms of the masters, mates and pilots
contracts. The work draft contains language specifying that
the appropriated amounts include funding for the contracts,
even if specific appropriations are not made.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DPS #1 was adopted.
2:51:08 PM
Co-Chair Meyer MOVED to ADOPT DPS #2, which would add a
total of $1.859 thousand dollars to various allocations
within the Department. (Copy on File). Co-Chair Chenault
OBJECTED for the purpose of discussion.
Ms. Kelly explained the costs associated with the Department
of Public Safety bargaining unit contract terms. He noted
that the Governor had requested these amounts.
Representative Hawker asked when the bargaining contract had
been completed. Ms. Kelly did not know.
ART CHANCE, DIRECTOR, LABOR RELATIONS, DEPARTMENT OF
ADMINISTRATION, stated that the numbers resulted as a
th
product from arbitration, awarded March 9, 2005.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DPS #2 was adopted.
2:5:45 PM
DEPARTMENT OF REVENUE
Representative Hawker MOVED to ADOPT REV #1, which would add
$6.5 million Permanent Fund Receipt dollars to the Alaska
Permanent Fund Corporation (APFC) Custody and Management
fees. (Copy on File). Representative Holm OBJECTED for
discussion purposes.
Representative Hawker noted that the amendment was related
to the fast track increased management fees for the APFC
pension funds and would be from contractual earnings.
Representative Holm WITHDREW his OBJECTION. There being NO
further OBJECTION, REV #1 was adopted.
2:54:20 PM
Co-Chair Meyer MOVED to ADOPT REV #2, which would add $261.1
thousand Receipt Supported Service dollars to the Child
Support Services Division. (Copy on File). Co-Chair
Chenault OBJECTED for discussion purposes.
SUSAN TAYLOR, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF REVENUE, explained that the Department is
requesting $261 thousand dollars for their child services
division. The request resulted from the hearing officer
transfer from the Department of Revenue to the Department of
Administration. The funding source had been transferred to
avoid charge-back situations. Later, it was discovered that
the Department of Administration could not use the dollars
under the Department's direct allocation plan. The
amendment increases authorization in the Child Support
Services division. Without the allocation, there would be a
huge impact and the Department would have to lay off up to
20 caseworkers and that field offices would also be
impacted.
2:57:14 PM
Representative Croft questioned if the amendment would
establish a charge-back situation. Ms. Taylor affirmed.
She clarified that the Department is working with the
federal government to create a direct cost to the Child
Support Program. She noted that it would be the
Legislature's prerogative to change the title.
In response to a question by Representative Croft, Ms.
Taylor observed that the existing funds are needed to
leverage federal funds if the amendment is not adopted.
Representative Croft asked what receipts the Department
currently receives. Ms. Taylor discussed the source of the
receipt-supported services. When a child has been in State
custody, the family receives Alaska Temporary Assistance
Program (ATAP) or Medicaid that family must sign up for
child support services.
3:01:25 PM
In response to a question by Representative Hawker, Ms.
Taylor explained that currently, the Child Support Division
budgets the receipt-supported services that it collects.
The Department is approaching the high side of their earning
capacity. She reiterated that receipt-supported services
are in the operating and capital budgets. The majority of
funds are from non-custodial parents, where the child had
been getting a cash assisted payment from the Alaska
Assistance Temporary Program (ATAP). That obligation
belongs to the non-custodial parent. When the payment is
received, it is a State-federal payment. Only a portion is
retained by the State and is used as a funding mechanism for
the Child Support Services.
3:04:25 PM
Representative Hawker understood that money would not be
taken from dependant children, but instead would come from
the non-custodial parents. The money was previously
recovered through the federal plan. Ms. Taylor agreed.
Representative Hawker noted that there is a fund source
change from federal to receipt supported services,
questioning if there should be a corresponding decrement.
Ms. Taylor pointed out that the decrement has occurred in
other areas of the budget.
3:06:33 PM
Representative Hawker thought there should be a
corresponding decrement to interagency receipts. Ms. Taylor
clarified that would be only half of the needed fix.
Additionally, the Child Support Services Division has the
authorization to pay the bill, and then the transaction
needs to be completed.
Representative Hawker concluded that the Subcommittee budget
had not balanced. Ms. Taylor pointed out that the
Department needs to budget for receipt-supported services,
while continuing to pursue federal fund reimbursement.
3:08:47 PM
Representative Hawker commented that the problem of
balancing transfers is systemic throughout the operating
budget.
3:10:04 PM
There being NO further OBJECTIONS, REV #2 was adopted.
3:10:22 PM.
DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
Representative Foster MOVED to ADOPT DOT #1, which would
move funds ($55 million dollars) in the Alaska Marine
Highway System budget. (Copy on File). Chair Chenault
OBJECTED for the purpose of discussion.
NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, spoke in
support of the amendment. She explained that fuel prices
had increased and that natural gas prices are also
increasing. The current estimated price per gallon is $1.84
dollars and the original estimate was $1.68 per gallon.
3:12:19 PM
Representative Hawker noted that FY06 had been under funded
for highway fuel in the marine highway budget. Ms. Slagle
explained that the operating plan is being assessed to see
if there needs to be a change there as well as an increase
to fuel cost.
3:13:36 PM
Representative Croft inquired if it would be appropriate to
add intent language indicating that money be used only for
fuel costs. Ms. Slagle did not believe that would present a
problem.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTIONS, DOT #1 adopted.
3:14:40 PM
Representative Foster MOVED to ADOPT DOT #2, which would add
$68 thousand general fund dollars to Central Region Highways
and Aviation. (Copy on File). Co-Chair Chenault OBJECTED
for the purpose of discussion.
Ms. Slagle explained DOT #2. She noted that the amendment
would address air traffic control services at the King
Salmon airport. The contract requires that the State pay
$68 thousand dollars to maintain the service.
Co-Chair Chenault asked what would happen with the contract
if the State chooses to end services. Vice-Chair Stoltze
interjected that "some outcomes save lives". Ms. Slagle
stressed that it is a safety concern when a wide variety of
aircraft enter a fairly busy airport during peak seasons.
Co-Chair Meyer inquired how the contracts work and if the
charge was only for peak service periods. Ms. Slagle
explained that the contract is on a monthly basis; she
offered to check to see if service is offered all year.
In response to a question by Representative Kelly, Ms.
Slagle noted that discussions are continuing with the
Federal Aviation Association (FAA) regarding responsibility
for services. The FAA has undertaken a further plane count.
Additionally, there are discussions happening with the U.S.
Air Force. The Department is attempting to get assistance
in both areas.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTIONS, DOT #2 was adopted.
3:18:54 PM
Representative Foster MOVED to ADOPT DOT #3, which would add
$2.02 million dollars to the Anchorage Airport Facilities
and $610 thousand dollars to the Anchorage Airport Field &
Equipment Maintenance. (Copy on File). Co-Chair Chenault
OBJECTED for the purpose of discussion.
Ms. Slagle explained that the amendment addresses
anticipated increased costs in fuel and utility charges at
the Anchorage International Airport.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTIONS, DOT #3 was adopted.
3:20:16 PM
Representative Foster MOVED to ADOPT DOT #4, which would add
$2.58 million dollars to the Anchorage Airport Operations
from the International Airport Revenue Funds. Co-Chair
Chenault OBJECTED for the purpose of discussion.
Ms. Slagle explained the request was in the amount of $2.2
million dollars in International Airport Revenue Funds to be
used for parking garage and fog seeding. She noted that the
concession process has not been working well. The amendment
puts the authority to administer the parking garage contract
under the airport's authority. The remaining funding would
place fog seeding under the airport's control. She
explained that fog seeding is a means of reducing the amount
of fog on the runways by using dry ice in small pellets.
Representative Weyrauch inquired why the airport was not
paying for that cost and why it had been included in the
State's budget request. Co-Chair Chenault explained that it
had been taken from the airport revenue funds and that
presently, the Department was requesting authority to spend
that money.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTIONS, DOT #4 was adopted.
3:25:17 PM
Representative Foster MOVED to ADOPT DOT #5, which would add
dollars to the Fairbanks International Airport. Vice-Chair
Stoltze OBJECTED for the purpose of discussion.
Ms. Slagle explained that the amendment would cover
increased costs in electricity and fuel bills at the
Fairbanks International Airport. She pointed out that
marketing activities would also be provided. The intent is
to attract additional concessionaires.
3:27:17 PM
Representative Holm asked the balance remaining in the
Fairbanks Airport Revenue Fund. Ms. Slagle did not have
those numbers on hand. She observed that the fund covers
the costs of operations at the Anchorage and Fairbanks
International Airports, supports Cold Bay and Sitka, and
covers the Capital budget items for the two international
airports.
Representative Holm questioned why diverted flights would
result in lost revenues for the State. Ms. Slagle commented
that it will have a long term affect if airlines need to
change flight patterns. She added that the airlines do
review and vote on the operating and capital budget.
3:30:44 PM
Ms. Slagle thought that amount was approximately $4 million
dollars. She added that what Fairbanks lacks, Anchorage
provides.
3:31:59 PM
Representative Croft noted that $50 thousand dollars could
fund a new business position.
Representative Croft MOVED to AMEND DOT #5 to reflect such a
change; with the exception of the first line item of $50
thousand, the monies only be used for increased fuel costs.
Co-Chair Chenault OBJECTED.
Representative Croft pointed out that the justification
rests with increased fuel costs. Co-Chair Chenault pointed
out that a breakdown of increased utility costs had also
been provided.
Representative Croft spoke in support of the change, noting
that other rural areas were being held to fuel costs only.
3:36:11 PM
Co-Chair Meyer inquired if the airport safety component had
been indicated for fuel costs. Ms. Slagle affirmed that
funding would go to vehicle use for patrolling.
Representative Holm pointed out that these are Airport
Revenue Funds not General Funds.
Representative Croft pointed out that the fuel crisis was
being addressed in many areas and reiterated that other
areas of the State's budget are being held to fuel costs.
Representative Kelly cautioned that the other expenditures
had not been given the same caveat.
3:39:16 PM
Co-Chair Meyer stressed that the amendment pertains to the
International Airport Revenue funds.
Representative Hawker asked if a limitation to fuel
purchases would be problematic. Ms. Slagle stated that the
Department could support the use for fuel and utilities.
Representative Croft stressed that fuel affects utilities.
He noted that other communities are facing the same issues
and they were told they could not use State funding for
utilities (SB 98). He maintained that the issue is how the
State should interact with similar entities.
Representative Holm maintained that there's confusion
regarding the appropriation and allocation.
3:43:29 PM
Co-Chair Meyer stressed the distinction between Airport
Revenue Funds and General Funds.
Representative Croft questioned if there was less
responsibility to guarantee that the appropriation was
legitimate.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Hawker, Joule, Moses, Stoltze,
Weyrauch, Croft
OPPOSED: Holm, Kelly, Meyer, Chenault
The amendment to DOT #5 MOTION PASSED (7-4).
The being NO OBJECTION, amended DOT #5 was adopted.
3:47:41 PM
Representative Foster MOVED to ADOPT Amendment DOT #6, which
would add International Airport 1027 dollars to the
International Airports. (Copy on File). Co-Chair Chenault
OBJECTED for the purpose of discussion.
Ms. Kelly explained that the amendment was directed toward
associated costs with the Department of Public Safety
bargaining unit contract terms. The Governor requested the
amounts.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTIONS, DOT #6 was adopted.
3:48:31 PM
Representative Foster MOVED to ADOPT DOT #7, which would add
$6.470 million Alaska Marine Highway System (AMHS) dollars
to Marine Vessel Operations component. Co-Chair Chenault
OBJECTED for purposes of discussion.
Ms. Kelly clarified that the amendment addresses costs
associated with the vessel operations bargaining unit
contract terms. The amounts are the amounts requested by
the Governor. The Governor had requested $48 million
dollars in capitalization of the Alaska Marine Highway
System (AMHS) fund. The bargaining agreements raised
capitalization requirements to $54.5 million dollars.
Representative Joule asked if the contract had recently been
settled. Ms. Kelly said it had.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, DOT #7 was adopted.
3:49:54 PM
UNIVERSITY OF ALASKA
Representative Weyhrauch MOVED to ADOPT UA #1, which would
amend language in Section 23 (b), including the terms of the
tentative agreement, providing for transition of represented
employees to the UA Choice Health Plan for university
employees represented by certain entities. (Copy on File).
Vice-Chair Stoltze OBJECTED for the purposes of discussion.
Representative Weyhrauch explained that the amendment
recognizes the change in monetary terms of the contract
relative to the tentative agreement to transition the
University of Alaska union represented employees to the UA
Choice Health plan.
Representative Kelly asked if the change resulted in a
savings to the State. Representative Weyhrauch replied that
there was no savings or expense associated with the action.
Representative Hawker requested that the University of
Alaska comment on the amendment.
PETE KELLY, DIRECTOR, STATE RELATIONS, UNIVERSITY OF ALASKA,
explained that without the addition of the requested
language, the University would not be able to fund the
request from proceeds nor recognize those existing
contracts.
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, UA #1 was adopted.
3:52:07 PM
Representative Weyhrauch MOVED to ADOPT UA #2, which would
add $500 thousand MHTAAR 1092 dollars for an allocation to
the Budget Reductions/Additions-System wide component.
(Copy on File). He requested that the University testify on
the amendment.
Mr. Kelly advised that the amendment would provide the
University authority to receive the mental health authorized
money to the University's Behavioral Health Program
partnership for FY06.
Representative Hawker indicated his confusion. Mr. Kelly
requested a brief at ease.
AT EASE: 3:53:54 PM
RECONVENE: 3:59:44 PM
3:59:49 PM
Co-Chair Chenault commented that UA #2 was more relative to
HB 66. He suggested the amendment be addressed following
the Language Section of HB 67.
4:00:26 PM
LANGUAGE AMENDMENTS
Co-Chair Meyer MOVED to ADOPT LANG #1, which would delete
Section 22 (funding for political subdivisions' PERS).
(Copy on File). Co-Chair Chenault OBJECTED for further
clarification.
Co-Chair Meyer commented on the requested amount. The
section appropriates $37.5 million dollars of FY05 general
funds to the Department of Administration to reduce the
liability of political subdivisions to the public employees'
retirement system (PERS). He pointed out that it is the
only FY05 effective date in the bill. He did not believe
that the State currently has enough funds to cover the
request without using the Capital Budget Reserve (CBR). He
said it is a new program.
Co-Chair Meyer noted that he preferred the program proposed
by Representative Moses' dividend. He believed that the
municipalities should be held to the same standard. The
reason to withhold would get them to help resolve the
PERS/TERS issue. If the municipalities were paid, what
would be the incentive for them to come to the table to help
resolve the issue.
Representative Croft stated he was "stunned". He emphasized
that it makes total sense to help out communities in some
way particularly with the State's natural resource wealth.
He believed that it was a mistake to discontinue revenue
sharing and that the action would be a triple hit to the
smaller communities. The impacted situation, hits people
that are providing services on the ground level. The
proposed measure would soften some of the pain providing
some assistance to these problems. He pointed out that the
cut does not get rid of any State bureaucrats and that the
burden was again being passed on to the rural level. He
recommended a partial cut.
4:07:23 PM
Representative Croft pointed out, the proposed $300 million
dollar increase in State general fund spending. To cut
$37.5 million dollars from local governments is impossible
to justify given increased State spending.
Representative Hawker stated that he would support the
amendment, understanding that the bill would not be moving
from committee at this time. He commented that the issues
could be discussed later. He recommended that the proposed
activity could be better addressed through the Amerada Hess
earnings. Representative Hawker recognized the controversy
and thought that it would not compromise the Committee from
working with the municipalities.
Representative Joule thought the possibility of addressing
municipal dividends during the session was small; he was
worried about the impact that the amendment will have. He
emphasized that smaller communities are disappearing. He
would not support the amendment.
4:11:03 PM
Co-Chair Meyer mentioned that he would be open to
alternatives for long-term help for the municipalities. He
thought that they could offer sales tax, property tax, or
bed taxes. He believed that the PERS and TERS increase
could get the municipalities to help with the solution.
Co-Chair Meyer did not think that the State should use FY05
general funds to provide for the increase. The increase has
already been spent and now it could only happen with dipping
into the CBR account. He hoped that there was another
solution.
Representative Joule mentioned "tools" available to the
municipalities. He stressed that most of those communities
were stretched to their maximum for raising any taxes.
Almost every village has already raised taxes to the maximum
that can be handled.
4:13:38 PM
Representative Kelly said his constituents have emphasized
that legislators come home with a long-term solution to the
PERS and TERS complication. He hoped to see it addressed
this year. The municipalities are expecting a long-term
solution. He thought that a "no" vote to the amendment
would help to identify the PERS/TERS issue.
4:15:54 PM
KEVIN RITCHIE, ALASKA MUNICIPAL LEAGUE, JUNEAU, advised that
creating a solution for the PERS/TERS concern is a top
priority for the municipalities and the Alaska Municipal
League (AML). The municipalities have been working with the
Legislature to address these concerns. He stressed that the
municipalities are open to alternative ways but that this is
a huge cost issue for the municipalities. It would be a 5%
salary hit to every municipality this fiscal year and 10%
next year. What that means is that these municipalities
would put 75% of their operating budget into salary; that
would be significant in addition to loosing Revenue Sharing.
He noted concerns with the rising fuel costs. For every
dollar increase, the State receives about $65 million
revenue dollars.
Mr. Ritchie emphasized that these are serious tax
ramifications for the communities. There are a number of
smaller communities that can tax but because of their size,
they might only generate $8,000 dollars. These communities
are doing what they can. The ability to overcome a large
financial hit is not feasible for some of the small
communities. He warned that the proposed impact would
affect the entire State and that it is a large problem. The
assumption that municipalities can just keep raising taxes
is incorrect.
4:20:06 PM
AT EASE: 4:20:34 PM
RECONVENE: 4:21:28 PM
4:21:31 PM
Co-Chair Chenault WITHDREW his OBJECTION. Representative
Croft OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Hawker, Holm, Kelly, Stoltze, Foster,
Chenault, Meyer
OPPOSED: Joule, Wehrauch, Croft
Representative Moses was not present for the vote.
The MOTION PASSED (7-3).
4:22:47 PM
UNIVERSITY OF ALASKA
Representative Hawker MOVED to ADOPT UA #2, which was
previously discussed addition of funds for the Budget
Reductions/Additions - System wide. Co-Chair Chenault
OBJECTED.
Representative Weyhrauch noted that he had already MOVED UA
#2. (Copy on File). Representative Hawker stated that he
had not concurred with the University of Alaska for
incorporating that language.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
further OBJECTION, UA #2 was adopted.
HB 66 and HB 67 were HELD in Committee for further
consideration.
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