Legislature(2007 - 2008)HOUSE FINANCE 519
02/27/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB138 | |
| HB139 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 49 | TELECONFERENCED | |
| *+ | HB 138 | TELECONFERENCED | |
| *+ | HB 139 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 139
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; amending
certain appropriations; ratifying certain expenditures;
making appropriations to capitalize funds; and
providing for an effective date."
Ms. Rehfeld explained the organization of HB 139, which
includes a "time sensitive" section of appropriations.
2:39:27 PM
1(c) Corrections Inmate Health Care
The funding is needed to meet the medical obligations
for the aging and increased offender population. The
driving factors are the sharp increase in the number of
offenders needing treatment, the cost of dialysis and
cancer treatments and the growing number of life-
threatening cases. The department will potentially run
out of funds as early as March 2007 and not be able to
pay vendors for services provided. $439.0 of this
request is related to nurses' market-based pay
increase.
$3,903.4
SHARLEEN GRIFFIN, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF CORRECTIONS, explained the time
sensitive request for inmate health care. She reported that
$439,000 is for market-based pay increases for nurses. The
remaining $3,464,000 is for increased health care costs for
an aging inmate population.
2:40:51 PM
Representative Gara wondered why this request is not in a
fast track supplemental. He questioned the large under
budgeting of the nurses' salary request. Ms. Griffin noted
that this piece is in the time-sensitive section of the
bill, similar to the fast track supplemental. Much of the
expense is due to unexpected catastrophic illness.
2:42:25 PM
Representative Hawker stated that in FY 06 there was an
adjusted base for inmate health care of $22.6 million and a
supplemental request for $2.6 million. Now in FY 07 there
is a $4.9 million supplemental request. He opined that the
Department of Corrections is a year behind in budgeting, in
spite of assurances last year that it was not behind. He
recalled last year's discussion about "truth in budgeting".
1(d) Corrections Anchorage Correctional Complex
The Anchorage Correctional complex is housing 50
offenders in crisis overflow beds in the gym due to
overcrowding in the facility. This request is for
required overtime for an additional security post which
translates into four positions. The projected
expenditures indicate that the component will run out
of funds by the middle of April.
$1,082.7
Ms. Griffin addressed the time sensitive request regarding
overcrowding of the Anchorage Correctional Complex. She
emphasized the risk to security that overcrowding poses.
2:44:30 PM
Representative Gara wondered why the continuous under
budgeting and if the budget proposal will be greater this
year. Ms. Griffin replied that work is being done with OMB
on several issues. Ill inmates are sent to Arizona to save
funds. The hope is to reduce expenses.
Representative Gara maintained that health care costs have
been under funded and questioned if the budget would reflect
true costs.
DWAYNE PEEPLES, DEPUTY COMMISSIONER, DEPARTMENT OF
CORRECTIONS, noted that the department is in the process of
evaluating health care costs. He noted that an amendment
would be presented in a couple of days, but did not think
the department would have an accurate estimate for two
months.
2:47:46 PM
3(a) Corrections Out-of-State Contractual
FY07 budget was based on 900 prisoners to be sent to
Arizona. The current number of prisoners in Arizona is
1060 and the department anticipates the need for a
total of 1,250 beds to assist in meeting the growing
prisoner population.
$1,338.5
Ms. Griffin explained that there are currently 1,060
offenders in Arizona and a plan to increase the number to
1,250. The Administration is looking at population
management strategies and may change the request.
Representative Hawker observed that a 1,000 bed request was
approved in the prior year. The extra beds were taken out
in Conference Committee, which resulted in the supplemental.
2:49:51 PM
3(b) Corrections Institution Director's Office
1) Correctional officer overtime is taking place due
to vacant correctional officer positions and facilities
overcrowding. When the offender population exceeds the
emergency capacity in the facility, it becomes
necessary to employ additional security staff for
public safety and protection.
$2,096.5
2) The facilities are also dealing with costs
resulting directly from prisoner overcrowding and the
increased costs of goods and services. This is
attributable to setting up crisis overflow beds.
$2,000.0
3) Electrical costs have also increased in all
institutions.
$300.0
4) Funding transfer from Statewide Probation and
Parole to offset increased costs in the institutions.
$4,496.5
Ms. Griffin noted that the request is for correctional
overtime due to overcrowding and to vacant positions. The
year began with 90 correctional officer vacancies, which
rose to 95 before dropping back to 60. There are also
increased costs due to higher offender populations and
rising costs for goods and services.
2:51:11 PM
Representative Kelly questioned if privatization of the
entire system had been considered. Mr. Peeples responded
that the current administration has not considered
privatization and did not anticipate consideration of
privatization. Representative Hawker noted that
th
privatization had been considered during the 24
Legislature.
2:53:26 PM
3(c) Corrections Institution Director's Office
Unpaid invoices from vendors from FY2006, including an
unpaid RSA with the Department of Transportation for
State Equipment Fleet charges of $42.6 and an unpaid
RSA with the Department of Administration for training
charges of $2.5.
$63.1
Ms. Griffin noted that section 3(c) pertained to interagency
transfers to other state agencies for unpaid invoices.
3(d) Corrections Inmate Transportation
More prisoner transports between Alaska and Arizona due
to management of the increased inmate population in the
state.
$90.0
Ms. Griffin explained that section 3(d) would cover prisoner
transportation between Alaska and Arizona. Representative
Chenault questioned if the funds would be sufficient. Mr.
Peeples noted that the U.S. Marshals and jets are used to
move up to 110 prisoners at one time. Smaller numbers are
moved with Alaska correctional officers and the use of
Alaska Airlines fares.
2:55:47 PM
3(e) Corrections Anchorage Correctional Complex
Revenue shortfall in federal manday billings is due to
the reduction in federal detainees and the number of
days these prisoners are held in this facility.
$1,000.0
Ms. Griffin related that the request is for $1 million for
federal revenue collection shortfalls.
3(f) Corrections Anchorage Correctional Complex
If manday billings are greater than anticipated, the
appropriation in 4(j) is reduced by an equivalent
amount.
$0.0
Ms. Griffin reported that if federal funds received exceed
$2,508.2 million, the appropriation in 3(e) would be reduced
accordingly.
3(g) Corrections Hiland Mountain Correctional Center
The facility's well water system did not meet the EPA
and DEC standards and therefore was decommissioned and
demolished. The new system was connected to the
Anchorage Water and Wastewater Utility system. Funding
is needed for the increased costs of the new water
system.
$84.1
Ms. Griffin observed that the well water system did not meet
EPA standards and has been hooked into the Anchorage waste
water utility system.
In response to a question by Representative Chenault, Ms.
Griffin estimated that the costs would be greater than
$84,100. Representative Chenault questioned when the well
was decommissioned. Ms. Griffin could not respond.
Discussion ensued as to the possible decommission date.
2:59:17 PM
3(h) Corrections Fairbanks Correctional Center
The 50% increase in the prisoner population in
Fairbanks created the need to expand staffing at the
facility to maintain public safety. Funding is
requested for the 19 new permanent full-time positions
that have been established in FY2007.
$729.9
Ms. Griffin noted that the facility ran 50 percent over
emergency capacity. Nineteen staff were added at the end of
FY 06. There have been major incidents, which threaten
public safety. The supplemental is partial-year funding for
the additional 19 positions.
3:00:46 PM
In response to a question by Representative Stoltze, Ms.
Griffin noted that a large number of the positions have been
filled. The facility filled some vacant positions prior,
resulting in six vacant correctional officer positions.
3:01:47 PM
3(i) Corrections Fairbanks Correctional Center
Unpaid FY2006 water and sewer bills.
$18.7
Ms. Griffin reported that the request would pay an invoice
that was lapsed.
3:02:02 PM
3(j) Corrections Existing Community Residential Centers
Funding is needed to pay contractors for housing
offenders at the Community Residential Centers (CRCs)
for the remainder of the fiscal year. The department
has professional service contracts with CRC providers
to help meet the security and residential needs of
adult offenders. Part of the increase is based on the
CPI rate for the community in which the CRC is located
and due to two re-negotiated contracts.
$553.5
Ms. Griffin noted the increase would partially cover CPI
increases for contracts. It would assist in recovery of
costs.
3:02:41 PM
3(k) Corrections Statewide Probation and Parole
Transfer to Institution Director's Office to assist in
meeting the institutions' increased costs. Funding is
available due to lag time in creating and filling
probation officer positions in FY2007.
$(100)
Ms. Griffin said the request would provide authorization for
transfer of probation officer positions.
14(c) Ratification Corrections
Internal department RSA from Administration and Support
(AR50560-06) to Institutional Facilities (AR50580-06)
to cover inmate costs.
$600,807.0
Ms. Griffin explained that this section would provide
ratification for beds that were not available and were
provided in state.
3:04:36 PM
Representative Gara asked for a cost estimation of the time-
sensitive and non time-sensitive items.
Representative Hawker observed that section 14(c) would be a
zero net. Ms. Griffin agreed.
Ms. Griffin noted that the total amount of the department's
request is about $13.2 million, with $5 million time
sensitive.
Co-Chair Chenault explained how the fast track items would
be determined.
3:06:05 PM
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT
1(a) Commerce ASMI
Increase the Alaska Seafood Marketing Institute's
National Consumer Campaign promoting Alaskan seafood,
as more than anticipated was received from industry
assessment.
$2,000.0
LAURA FLEMMING, COMMUNICATIONS DIRECTOR, ALASKA SEAFOOD
MARKETING INSTITUTE, DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT, spoke to section 1a. She noted that
the supplemental request would allow expenditure of funds
already remitted. She explained that of the $2 million
requested for legislative authorization, $1.4 million is an
adjustment passed through, following a revenue audit showing
the additional amount owed to ASMI. The rest are receipts
from the past year.
In response to a question by Representative Gara, Ms.
Flemming explained that the Board recently met and learned
that the seafood industry tax revenue had been available.
The desire is to utilize the funds for marketing in order to
increase sales.
3:10:50 PM
Representative Gara receipt reported service funds from the
industry, or taxes in FY 01 was $6.9 million, FY 02 - $5.4;
FY 03 - $4.6; FY 04 - $5.3; FY 05 - $4.3; FY 06 - $6.1; and
FY 07, without the supplemental, $5.8. With the
supplemental, it would be $7.8 in FY 07. She stressed that
the expectation is for funding to go up.
Representative Crawford wondered if surpluses for products
are currently being stockpiled. Ms. Flemming responded that
the market for products is very strong right now.
3:13:29 PM
Representative Kelly explained that the Community and
Economic Development Subcommittee is working with ASMI to
prevent a perception that they should be punished for the
additional money. He added that the additional funds
demonstrate success. He noted that there are discussions
regarding impact to the FY 08 general funds contribution, so
that the funds could be increased.
3:15:09 PM
Representative Joule questioned if domestic markets or
foreign markets would be targeted and what the results would
be. Ms. Flemming stated that the funds being discussed
would match federal funds domestically and internationally.
The export market value of Alaska Seafood in ASMI program
countries grew to $1.73 billion in 2005, a 44 percent rate
of growth. The U.S. market value grew 42 percent in four
years to reach $1.74 billion in 2005. She felt that
marketing efforts were successful.
3:17:11 PM
Representative Thomas asked if the market concentrates on
any particular product. He also wondered if there has been
a change in the trend from salmon, which is owned by the
fisherman, to processors. Ms. Flemming did not see a major
difference. She felt that there was a greater alignment
with the industry than previously seen. Marketing follows
the direction of the members and currently is targeting
Russian king crab.
In response to a question by Representative Thomas, Ms.
Flemming explained that most marketing is directed to
"salmon", in general, without specific mention of species.
She spoke to the Cook It Frozen campaign, which applies to
all seafood, and the canned salmon promotion.
Representative Stoltze spoke in support of the marketing
efforts of ASMI and its Board.
3:21:07 PM
1(b) Commerce Regulatory Commission of Alaska
Outside council for litigation at the Federal Energy
Regulatory Commission (FERC) to defend RCA's
jurisdiction over intrastate rates on the Trans-Alaska
Pipeline (TAPS); and for other TAPS-related litigation
at the Supreme Court of Alaska involving RCA.
$750.0
SAMUEL THOMAS, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT, noted the $750,000 increase for RCA to defend
jurisdiction over intrastate rates on the Trans-Alaska
Pipeline and other TAPS-related litigation at the Supreme
Court. He estimated that it could exceed $1 million.
Outside legal counsel is needed. There are insufficient
funds to cover the costs without the supplemental.
3:23:30 PM
1(e) Environmental Conservation, Division of Water Quality
The cruise ship head tax ballot initiative was adopted
by voters during the August 2006 primary election.
Passage of the initiative, however, did not result in
an appropriation for the program. DEC needs a current
year appropriation to cover costs that are being
incurred in order to make a good faith effort to
implement the program within the initiative's timeline.
FY2007 expenditures are occurring to establish the
program.
$811.3
LYNN KENT, DIRECTOR, DIVISION OF WATER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, noted that the request would
allow implementation of the Ocean Ranger Program as a result
of the ballot initiative. Fees would be collected during
the current fiscal year and deposited into the existing
commercial passenger vessel environmental compliance fund.
DEC is in the process of developing a plan for the upcoming
year, with the intent to have some rangers trained and on
board.
3:26:08 PM
Representative Hawker questioned if there is any way to
implement the initiative without an additional
appropriation. Ms. Kent noted that the ballot initiative
was subject to legislative appropriation, and could not be
implemented without additional funding.
3:27:23 PM
Representative Thomas questioned how rangers would board
ships. Ms. Kent noted that a contractor is addressing this
and other issues. There are a number of issues that were
not addressed by the ballot initiative. Representative
Thomas noted that cruise ships could lose as much as three
beds per ships and questioned if the state would need to
reimburse companies. Ms. Kent summarized that two rangers
would be needed and that the state would be responsible for
expenses. She noted that staff would be in a regulated
facility on a full-time basis and that conduct and duties
would have to be sorted out.
Representative Stoltze asked if the architects of the
initiative have offered advice. Ms. Kent noted that they
are discussing intent, but most of the focus is on the
language in the initiative.
3:30:40 PM
Representative Hawker asked for an estimate of costs for a
fully operational program. Ms. Kent observed that for 24/7
coverage it would cost $5.6 million. Representative Hawker
argued that the initiative mandated $5.6 million and that
there is a reason that legislative appropriations are not
set by initiative.
3:32:20 PM
Representative Kelly asked what the penalty would be if the
appropriation is not made. Ms. Kent noted that other
current cruise ship monitoring programs would remain in
place if the initiative was not funded. She felt that
current programs were affective.
In response to a question by Representative Chenault, Ms.
Kent observed that there are over a million cruise ship
passengers per year. Representative Chenault noted that the
initiative would cost the state $5.6 million while only $3.6
million would be collected by the Ocean Ranger program.
Representative Gara questioned if 24-hour coverage is
needed. Ms. Kent replied that the initiative does not state
the number of hours that coverage is needed.
3:35:58 PM
Representative Crawford said he does not understand why
there are Ocean Rangers needed outside Alaskan waters. Ms.
Kent said the contractor is looking at the costs of putting
an Ocean Ranger on board in outside waters.
Representative Joule wondered if the state is liable if the
initiative is not funded. Ms. Kent replied that a citizen
could sue the department for failure to perform any act or
duty in the statute that is non-discretionary.
Representative Joule requested a legal response. Ms. Kent
agreed to obtain one.
3:37:56 PM
Representative Chenault asked what other requirements the
initiative contained. Ms. Kent replied that the initiative
states that the Ocean Rangers be Coast Guard licensed marine
engineers, which requires training at a maritime academy and
sea time. The training requirements are different for Ocean
Rangers than for current consultants on board. The current
program looks at wastewater discharges and vessel emissions.
The Ocean Ranger program requires dealing with health and
safety issues such as food service and protection of
residents in ports. Representative Chenault requested
further information.
3:40:16 PM
1(f) Health & Social Services Capital
Fairbanks Virology Laboratory Completion.
Costs have risen over what was originally determined,
particularly the costs of steel, transportation, and
petroleum based products. The miscellaneous receipts
come from interest earnings on the Certificate of
Participation (COP) which is being used to fund the
majority of the project. The original appropriation
was $24.2 million in FY06.
$6,500.0
JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE
AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, described the request. In 2005 the legislature
passed authorization to build the Fairbanks Virology Lab.
Since then there has been an increase in construction costs
above the projected budget. She described a variety of
additional costs and the steps taken to manage them. This
request is time sensitive.
3:44:55 PM
Co-Chair Meyer asked if the $3 million of other funds is
from interest earnings. Ms. Clarke said it was. Co-Chair
Meyer asked why the project was not started last summer.
Ms. Clarke referred to a feasibility study and the time
needed to work on the design.
Representative Hawker asked about the miscellaneous receipts
from the interest earnings on the Certificate of
Participation (COP). Ms. Clarke said the COP's were issued
at a good rate. She offered to get more information.
3:46:27 PM
1(g) Health & Social Services Capital
Title change: "Juneau Pioneer Home Roof Replacement" to
"Pioneer Homes Roof Repair and Replacement". The
department would like to
Use excess funds from the original project to repair
Sitka Pioneer Home roof.
$0.0
Ms. Clarke reported a language change to enable the
appropriation to be used for all Pioneer Homes. She
provided pictures of some of the changes needed (copy on
file.) She described the possible use of excess funds to
repair the Sitka Pioneer Home roof.
Co-Chair Meyer reported that he has toured the Pioneer Home
in Ketchikan which has a flat roof. He questioned the
design. Ms. Clarke said the Sitka roof is not flat and is a
historical building. The Juneau Pioneer Home roof is flat.
Ms. Clarke informed the committee that new techniques will
ensure adequate repair to these roofs.
3:49:29 PM
6(a) Health & Social Services Pioneer Homes
Receipt supported services authority to cover
1) nurses' salaries $86.9;
2) funds to offset uncollectible federal revenues
$231.0; and
3) safety, sanitation and operating costs $482.1
$800.0
Ms. Clarke explained the request for Pioneer Home costs.
Past attempts to budget for these receipts have not been
successful.
Representative Hawker summarized that items 1, 2, and 3 are
non-discretionary and items 3 and 4 are discretionary.
Money could be used to offset existing expenses. Ms. Clarke
agreed.
3:52:54 PM
6(b) Health & Social Services Behavior Health Medicaid
Services
Cost recovery of overpayments to comply with provisions
of SB 41 (CH 66, SLA 03) related to audits.
$600.0
Ms. Clarke noted that this is the first of four requests
related to annual audits.
Representative Chenault asked why authorization is needed
for further expenditure. Ms. Clarke reported that the
federal government expects to receive a share. Some of the
money will go to offset this expense.
Representative Hawker explained that in SB 41 there is a
provision which mandates an accounting procedure that
results in authorizing these funds the first time, to make
payments, and to appropriate the money a second time.
3:55:29 PM
6(c) Health & Social Services Children's Medicaid
Services
Cost recovery of overpayments to comply with provisions
of SB 41 (CH 66, SLA 03) related to audits.
$100.0
Ms. Clarke reported that 6(c) is for children's Medicaid
Services and has the same purpose as 6(b).
6(d) Health & Social Services Medicaid Services
Alaska Regional Hospital Medicaid Rate Settlement for
1991 through 2000. Settlement agreement has been
signed.
$8,000.0
Ms. Clarke explained the request for the Alaska Regional
Hospital Medicaid Rate Settlement issues for 1991 through
2000. Representative Chenault asked if there will be more
cases. Ms. Clarke thought there should not be any more.
3:57:38 PM
6(e) Health & Social Services Medicaid Services
Cost recovery of overpayments to comply with
provisions of SB 41 (CH 66, SLA 03) related to
audits.
$1,000.0
Ms. Clarke pointed to the relationship to 6 (b).
6(f) Health & Social Services Probation Services
Court ordered costs. The legislature has directed the
department to bring the costs forward in a supplemental
each year.
$206.5
Ms. Clarke explained the court ordered costs for the
juvenile justice program.
Representative Hawker pointed out that the House has sought
truth in budgeting and the change was a result of a
Conference Committee.
3:59:14 PM
6(g) Health & Social Services Adult Public Assistance
Formula program reduction. Savings are from a
combination of continued savings in Interim Assistance
from nurse reviews and payment size per client
decreases as clients have more pension income.
$(750.0)
Ms. Clarke shared that the savings are from the public
assistance program.
6(h) Health & Social Services Senior Care
Caseload reduction; people are not applying for the
pharmacy benefit as much as anticipated.
$(1,500.0)
Ms. Clarke reported a reduction in the Senior Care program,
especially the prescription drug portion.
Representative Gara asked what percent of the poverty line
qualifies for Senior Care. Ms. Clarke said the cash benefit
is at 135 percent; the prescription drug benefit is at 175
percent.
4:01:02 PM
Representative Thomas wondered how expensive the pharmacy
benefit was to the state. Ms. Clarke reported that seniors
were not interested in the program.
Representative Gara wondered what would happen if the Senior
Care program qualification was increased to 175 percent of
the poverty level. He asked if it would come out even to
transfer the $1.5 million savings to the program. Ms.
Clarke said the Senior Care program requires reauthorization
by the legislature this year and that question could be
pursued. Representative Gara requested more information.
4:03:04 PM
6(i) Health & Social Services Senior and Disabilities
Services Appropriation
The Senior and Disabilities Services appropriation
decreases by $5,000.0 from $334,174.2 to $329,174.2
because of the allocation change below:
$0.0
Ms. Clarke reported less spending than budgeted for on the
Senior and Disabilities Services Appropriation.
6(j) Health & Social Services Senior and Disabilities
Medicaid Services Allocation
Savings in the personal care attendant program due to
implementation of regulations which did such things
as requiring medical determinations by department
staff or designee (had been done by the provider),
limiting hours of service, limiting to one attendant
a household with more than one person qualifying for
PCA, and other cost savings.
$(5,000.0)
6(k) Health & Social Services Senior and Disabilities
Medicaid Services
Cost recovery of overpayments to comply with
provisions of SB 41 (CH 66, SLA 03) related to
audits.
$800.0
Ms. Clarke related the savings from this program.
4:04:24 PM
14(b)(3) Ratification Health and Social Services
AR23020-05 Behavioral Health Medicaid
$3,051,744.30
14(b)(4) Ratification Health and Social Services
AR23301-05 Medicaid Services
$2,606,666.14
14(b)(5) Ratification Health and Social Services
AR23551-05 Senior and Disabilities Medicaid
$349,170.66
Ms. Clarke explained that the ratifications resulted from
under collection of federal revenue.
HB 139 was heard and HELD in Committee for further
consideration.
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