Legislature(1997 - 1998)
03/02/1998 02:00 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 461 "An Act making supplemental and special appropriations; and providing for an effective date." ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGMENT AND BUDGET, OFFICE OF THE GOVERNOR, provided an overview of the proposed time-sensitive appropriations from the Governor's FY98 Supplemental Bill (HB397, SB292). She assured Committee members that the Administration had placed strict limits on what would be considered time-sensitive. DEPARTMENT OF REVENUE - 1 (a) DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET (OMB), OFFICE OF THE GOVERNOR, stated that 1(a) would address the immediate funding for monies needed to prevent cash-flow problems for the Bank of America building. Department of Administration (DOA) has been paying maintenance costs out of their budget as a stopgap measure, however, that budget is experiencing it's own cash flow problems. Private tenants are currently paying AHFC, and OMB would prefer to give AHFC the authority to contract with DOA. The request would address the fiscal note situation resulting from last session. JOHN BITNEY, ALASKA HOUSING FINANCE CORPORATION (AHFC), ANCHORAGE, advised that AHFC at this time has no authority to use the receipts from the building to pay for operation and maintenance costs. AHFC has been collecting the receipts in a separate holding account. With this authority, AHFC would RSA reimbursement to DOA for their expenses. DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS - 1(b) Co-Chair Hanley advised that Section 1(b) had been addressed in HB 370. DEPARTMENT OF CORRECTIONS - 1(c) Mr. Spencer explained that the requested appropriation would be used to cover costs associated with Community Residential Center (CRC) beds. Some CRC contracts will expire March 31, 1998. The Department cannot implement contracts to continue these beds if this requested funding is not made available. Representative Mulder commented that the Department is looking into existing funding that could be applied. DWAYNE PEEPLES, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF CORRECTIONS (DOC), noted that since the supplemental request was submitted, the Department has done a reassessment of the CRC funding BRU's. There is $18 thousand dollars available in a new CRC BRU, which could be available because of start up delays of new beds. Additionally, $64 thousand more dollars has been identified in an existing CRC BRU, money which could also be made available. He noted that to date, the $236 thousand dollar initial request could be reduced by $82 thousand dollars. Mr. Peeples addressed the program receipts. He stated that $50 thousand dollars would come from the Drinking While Intoxicated (DWI) Program. The Department was authorized to receive funds which were above the remaining account balance in that program. Co-Chair Hanley commented that the in-mates occupying the beds would pay for a large portion. DEPARTMENT OF HEALTH AND SOCIAL SERVICES - 1(d) JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that the $100 thousand dollar appropriation request would be used to fund the Maternal Child Care Clinics scheduled to begin in late March. These clinics may be cancelled if a supplemental appropriation allowing use of program receipts from clinic fees is not approved. KAREN PEARSON, HEALTH PROGRAMS MANAGER, DIVISION OF PUBLIC HEALTH, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, spoke to the work performed by the specialty clinics. With a professional team traveling out to rural communities allows those families not to have to travel to Anchorage or the lower 48 in order to access medical services. Co-Chair Hanley pointed out that not all people pay for services received at these clinics. He asked if the people, who do pay, cover costs of the clinics. Ms. Clarke understood that the clinics were subsidized through other funding mechanisms. Last year, the Department received funding through Alaska Mental Health Trust Authority as well as federal block grants. She agreed that program receipt revenue does not cover the full cost of the clinics. Co-Chair Hanley questioned why a supplemental request exists when the Department had these clinics included in last year's budget proposal. Ms. Pearson explained that the program staff was not aware during last year's budget that the Division would no longer be able to go to the Legislative Budget and Audit Committee (LBA) for additional program receipts. Representative Foster echoed concern. Ms. Clarke noted that the Department does have some remaining funds resulting from an increase received from the FY99 Mental Health Trust Authority which could continue some clinics. DEPARTMENT OF MILITARY & VETERAN'S AFFAIRS - 1(e) NICO BUS, BUDGET COORDINATOR, DEPARTMENT OF MILITARY & VETERAN'S AFFAIRS (DMVA), stated that the requested funding would coordinate federal receipts for Poker Flats Research Range. The Department will transfer funding to the University of Alaska so that construction can begin this spring. The specific work to be done would happen over a two year time frame, costing about $20 million federal dollars. Those funds would be used for refurbishment of a road and the technology support. He noted that because of existing agreements, it would be easiest for those funds to be distributed through DMVA. The Department would act as funding conduit. Mr. Bus noted that there would be no money for the Department. Representative Martin pointed out that Section 1(e) and 1(i) represented the same money. He asked if the funds would conflict with the Kodiak Space Center. Co-Chair Therriault explained that Poker Flats rockets were atmospheric sounding rockets and which could not achieve orbit; the Kodiak facility rockets will orbit. Representative Martin asked how much money had been spent over the past five years for upgrading. MARY LOU BURTON, (TESTIFIED VIA TELECONFERENCE), UNIVERSITY OF ALASKA, FAIRBANKS, believed that approximately $10 million dollars has been spent since 1990. The project has been 100% federally refunded. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES - 1(f) Co-Chair Hanley questioned why this item had been included in the fast track supplemental. NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (DOTPF), stated that this stretch of the road is in great need of repair. It had been included in the State Transportation Improvement Program (STIP) to fix sections of the road during a five years period beginning in 2000. Because of the damages, which occurred this summer, the Department realized they needed to speed up the work. The road has deteriorated. The Federal Highway department has granted approval for this project. The Department is rapidly working to get the proposal completed in order to go to bid by April so that the repairs could be done by August. She pointed out that many states are currently using federal highway money to maintain roads, although it requires each state to provide a plan. Ms. Slagle pointed out that a specific section of road has been identified for repair. The State would not be allowed to undertake general overall maintenance when attempting to meet Federal Highway approval, yet, specific work will be approved. Co-Chair Hanley asked if the State had overappropriated it's original match or if the Department had held off on already approved federal projects. THOMAS BRIGHAM, DIRECTOR, DIVISION OF STATEWIDE PLANNING, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, replied that neither point had occurred. The Department has increased the size of the FY98 program to general expectation. The Tok project fits into bigger project funding appropriated by the federal government, which would not displace other projects. Co-Chair Hanley inquired the total highway match for this year. Mr. Brigham replied it would be in the amount of $24.5 million dollars. Because of new federal authorization, there could be additional federal funds available. The average match rate is 10%. Co-Chair Therriault asked if the proposed increment would cause a shift to any other proposed project. Mr. Brigham stated that nothing would be displaced and no major design would be needed. DEPARTMENT OF FISH AND GAME - 1(g) KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF FISH AND GAME, stated that the requested allocation would be used for subsistence harvest research projects. He added, early approval of federal receipts would allow timely completion of these projects. There are five separate small projects included in the request, all of which will need to be completed by September 30, 1998. He added that this would be a 100% federal fund. Representative Foster argued the point that the Nome subsistence position had been cut leaving sixteen positions residing in Anchorage. He indicated his resentment in supporting sixteen subsistence positions in Anchorage when the need is in Bush Alaska. Mr. Brooks responded that the economics of maintaining Bush Alaska offices and leases became prohibitive. Flying from village to village is expensive. The Anchorage office has always been the hub. He summarized that the budget has been cut so small, it is impossible for the Department to cover such a wide area. DEPARTMENT OF LABOR - - 1(h) REBECCA GAMEZ, DIRECTOR, DIVISION OF EMPLOYMENT SERVICES, DEPARTMENT OF LABOR (DOL), explained that the $3 million dollar supplemental request would be used to establish the Alaska Disaster Assistance Program (ADAP). Early approval will allow relief for those persons suffering from the loss of their primary income due to the poor salmon-fishing season in Bristol Bay. Representative Martin asked how the program was different from HB 370. Ms. Gamez explained that this was not a loan program; it was an entitlement program. DOL anticipates quick turnover costs. Administrative costs will amount to approximately 8.4%; $2.75 million dollars will be available to 54 communities in the State. Co-Chair Hanley asked if the Department used guidelines similar to those established by FEMA. Ms. Gamez responded that the determination would be based on a combination of regulations and laws and would include some of those used through FEMA. The federal government turned that request down. An amount had been determined by estimating the maximum number of people that would be eligible under the Disaster Unemployment Assistance program and then used the average unemployment benefit rate received. Representative Martin asked why the program had been limited to Bristol Bay. Ms. Gamez replied that the Division had "stuck" with the basic FEMA request made a number of months ago and did not expand it. Representative Martin suggested adding language specifying all communities that could qualify for the funding. (Tape Change HFC 98- 48, Side 2). Co-Chair Hanley noted that to undertake this request would require additional legislation. Normally there would be a fiscal note attached with the bill. Mr. Spencer questioned where the fiscal note would show up; he recommended the use of conditional language. A fiscal note would provide appropriation contingent upon the bill passing. Appropriation could be made in the bill, but if the bill did not pass, the appropriation would be no good. Co-Chair Hanley noted that there could be an appropriation bill tagging along with the legislation. UNIVERSITY OF ALASKA - 1(i) Co-Chair Hanley noted that Section 1(i) was tied with Section 1(e). DEPARTMENT OF MILITARY & VETERAN'S AFFAIRS - 1(j) Mr. Bus explained that the appropriation would fund the Youth Corps ChalleNGe program. He stated that early approval was needed to begin the next scheduled class on March 16, 1998. He advised that $250 thousand dollars had been allocated in the FY98 budget to support the program with the understanding that the Department could come back during the supplemental budget process. The Department did not know what the federal funding commitment would be. The initial allocation for Alaska was about $2 million dollars. DMVA continues to run the program in anticipation of 80 graduates per class in each of the two classes. In order to get the program back up to par; the Department is proposing supplemental funding request in the amount of $608 thousand dollars to secure the program through June, 1998. Co-Chair Hanley asked the total anticipated budget for the year. Mr. Bus replied that it would be $3.4 million dollars, consisting of State and federal funding. The federal government has committed to $2.1 million dollars. Co-Chair Hanley asked the amount of the request if there were 60 graduates. Mr. Bus explained that becomes complicated as the federal guidelines require 75% federal funds for 25% State funding match requirements. Co-Chair Hanley requested an impact statement indicating the cost differential for 60 and/or 80 graduates. He pointed out that the percentage provided by the feds is declining. Representative Foster pointed out that when the program started it was a total federally funded program, however, at this time, the projection is that federal funding will pay 60% of costs and the State will provide 40% of the associated costs. Representative Foster pointed out that the cost per graduated student is approximately $22 thousand dollars. Mr. Bus advised that the program was geared to the "at-risk" youth and that it is a cost avoidance program. The cost of sending a youth to a correctional facility is approximately $66 thousand dollars. Mr. Bus emphasized that at-risk youth really benefit from the program. DEPARTMENT OF ADMINISTRATION - 1(k) Mr. Spencer noted that the Department of Administration (DOA) was requesting funding for needed monthly lease payments for the period from now through May, 1998. SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION, advised that when the FY98 budget had been passed, DOA projected that budget would be short approximately $1.7 million dollars. The net effect of activity since that time has resulted in a total request of $1.4 million dollars. HB 461 was HELD in Committee for further consideration.