Legislature(1993 - 1994)
02/01/1994 10:10 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 243 FOUR DAM POOL TRANSFER FUND Co-chair Pearce directed that SB 243 be brought on for discussion and referenced Amendment No. 1 by Senator Sharp. She noted numerous questions surrounding ramifications of SB 106 and 126, which passed the legislature last year, the systems that were effected by passage, and how moneys flow in and out of established funds. Co-chair Frank acknowledged need for a refresher course on the issue. Co- chair Pearce advised that meetings would be held with the bill drafter, staff from the department, and the Legislative Finance Division, prior to proceeding with SB 243. BRUCE GERAGHTY, Deputy Commissioner, Dept. of Community and Regional Affairs, came before committee. He concurred in need for technical adjustments as a result of last year's passage of SB 106 and 126. The department has started work on adoption of regulations. As that effort progresses, the department will work with the legislature to fix whatever is necessary. Co-chair Frank voiced his understanding that policy issues relating to transfer of energy programs from the Dept. of Commerce and Economic Development to the Dept. of Community and Regional Affairs remain. Mr. Geraghty acknowledged problems surrounding movement of a quasi-independent entity into a line agency as well as a budgetary shift from CIP receipts to general funds. Co-chair Frank asked that Legislative Finance Division be asked to demonstrate how the transition was structured, what funds were used to support AEA's budget, and how the effort will be funded under the Governor's proposed budget. He voiced concern regarding movement from a CIP-based to a general fund budget. REMOND HENDERSON, Director, Administrative Services, Dept. of Community and Regional Affairs, explained that a policy decision was made to budget the "entire operation of the energy division under general funds." There was concern over the number of positions that had been funded with CIP receipts and inability to track whether or not all the positions were needed. The Alaska Energy Authority did not operate like a line agency in terms of how it charged operations to CIP receipts. It did not have RSAs between the operating budget and the capital budget. It direct charged individual positions to various funds, and there was no consistency as to how that happened. Mr. Henderson voiced his belief that CIP receipts could be used as a funding source and appropriately accounted for. Co-chair Frank said that such funding is common in the Dept. of Transportation and Public Facilities and other departments. Mr. Henderson sought assistance in a situation he said had only recently arisen. He explained that AIDEA has identified transition costs that it says it would not normally have incurred absent passage of the above-noted legislation. What is in question is whether AIDEA is entitled to any of the funds that were appropriated last year, either through normal operations--the $8.4 million that was appropriated--or the $3.9 million in general funds that was appropriated for the transition. Until that issue is resolved, it would be difficult for the Dept. of Community and Regional Affairs to split the power development revolving loan fund. The department sought guidance from the Office of Management and Budget. OMB suggested that the matter represents an internal policy decision. Concern remains regarding whether AIDEA is legally entitled to the funds. Mr. Henderson said that guidance from the legislature or Legislative Finance Division would assist in transfer of funds into the four dam pool. Co-chair Pearce suggested that the Legislative Auditor, director of the Legislative Finance Division and director of Legal Services work with the department on the issue. Senator Kerttula voiced concern regarding whether allocation of positions to the newly created division of energy is adequate for proper function. Co-chair Pearce asked that Mike Greany, Director of Legislative Finance Division, coordinate an informational presentation to committee RANDY WELKER, Legislative Auditor, advised of a pending request to the Legislative Budget and Audit Committee that Legislative Audit "go in, basically, and look at the breakup of the energy authority and how those programs ended up where they did." While it is not anticipated that that work will be completed before the end of the session, concerns being raised at the present meeting could be worked into the scope of that review. Independent review should highlight areas of weakness that could be brought back to the legislature next session. Co-chair Frank voiced need for as much information as possible in order to properly prepare the upcoming budget. Senator Kerttula concurred. He voiced his belief that the legislature destroyed an entity that was functioning, albeit perhaps not that well, and replaced it with one that may not function at all in terms of services to the public. ADJOURNMENT The meeting was adjourned at approximately 11:00 a.m.