Legislature(2001 - 2002)

03/29/2001 10:05 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     CS FOR HOUSE BILL NO. 103(FIN)(brf sup maj fld)                                                                            
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize  funds; and providing for an effective date."                                                            
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 104(FIN)                                                                                             
     "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."                                                                             
                                                                                                                                
                                                                                                                                
Senator Leman complimented the departments he worked with for their                                                             
cooperation in reviewing the budgets.                                                                                           
                                                                                                                                
Department of Revenue                                                                                                         
                                                                                                                                
Senator Leman, Chair                                                                                                            
Senator Phillips                                                                                                                
Senator Ellis                                                                                                                   
                                                                                                                                
Senator Leman said the Department of Revenue Management Plan for                                                                
FY 01 was approximately $12.1 million in general funds, and the                                                                 
subcommittee was directed by the Senate to prepare a budget of                                                                  
$11.9 million general funds for FY 02. He noted this amount was                                                                 
just slightly below the Governor's requested amount of $12.017.3                                                                
million.                                                                                                                        
                                                                                                                                
Senator Leman reviewed the line items as follows:                                                                               
                                                                                                                                
     Fully  funded   Child  Support  Enforcement   and  allowed  for                                                            
     increase to Officer 1 upgrade                                                                                              
                                                                                                                                
He expressed that the full funding of the child support budget                                                                  
request was the "highlight" of the $11.9 million budget the                                                                     
subcommittee prepared.                                                                                                          
                                                                                                                                
     Included   front  section  language  to  allow   Child  Support                                                            
     Enforcement  Division  (CSED)  to use  minimum  state  required                                                            
     match for federal funds                                                                                                    
                                                                                                                                
     Disallowed  a $58.0 request for  Municipal Bond Bank  Authority                                                            
     (MBBA)  receipts  after  discussing  with  the  Department  the                                                            
     possibility of coming  back with a supplemental request if bond                                                            
     sales  do occur.  This  is distinct  from  the  $58.0 MBB  Rcpt                                                            
     request  in the Slow-Track Supplemental  which does  need to be                                                            
     funded.                                                                                                                    
                                                                                                                                
     Alaska  Housing Finance Corporation  (AHFC): Increased  federal                                                            
     receipts   ($300.0)  for  370  new  Section  8  vouchers;   but                                                            
     disallowed  three  additional  positions  to  administer  these                                                            
     vouchers.  I've asked  the Department  to  review its  staffing                                                            
     levels  and see if this work  can be done with existing  staff.                                                            
                                                                                                                                
     AHFC:  Disallowed  two PCNs  and  funding for  HOME/Tax  Credit                                                            
     compliance   auditors.  Requested  Department   to  review  its                                                            
     staffing levels and  see if this work can be done with existing                                                            
     staff.                                                                                                                     
                                                                                                                                
     Slightly  reduced the Department request for  AHFC Receipts for                                                            
     programs  moving  from the  Capital  to the  Operating  Budget.                                                            
     ($462.0 to $435.0/AHFC Rcpts).                                                                                             
                                                                                                                                
     Alaska  Mental  Health  Trust Authority  (AMHTA):  Allowed  one                                                            
     intern and one permanent  FT employee and some increased travel                                                            
     (Request  was $23.8  Mental Health  Administration (MH  Admin),                                                            
     funded $11.0).                                                                                                             
                                                                                                                                
     AMHTA;  After seeing  that thirteen  out  of twenty-one  Deputy                                                            
     Directors  are Range  23 or below,  reduced  the request  for a                                                            
     Deputy Director from Range 25 to Range 23.                                                                                 
                                                                                                                                
     There were  increases in Alaska State Pension  Investment Board                                                            
     management fees.                                                                                                           
                                                                                                                                
Senator  Leman commented  that while the  increase of approximately                                                             
$4.5 million in  management fees was not part of the  general funds,                                                            
he wanted to bring it to the Committee's attention.                                                                             
                                                                                                                                
     Reduced  Permanent Fund  Corporation's  request for  additional                                                            
     travel,  salaries,  and  equipment  ($58.7  request  funded  at                                                            
     $47.1)                                                                                                                     
                                                                                                                                
Senator Leman  clarified that even though the travel,  salaries, and                                                            
equipment funds  were not general funds, the subcommittee  wanted to                                                            
be responsible for the allocations.                                                                                             
                                                                                                                                
     Allowed partial increment to Permanent Fund Division                                                                       
     (request $116.5, funded $110.0)                                                                                            
                                                                                                                                
Senator  Leman informed that  this Permanent  Fund Division  request                                                            
was  to  cover costs  of  mailing  letters,  instead  of  postcards,                                                            
notifying residents that  their Permanent Fund applications had been                                                            
received.                                                                                                                       
                                                                                                                                
Senator Leman  commended to  the full Senate  Finance Committee  the                                                            
subcommittee's  General Fund proposed budget of $11,952,000  for the                                                            
Department of Revenue.                                                                                                          
                                                                                                                                
Department of Environmental Conservation                                                                                      
                                                                                                                                
Senator Leman, Chair                                                                                                            
Senator Torgerson                                                                                                               
Senator Olson                                                                                                                   
                                                                                                                                
Senator   Leman  stated   that  the  Department   of  Environmental                                                             
Conservation  had  previously  been  funded with  $12.2  million  in                                                            
general  funds out  of a  total department  budget of  close to  $50                                                            
million. He noted  that the Governor's budget request  included $1.5                                                            
million in general funds  and two positions, additional "Oil and Haz                                                            
Mat funds"  of close to $700,000 and  three positions, and  Facility                                                            
Receipt  Funds  of approximately   $150,000 and  two  positions.  He                                                            
continued that  the Governor's budget consisted of  a total increase                                                            
of  $2.8  million   and  seven  positions.  He  informed   that  the                                                            
allocation for funding  his subcommittee received for the Department                                                            
of Environmental  Conservation budget  was a $700,000 increase  over                                                            
the  FY  01 Management  Plan.  He  informed  that  the subcommittee                                                             
recommended a  budget of $12.82 million dollars, which  was $100,000                                                            
under the allocation.                                                                                                           
                                                                                                                                
He highlighted other subcommittee recommendations as follows:                                                                   
                                                                                                                                
     Disallowed  a  $300.0/GF  increment   for Arctic  Contaminants                                                             
     Program  -  there  are  funding  sources  in  the  Capital  and                                                            
     Operating budgets if this is a priority for the Department.                                                                
                                                                                                                                
     Slight reduction in Solid Waste Management.                                                                                
                                                                                                                                
     Allow increment for Water Quality due to passage of HB 361,                                                                
     and kept $77.0 in Statutory Designated Program Receipts.                                                                   
                                                                                                                                
     Increased   funding  to  the  Spill  Prevention   and  Response                                                            
     Division  to include  $609.4  in 470  Fund (Oil  and  Hazardous                                                            
     Substance  Prevention and  Response Fund)  + two positions  for                                                            
     new activities associated  with British Petroleum/ARCO/Phillips                                                            
     merger. Additionally,  $77.5 Oil Haz & one position  for SB 273                                                            
     Cruise Ship/Railroad monitoring.                                                                                           
                                                                                                                                
     Funding  for Local  Emergency  Planning committees  to  create,                                                            
     maintain and test  oil/hazardous substance spill response plans                                                            
     ($423.4 Oil Haz & zero positions).                                                                                         
                                                                                                                                
Senator  Leman noted  the  subcommittee  had increased  the  funding                                                            
approximately  $100,000 over last year for local emergency  planning                                                            
commissions.                                                                                                                    
                                                                                                                                
     Facility Construction  & Operation: Funded one of two requested                                                            
     positions  to administer  operator  certification requirements                                                             
     for Class A water systems.                                                                                                 
                                                                                                                                
     Letter of  Intent directing the Department to  seek a waiver to                                                            
     exclude  the smallest water systems  that do not add  chemicals                                                            
     to their systems from  the operator certification requirements.                                                            
                                                                                                                                
Senator  Leman concluded  that  the  subcommittee met  the  spending                                                            
limit  determined  by  the Senate  Majority,  and  he  believed  the                                                            
Department is funded adequately to do its mission.                                                                              
                                                                                                                                
Alaska Court System                                                                                                           
                                                                                                                                
Senator Wilken, Chair                                                                                                           
Senator Pearce                                                                                                                  
Senator Davis                                                                                                                   
                                                                                                                                
Senator   Wilken    informed   that   the   subcommittee's    budget                                                            
recommendation  of $50,923,500  was  within the  allocation for  the                                                            
Alaska Court System (ACS)  He said this allocation was met with a .7                                                            
percent  increase in  general  fund spending,  almost  all of  which                                                            
would  be  dedicated  to the  maintenance  and  operations  cost  of                                                            
approximately  $337,700  for  the new  Fairbanks  Courthouse  (Trial                                                            
Courts), scheduled to open in August 2001.                                                                                      
                                                                                                                                
He stated the following receipt authority was approved:                                                                         
                                                                                                                                
     An increment of $150,000 from the Mental Health Trust                                                                      
     Authority  for a count coordinated resources  project to assist                                                            
     mentally  ill persons who have been convicted  of a misdemeanor                                                            
     crime.                                                                                                                     
                                                                                                                                
      An increment of $188,100 from the Department of Revenue                                                                   
     interagency receipts to establish a pro se center to assist                                                                
     litigants   in   family   matters   before  and   after   court                                                            
     proceedings.                                                                                                               
                                                                                                                                
     An increment of $216,000 from federal receipts to continue                                                                 
     the Anchorage Drug Court pilot program.                                                                                    
                                                                                                                                
     Commission  of Judicial Conduct  - The Subcommittee  approved a                                                          
     $15,000 increment  to help reduce the level of  underfunding in                                                            
     its personnel budget.                                                                                                      
                                                                                                                                
     Judicial Council - The subcommittee recommended the                                                                      
      continuation of the Judicial Council's budget as funded                                                                   
     in FY 01.                                                                                                                  
                                                                                                                                
Senator Wilken  continued that the  budget approved an "increase  in                                                            
headcount  of  plus  four" with  zero  general  fund  additions.  He                                                            
informed that the Judicial  Council came in the very last day of the                                                            
budget  work, with  late  information  on some  outstanding  funding                                                            
source issues  and asked for a $39,000 increment.  He commented that                                                            
while he was not  able to put it in the budget, he  understood their                                                            
situation.  He stated  he wanted  the Committee  to  know about  the                                                            
request so further  discussion might garner another  funding source.                                                            
                                                                                                                                
Senator Leman  asked for further details on the four  new positions.                                                            
                                                                                                                                
Senator Wilken responded  that he did not have that information with                                                            
him.                                                                                                                            
                                                                                                                                
Co-Chair Donley said that they would come back to that.                                                                         
                                                                                                                                
Department of Law                                                                                                             
                                                                                                                                
Senator Wilken, Chair                                                                                                           
Senator Taylor                                                                                                                  
Senator Ellis                                                                                                                   
                                                                                                                                
Senator Wilken  reported that the proposed budget  allocation for FY                                                            
02  Operating  Budget  for  the  Department  of  Law  was  met  with                                                            
$25,473,600 in general  fund spending. He commented that this was an                                                            
overall 1.55 percent  reduction in general funds spending.  He added                                                            
that the subcommittee  approved the addition of eight  new positions                                                            
for the Department,  two of which would be funded  by general funds.                                                            
                                                                                                                                
He continued that  in addition to the baseline management  plan, the                                                            
subcommittee approved the following "significant" items:                                                                        
                                                                                                                                
     Criminal Division, Criminal Justice Litigation                                                                           
     Approved an increment for $117,500 for the Victim Witness                                                                  
     Notification and Support program to provide for more reliable                                                              
     notification to victims of crime.                                                                                          
                                                                                                                                
     Civil Division, Collections and Support                                                                                  
     Approved a reduction in excess General Fund Program Receipt                                                                
     Authority in the amount of $53,700.                                                                                        
                                                                                                                                
     Civil Division, Environmental Law                                                                                        
     Approved a reduction in excess General Fund Program Receipt                                                                
     Authority in the amount of $33,500.                                                                                        
                                                                                                                                
     Civil Division, Governmental Affairs Section                                                                             
     Approved an increment for $90,000 for an Associate Attorney                                                                
     (paralegal) position to conduct specialized research and                                                                   
     assist within the Governmental Affairs Division.                                                                           
                                                                                                                                
     Civil Division, Human Services Section                                                                                   
     Approved  an increment for $137,000 for a Juvenile  Delinquency                                                            
     Attorney  position  in  Anchorage  to  handle  the significant                                                             
     increase  in the number of cases  handled by this section  over                                                            
     the past two years.                                                                                                        
                                                                                                                                
     Oil and Gas Litigation and Legal Services, Oil and Gas                                                                   
     Litigation                                                                                                               
     Approved a reduction in General Fund support for this division                                                             
     by $91,600.                                                                                                                
                                                                                                                                
Senator Wilken  noted that  the subcommittee  asked the Division  of                                                            
Oil and Gas to help absorb  new general fund allocation increases by                                                            
shouldering a $91,600 reduction.                                                                                                
                                                                                                                                
Senator   Wilken  informed   there  were   outstanding  issues   the                                                            
Department  of Law was  involved in,  one of which  was an  on-going                                                            
lawsuit against  the Bank of America. Senator Wilken  explained that                                                            
the  Department  of Law  had asked  for  $250,000 to  continue  that                                                            
lawsuit with  an anticipated rate  of return of between $50  and $80                                                            
million. He continued  that he felt this would be  money well spent,                                                            
but there were two other  avenues of funding that could be available                                                            
for  funding  which  he  would  support,  rather  than  through  the                                                            
operating budget.                                                                                                               
                                                                                                                                
Co-Chair Donley commented  that this funding was not in the House of                                                            
Representatives budget either.                                                                                                  
                                                                                                                                
Senator Wilken replied that was correct.                                                                                        
                                                                                                                                
Department of Education and Early Development                                                                                 
                                                                                                                                
Senator Wilken, Chair                                                                                                           
Senator Elton                                                                                                                   
Senator Torgerson                                                                                                               
                                                                                                                                
Senator Wilken  reported that the Department of Education  and Early                                                            
Development  (DEED) allocation was  $29,795,800 and did not  include                                                            
budget  recommendations   for  the   foundation  formula   or  pupil                                                            
transportation. He informed  the full Senate Finance Committee would                                                            
address those  items. He noted the overall reduction  of $188,300 in                                                            
general  fund spending  was a  .6percent  reduction from  the FY  01                                                            
Management  Plan. He  continued  that the  budget  includes six  new                                                            
positions,  one fulltime  and  one temporary  position  funded  with                                                            
general funds.                                                                                                                  
                                                                                                                                
He outlined the highlights of the proposed budget as follow:                                                                    
                                                                                                                                
     Executive Administration, Commissioner's Office.                                                                         
     Approved   a  travel   allocation   reduction   by  3   percent                                                            
     department-wide, realizing a decrement of $50,000.                                                                         
                                                                                                                                
     Teaching and Learning  Support, Special & Supplemental Services                                                          
     Approved  a $2,000,000  and a  $6,645,800  increase in  federal                                                            
     receipt  authority  for Special  Education  and  Title I  Grant                                                            
     programs  that  provide  direct   assistance  to  local  school                                                            
     districts.                                                                                                                 
                                                                                                                                
     Approved  receipt for  $100,000 Mental  Health Trust  Authority                                                            
     funds to aid the transition  of students with disabilities from                                                            
     high school to the community.                                                                                              
                                                                                                                                
     Teaching and Learning Support, Quality Schools                                                                           
     Approved an increment request for $74,300 for the                                                                          
     Correspondence Program Review Program                                                                                      
                                                                                                                                
Senator Wilken  explained  that there were  now over 9,000  students                                                            
taking  correspondence  courses, which  reflects  tremendous  growth                                                            
since the program's inception.  He said $74,300 would cover the cost                                                            
of complying  with federally  mandated programs  and would  focus on                                                            
two pilot  programs: one  in Delta  and one in  Nenana. He said  the                                                            
assessments  of these programs  would help  determine whether  other                                                            
correspondence programs could use these pilot programs.                                                                         
                                                                                                                                
     Approved  a $1,200,000  increase in  federal receipt  authority                                                            
     for  RightStart,   Extended  Day  Kindergarten,   and  Academic                                                            
     Intervention Coordinator programs.                                                                                         
                                                                                                                                
     Approved  a $4,620,600  increase in  federal receipt  authority                                                            
     for  the Eisenhower,  Innovative Education  and Classroon  Size                                                            
     Reduction, and Teacher  Recruitment and Retention programs that                                                            
     provide direct assistance to local school districts.                                                                       
                                                                                                                                
     Early Development, Child Nutrition                                                                                       
     Approved a $1,075,000  increase in federal receipt authority to                                                            
     reimburse  school  districts for  increased  freight costs  for                                                            
     shipping   United  States  Department  of  Agriculture   (USDA)                                                            
     commodities  ($75,000) and additional  costs involved  with the                                                            
     free   and   reduced   meals   provided   daily   to   students                                                            
     ($1,000,000).                                                                                                              
                                                                                                                                
      Early Development, Child Care Assistance and Licensing                                                                  
     Approved a $3,873,500 and $1,717,000 increase in federal                                                                   
     receipt  authority to offer Child  Care Development  Fund money                                                            
     to low-income working families to help pay for local child                                                                 
     care.                                                                                                                      
                                                                                                                                
     Approved  a $3,000,000 increase in Inter-agency  (IA) Temporary                                                            
     Assistance  to Needy  Families (TANF)  receipts for Child  Care                                                            
     Assistance.                                                                                                                
                                                                                                                                
     Approved a $2,000,000 increase in federal receipt authority                                                                
     for Child Care Assistance.                                                                                                 
                                                                                                                                
     Early Development, Head Start Grants                                                                                     
     Recognized  a $3,783,000 increase  in federal receipts  for the                                                            
     expansion of the Head Start Program that will be available                                                                 
     directly to local Head Start managers.                                                                                     
                                                                                                                                
     Accepted a $100,000  Investment Loss Trust Fund (ILTF) increase                                                            
     for local Head Start Match.                                                                                                
                                                                                                                                
     Early Development, Special Programs                                                                                      
     Approved  a $100,000 increase in federal receipt  authority for                                                            
     Sequenced   Training  for  Early  Childhood  Professionals   in                                                            
     Alaska.                                                                                                                    
                                                                                                                                
     Approved  a  $475,000  increase  in IA  receipt  authority  for                                                            
     EvenStart grants (Family Literacy).                                                                                        
                                                                                                                                
     Requested the Department  of Education and Early Development to                                                            
     consider  the merits of the organizational  structure  proposed                                                            
     by the House and implement the appropriate changes.                                                                        
                                                                                                                                
     Education Support Services, District Support Services                                                                    
     Recommended  a  reappropriation  of K-12  Support  FY 01  lapse                                                            
     funds in the amount of $350,000 for a District Cost Study                                                                  
     (language section). This is a one-time cost.                                                                               
                                                                                                                                
     Commissions and Boards, Alaska State Council on the Arts                                                                 
     Approved an increment of $11,500, a 2.5 percent increase.                                                                  
                                                                                                                                
     Kotzebue Technical Center, Kotzebue Tech Operations Grant                                                                
     Eliminated  the General Fund  appropriation as directed  in the                                                            
     FY  00  Operating  Budget  Intent  Language.   This  vocational                                                            
     facility is eligible  and will receive funding under the Alaska                                                            
     Technical  and  Vocational Education  program,  established  in                                                            
     House Bill 289, Ch. 132, SLA 2000.                                                                                         
                                                                                                                                
     Alaska Vocational Technical Center                                                                                       
     Accepted  $634,200 increase in  Receipt Support Services  funds                                                            
     for  Rent  Receipts,   First  Alaskan  Foundation   Grant,  and                                                            
     Certified Nurse Assistance programs.                                                                                       
                                                                                                                                
     Mt. Edgecumbe Boarding School                                                                                            
     Approved  a  partial increment  request  for $131,100  for  the                                                            
     Dormitory Services and Management contracts.                                                                               
                                                                                                                                
     Alaska Library and Museums, Library Operations                                                                           
      Approved an $98,700 increment for the Gates Foundation                                                                    
     Project.                                                                                                                   
                                                                                                                                
     Alaska Library and Museums, Museum Operations                                                                            
      Approved a $40,400 increase of Museum Grants to provide                                                                   
     grants to local museums.                                                                                                   
                                                                                                                                
     Alaska Postsecondary Education Commission,                                                                               
     Student Loan Operations                                                                                                  
     Recommended  the acceptance of $250,000 from  Alaska Commission                                                            
     on  Postsecondary Education  (ACPE) Dividend  receipts  for the                                                            
     National   Guard  Continuing   Education   Benefits   (language                                                            
     section).                                                                                                                  
                                                                                                                                
     Alaska Postsecondary Education Commission,                                                                               
     Student Loan Operations.                                                                                                 
     Approved $63,100 increase in ACPE Dividend for increase costs                                                              
     for the Washington, Wyoming, Alaska, Montana, Idaho Medical                                                                
     Education Program (WWAMI).                                                                                                 
                                                                                                                                
Senator Wilken  outlined some outstanding  issues regarding  daycare                                                            
and qualifications  for  daycare  and transportation.  Although  the                                                            
transportation issue was  not a charge of this subcommittee, Senator                                                            
Wilken expressed  that support  of the  allocation of approximately                                                             
$50 million  be adopted  by the  Senate Finance  Committee to  fully                                                            
fund pupil transportation in the FY 02 budget.                                                                                  
                                                                                                                                
Senator Olson  commented that it certainly was troubling  to look at                                                            
withholding funding  from the Kotzebue Technical Center,  and he did                                                            
not see the  advantage in not funding  it, especially at  a location                                                            
where training for pipeline  jobs was available. Senator Olson added                                                            
that  he had not  been  involved in  earlier discussions  about  the                                                            
Technical  Center and would  like to know  what agreements  had been                                                            
made.                                                                                                                           
                                                                                                                                
Senator Wilken responded  he agreed about the programs the Technical                                                            
Center  offered  and gave  some  background  information  about  the                                                            
subcommittee discussions  on the University's Chukchi Campus and the                                                            
Kotzebue Technical Center.  He continued that the two facilities are                                                            
a short  distance  from  each other  and perhaps  the  two could  be                                                            
joined together  to operate  more efficiently  without jeopardizing                                                             
any programs.  He commented that there were a lot  of resources in a                                                            
small amount of  production and perhaps it could be  more effective.                                                            
He said that this was the  third year of discussions to advance this                                                            
theory.                                                                                                                         
                                                                                                                                
Senator Olson commented  that he was not sure "what deals were being                                                            
made," but he  did not see how the two could be combined  since they                                                            
has entirely different  focuses. He voiced that the  Chukchi College                                                            
had an academic  environment while  the Technical Center  focuses on                                                            
vocational  technical skills.  He said  that the  two entities  have                                                            
different goals.                                                                                                                
                                                                                                                                
Senator Wilken  answered that  he had been  part of the discussions                                                             
the Committee has had prior  to Senator Olson's participation on the                                                            
Finance Committee.  Senator Wilken  said he would be able  to review                                                            
the matter with Senator Olson.                                                                                                  
                                                                                                                                
Department of Fish and Game                                                                                                   
                                                                                                                                
Senator Kelly, Chair                                                                                                            
Senator Pearce                                                                                                                  
Senator Austerman                                                                                                               
Senator Hoffman                                                                                                                 
                                                                                                                                
Co-Chair Kelly reported  that the subcommittee came in approximately                                                            
$37,000  under  the   Senate  Majority  determined  allocation   and                                                            
recommended  the FY 02 funding for  the Department of Fish  and Game                                                            
at $30,719,000 in general  funds and $127,759,400 in total funds. He                                                            
continued that  this budget is an  increase of $372,000 over  the FY                                                            
01 budget and  $10,513,900 over the  FY 01 Authorized total  budget.                                                            
However, it  was a reduction of $275,000  in general funds  from the                                                            
Governor's requested FY 02 budget.                                                                                              
                                                                                                                                
Senator  Kelly continued  that  the  subcommittee fully  funded  the                                                            
Department's requests for  the Division of Commercial Fisheries, the                                                            
Division  of Sport  Fisheries, the  Division  of Subsistence,  State                                                            
Facilities  Maintenance,  and  the  Commercial  Fisheries  (Limited)                                                            
Entry Commission.  He noted  that the subcommittee  had also  funded                                                            
all second-year labor contracts.                                                                                                
                                                                                                                                
Senator  Kelly outlined  changes the  subcommittee  had made to  the                                                            
Governor's request:                                                                                                             
                                                                                                                                
     Wildlife Conservation                                                                                                    
     In the Conservation  and Reinvestment Act (CARA) Implementation                                                            
     component,  The Department requested $2,425,000  in new federal                                                            
     funding for  Conservation and Reinvestment Act  implementation.                                                            
     The subcommittee has  proposed funding of $1,510,000 along with                                                            
     intent  language requesting  that  the Department  of Fish  and                                                            
     Game  seek  approval  of  the  Legislative   Budget  and  Audit                                                            
     Committee   to  receive  and  expend  any  additional   federal                                                            
     receipts  in  the  event  Conservation   and  Reinvestment  Act                                                            
     funding is reauthorized in Congress.                                                                                       
                                                                                                                                
     Administration and Support                                                                                               
     In the Boards  of Fisheries and Game, the Department  requested                                                            
     an increment of $76,700  in general funds. The subcommittee has                                                            
     recommended  funding of $56,700 in general funds,  which equals                                                            
     the  amount  of the  reduction the  Boards  took in  the FY  01                                                            
     budget.                                                                                                                    
                                                                                                                                
     In  the  Advisory  Committees,   the Department   requested  an                                                            
     increment  of $45,000  in general funds.  The subcommittee  has                                                            
     recommended  funding of $15,000 in general funds,  which equals                                                            
     the  amount of the  reduction the Advisory  Committees  took in                                                            
     the FY 01 budget.                                                                                                          
                                                                                                                                
     Habitat                                                                                                                  
     In the Habitat  component, the Department increment  request of                                                            
     $225,000  in general  funds for  Oil and Gas  Permitting  & the                                                            
     Kenai River Center has been denied.                                                                                        
                                                                                                                                
Department of Community and Economic Development                                                                              
                                                                                                                                
Senator Kelly, Chair                                                                                                            
Senator Pearce                                                                                                                  
Senator Torgerson                                                                                                               
Senator Lincoln                                                                                                                 
                                                                                                                                
Senator Kelly explained  that the subcommittee recommended the FY 02                                                            
funding for the Department  of Community and Economic Development to                                                            
consist of  $41,767,300 in general  funds and $147,835,500  in total                                                            
funds.  He  stated that  this  budget  is an  increase  of  $266,500                                                            
general funds and $14,759,100  total funds over the FY 01 Authorized                                                            
Department of  Community and Economic Development  budget. He stated                                                            
the subcommittee  has reduced the  Department's request by  $454,800                                                            
in general funds.                                                                                                               
                                                                                                                                
Co-Chair Kelly said that the subcommittee fully funded the                                                                      
Department's requests for Executive Administration and                                                                          
Development, Municipal Revenue Sharing, Investments, the Alaska                                                                 
Aerospace Development Corporation (AADC), Alaska Industrial                                                                     
Development and Export Authority (AIDEA), Alaska Science and                                                                    
Technology Foundation (ASTF), Alaska Seafood Marketing Institute                                                                
(ASMI), Banking, Securities & Corporations, the Division of                                                                     
Insurance, Occupational Licensing, and Department of Community                                                                  
and Economic  Development State Facilities  Rent. He continued  that                                                            
the subcommittee  had also funded  all second-year labor  contracts.                                                            
He noted that the subcommittee had updated the Executive                                                                        
Administration  Support Cost Allocation  Plan at the request  of the                                                            
Department.                                                                                                                     
                                                                                                                                
Senator Kelly  listed the changes  the subcommittee had made  to the                                                            
Department's request as follows:                                                                                                
                                                                                                                                
     Community Assistance & Economic Development                                                                              
     In the Community and Business Development component, the                                                                   
     Department request of a fund source change of $99,800 from                                                                 
     Rural Development Initiative funds to general funds has been                                                               
     denied.                                                                                                                    
                                                                                                                                
     In the Community and Business Development component, the                                                                   
      Department request of $100,000 in general funds for an                                                                    
     Economic Development Administration planning grant has been                                                                
     denied.                                                                                                                    
                                                                                                                                
     In the Community and Business Development component, the                                                                   
     Department requested $35,000 in general fund program                                                                       
     receipts for Made In Alaska and other miscellaneous                                                                        
      increases. The subcommittee has recommended funding of                                                                    
     $20,000 in statutory designated program receipts for the                                                                   
     miscellaneous increases.                                                                                                   
                                                                                                                                
     In the Community and Business Development component, the                                                                   
     Department requested $20,000 in general fund program                                                                       
     receipts for the official state highway map. The                                                                           
      subcommittee has recommended full funding of $20,000 in                                                                   
     statutory designated program receipts.                                                                                     
                                                                                                                                
     Qualified Trade Association Contract                                                                                     
     In the Qualified Trade Association Contract, the                                                                           
      subcommittee has recommended a reduction of $200,000 in                                                                   
     general funds. This will still fund the Contract at                                                                        
     $4,600,000 which is still $100,000 in state funds higher                                                                   
     than the Millennium Plan calls for.                                                                                        
                                                                                                                                
     Investments                                                                                                              
     In Investments, the subcommittee has recommended funding of                                                                
     $43,000 in Rural Development Initiative Funds for                                                                          
     compensation for servicing loans. This is at the request of                                                                
     the department.                                                                                                            
                                                                                                                                
     Alaska Aerospace Development Corporation                                                                                 
     In the AADC Facilities Maintenance component, the                                                                          
     subcommittee has recommended that in place of the language                                                                 
     section, the AADC receive $9,000,000 in AERO Receipt                                                                       
     authority from launch activities in the numbers section of                                                                 
     the budget.                                                                                                                
                                                                                                                                
     Alaska Science and Technology Foundation                                                                                 
     In ASTF, the subcommittee has recommended that in place of                                                                 
     the language section, the ASTF receive $1,500,000 in ASTF                                                                  
      Funds for grants in the numbers section of the budget.                                                                    
                                                                                                                                
     AK Seafood Marketing Institute                                                                                           
     In ASMI, the subcommittee has recommended that in place of                                                                 
      the language section, ASMI receive $700,000 in receipt                                                                    
     supported services to match the FY 01 carryforward.                                                                        
                                                                                                                                
     Insurance                                                                                                                
     In Insurance Operations, the subcommittee has recommended an                                                               
     increment of $10,000 in receipt supported services for the                                                                 
     yearly dues of the National Conference of Insurance                                                                        
     Legislators.                                                                                                               
                                                                                                                                
     Regulatory Commission of Alaska (RCA)                                                                                    
     In the RCA, the Department requested $352,900 in RCA                                                                       
      receipts for seven positions to deal with the increased                                                                   
     workload. The subcommittee has recommended funding of                                                                      
     $277,200 in RCA receipts for five of those positions.                                                                      
                                                                                                                                
                                                                                                                                
Senator Leman asked if  Co-Chair Kelly could explain why the Tourism                                                            
budget  was $100,000  over  the Millennium  Plan,  and  was there  a                                                            
reason that this budget was not reducing as rapidly as targeted.                                                                
                                                                                                                                
Senator Kelly  responded that, even with $100,000,  the subcommittee                                                            
still came  in under the  spending limit agreed  upon by the  Senate                                                            
Majority.                                                                                                                       
                                                                                                                                
Senator Leman  queried "so  one year after  they agreed to  the plan                                                            
they have come back" claiming to be unable to follow the plan.                                                                  
                                                                                                                                
Co-Chair Kelly surmised this to be the case.                                                                                    
                                                                                                                                
Department of Health and Social Services                                                                                      
                                                                                                                                
Senator Green, Chair                                                                                                            
Senator Kelly                                                                                                                   
Senator Davis                                                                                                                   
Senator Therriault                                                                                                              
                                                                                                                                
Senator Green reported  the Department of Health and Social Services                                                            
budget "was  the largest single piece  of the state budget",  and it                                                            
was  "awe  inspiring".  She  commented  that  "100  percent  of  all                                                            
Alaskans' PFDs", would  "not pay for this budget". She informed that                                                            
the subcommittee  has presented a "very generous budget  and came in                                                            
right at our cap" with  a total budget of $470 million general funds                                                            
and  $1.2 billion  total funds,  an  increase of  approximately  $15                                                            
million in general funds and $100 million total funds.                                                                          
                                                                                                                                
Senator Green noted the  changes in the Senate subcommittee's budget                                                            
as  compared  to  the House  of  Representatives  FY  02  budget  as                                                            
follows:  the inclusion of  the Alaska  Housing Finance Corporation                                                             
(AHFC) money  for nurses' salaries  was included in the fast-track;                                                             
$200,000  in general  funds was  restored to  the public  assistance                                                            
field  services to  ensure  the maintenance  efforts  for  Temporary                                                            
Assistance  to Needy Families  (TANF); all  medical assistance  fund                                                            
money was properly shown  as a GF match; a $350,000 increase to fund                                                            
transcription  services to free up approximately 20%  of each social                                                            
workers' time;  funding of $700,000 for the Infant  Learning Program                                                            
(ILP) by  shifting money  from the alcohol  drug abuse grant  to the                                                            
infant program thereby  fully restoring that program.; and a $40,000                                                            
increment to fund one position in the Vital Statistics staff.                                                                   
                                                                                                                                
Senator  Green  noted  a request  for  $188,600  general  funds  for                                                            
Tobacco Prevention  and Control in  the Governor's request  that the                                                            
subcommittee  recommended   against  because  it  should  be  funded                                                            
through  the Tobacco Settlement  account instead  of general  funds.                                                            
She continued  that with further clarification, the  component could                                                            
be restored.                                                                                                                    
                                                                                                                                
Senator Green  informed that the subcommittee  approved five  of the                                                            
requested  seven  new positions  with  $100,000  general  funds  for                                                            
Community Health Emergency Service.                                                                                             
                                                                                                                                
Senator Green continued  that the subcommittee approved the transfer                                                            
approximately  $423,000 from Statutory  Designated Program  Receipts                                                            
to the Alaska Psychiatric Institute (API).                                                                                      
                                                                                                                                
Senator  Green explained  "the funding  for all  designated BRUs  is                                                            
transferred  to purchase  services, state  health services,  alcohol                                                            
and  drug abuse  services,  and  community  health grants  with  the                                                            
intent  of this  transfer to  place all  grants  in the competitive                                                             
grant line for  types of services to allow the Department  to better                                                            
match the  grant to  the ability  of the grantee  to generate  funds                                                            
from  alternative  sources  including Medicaid  and  direct  federal                                                            
grants."                                                                                                                        
                                                                                                                                
Senator Green  informed that the subcommittee learned  that "many of                                                            
our sites  across the state  are receiving  direct federal  grants,"                                                            
"Indian  Health Service money",  Medicaid  filings, and third  party                                                            
payments,   so  that   their  budgets   are   being  "supplemented"                                                             
significantly   above  state  funding.   She  explained   that  this                                                            
currently  benefits some  agencies,  but the  subcommittee felt  the                                                            
BRUs should  be reallocated  to assist smaller  rural programs  that                                                            
could benefit from additional funding.                                                                                          
                                                                                                                                
Senator  Green  continued   that  the  subcommittee   supported  the                                                            
following:  4 percent  reduction  in  funding to  Purchase  Services                                                            
Family Preservation; 8  percent reduction in funding to State Health                                                            
Services  Community Health  Grants; 2 percent  reduction in  funding                                                            
for Alcohol, Drug  and Abuse Services, a part of which  went to fund                                                            
the  ILP; $5,000  grant  to  help fund  front  line staff  in  rural                                                            
services programs, $3.25 million federal grant to Epidemiology.                                                                 
                                                                                                                                
Senator  Green  said that  the  Child  Protection  Legal  Assistance                                                            
Program was relocated to the Department of Administration.                                                                      
                                                                                                                                
Senator Green  shared that the subcommittee recommended  a 1 percent                                                            
decrease to the Governor's  request for Medicaid and emphasized that                                                            
the  roll  of Medicaid,  Welfare  and  associated  costs  should  be                                                            
seriously reviewed, as  they are "the driver" of increasing costs to                                                            
the  Health and  Social  Services  budget.  She continued  that  the                                                            
Medicaid  Taskforce was working  on how to  control these costs  and                                                            
alternative  ways   to  provide  health  care,  medical   care,  and                                                            
insurance more cost effectively.                                                                                                
                                                                                                                                
Senator Green said the  subcommittee also supports a request to fund                                                            
eleven different  rural medical providers  each with a minimum  of a                                                            
$200,000 grant to adequately staff their offices.                                                                               
                                                                                                                                
Senator Wilken asked Senator  Green if this ILP she spoke of was the                                                            
same one the Key Campaign spoke about on their recent visit.                                                                    
                                                                                                                                
Senator Green responded yes, that ILP had been funded with                                                                      
general fund money.                                                                                                             
                                                                                                                                
Senator  Hoffman  voiced  support  for  the funding  of  the  Infant                                                            
Learning Program,  but was concerned it received an  increase at the                                                            
expense  of  the Alcohol  and  Drug  Abuse programs.  He  urged  the                                                            
Committee  to rethink  the logic  of this  funding  since the  State                                                            
suffers from such rates of high alcohol and drug abuse.                                                                         
                                                                                                                                
Senator  Hoffman also asked,  regarding the  competitive grants,  if                                                            
there  had  been  a  reduction  in  past  grants  to  Anchorage  and                                                            
Fairbanks.                                                                                                                      
                                                                                                                                
Senator  Green  responded  no, that  Anchorage  and  Fairbanks  "are                                                            
competitive   grant  providers  themselves."   She  continued   that                                                            
Anchorage and  Fairbanks "receive a block grant" and  save the state                                                            
money because the state  does not have to evaluate those competitive                                                            
grants.                                                                                                                         
                                                                                                                                
Senator Hoffman concurred  that competitive grant providers save the                                                            
state money,  but so do  other non-profit  organizations. He  voiced                                                            
his concern that some groups  seem to be "punished for going out and                                                            
getting  additional federal  dollars." He  stated "the reduction  of                                                            
the past few grants and  only in Rural Alaska, does not seem fair to                                                            
me and then  putting them into one  BRU on a competitive  basis also                                                            
doesn't make sense."                                                                                                            
                                                                                                                                
Senator  Hoffman  reiterated that  this  "budget is  treating  Rural                                                            
Alaska  unfair" and  that having  no reduction  in  the urban  pass-                                                            
through programs  in Anchorage and Fairbanks puts  the "balancing of                                                            
this budget  on the backs of Rural  Alaska," and "at the  expense of                                                            
the alcohol and drug program."                                                                                                  
                                                                                                                                
Senator Green acknowledged  what Senator Hoffman had said, but said,                                                            
nonetheless,  in a competitive  grant process,  a grant has  just as                                                            
much potential  for additional funds  as a detriment. She  continued                                                            
that the funding in those  grant lines has been essentially the same                                                            
since  1981,  with perhaps  one  reduction.  She  noted that  it  is                                                            
difficult  to determine whether  an "arbitrary  figure was  there to                                                            
begin with"  or the  funding was  based on actual  costs. She  said,                                                            
however, that  the competitive grant  process allows for  new people                                                            
to come in  and compete, and assesses  no-growth programs.  She said                                                            
there is "interesting  information"  available on who has  been able                                                            
to attract new funding.                                                                                                         
                                                                                                                                
                                                                                                                                
SFC 01 # 57, Side B 10:52 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator Green continued  some groups have acquired sophistication in                                                            
their  funding endeavors  while other  groups have  not. She  voiced                                                            
concern that this imbalance should be addressed.                                                                                
                                                                                                                                
Senator Hoffman  said he  talked to the Chief  Executive Officer  of                                                            
the Yukon Kuskokwim  Health Corporation  who said that, as  a result                                                            
of these  program  cuts, there  would be  direct  cuts in  services.                                                            
Senator Hoffman  opined there would  be more reductions of  services                                                            
in rural  Alaska,  and he  felt the  whole state  should be  treated                                                            
equally.                                                                                                                        
                                                                                                                                
Senator   Green  explained   that  because   only  two  communities                                                             
(Anchorage  and Fairbanks)  oversaw  their own  grants, every  other                                                            
area in  the state  was in the  competitive grant  process and  were                                                            
subject to  the same scrutiny. She  expanded that through  the grant                                                            
process,  there could  be  some efficiencies  in  funding through  a                                                            
department or each BRU.                                                                                                         
                                                                                                                                
Senator  Hoffman remarked  that  all areas,  both  urban and  rural,                                                            
including Anchorage and  Fairbanks, should be in the same pool, with                                                            
"one  pot of  funds  and let  them  all compete  equally  for  those                                                            
dollars. That  would be fair, and then you would see  efficiencies".                                                            
                                                                                                                                
Office of the Governor                                                                                                        
                                                                                                                                
Senator Donley, Chair                                                                                                           
Senator Halford                                                                                                                 
Senator Kelly                                                                                                                   
Senator Olson                                                                                                                   
Senator Pearce                                                                                                                  
                                                                                                                                
Senator  Donley  said  that  the  Governor's  Office  budget  target                                                            
established by the Senate  Majority is $15,536,800 general funds and                                                            
the Senate  subcommittee's recommendation  is the same as  the House                                                            
of Representatives  recommendation.  He said the main issue  was how                                                            
to deal with $12.85  million in federal funds from  the Conservation                                                            
and  Reinvestment   Act  (CARA)  He   said  that,  like   the  House                                                            
subcommittee, the Senate  subcommittee recommended $100,000 of these                                                            
funds be designated  for the Governor's  Office for determining  how                                                            
to use the CARA money.                                                                                                          
                                                                                                                                
He continued  that the  Division of  Elections was  another area  of                                                            
focus. He explained  that since it  was not an election year,  there                                                            
was  a reduction  of  five temporary  positions  and  one full  time                                                            
position in the Human Rights  Commission, but there was the addition                                                            
of fourteen temporary  positions in Elections due  to redistricting.                                                            
                                                                                                                                
Senator Donley  stated that  a major change  in this budget  was the                                                            
transfer  of   the  International   Trade  and  Market  funding   of                                                            
approximately  $1  million,   from  the  Governor's  Office  to  the                                                            
Department of Community and Economic Development.                                                                               
                                                                                                                                
Legislature                                                                                                                   
                                                                                                                                
Senator Donley, Chair                                                                                                           
Senator Kelly                                                                                                                   
Senator Hoffman                                                                                                                 
Senator Pearce                                                                                                                  
Senator Halford                                                                                                                 
                                                                                                                                
Senator   Donley   said   the  subcommittee's    recommendation   of                                                            
$37,287,000 in general  funds for this budget is the same as that of                                                            
the House.  He informed that this  budget consisted of zero  federal                                                            
funds  and minor transfers  and  adjustments within  the budget.  He                                                            
detailed that  the largest of these adjustments was  the addition of                                                            
$250,000   of  receipts   to  Legislative   Audit  to  formalize   a                                                            
reimbursable  services   agreement  (RSA)  with  the  Department  of                                                            
Administration for auditing  executive branch agencies. He continued                                                            
that the next  largest one was the transfer of interagency  receipts                                                            
of  $60,000 in  Administrative  Services  for increased  print  shop                                                            
receipts.  He said the  subcommittee added  one permanent  full-time                                                            
position  to Administrative  Services  for data  processing and  one                                                            
equivalent  position for Legislative  Council.  He said there  was a                                                            
transfer of $11,000 for  dues increases for NTSL and Energy Council.                                                            
He summarized  that there were a few  other transfers that  are less                                                            
than $20,000.                                                                                                                   
                                                                                                                                
Co-Chair  Donley  announced  that  Senator  Leman's  report  on  the                                                            
Department  of  Natural  Resources,  and Senator  Ward  and  Senator                                                            
Austerman's committee reports would be heard the next day.                                                                      
                                                                                                                                
University of Alaska                                                                                                          
                                                                                                                                
Committee of the Whole                                                                                                          
                                                                                                                                
Co-Chair Donley presented  the close out of the University of Alaska                                                            
budget.  He informed  that the  Committee's recommendation  was  the                                                            
same as the House  recommendation of $193,500,000  in General Funds.                                                            
He said that within  the budget, the Committee recommended  a change                                                            
to the Legislative Intern  Program at the request of the University.                                                            
He  continued  that  the University  wished  to  remove  the  Intern                                                            
Program  as  a  line  item in  the  budget  to  be  instead  handled                                                            
internally. Co-Chair Donley  stated that the Committee supports that                                                            
request.                                                                                                                        
                                                                                                                                
Co-Chair  Donley clarified  that on  the FY  02 Senate Subcommittee                                                             
worksheet, under  University of Alaska Budget Reductions/Additions-                                                             
Systemwide,  General  Fund  column,  the  Committee  recommendation                                                             
amount would change  from $9,227,100 to $9,363,100.  Co-Chair Donley                                                            
shared that this  budget reflects a 5.08 percent increase  over last                                                            
year.                                                                                                                           
                                                                                                                                
Senator  Wilken   questioned  information  referring   to  the  Post                                                            
Secondary  Education allocation  of a $2  million dividend  that the                                                            
House  had  accepted,  but  that was  not  included  in  the  Senate                                                            
Committee  recommendations.  He  asked  how this  would  impact  the                                                            
overall increase the University would receive over FY 01.                                                                       
                                                                                                                                
Co-Chair Donley  replied the recommendation before  the Committee is                                                            
a $9.3 million general fund increase.                                                                                           
                                                                                                                                
Senator  Wilken said  he  hoped to  do more  for the  university  in                                                            
response to the  pleas of many people and University  President Mark                                                            
Hamilton's mission to make  it a "university system the state can be                                                            
proud of."                                                                                                                      
                                                                                                                                
Senator Green  made a motion  to adopt  the university subcommittee                                                             
report.                                                                                                                         
                                                                                                                                
Senator Austerman objected  to state for the record that he felt the                                                            
same  as  Senator  Wilken.  Senator   Austerman  said  he  plans  to                                                            
readdress  any concerns he  might have about  the University  budget                                                            
when the budget comes back before the Committee.                                                                                
                                                                                                                                
There were  no further  objections and  the University subcommittee                                                             
report was ADOPTED.                                                                                                             
                                                                                                                                
Co-Chair  Kelly  moved  to  adopt  the  other previously   discussed                                                            
subcommittee reports of that day.                                                                                               
                                                                                                                                
Co-Chair Donley  stated there being no objections,  the subcommittee                                                            
reports were ADOPTED.                                                                                                           
                                                                                                                                
Senator Wilken  provided the  information on  the four positions  in                                                            
the Alaska  Court System Budget that  Senator Leman had asked  about                                                            
earlier. He said the positions  consisted of one project manager for                                                            
the Mental Health Court  funded entirely by the Mental Health Trust,                                                            
and an attorney  and two paralegals for the Anchorage  pro se center                                                            
fully funded by Federal Funds.                                                                                                  
                                                                                                                                
Senator Wilken thanked  all of the people of the various departments                                                            
and his staff  who had worked hard, cooperatively,  and respectfully                                                            
with his subcommittees on the budgets.                                                                                          
                                                                                                                                
Co-Chair  Donley  thanked  the Committee  and  the staff  for  their                                                            
efforts on all the budgets.                                                                                                     

Document Name Date/Time Subjects