Legislature(2007 - 2008)SENATE FINANCE 532

04/12/2007 09:00 AM FINANCE


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09:09:37 AM Start
09:09:41 AM SB 61
09:54:52 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 61 SUPPLEMENTAL APPROPRIATIONS TELECONFERENCED
Heard & Held
+= HB 95 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Scheduled But Not Heard
+= HB 96 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Scheduled But Not Heard
Committee Amendments
+ Bills Previously Heard/Scheduled TELECONFERENCED
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                         April 12, 2007                                                                                       
                           9:09 a.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair  Lyman Hoffman  convened  the  meeting at  approximately                                                               
9:09:37 AM.                                                                                                                   
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
Senator Fred Dyson                                                                                                              
                                                                                                                                
Also  Attending:  TOM MAHER,  Staff  to  Co-Chair Hoffman;  JANET                                                             
CLARKE, Assistant Commissioner,  Finance and Management Services,                                                               
Department of  Health and Social Services;  EDDY JEANS, Director,                                                               
School Finance  and Facilities  Section, Department  of Education                                                               
and Early Development.                                                                                                          
                                                                                                                                
Attending  via  Teleconference:   There  were  no  teleconference                                                             
participants.                                                                                                                   
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB  61-SUPPLEMENTAL APPROPRIATIONS                                                                                              
                                                                                                                                
This was the  second hearing for this bill in  the Senate Finance                                                               
Committee. The Committee heard from  the Department of Health and                                                               
Social  Services  and  the  Department  of  Education  and  Early                                                               
Development. The bill was held in Committee.                                                                                    
                                                                                                                                
9:09:41 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 61                                                                                                         
     "An  Act   making  appropriations  for   qualified  regional                                                               
     seafood  development  associations,  for  investigation  and                                                               
     litigation  relating  to  the public  employees'  retirement                                                               
     system  and  the  teachers' retirement  system,  and  for  a                                                               
     special advisory  election; and  providing for  an effective                                                               
     date."                                                                                                                     
                                                                                                                                
                                                                                                                                
9:12:03 AM                                                                                                                    
                                                                                                                                
Co-Chair   Hoffman  introduced   the  Senate   Finance  Committee                                                               
substitute for SB 61 and identified an accompanying spreadsheet.                                                                
                                                                                                                                
9:12:36 AM                                                                                                                    
                                                                                                                                
TOM  MAHER,   Staff  to  Co-Chair  Hoffman,   informed  that  the                                                               
committee  substitute contained  new items  in addition  to items                                                               
previously reviewed  during hearings on  SB 61, the  "fast track"                                                               
supplemental appropriation bill, and  SB 83, the "time sensitive"                                                               
supplemental appropriation bill.                                                                                                
                                                                                                                                
Mr.  Maher noted  that  the funding  for  the Fairbanks  virology                                                               
laboratory   had  been   omitted  from   the  current   committee                                                               
substitute.   He  summarized   the  total   appropriation  amount                                                               
contained  in SB  61  as $1,006,893,600  in  general funds,  $21,                                                               
482,500 in  federal funds, and  $1,765,400 in other funds,  for a                                                               
total of $1,030,141,500.                                                                                                        
                                                                                                                                
Mr.  Maher  set forth  that  Section  1 of  the  bill  was a  new                                                               
appropriation  of  $1  billion  to be  deposited  in  the  public                                                               
education  fund. Those  monies were  "carryforward" dollars  from                                                               
the current fiscal year (FY), FY 07.                                                                                            
                                                                                                                                
9:14:54 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman remarked that this  appropriation was an attempt                                                               
to  "semi-save" funds  received  from the  Petroleum Profits  Tax                                                               
(PPT)  by depositing  them into  the public  education fund  as a                                                               
savings account. The  action had been initiated last  year by the                                                               
24th Legislature, and  would act to reassure the  public that the                                                               
State was not engaging in a "spending spree".                                                                                   
                                                                                                                                
9:16:15 AM                                                                                                                    
                                                                                                                                
Senator Dyson asked for a list  of the schools that could receive                                                               
funds  from this  deposit, specifically  whether charter  schools                                                               
would be eligible.                                                                                                              
                                                                                                                                
9:16:51 AM                                                                                                                    
                                                                                                                                
Mr. Maher responded that the  language in the bill was consistent                                                               
with  current statute  governing the  public education  fund, and                                                               
referred to a  "central correspondence school". He  was unsure if                                                               
such an  entity still existed,  but the language was  included to                                                               
conform to statute.                                                                                                             
                                                                                                                                
Senator Dyson  would research his  question before  the Committee                                                               
took action on the bill.                                                                                                        
                                                                                                                                
9:17:44 AM                                                                                                                    
                                                                                                                                
Mr. Maher reported  that Section 2(a) was  originally included as                                                               
Section 1  of SB 61,  and was a  tax "pass through"  for regional                                                               
seafood  development  corporations.  The $153  million  in  other                                                               
funds would be used for tax  assessments, and had been "left out"                                                               
of the budget the prior year.                                                                                                   
                                                                                                                                
9:18:21 AM                                                                                                                    
                                                                                                                                
Mr.  Maher relayed  that Section  2(b) of  the current  committee                                                               
substitute was  initially requested  in Section 1  of SB  83, and                                                               
would provide funding to the  Regulatory Commission of Alaska for                                                               
continued   litigation   efforts   before  the   Federal   Energy                                                               
Regulatory  Commission  (FERC).  The  supplemental  appropriation                                                               
amount for  FY 07 would  be $750,000, with $600,000  requested in                                                               
the  FY  08 regular  Operating  budget.  The Committee  opted  to                                                               
include the requested $600,000 in  the supplemental budget rather                                                               
than in  the FY  08 operating  budget and  to extended  the lapse                                                               
date associated  with the funds  to avoid a possible  increase in                                                               
fees.                                                                                                                           
                                                                                                                                
9:19:34 AM                                                                                                                    
                                                                                                                                
Mr.  Maher  spoke  to  Section   3(a)  of  the  bill,  originally                                                               
requested in  Section 1(c) of  SB 83, relating to  the Department                                                               
of Corrections  inmate health care costs.  The allocation totaled                                                               
$3,903,400, but  could be increased  by the  Palin Administration                                                               
as the  cost estimates were  in flux. Any additional  needs would                                                               
be funded in a "final appropriation bill".                                                                                      
                                                                                                                                
9:20:16 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  understood  the  Department  could  require  a                                                               
further $1 million in addition to this appropriation.                                                                           
                                                                                                                                
Mr. Maher affirmed.                                                                                                             
                                                                                                                                
9:20:27 AM                                                                                                                    
                                                                                                                                
Mr.  Maher  pointed  out  that  Section 3(b)  of  this  bill  was                                                               
incorporated  from  Section 1(d)  of  SB  83, and  would  provide                                                               
$1,082,700  to the  Anchorage Correctional  Complex to  assist in                                                               
addressing overpopulation issues.                                                                                               
                                                                                                                                
9:20:50 AM                                                                                                                    
                                                                                                                                
Mr. Maher explained that Section  4(a) was a new appropriation to                                                               
the  Department of  Health  and Social  Services,  Office of  the                                                               
Commissioner  in the  amount of  $2,315,000  for operating  costs                                                               
associated   with  implementing   the   recommendations  of   the                                                               
legislative  Medicaid  review  report.  This  multi-year  funding                                                               
would provide  for efforts from  2007 through 2009 to  obtain the                                                               
potential Medicaid savings identified in the review report.                                                                     
                                                                                                                                
9:22:09 AM                                                                                                                    
                                                                                                                                
JANET  CLARKE,  Assistant  Commissioner, Finance  and  Management                                                               
Services,  Department of  Health and  Social Services,  testified                                                               
that  she had  collaborated with  Jerry Fuller  of the  Office of                                                               
Program  Review  within the  Department  to  develop funding  and                                                               
execution plans  to implement the recommendations  in the Pacific                                                               
Health  Policy   Group  report.  She  directed   attention  to  a                                                               
memorandum from herself to the  Committee chairs, dated March 28,                                                               
2007  [copy  on  file],  and an  accompanying  one  page  summary                                                               
spreadsheet.                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  asked that  she  provide  an overview  of  the                                                               
projects associated with the Medicaid review report funding.                                                                    
                                                                                                                                
9:23:32 AM                                                                                                                    
                                                                                                                                
Ms.   Clarke  referred   members  to   the  spreadsheet   of  the                                                               
aforementioned memorandum,  and indicated that 13  projects would                                                               
be allocated funding under this appropriation.                                                                                  
                                                                                                                                
Co-Chair Hoffman clarified that the spreadsheet was located on                                                                  
the last page of memorandum. The spreadsheet depicted the                                                                       
following.                                                                                                                      
                                                                                                                                
     Project #: 1                                                                                                               
     Projects in Medicaid Report: Tiered Pharmacy Pricing                                                                       
     Who/How: DHSS-Internal                                                                                                     
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 0.0                                                                                                            
     Comment: No new resources needed                                                                                           
                                                                                                                                
     Project #: 2                                                                                                               
     Projects in Medicaid Report: Pharmacy Prior Authorization                                                                  
     Who/How: DHSS-Internal                                                                                                     
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 0.0                                                                                                            
     Comment: No new resources needed                                                                                           
                                                                                                                                
     Project #: 3                                                                                                               
     Projects in Medicaid Report: Level of Care controls in                                                                     
          Personal Care Assistant program                                                                                       
     Who/How: DHSS-Internal                                                                                                     
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 0.0                                                                                                            
     Comment: No new resources needed                                                                                           
                                                                                                                                
     Project #: 4                                                                                                               
     Projects in Medicaid Report: Alternate Reimbursement                                                                       
          Methodology for DD services                                                                                           
     Who/How: DHSS-Internal                                                                                                     
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 0.0                                                                                                            
     Comment: No new resources needed                                                                                           
                                                                                                                                
     Project #: 5                                                                                                               
     Projects in Medicaid Report: Implement Disease Management                                                                  
          Program                                                                                                               
     Who/How: DHSS-Internal                                                                                                     
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 80,000                                                                                                         
                                                                                                                                
     Project #: 6                                                                                                               
     Projects in Medicaid Report: Personal Care Assistant                                                                       
          Waivers                                                                                                               
     Who/How: DHSS-Internal                                                                                                     
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 0.0                                                                                                            
     Comment: No new resources needed                                                                                           
                                                                                                                                
     Project #: 7                                                                                                               
     Projects    in    Medicaid   Report:    Federal    Financial                                                               
          Participation in Pioneer Homes                                                                                        
     Who/How: DHSS-Contractor                                                                                                   
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 50,000                                                                                                         
                                                                                                                                
     Project #: 8                                                                                                               
     Projects in Medicaid Report: Address Wait List for DD                                                                      
          Services                                                                                                              
     Who/How: DHSS-Contractor                                                                                                   
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 20,000                                                                                                         
                                                                                                                                
     Project #: 9                                                                                                               
     Projects in Medicaid Report: Federal Funds Participation                                                                   
          for CAMA                                                                                                              
     Who/How: DHSS-Contractor                                                                                                   
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 20,000                                                                                                         
                                                                                                                                
     Project #: 10                                                                                                              
     Projects in Medicaid Report: Substance Abuse/Mental Health                                                                 
          Waiver                                                                                                                
     Who/How: DHSS-Contractor                                                                                                   
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 35,000                                                                                                         
                                                                                                                                
     Project #: 11                                                                                                              
     Projects in Medicaid Report: Long Term Care Planning                                                                       
     Who/How: DHSS-Contractor                                                                                                   
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 250,000                                                                                                        
     Comment: $50,000 GF already exists in DHSS                                                                                 
                                                                                                                                
     Project #: 12                                                                                                              
     Projects in Medicaid Report: Other Resources                                                                               
     Who/How: DHSS-Internal                                                                                                     
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 136,000                                                                                                        
     Comment: State coordination of project                                                                                     
                                                                                                                                
     Project #: 13                                                                                                              
     Projects in Medicaid Report: Increase Rural Providers                                                                      
          Federal Funds participation                                                                                           
    Comment: Estimates of costs provided by rural providers                                                                     
                                                                                                                                
     Projects in Medicaid Report: 13-a Managed Care                                                                             
     Who/How: Grant to ANTHC                                                                                                    
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 50,000                                                                                                         
                                                                                                                                
     Projects in Medicaid Report: 13-b Specific Service                                                                         
          Plan/Definitions                                                                                                      
     Who/How: Grant to ANTHC                                                                                                    
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 700,000                                                                                                        
                                                                                                                                
     Who/How: Additional Grant                                                                                                  
     Fiscal Year: FY07/08                                                                                                       
     Total Cost: 214,000                                                                                                        
     Comment: Grant to Regional Provider                                                                                        
                                                                                                                                
     Projects in Medicaid Report: 13-c Reimbursement methodology                                                                
     Who/How: Grant to ANTHC                                                                                                    
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 250,000                                                                                                        
                                                                                                                                
     Who/How: Additional Grant                                                                                                  
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 138,000                                                                                                        
     Comment: Grant to Regional Provider                                                                                        
                                                                                                                                
     Who/How: DHSS-Internal State                                                                                               
     Fiscal Year: FY07/08/09                                                                                                    
     Total Cost: 372,000                                                                                                        
                                                                                                                                
     TOTAL COSTS: 2,315,000                                                                                                     
     Comment: Costs to DHSS can be funded at 50% federal thru                                                                   
          Medicaid                                                                                                              
                                                                                                                                
     State General Fund costs: 1,132,500                                                                                        
                                                                                                                                
Ms. Clarke explained  that projects one through  four and project                                                               
six   could  be   accomplished   internally  without   additional                                                               
resources by utilizing existing staff.                                                                                          
                                                                                                                                
9:25:59 AM                                                                                                                    
                                                                                                                                
Ms. Clarke  informed that the  Disease Management Program  was an                                                               
innovative approach  that focused on disease  prevention. Alaska,                                                               
along with  many other states,  had made progress on  this front,                                                               
and the funding would allow for continued efforts.                                                                              
                                                                                                                                
9:27:01 AM                                                                                                                    
                                                                                                                                
Ms.  Clarke   spoke  to  the  seventh   project  listed,  Federal                                                               
Financial Participation in Pioneer  Homes. When the Pioneer Homes                                                               
were moved  into the Department  in FY 2004,  "extensive" efforts                                                               
were  exerted to  increase  Medicaid  participation for  eligible                                                               
Pioneer  Home  residents.  This  funding  would  assist  in  this                                                               
endeavor.                                                                                                                       
                                                                                                                                
9:27:53 AM                                                                                                                    
                                                                                                                                
Ms.  Clarke summarized  Project  #8, and  told  that the  funding                                                               
would support  the Department  in its goal  of reducing  the wait                                                               
list for those who receive  services to assist with developmental                                                               
disabilities (DD).                                                                                                              
                                                                                                                                
Ms.  Clarke informed  that the  ninth project  would examine  the                                                               
CAMA program to  possibly modify the State-funded  program into a                                                               
federally-funded Medicaid program.                                                                                              
                                                                                                                                
9:29:01 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman asked for a definition of the "CAMA" program.                                                                  
                                                                                                                                
Ms.  Clarke   defined  CAMA  as  the   Catastrophic  and  Medical                                                               
Assistance program, which provided  service for "very, very poor"                                                               
uninsured  individuals  with  chronic  conditions  who  were  not                                                               
Medicaid eligible.                                                                                                              
                                                                                                                                
Ms. Clarke told that Project  #10 would explore the potential for                                                               
federal  waivers relating  to substance  abuse and  mental health                                                               
expenditures.                                                                                                                   
                                                                                                                                
9:30:02 AM                                                                                                                    
                                                                                                                                
Ms.  Clarke set  forth that  Long Term  Care Planning,  listed as                                                               
Project #11,  was identified in  the Pacific Health  Policy Group                                                               
as  an  area that  could  be  eligible for  "significant  federal                                                               
dollars." The  request would fund  contractor support, and  is in                                                               
addition to  $50,000 currently in  the Department's  budget. This                                                               
project would likely result in  the largest "payoff" to the State                                                               
in terms of general fund savings.                                                                                               
                                                                                                                                
9:30:41 AM                                                                                                                    
                                                                                                                                
Ms.   Clarke   characterized    the   implementation   of   these                                                               
recommendations as  "comprehensive", and  noted that  the twelfth                                                               
request would  provide funds to  monitor the overall  progress of                                                               
the Medicaid plan.                                                                                                              
                                                                                                                                
9:31:12 AM                                                                                                                    
                                                                                                                                
Ms.  Clarke  explained  that Project  #13  addressed  prospective                                                               
savings  related  to rural  providers.  She  spoke to  the  three                                                               
subsections,  noting  that  grants  were included  for  both  the                                                               
Alaska  Native   Tribal  Health   Consortium  and   for  regional                                                               
providers.                                                                                                                      
                                                                                                                                
Ms. Clarke  informed that  the total amount  of this  request was                                                               
$2,315,000,  50  percent  of which  was  reimbursable  through  a                                                               
federal Medicaid administrative claim.                                                                                          
                                                                                                                                
9:33:33 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman commented  that  this was  a  "small amount  of                                                               
funds"  considering  the  growth  of the  Medicaid  and  Medicare                                                               
programs  in  recent  years,  and   the  continued  expansion  of                                                               
services to  eligible Alaskans. The  Pacific Health  Policy Group                                                               
study and  this subsequent  appropriation represented  an attempt                                                               
to control and manage costs.                                                                                                    
                                                                                                                                
9:34:39 AM                                                                                                                    
                                                                                                                                
Senator Olson  inquired regarding Project  #8, the DD  wait list,                                                               
and  asked  if the  Department  would  consider  the age  of  the                                                               
recipient.                                                                                                                      
                                                                                                                                
9:35:04 AM                                                                                                                    
                                                                                                                                
Ms.  Clarke  responded  that  the   wait  list  for  DD  services                                                               
currently  included people  who were  on wait  list for  Medicaid                                                               
services or not eligible for  those federally funded services due                                                               
to  current  screening requirements.  The  State  pays for  those                                                               
services through the use of  grants of general funds. For others,                                                               
such  as  children with  autism,  early  diagnosis and  treatment                                                               
could  improve their  prognosis.  It may  be  possible to  expand                                                               
Medicaid  eligibility  to   include  these  individuals,  thereby                                                               
reducing  general fund  expenditures.  The  project would  assist                                                               
Alaskans of all ages.                                                                                                           
                                                                                                                                
9:36:27 AM                                                                                                                    
                                                                                                                                
Mr.  Maher identified  Section 4(b)  as  Section 1(g)  of SB  83,                                                               
which would add language to  the Juneau Pioneer Home's allocation                                                               
to allow for  repair and replacement by adding  the word "repair"                                                               
to the section.                                                                                                                 
                                                                                                                                
9:37:09 AM                                                                                                                    
                                                                                                                                
Mr.   Maher  communicated   that   Section  5   was  an   amended                                                               
appropriation from SB 61 Section  2, and would pay the Department                                                               
of  Law  for investigatory  work  performed  in relation  to  the                                                               
State's  former actuary,  Mercer Human  Resource Consulting.  The                                                               
appropriation  was drawn  from the  Public Employees'  Retirement                                                               
System and the Teachers' Retirement System.                                                                                     
                                                                                                                                
9:37:58 AM                                                                                                                    
                                                                                                                                
Mr.  Maher stated  that Section  6  was incorporated  from SB  83                                                               
Section  1 (h)  through (m).  These proposed  appropriations were                                                               
requested by  the Governor, and  included a language  addition in                                                               
subsection  (g) relating  to  the Chitina  Personal  Use Dip  Net                                                               
Fishery.                                                                                                                        
                                                                                                                                
9:38:34 AM                                                                                                                    
                                                                                                                                
Mr. Maher spoke to Section  7, which had previously been included                                                               
in SB  61 as Section  3. This  allocation would provide  funds to                                                               
the Division  of Elections to  pay for costs associated  with the                                                               
April  3, 2007  special  advisory election.  The initial  funding                                                               
request was  for more than  $1 million,  but had been  revised to                                                               
$775,000.                                                                                                                       
                                                                                                                                
9:39:12 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  announced that the Committee  would discuss two                                                               
items  that were  not included  in SB  61. These  items were  the                                                               
Fairbanks  Virology  Laboratory  and  an  appropriation  for  the                                                               
Chenega Bay School.                                                                                                             
                                                                                                                                
Mr. Maher  informed that the  virology laboratory  had previously                                                               
been included  in another appropriation request,  and the funding                                                               
for the Chenega Bay School was a new consideration.                                                                             
                                                                                                                                
9:40:11 AM                                                                                                                    
                                                                                                                                
Ms. Clarke explained  that the Department had  requested as "time                                                               
sensitive"  in   SB  83  funding   for  cost  over-runs   in  the                                                               
construction  of  the  virology  laboratory.  The  Department  of                                                               
Health  and Social  Services was  informed by  the Department  of                                                               
Transportation  and   Public  Facilities  that  the   "notice  to                                                               
proceed" would  be withheld from  the contractor until  the total                                                               
necessary funding was provided.  When the Department learned that                                                               
the  funding  was not  included  in  the supplemental  budget,  a                                                               
conversation occurred  with the Department of  Transportation and                                                               
Public Facilities  regarding the cost  to delay the  project. The                                                               
Department of Transportation and  Public Facilities informed that                                                               
any delay past  May 1, 2007 would result in  an estimated cost of                                                               
$10,000 per  day. She  noted that an  estimate was  also provided                                                               
for a delay  into the next fiscal year, and  this information was                                                               
provided to the Committee in  a memorandum from the Department of                                                               
Health and  Social Services dated  April 11, 2007 [copy  on file]                                                               
distributed to Members previously that day.                                                                                     
                                                                                                                                
9:42:34 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  had not seen  that memorandum, and asked  for a                                                               
"break down" of the $10,000 per day delay cost quoted.                                                                          
                                                                                                                                
Ms.  Clarke  replied  that  the  quote  from  the  Department  of                                                               
Transportation  and Public  Facilities  was  not delineated,  the                                                               
cost  was based  on  the  assumption that  any  delay would  push                                                               
construction costs  into the winter  season, thus  requiring more                                                               
over-time expenses.                                                                                                             
                                                                                                                                
9:43:11 AM                                                                                                                    
                                                                                                                                
Ms. Clarke  clarified that the  contractor was prepared  to begin                                                               
construction, but had not yet  been given notice to proceed. This                                                               
predicament was the source of the delay costs.                                                                                  
                                                                                                                                
9:43:41 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman asked  if there  existed  "flexibility" in  the                                                               
contractual arrangement to avoid the delay costs.                                                                               
                                                                                                                                
Ms. Clarke  responded that  the Department  of Health  and Social                                                               
Services   would  have   to  confer   with   the  Department   of                                                               
Transportation  and Public  Facilities,  as  that department  was                                                               
managing the contract.                                                                                                          
                                                                                                                                
Co-Chair Stedman requested  information regarding the contractual                                                               
arrangement and the "bid documents".                                                                                            
                                                                                                                                
9:44:29 AM                                                                                                                    
                                                                                                                                
Ms. Clarke  shared knowledge of  "concern" within  the Department                                                               
of  Transportation  and  Public  Facilities  in  regards  to  the                                                               
funding for  the laboratory, and  informed that  the construction                                                               
schedule was "very tight".                                                                                                      
                                                                                                                                
9:45:09 AM                                                                                                                    
                                                                                                                                
Senator Elton asked if savings  could be achieved if construction                                                               
began prior to May 1, 2007.                                                                                                     
                                                                                                                                
Ms. Clarke  would research that  question with the  Department of                                                               
Transportation and Public Facilities.                                                                                           
                                                                                                                                
9:45:52 AM                                                                                                                    
                                                                                                                                
Senator Thomas asked  if Ms. Clarke received  an explanation from                                                               
the Department of Transportation and  Public Facilities as to why                                                               
the   virology   laboratory   funding  was   removed   from   the                                                               
supplemental appropriation bill.                                                                                                
                                                                                                                                
Ms. Clarke had received no such explanation.                                                                                    
                                                                                                                                
Senator Thomas furthered,  asking if the funding  referred to was                                                               
the ultimate request for the final stage of construction.                                                                       
                                                                                                                                
Ms.   Clarke  affirmed,   stating   that   the  current   request                                                               
represented the "final number".                                                                                                 
                                                                                                                                
9:46:50 AM                                                                                                                    
                                                                                                                                
Senator Olson  asked regarding penalties related  to construction                                                               
delays.                                                                                                                         
                                                                                                                                
Ms. Clarke  was unsure, but  would examine the question  with the                                                               
Department of Transportation and Public Facilities.                                                                             
                                                                                                                                
9:47:16 AM                                                                                                                    
                                                                                                                                
EDDY  JEANS, Director,  School  Finance  and Facilities  Section,                                                               
Department  of Education  and Early  Development, explained  that                                                               
the requested  funds were to be  used to replace the  roof of the                                                               
Chenega Bay School.  The repairs had already  been completed, but                                                               
the school district did not have  the funds to pay the contractor                                                               
for the work that was done,  thus the district was making monthly                                                               
interest  payments  to  the  contractor   in  anticipation  of  a                                                               
supplemental appropriation.                                                                                                     
                                                                                                                                
AT EASE 9:48:39 AM/9:53:12 AM                                                                                               
                                                                                                                                
Co-Chair Hoffman  concluded the  hearing on  SB 61.  He announced                                                               
that  the Committee  would take  action on  the bill  at a  later                                                               
time.                                                                                                                           
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyman Hoffman adjourned the meeting at 9:54:52 AM                                                                    

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