Legislature(1999 - 2000)

08/18/2000 02:15 PM House BUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                      JOINT COMMITTEE                                                                                           
                LEGISLATIVE BUDGET AND AUDIT                                                                                    
                      August 18, 2000                                                                                           
                         2:15 P.M.                                                                                              
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Gail Phillips, Chair                                                                                             
Representative Eric Croft                                                                                                       
Representative Gary Davis                                                                                                       
Representative Gene Therriault                                                                                                  
                                                                                                                                
Senator Randy Phillips, Vice Chair                                                                                              
Senator Rick Halford                                                                                                            
Senator Gary Wilken                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Con Bunde                                                                                                        
Representative Eldon Mulder (alternate)                                                                                         
                                                                                                                                
Senator Al Adams                                                                                                                
Senator Sean Parnell                                                                                                            
Senator Drue Pearce (alternate)                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
     APPROVAL OF MINUTES - April 26, 2000                                                                                       
     REVISED PROGRAM RECEIPTS                                                                                                   
     OTHER COMMITTEE BUSINESS                                                                                                   
     EXECUTIVE SESSION                                                                                                          
     AUDIT REPORTS                                                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
PAT HARTLEY, Legislative Assistant                                                                                              
     to Representative Gail Phillips                                                                                            
345 W. Sterling Highway, #102 B                                                                                                 
Homer, Alaska  99603                                                                                                            
Telephone:     (907) 235-2921                                                                                                   
                                                                                                                                
PAT DAVIDSON, Director                                                                                                          
Division of Legislative Audit                                                                                                   
State Office Building, Sixth Floor                                                                                              
Juneau, Alaska  99801                                                                                                           
Telephone:     (907) 465-3830                                                                                                   
POSITION STATEMENT:  Spoke to Audit Reports                                                                                     
                                                                                                                                
GINGER BLAISDELL, Fiscal Analysts                                                                                               
Division of Legislative Finance                                                                                                 
State Office Building, Sixth Floor                                                                                              
Juneau, Alaska 99811                                                                                                            
Telephone:     (907) 465-5432                                                                                                   
POSITION STATEMENT: Introduced the RPLs                                                                                         
                                                                                                                                
JEFF JESSE, Executive Director                                                                                                  
Alaska Mental Health Trust Authority                                                                                            
Department of Revenue                                                                                                           
        th                                                                                                                      
550 W. 7 Avenue, Suite #1820                                                                                                    
Anchorage, Alaska  99501                                                                                                        
Telephone:     (907) 269-7963                                                                                                   
POSITION STATEMENT: Spoke to RPL #02-1-0011                                                                                     
                                                                                                                                
JANET CLARKE, Director                                                                                                          
Division of Administrative Services                                                                                             
Department of Health and Social Services                                                                                        
PO Box 110650                                                                                                                   
Juneau, Alaska  99811-0650                                                                                                      
Telephone:     (907) 465-3082                                                                                                   
POSITION STATEMENT:  Spoke to RPL #06-1-0030                                                                                    
                                                                                                                                
GREG WOLF, Director                                                                                                             
Division of Trade and Development                                                                                               
Department of Community & Economic Development                                                                                  
          th                                                                                                                    
550 West 7 Street, Suite #1770                                                                                                  
Anchorage, Alaska  99501                                                                                                        
Telephone:     (907) 269-8115                                                                                                   
POSITION STATEMENT:  Spoke to RPL #08-1-0008                                                                                    
                                                                                                                                
JEFF BERLINER, Trade Specialist                                                                                                 
Division of Trade and Development                                                                                               
Department of Community & Economic Development                                                                                  
PO Box 110804                                                                                                                   
Juneau, Alaska  99811-0804                                                                                                      
Telephone:     (907) 465-3962                                                                                                   
POSITION STATEMENT:  Spoke to RPL #08-1-0008                                                                                    
                                                                                                                                
COL. MARK STIGAR, Aviation Officer                                                                                              
Alaska Army National Guard                                                                                                      
Department of Military and Veterans Affairs                                                                                     
PO Box 5800                                                                                                                     
Ft. Richardson, Alaska  99505-0800                                                                                              
National Guard Armory                                                                                                           
Telephone:     (907) 428-6900                                                                                                   
POSITION STATEMENT:  Spoke to RPL #09-1-0009                                                                                    
                                                                                                                                
ROBERT LOEFFLER, Director                                                                                                       
Division of Mining, Land and Water                                                                                              
Department of Natural Resources                                                                                                 
3601 C Street #800                                                                                                              
Anchorage, Alaska  99503-5935                                                                                                   
Telephone:     (907) 269-8600                                                                                                   
POSITION STATEMENT:  Spoke to RPL #10-1-4015                                                                                    
                                                                                                                                
KRAG JOHNSON                                                                                                                    
Denali Commission 2002 Work Plan                                                                                                
510 L Street #410                                                                                                               
Anchorage, Alaska   99501                                                                                                       
Telephone:  (907) 271-1413                                                                                                      
POSITION STATEMENT:  Update on the Denali Commission                                                                            
                                                                                                                                
BRAD PIERCE, Senior Policy Analyst                                                                                              
Office of Management and Budget                                                                                                 
Court Plaza Building                                                                                                            
240 Main Street #801                                                                                                            
Juneau, Alaska  99811-0020                                                                                                      
Telephone:(907) 465-4677                                                                                                        
POSITION STATEMENT:  Update on the Carlson Case                                                                                 
                                                                                                                                
STEPHEN WHITE, Assistant Attorney General                                                                                       
Natural Resources Division                                                                                                      
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, Alaska  99811-0300                                                                                                      
Telephone:(907) 465-3600                                                                                                        
POSITION STATEMENT:  Info on the Carlson Case Update                                                                            
                                                                                                                                
DALE ANDERSON, Staff                                                                                                            
     to Representative Eldon Mulder                                                                                             
Alaska State Legislature                                                                                                        
House of Representatives                                                                                                        
State Capitol, Room 507                                                                                                         
Juneau, Alaska  99801-1182                                                                                                      
Telephone:(907) 465-2647                                                                                                        
POSITION STATEMENT:  Update regarding the                                                                                       
                     Regional Board of School study.                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 00-6, Side A                                                                                                             
Number 0001                                                                                                                     
                                                                                                                                
CHAIR   GAIL  PHILLIPS   called   the  Joint   Committee   on                                                                   
Legislative Budget  and Audit meeting  to order at  2:15 p.m.                                                                   
on August  18, 2000.   Members present  at the call  to order                                                                   
were  Representatives Phillips,  Davis,  and Therriault,  and                                                                   
Senators  Phillips,  Halford   and  Wilken.    Representative                                                                   
Croft joined the Committee meeting later.                                                                                       
                                                                                                                                
APPROVAL OF MINUTES                                                                                                           
                                                                                                                                
CHAIR PHILLIPS noted that the first order of business would                                                                     
the approval of the minutes from the Legislative Budget and                                                                     
                                      th                                                                                        
Audit Committee meeting held April 26, 2000.                                                                                    
                                                                                                                                
SENATOR  PHILLIPS MOVED  approval  of the  minutes and  asked                                                                   
for  unanimous  consent.    There  being  NO  OBJECTION,  the                                                                   
minutes were approved and adopted.                                                                                              
                                                                                                                                
REVISED PROGRAMS (RPLs)                                                                                                       
                                                                                                                                
GINGER   BLAISDELL,   Legislative   Analysts,   Division   of                                                                   
Legislative   Finance,   (testified    via   teleconference),                                                                   
explained  the  RPLs  before the  Committee  for  review  and                                                                   
action.                                                                                                                         
                                                                                                                                
RPL Number:    02-1-0011                                                                                                      
                                                                                                                                
Department of Administration                                                                                                    
Rural Long Term Care Job Development                                                                                            
                                                                                                                              
$52.0 MHTAAR - Operating                                                                                                      
                                                                                                                                
GINGER  BLAISDELL stated  that  the requested  funding  would                                                                   
provide  for  a  continuation  of the  Rural  Long-Term  Care                                                                   
Workforce    Development    Project    begun    in    FY2000.                                                                   
Additionally,  the request  would  increase the  availability                                                                   
of qualified long-term care workers throughout the State.                                                                       
                                                                                                                                
JEFF JESSE,  Executive Director,  Alaska Mental Health  Trust                                                                   
Authority  (AMHTA), added  that the request  would move  some                                                                   
of  the FY00  Mental Health  authorized  receipts into  FY01.                                                                   
He  noted that  action had  occurred after  the trustees  had                                                                   
discussion  with the  Administration  regarding the  concern.                                                                   
Both  parties agreed  it would  be an  appropriate course  of                                                                   
action  to  develop  the program  for  rural  long-term  care                                                                   
systems.                                                                                                                        
                                                                                                                                
SENATOR  WILKEN noted  his support  for  continuation of  the                                                                   
program.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  THERRIAULT MOVED  to approve RPS  #02-1-0011.                                                                   
There being NO OBJECTION, RPL #02-1-0011 was adopted.                                                                           
                                                                                                                                
RPL Number:    06-1-0030                                                                                                      
                                                                                                                                
Department of Health and Social Services                                                                                        
CIP Ketchikan Juvenile Treatment Center                                                                                         
                                                                                                                                
$263.0 Statutory Designated Program Receipts (SDPR)                                                                           
          Capital Appropriation                                                                                               
                                                                                                                              
GINGER BLAISDELL  pointed out  the funding would  provide for                                                                   
the Department  of Health  and Social  Services, Division  of                                                                   
Juvenile Justice,  an allocation for capital  construction of                                                                   
the  Ketchikan Juvenile  Detention/Diagnostic  and  Treatment                                                                   
Center.  The  City of Ketchikan would provide  funds to cover                                                                   
all facility construction costs exceeding the estimates.                                                                        
                                                                                                                                
Ms.  Blaisdell noted  that the  Department of  Transportation                                                                   
and  Public  Facilities  required   contingency  money  which                                                                   
amounted to more  than the actual costs of  the construction.                                                                   
The City  of Ketchikan has agreed  that these funds  would be                                                                   
the last money spent on the project.                                                                                            
                                                                                                                                
JANET   CLARKE,   Director,    Division   of   Administrative                                                                   
Services,   Department  of   Health   and  Social   Services,                                                                   
explained that  all five bids  provided to the  Department of                                                                   
Transportation  and Public Facilities  for the facility  were                                                                   
in  excess of  the  cost estimator.    She  advised that  the                                                                   
Department of  Transportation and  Public Facilities  and the                                                                   
Department  of  Health  and Social  Services  had  taken  the                                                                   
following action to deal with that concern:                                                                                     
                                                                                                                                
     ·    Reduced the scope of the project, eliminating the                                                                     
          added alternate; and                                                                                                  
     ·    Contacted the City of Ketchikan, at which time,                                                                       
          the  City agreed to  provide the additional  needed                                                                   
          funding  plus  other   local  funds  to  allow  the                                                                   
          Department    of    Transportation    and    Public                                                                   
          Facilities to award the base bid.                                                                                     
                                                                                                                                
Ms.  Clarke continued,  approval of  the funds  is needed  in                                                                   
order that the  Department of Health and Social  Services can                                                                   
meet the  requirement that  the Department of  Transportation                                                                   
and Public  Facilities has for  a 10% contingency fund.   The                                                                   
funds are not currently available.                                                                                              
                                                                                                                                
SENATOR PHILLIPS  asked if the contribution made  by the City                                                                   
of Ketchikan  was  a direct contribution  or  if it had  been                                                                   
State funded.                                                                                                                   
                                                                                                                                
MS.  CLARKE understood  that  it  was a  direct  contribution                                                                   
from local  government.   She admitted  the possibility  that                                                                   
they  could  have received  some  revenue  sharing,  however,                                                                   
there was not  a direct appropriation made to  them that they                                                                   
"turned around and gave back to the State".                                                                                     
                                                                                                                                
REPRESENTATIVE  G. THERRIAULT warned  that no money  had been                                                                   
received from the  City of Ketchikan to date.   He questioned                                                                   
if they actually intended to spend any of their own money.                                                                      
                                                                                                                                
MS. CLARKE clarified  that the City of Ketchikan  had pledged                                                                   
the  required amount  through  local ordinances.   The  funds                                                                   
have not  yet been  expended because  the Department  has not                                                                   
yet begun  construction.  She  emphasized that it was  a real                                                                   
pledge.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  G.  DAVIS  asked   when  the  bids  had  been                                                                   
accepted and opened.                                                                                                            
                                                                                                                                
                                                    st                                                                          
MS. CLARKE responded  the bids were opened on June 1,   2000.                                                                   
She  noted  that   building  can  occur  all   year  long  in                                                                   
Ketchikan, as the winters tend to be mild.                                                                                      
                                                                                                                                
REPRESENTATIVE  G.   DAVIS  MOVED  to  adopt   the  requested                                                                   
funding.    There  being NO  OBJECTION,  RPL  #06-1-0030  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
RPL Number:    08-1-0008                                                                                                      
                                                                                                                                
Department of Community & Economic Development                                                                                  
Alaska-Russia Far East Project                                                                                                  
                                                                                                                                
$440,000 Federal - US Agency for International Development                                                                    
     (USAID) part 1 of a 2 part grant Total of $745,835                                                                     
                                                                                                                                
GINGER  BLAISDELL explained  that the  requested money  would                                                                   
be federal funds  made available by the United  States Agency                                                                   
for International  Development (USAID).  USAID  would provide                                                                   
funding  to the Division  of International  Trade and  Market                                                                   
Development   (DITMD)   for    Alaskan   projects   providing                                                                   
technical assistance for development in Sakhalin.                                                                               
                                                                                                                                
GREG  WOLF,  Director,  Division of  Trade  and  Development,                                                                   
Department  of Community  & Economic  Development,  commented                                                                   
that the Department  is seeking additional  receipt authority                                                                   
for the grant  to provide for continued funding  for projects                                                                   
in Sakhalin,  located in Russia.   He suggested  that raising                                                                   
Alaska's  profile in  that area  would be  beneficial to  the                                                                   
State.   Companies in  the oil and  gas industry  support the                                                                   
construction    and    are   actively    pursuing    business                                                                   
opportunities in  that area.   Funding would help  to further                                                                   
open the  doors for  Alaska development on  the island.   Mr.                                                                   
Wolf  emphasized  that  there  would be  no  State  financial                                                                   
match required by accepting this grant.                                                                                         
                                                                                                                                
REPRESENTATIVE  THERRIAULT  questioned  how the  $20,000  for                                                                   
personal services would be used.                                                                                                
                                                                                                                                
MR.  WOLF assumed  that it  would be  used for  unanticipated                                                                   
costs associated  with other projects  which the  Division is                                                                   
working  toward in  outside  areas.   He  clarified that  the                                                                   
funds would  allow the  Department to do  a "little  more" in                                                                   
outside projects.                                                                                                               
                                                                                                                                
In   response   to  Representative   Therriault,   Mr.   Wolf                                                                   
acknowledged   that  there   is   an  environmental   project                                                                   
occurring on  the island.   The project envisions  paying for                                                                   
actual  "out-of-pocket"   costs  and  consultants   going  to                                                                   
Sakhalin and  should be  defined based on  the needs  of that                                                                   
area.   He added that  it would be  a project of  the Alaska-                                                                   
Sakhalin  working  group,  which  would  be  comprised  of  a                                                                   
number  of committees.   The  Committees  on Energy,  Ecology                                                                   
and Training  developed the project.   It currently  is being                                                                   
narrowed down.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  G.   DAVIS  MOVED  to  adopt   the  requested                                                                   
funding for the Alaska-Russian Far East project.                                                                                
                                                                                                                                
SENATOR  PHILLIPS OBJECTED.   He suggested  that the  request                                                                   
should be funded through the private sector.                                                                                    
                                                                                                                                
MR.  WOLF  responded  that this  is  federal  funding  coming                                                                   
through   the   United  States   Agency   for   International                                                                   
Development  (USAID).   He stressed that  the private  sector                                                                   
does make  full-time contributions and  that there is  no in-                                                                   
kind funding required.                                                                                                          
                                                                                                                                
REPRESENTATIVE   G.  DAVIS  noted   that  he  supported   the                                                                   
request.   He  commented that  the funding  could help  place                                                                   
the  Russian government  in  an  operating status  to  manage                                                                   
that  type of  facility.   He  asked how  private  enterprise                                                                   
should  come  to  that  status.     Representative  G.  Davis                                                                   
suggested  that   it  would  be  a   government-to-government                                                                   
responsibility  and reminded  members of  the direct  benefit                                                                   
to Alaskans through the "marriage".                                                                                             
                                                                                                                                
JEFF  BERLINER,  Trade  Specialist,  Division  of  Trade  and                                                                   
Development,    Department    of   Community    &    Economic                                                                   
Development,  addressed the benefits  to the private  sector.                                                                   
The  Workforce  Development  Project  is a  follow-up  of  an                                                                   
earlier  USAID project,  which  established Sakhalin  College                                                                   
that  trains workers  in oil  field  skills.   Many of  those                                                                   
workers  have  been trained  in  Alaska.   The  benefits  are                                                                   
primarily  to  the Kenai  Peninsula,  bringing  approximately                                                                   
$300 million dollars  to the private sector.   The project is                                                                   
designed to  increase training  and provide more  involvement                                                                   
for Alaskan companies.                                                                                                          
                                                                                                                                
CHAIR PHILLIPS  asked if  non-approval  of the request  would                                                                   
affect the operations of Sakhalin College.                                                                                      
                                                                                                                                
MR.  BERLINER  replied  that   it  would  bring  all  of  the                                                                   
projects to  a halt.   The Sakhalin  Development Agency  is a                                                                   
project   establishing  an   agency   modeled  after   Alaska                                                                   
Industrial  Development  Export   Authority  (AIDEA).    That                                                                   
project is  currently half-finished.   There have  been other                                                                   
regions in Russia  that have requested similar  projects from                                                                   
Alaska.  Such a  project as this has the potential  to create                                                                   
the  first true  market economy  and  lending institution  in                                                                   
Russia, which could be a model for all Russian regions.                                                                         
                                                                                                                                
REPRESENTATIVE  THERRIAULT asked  if Representative  G. Davis                                                                   
had contacted the congressional staff regarding support.                                                                        
                                                                                                                                
MR. WOLF interjected  that the private sector  is also paying                                                                   
into the project.                                                                                                               
                                                                                                                                
SENATOR  PHILLIPS   reiterated  his  concern  if   there  was                                                                   
anything   prohibiting  the  private   sector  from   totally                                                                   
handling the concern.                                                                                                           
                                                                                                                                
MR.  BERLINGER   explained  that   the  first  part   of  the                                                                   
environmental project had been 100% privately funded.                                                                           
                                                                                                                                
A roll call  vote was taken on  the motion to adopt  RPL #08-                                                                   
1-0008.                                                                                                                         
                                                                                                                                
IN FAVOR:      Representatives G. Davis, Therriault, Croft,                                                                     
               Phillips                                                                                                         
               Senators Wilken, Halford                                                                                         
OPPOSED:       Senator Phillips                                                                                                 
                                                                                                                                
Representatives  Bunde  and  Mulder   and  Senators  Parnell,                                                                   
Adams, and Pearce were not present for the vote.                                                                                
                                                                                                                                
The MOTION PASSED (6-1).                                                                                                        
                                                                                                                                
RPL Number:    09-1-0009                                                                                                      
                                                                                                                              
Department of Military and Veterans Affairs                                                                                     
Centralized Billing Point for Medivac Missions                                                                                  
                                                                                                                                
$205.0   Statutory Designated Program Receipts (SDPR)                                                                         
          Operating                                                                                                           
                                                                                                                                
GINGER  BLAISDELL   stated  the  purpose  of   the  requested                                                                   
funding would  be for the  Alaska Army National  Guard (AANG)                                                                   
to gain  the ability  to receive  and expend  total costs  of                                                                   
medivac  missions through  the State  of Alaska's  accounting                                                                   
system.   She  noted  that  the process  is  administratively                                                                   
complex,  burdensome and  results  in payment  delays to  the                                                                   
aircrews and confusion  for the State and the  customer.  She                                                                   
suggested that the project could simplify the process.                                                                          
                                                                                                                                
Ms.  Blaisdell  acknowledged   concern  of  the  Division  of                                                                   
Legislative  Finance that the  increased authorization  would                                                                   
raise the apparent  size of that budget.  The  Division would                                                                   
like to see  that no administrative charge-backs  are charged                                                                   
against the  agency.  She noted  that the agency  has assured                                                                   
the  Division   that  those   costs  would   go  toward   the                                                                   
administrative  costs  to  the  Department  of  Military  and                                                                   
Veterans Affairs.   The benefit  would be a consolidation  of                                                                   
billings.                                                                                                                       
                                                                                                                                
COL.  MARK STIGAR,  Aviation  Officer,  Alaska Army  National                                                                   
Guard,   Department  of   Military   and  Veterans   Affairs,                                                                   
explained  that  the  National   Guard  has  been  trying  to                                                                   
streamline the  system for  the past year.   There  have been                                                                   
many delayed  payments  because of confusion  in the  billing                                                                   
systems.                                                                                                                        
                                                                                                                                
SENATOR HALFORD  asked about  typical medivac facilities  and                                                                   
equipment used.                                                                                                                 
                                                                                                                                
COL.  STIGAR   replied   that  the  National   Guard   is  in                                                                   
partnership  with  private  companies  in  the  Bethel  area.                                                                   
Many of  the villages do  not have instrument  approaches for                                                                   
helicopters.  The  primary reason that the National  Guard is                                                                   
involved is that no one else can get into those areas.                                                                          
                                                                                                                                
REPRESENTATIVE  THERIAULT  pointed  out  that  no  additional                                                                   
money was  being spent; however,  changes were being  made to                                                                   
how it flows through the system.                                                                                                
                                                                                                                                
REPRESENTATIVE  THERRIAULT MOVED  that the Committee  approve                                                                   
RPL #09-1-0009.  There being NO OBJECTION, it was approved.                                                                     
                                                                                                                                
RPL Number:    10-1-4015                                                                                                      
                                                                                                                              
Department of Natural Resources                                                                                                 
CIP-Abandoned Mine Lands Reclamation                                                                                            
                                                                                                                                
$882.0 Federal - Capital                                                                                                      
                                                                                                                              
GINGER BLAISDELL  commented that  the request would  amend an                                                                   
existing capital  project for the federally-funded  Abandoned                                                                   
Mine  Lands (AML)  Reclamation  program.   The funding  would                                                                   
allow the  FY99 federal grant  to be increased by  the amount                                                                   
not expended in earlier years.                                                                                                  
                                                                                                                                
ROBERT  LOEFFLER,  Director,  Division  of Mining,  Land  and                                                                   
Water, Department  of Natural  Resources, explained  that the                                                                   
Department of  Natural Resources  had received federal  funds                                                                   
for the reclamation  of an historic and abandoned  mine.  The                                                                   
grant was  used for the  private sector to provide  financing                                                                   
for primarily coal mines.                                                                                                       
                                                                                                                                
SENATOR PHILLIPS asked if some  of the funds had been used to                                                                   
pay the contractor in Palmer.                                                                                                   
                                                                                                                                
MR. LOEFFLER replied they had.   He added that there is still                                                                   
a  contract claim  pending following  the  completion of  the                                                                   
contracts, which will be forth coming soon.                                                                                     
                                                                                                                                
SENATOR PHILLIPS MOVED to adopt  RPL #10-1-4015.  There being                                                                   
NO OBJECTION, it was adopted.                                                                                                   
                                                                                                                                
RPL Number:    10-1-4022                                                                                                      
                                                                                                                                
Department of Natural Resources                                                                                                 
Division of Minerals, Land and Water Development                                                                                
Expedite Land Transfers                                                                                                         
                                                                                                                                
$30.0 Statutory Designated Program Receipts (SDPR)                                                                            
      Operating Budget                                                                                                        
                                                                                                                                
GINGER  BLAISDELL  noted  that  the  money  would  come  from                                                                   
municipalities to  expedite the processing for  land transfer                                                                   
requests.   During the 2000  Legislative Session, SB  283 was                                                                   
passed  and  addressed  land  disposals.    That  legislation                                                                   
changed  all the  statutory  designated  program receipts  to                                                                   
State land  funds.  She indicated  that fund was  intended to                                                                   
be used  for State  purposes, not  municipal monies  and that                                                                   
the funding needs to be replenished.                                                                                            
                                                                                                                                
REPRESENTATIVE  THERRIALUT  MOVED  to adopt  RPL  #10-1-4022.                                                                   
There being NO OBJECTION, it was adopted.                                                                                       
                                                                                                                                
OTHER COMMITTEE BUSINESS                                                                                                      
                                                                                                                                
DENALI COMMISSION                                                                                                               
                                                                                                                                
KRAG JOHNSON,  Denali Commission 2002 Work  Plan, highlighted                                                                   
what the  Denali Commission has  undertaken.   The Commission                                                                   
was established in 1998 to deliver  services from the federal                                                                   
government,  in a  cost-effective and  practicable manner  to                                                                   
communities throughout rural Alaska.                                                                                            
                                                                                                                                
To  date  the  Commission  has   received  approximately  $20                                                                   
million dollars  with additional  appropriations expected  to                                                                   
be coming from  the Trans-Alaska Pipeline Liability  Fund for                                                                   
bulk  fuel in  the amount  of $10  million dollars.   In  the                                                                   
first  two years,  the  Commission received  a  total of  $60                                                                   
million dollars  and over $50 million dollars  were obligated                                                                   
to the  bulk fuel and power  generation needs  throughout the                                                                   
State.                                                                                                                          
                                                                                                                                
SENATOR  HALFORD  asked  if  additional  generation  capacity                                                                   
would be put in place.                                                                                                          
                                                                                                                                
MR. JOHNSON responded that the  bulk fuel storage program was                                                                   
only  one  portion   of  the  construction  package   of  the                                                                   
facilities.   He  noted  that $10  million  dollars had  been                                                                   
directly  dedicated to  bulk fuel  of which  the majority  of                                                                   
that  money  would  be  used to  up-grade  the  fuel  storage                                                                   
capacity in rural Alaska.                                                                                                       
                                                                                                                                
Mr.  Johnson spoke  to  other areas  of  involvement such  as                                                                   
training  and  economic  development.    The  Commission  was                                                                   
dedicated to  provide training  needs to local  residents for                                                                   
the construction  and operation  of jobs  that go along  with                                                                   
the projects.  Ten percent of  the funding has been allocated                                                                   
to go for the training needs.                                                                                                   
                                                                                                                                
Mr. Johnson pointed out that the  Commission is investigating                                                                   
economic  development   opportunities.  The   only  committed                                                                   
project to date is a $500 thousand  dollar mini-grant program                                                                   
to the Department of Community & Economic Development.                                                                          
                                                                                                                                
CHAIR PHILLIPS  supported the Denali Commission  not assuming                                                                   
a "hard line" stance on policy.                                                                                                 
                                                                                                                                
(Tape Change, LBA 00-6, Side 2).                                                                                              
                                                                                                                                
MR.  JOHNSON explained  that the  Commission is  "struggling"                                                                   
with   numerous   requests   for   assistance   in   economic                                                                   
development.   The  Commission  anticipates  to obligate  the                                                                   
entire amount.   He noted that construction had  begun on the                                                                   
 st                                                                                                                             
1   project  and that  FY  2000  funds have  been  obligated.                                                                   
Following the  first year construction funding  of the Alaska                                                                   
Energy Authority (AEA), the Commission  decided to review the                                                                   
processes.     He  acknowledged   the  request  to   have  an                                                                   
independent, outside review or  audit of the fund handling at                                                                   
the community level.                                                                                                            
                                                                                                                                
Mr. Johnson  added that  Representative Morgan had  requested                                                                   
an audit of the  Division of Energy.  He believed  that could                                                                   
be tied into what currently has been undertaken.                                                                                
                                                                                                                                
Mr. Johnson  addressed the Commission's federal  agency work.                                                                   
In an  effort to  coordinate and  deliver federal  resources,                                                                   
the Commission is closely working  with the State and federal                                                                   
agencies.   In the  future, the  Commission will continue  to                                                                   
work  with various  energy  programs  and the  Alaska  Energy                                                                   
Authority,  Division   of  Energy.     Senator  Stevens   was                                                                   
successful   in  securing   $10  million   dollars  for   the                                                                   
Commission   to  directly  appropriate   for  health   clinic                                                                   
construction.                                                                                                                   
                                                                                                                                
At  present,  what  remains  in the  budget  is  $30  million                                                                   
general appropriation  dollars for the Commission's  efforts,                                                                   
$10  million  dollars  for  the   health  clinic  facilities,                                                                   
leaving an additional $10 million dollars.                                                                                      
                                                                                                                                
Mr. Johnson  noted that member's  packets included a  copy of                                                                   
the FY2002 work plan.  He urged  members to review the packet                                                                   
and provide comments.                                                                                                           
                                                                                                                                
CHAIR  PHILLIPS  asked  the response  received  from  Senator                                                                   
Stevens regarding work done by the Commission.                                                                                  
                                                                                                                                
MR. JOHNSON  responded that Senator  Stevens had  approved of                                                                   
the general direction  taken by the Commission.   He spoke to                                                                   
federal funds, which the Commission  could expect to receive,                                                                   
and  what  the  Commission  should do  to  "fit"  into  those                                                                   
system-area  needs.   Thus  concluded  the testimony  by  the                                                                   
Denali Commission.                                                                                                              
                                                                                                                                
CARLSON VERSUS STATE OF ALASKA CASE                                                                                             
                                                                                                                                
BRAD PIERCE, Senior Policy Analyst,  Office of Management and                                                                   
Budget, spoke  to developments  in the Donald  Carlson versus                                                                   
the State  of Alaska  case.   He noted  that the  case was  a                                                                   
class action  lawsuit by a non-resident  commercial fisherman                                                                   
over the license fee differential  charged by the State.  The                                                                   
suit was  brought forward  in 1986.   The  period of  time of                                                                   
that case is 1984 to present.                                                                                                   
                                                                                                                                
A ruling  was provided  in June  2000.   He noted that  Steve                                                                   
White is  the lead attorney on  that case and  requested that                                                                   
he testify at this time.                                                                                                        
                                                                                                                                
STEPHEN WHITE, Assistant Attorney  General, Natural Resources                                                                   
Division, Department  of Law, advised that the  case had been                                                                   
before  the Alaska  Supreme Court  twice in  the last  month.                                                                   
The Court  ruled in 1996, giving  both sides a formula  to be                                                                   
used  to  determine  the  permissible  difference  between  a                                                                   
resident and non-resident limited  entry permit.  The formula                                                                   
takes  the State's  expenditures for  commercial fishing  and                                                                   
divides it by the number of people  in Alaska, then multiples                                                                   
that number by  the percentage of the budget  coming from oil                                                                   
revenues.   The formula provides  a dollar figure,  resulting                                                                   
in  the  additional  amount  that  can  be  charged  to  non-                                                                   
residents for their fishing licenses.                                                                                           
                                                                                                                                
Mr. White continued, an uncertain  part of the formula is the                                                                   
annual  fisheries budget,  which  is a  variable number  each                                                                   
year supporting  commercial fishing.   The State  developed a                                                                   
method and approach for identifying  those commercial-fishing                                                                   
expenditures.    The  trial clarified  that  portion  of  the                                                                   
formula.                                                                                                                        
                                                                                                                                
Mr. White advised  that the State had presented  to the Court                                                                   
six  different components  and legitimate  ways of  measuring                                                                   
commercial fishery costs to the  State.  The judge ruled that                                                                   
only  two  of  those components  could  be  allowed  in  that                                                                   
formula.  Additionally, the State  used the figures from FY96                                                                   
to illustrate  the various  budget components. Only  allowing                                                                   
two components,  the permissible differential was  reduced to                                                                   
$155 dollars for that year.  He  stressed the amount does not                                                                   
capture the necessary fees.                                                                                                     
                                                                                                                                
Mr.  White continued,  following  that  trial,  the State  of                                                                   
Alaska asked  the Entry  Commission to  take the result  from                                                                   
the Court and  calculate what the potential  refunds would be                                                                   
for FY96.  He acknowledged that  there is some uncertainty in                                                                   
how to  calculate refunds  and the  interest associated  with                                                                   
those  amounts.  The  range of  refunds for  that year  alone                                                                   
amount to $1.2 to $1.8 million  dollars.  The next step would                                                                   
be to identify  the legal issues surrounding  the calculation                                                                   
of refunds.  He  noted that the State would  be appealing the                                                                   
decision;  however, he  believed  that the  action would  not                                                                   
happen for  another year or so.   Mr. White pointed  out that                                                                   
there are approximately  11,000 non-residents that  paid fees                                                                   
in the last sixteen years, and  who create the "class action"                                                                   
suit.   The  State of  Alaska  had requested  that the  judge                                                                   
limit the recovery to only those  plaintiffs named instead of                                                                   
the entire class.  The judge did rule against that request.                                                                     
                                                                                                                                
MR. PIERCE  added,  since there  is a formula,  the State  of                                                                   
Alaska's  Department of  Law has proposed  that the  Governor                                                                   
write legislation to indicate  "good faith" to the Court, and                                                                   
which the  State would attempt  to live within.   He reminded                                                                   
members that the "meter is running" on the action pending.                                                                      
                                                                                                                                
REGIONAL BOARD OF SCHOOL                                                                                                        
VOCATIONAL EDUCATION UPDATE                                                                                                     
                                                                                                                                
DALE ANDERSON,  Staff, Representative Eldon  Mulder, provided                                                                   
an   update   on   the  regional   school   study   and   the                                                                   
accomplishments it  has achieved.  He identified  110 schools                                                                   
in the State of  Alaska, which in the last  twelve years have                                                                   
averaged less than six high school students.                                                                                    
                                                                                                                                
CHAIR  PHILLIPS explained  that  the Legislative  Budget  and                                                                   
Audit Committee  had been tasked  by House Finance  Committee                                                                   
to   provide   a  statewide   task   force   to   investigate                                                                   
consideration of  regional boarding high schools.   She noted                                                                   
that  the  information  provided  by  Mr.  Anderson  was  the                                                                   
beginning of that process.                                                                                                      
                                                                                                                                
MR. ANDERSON  explained that objectives had  been established                                                                   
focusing the analysis for the  study.  He noted that member's                                                                   
packets contained  a scope of  ideas from sources  throughout                                                                   
the  State  and  that  all  of   the  110  schools  had  been                                                                   
identified.  A statewide questionnaire  has been sent out and                                                                   
some responses  have been  received back.   The  distribution                                                                   
was mailed  in early  August to  all education  associations,                                                                   
superintendents,   principals,   legislators   and   thirteen                                                                   
regional corporations.                                                                                                          
                                                                                                                                
REPRESENTATIVE  G. DAVIS questioned  the connection  with the                                                                   
"vocational" aspect of the material.                                                                                            
                                                                                                                                
MR. ANDERSON  explained that the  boarding school  concept is                                                                   
the basic schooling  program being considered.   Within that,                                                                   
many  varying "tracks"  could  be taken  such as  vocational,                                                                   
technical  or college  prep programs  and  he suggested  that                                                                   
there are varying opportunities at each site.                                                                                   
                                                                                                                                
REPRESENTATIVE  CROFT   pointed  out  that  Kodiak   was  not                                                                   
mentioned  in  the   report.    He  asked  if   it  had  been                                                                   
considered.                                                                                                                     
                                                                                                                                
CHAIR  PHILLIPS mentioned  that  there are  requests at  this                                                                   
time from Kodiak, St. Mary's,  Bethel, Seldovia, and a number                                                                   
of   other   places   throughout   the   State.   Since   the                                                                   
questionnaire  has been  distributed,  there  have been  many                                                                   
additional  requests   received  in  hopes   of  revitalizing                                                                   
programs which were  in place in the past.   Mt. Edgecumbe is                                                                   
currently the only boarding school  operating in the State at                                                                   
this time.                                                                                                                      
                                                                                                                                
SENATOR HALFORD  believed that this  was a good project.   He                                                                   
questioned how to generate local  support in order to get the                                                                   
project to work.                                                                                                                
                                                                                                                                
REPRESENTATIVE  CROFT agreed  that it  would be difficult  to                                                                   
decide in which villages the schools should be located.                                                                         
                                                                                                                                
CHAIR PHILLIPS  noted  that there would  be several  criteria                                                                   
used in determining the location.                                                                                               
                                                                                                                                
     ·    Good transportation system;                                                                                           
     ·    Public safety; and                                                                                                    
     ·    Health facilities.                                                                                                    
                                                                                                                                
REPRESENTATIVE  THERRIAULT   noted  that  "regional"   should                                                                   
indicate  that the  State wants  the opportunities  disbursed                                                                   
throughout the State; however,  he thought that there need to                                                                   
be boundary exceptions.   He foresaw that "control"  would be                                                                   
another big issue.                                                                                                              
                                                                                                                                
EXECUTIVE SESSION                                                                                                             
                                                                                                                                
SENATOR PHILLIPS  made a motion, in accordance  with Title 24                                                                   
and  44, to  move to  Executive  Session for  the purpose  of                                                                   
discussing  audit  reports  which are  held  confidential  by                                                                   
law.   There  being  NO OBJECTION,  the  Committee went  into                                                                   
Executive Session at 3:32 P.M.                                                                                                  
                                                                                                                                
CHAIR  PHILLIPS  requested  that  Pat  Davidson  (Legislative                                                                   
Auditor)  and  Pat  Hartley  (Legislative  Budget  and  Audit                                                                   
Legislative Assistant) attend the Executive Session.                                                                            
                                                                                                                                
The Committee resumed Open Session at 3:55 P.M.                                                                                 
                                                                                                                                
(Tape Change, LBA 00-7, Side 1).                                                                                              
                                                                                                                                
AUDIT REPORTS                                                                                                                 
                                                                                                                                
SENATOR PHILLIPS  MOVED that the  first four final  audits on                                                                   
the agenda be released to the public:                                                                                           
                                                                                                                                
     ·    OG/Alaska Human Rights Commission                                                                                     
     ·    DEED/DLWD - Little Davis Bacon Act                                                                                    
     ·    DCED/AEA/AIDEA - 4 Dam Pool                                                                                           
    ·    DFG/Board of Fish - Some Operational Practices                                                                         
                                                                                                                                
There  being  NO  OBJECTION,   the  four  final  audits  were                                                                   
released to their respective Departments for public view.                                                                       
                                                                                                                                
SENATOR PHILLIPS  MOVED that  the final  audit on the  agenda                                                                   
be released to the public:                                                                                                      
                                                                                                                                
     ·    Statewide Single Audit for FY99                                                                                       
                                                                                                                                
PAT  DAVIDSON,  Director,  Division   of  Legislative  Audit,                                                                   
advised that the  agencies would have twenty  days to respond                                                                   
to that  audit.  She  suggested that  once all the  responses                                                                   
had been received,  the Legislature should release  a copy of                                                                   
the  report  to   Committee  members;  if  no   objection  is                                                                   
received  within   seven  days,  then  the  audit   would  be                                                                   
released to the public.                                                                                                         
                                                                                                                                
There being NO  OBJECTION, the final audit on  the agenda was                                                                   
approved.                                                                                                                       
                                                                                                                                
AUDIT REQUEST                                                                                                                 
                                                                                                                                
PAT DAVIDSON  stated that  the Committee  had received  three                                                                   
new requests as  well as one established  through legislation                                                                   
passed  in 1996.   That request  was for  a compliance  audit                                                                   
for  an obligation  under the  first amendment  of the  North                                                                   
Star Unit Police Department.                                                                                                    
                                                                                                                                
The  second  audit  request was  submitted  by  Senator  John                                                                   
Torgerson  to  look  into  the   Statewide  Training  Program                                                                   
(STEP)   in  the   Department   of  Labor   and  Work   Force                                                                   
Development.                                                                                                                    
                                                                                                                                
Additionally,  a  request  was  submitted  by  Representative                                                                   
Carl Morgan  to audit what use  to be the Division  of Energy                                                                   
(DOE)  and   its  current  placement  in   Alaska  Industrial                                                                   
Development and Export Authority (AIDEA).                                                                                       
                                                                                                                                
The  final  audit request  was  submitted  by  Representative                                                                   
Jeannette  James  to  investigate   the  Division  of  Senior                                                                   
Services,  specifically,  payment  for  the  assisted  living                                                                   
programs.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  THERRIAULT  questioned  the  reason  for  the                                                                   
audit submitted by Representative Morgan.                                                                                       
                                                                                                                                
MS.   DAVIDSON  explained   that  there   had  been   concern                                                                   
expressed about movement  of the Division of  Energy from the                                                                   
Department  of Community  and  Regional Affairs.   Since  the                                                                   
move,  there   has  been  a   significant  amount   of  staff                                                                   
turnover.  The  audit would investigate what  the effects are                                                                   
and  determine  if  AEA  could better  meet  its  mission  if                                                                   
placed in a different agency.                                                                                                   
                                                                                                                                
SENATOR WILKEN  referenced the  audit regarding the  assisted                                                                   
living  rates.   He  asked if  there  had been  reference  to                                                                   
personal care attendants and how they are being to be paid.                                                                     
                                                                                                                                
MS. DAVIDSON  replied that  the audit  request was  addressed                                                                   
to the concern  over delayed payments in the  Assisted Living                                                                   
Program.   It  does  not limit  the  types  of payment  being                                                                   
distributed;  however,  the  focus   of  the  request  is  to                                                                   
determine how quickly  the agency is getting  payments out to                                                                   
the providers.                                                                                                                  
                                                                                                                                
SENATOR   WILKEN   noted   that   he   would   request   that                                                                   
Representative  James  consider   adding  how  personal  care                                                                   
attendants are paid  and the overhead taken  before the funds                                                                   
are distributed.                                                                                                                
                                                                                                                                
REPRESENTATIVE  G.  DAVIS MOVED  to  approve the  four  audit                                                                   
requests.  There being NO OBJECTION, they were approved.                                                                        
                                                                                                                                
MS.  DAVIDSON pointed  out  that the  Division  of Audit  had                                                                   
received    some    correspondence   about    a    particular                                                                   
individual's   case  and   whether  it   was  covered   under                                                                   
workman's compensation.   She noted that she  had been making                                                                   
inquiries regarding  that concern and had not  yet compiled a                                                                   
request or determined  what the objectives of  that would be.                                                                   
She recommended it could be handled "in-house".                                                                                 
                                                                                                                                
REPRESENTATIVE  THERRIAULT  voiced  caution  in  turning  the                                                                   
Legislative Budget  and Audit  Committee into an  ombudsman's                                                                   
office.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  G. DAVIS questioned  if there was  "room" for                                                                   
an   audit   consideration  given   to   statewide   computer                                                                   
purchases and  networking organizations.   He noted  that the                                                                   
Office  of  the  Governor  had   distributed  a  request  for                                                                   
telecommunication  services  stressing the  technicalness  of                                                                   
that field.   He questioned  the impact that  computerization                                                                   
of State government will entail.                                                                                                
                                                                                                                                
MS. DAVIDSON noted  that if there was interest,  Karen Morgan                                                                   
from Information  Technology Group (ITG) could  be invited to                                                                   
discuss the  scope of  such a request.   Members  agreed that                                                                   
would be beneficial.                                                                                                            
                                                                                                                                
CHAIR PHILLIPS noted that Ms. Morgan's presentation could                                                                       
be added to one of the following meeting agendas.                                                                               
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
CHAIR PHILLIPS adjourned the meeting at 4:10 P.M.                                                                               

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