Legislature(1999 - 2000)

12/06/2000 01:15 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                                                                                    
                      December 6, 2000                                                                                          
                         1:15 P.M.                                                                                              
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Gail Phillips, Chair                                                                                             
Representative Con Bunde                                                                                                        
Representative Eric Croft                                                                                                       
Representative Gary Davis (via teleconference)                                                                                  
Representative Gene Therriault (via teleconfernece)                                                                             
Representative Eldon Mulder (alternate-via teleconfernece)                                                                      
                                                                                                                                
Senator Randy Phillips, Vice Chair                                                                                              
Senator Sean Parnell (via teleconfernece)                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Al Adams                                                                                                                
Senator Rick Halford                                                                                                            
Senator Gary Wilken                                                                                                             
Senator Drue Pearce (alternate)                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
                                      th                                                                                        
     APPROVAL OF MINUTES - October 27, 2000                                                                                     
     REVISED PROGRAM RECEIPTS                                                                                                   
     EXECUTIVE SESSION                                                                                                          
     AUDIT REPORTS                                                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
PAT HARTLEY, Legislative Assistant                                                                                              
     to Representative Gail Phillips                                                                                            
345 W. Sterling Highway, Suite #102 B                                                                                           
Homer, Alaska  99603                                                                                                            
Telephone:     (907) 235-2921                                                                                                   
                                                                                                                                
DAVID TEAL, Director (Testified via Teleconference)                                                                             
Division of Legislative Finance                                                                                                 
State Office Building, Sixth Floor                                                                                              
Juneau, Alaska   99811                                                                                                          
Telephone:     (907) 465-3002                                                                                                   
POSITION STATEMENT:  Introduced the RPL's                                                                                       
                                                                                                                                
PAT DAVIDSON, Director                                                                                                          
Division of Legislative Audit                                                                                                   
State Office Building, Sixth Floor                                                                                              
Juneau, Alaska  99801                                                                                                           
Telephone:     (907) 465-3830                                                                                                   
POSITION STATEMENT:  Addressed the Audit Reports                                                                                
                                                                                                                                
YVONNE CHASE, Deputy Commissioner                                                                                               
Early Development (Testified via Teleconference)                                                                                
Department of Education and Early Development                                                                                   
        th                                                                                                                      
333 W. 4 Avenue, Suite #220                                                                                                     
Anchorage, Alaska  99501-2341                                                                                                   
Telephone:     (907) 269-4635                                                                                                   
POSITION STATEMENT:  Testified on RPL 05-1-0618                                                                                 
                                                                                                                                
MARY STOVALL, Administrative Manager                                                                                            
Early Development                                                                                                               
Department of Education and Early Development                                                                                   
        th                                                                                                                      
333 W. 4 Avenue, Suite #220                                                                                                     
Anchorage, Alaska  99501-2341                                                                                                   
Telephone:     (907) 269-44512                                                                                                  
POSITION STATEMENT:  Testified on RPL 05-1-0618                                                                                 
                                                                                                                                
NICO BUS, Budget Manager                                                                                                        
Department of Military and Veterans Affairs                                                                                     
400 Willoughby Ave, Suite 500                                                                                                   
Juneau, Alaska  99811                                                                                                           
Telephone:     (907) 465-2406                                                                                                   
POSITION STATEMENT:  Testified on RPL #09-1-0036                                                                                
     and RPL #09-1-0037                                                                                                         
                                                                                                                                
TIM JONES, Executive Director                                                                                                   
Alaska Military Youth Academy                                                                                                   
Alaska National Guard Youth Corps                                                                                               
Department of Military and Veterans Affairs                                                                                     
P.O. Box 5800                                                                                                                   
Ft. Richardson, Alaska  99505-0800                                                                                              
Telephone:     (907) 428-6067                                                                                                   
POSITION STATEMENT:  Testified on RPL #09-1-0036                                                                                
     and RPL #09-1-0037                                                                                                         
                                                                                                                                
RICHARD LASHER, Administrative Manager                                                                                          
Department of Military and Veterans Affairs                                                                                     
Alaska Military Youth Academy (AMYA)                                                                                            
P.O. Box 5727                                                                                                                   
Ft. Richardson, Alaska  99501-0727                                                                                              
Telephone:     (907) 384-6013                                                                                                   
POSITION STATEMENT:  Testified on RPL #09-1-0036                                                                                
     and RPL #09-1-0037                                                                                                         
                                                                                                                                
KENNETH BISCHOFF, Director (Testified via Teleconference)                                                                       
Division of Administrative Services                                                                                             
Department of Public Safety                                                                                                     
P.O. Box 11120                                                                                                                  
Juneau, Alaska  99811-1200                                                                                                      
Telephone:     (907) 465-4336                                                                                                   
POSITION STATEMENT:  Testified on RPL #12-1-0106                                                                                
                                                                                                                                
KURT PARKAN, Deputy Commissioner                                                                                                
     (Testified via Teleconference)                                                                                             
Department of Transportation and Public Facilities                                                                              
3132 Channel Drive                                                                                                              
Juneau, Alaska  99801-7898                                                                                                      
Telephone:     (907) 465-6977                                                                                                   
POSITION STATEMENT:  Testified on RPL #25-1-2064                                                                                
     and RPL #25-1-2063                                                                                                         
                                                                                                                                
JAMES FIORENZI, Assistant Airport Manager                                                                                       
Fairbanks Airport                                                                                                               
Department of Transportation and Public Facilities                                                                              
6450 Airport Way, Suite #1                                                                                                      
Fairbanks, Alaska  99702                                                                                                        
Telephone:     (907) 474-2505                                                                                                   
POSITION STATEMENT:  Testified on RPL #25-1-2064                                                                                
     and RPL #25-1-2063                                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 00-10, Side A                                                                                                            
                                                                                                                                
CHAIR   GAIL  PHILLIPS   called   the  Joint   Committee   on                                                                   
Legislative Budget  and Audit meeting  to order at  1:15 P.M.                                                                   
on December  6, 2000.  Members  present at the call  to order                                                                   
were Representatives  Gail Phillips,  Con Bunde,  Eric Croft,                                                                   
Gary Davis,  Eldon Mulder  and Gene  Therriault and  Senators                                                                   
Randy Phillips and Sean Parnell.                                                                                                
                                                                                                                                
APPROVAL OF MINUTES                                                                                                           
                                                                                                                                
CHAIR PHILLIPS noted  that the first order of  business would                                                                   
be the  approval of the  minutes from the Legislative  Budget                                                                   
                                            th                                                                                  
and Audit Committee meeting held October 27, 2000.                                                                              
                                                                                                                                
SENATOR R.  PHILLIPS MOVED to  approve the minutes  and asked                                                                   
for  unanimous  consent.    There  being  NO  OBJECTION,  the                                                                   
minutes were approved and adopted.                                                                                              
                                                                                                                                
REVISED PROGRAMS (RPL's)                                                                                                      
                                                                                                                                
DAVID  TEAL,  Director,  Division   of  Legislative  Finance,                                                                   
explained the RPL's before the Committee.                                                                                       
                                                                                                                                
RPL Number:    05-1-0618                                                                                                      
                                                                                                                              
Department of Education & Early Development                                                                                     
Child Care Development Funds                                                                                                    
                                                                                                                                
$5,590,473 Federal Funds                                                                                                      
                                                                                                                                
DAVID  TEAL explained  that the  request  was for  additional                                                                   
authority  to  receive  and  expend  the  FY2000  Child  Care                                                                   
Development  Funds (CCDF)  carry  forward and  to record  the                                                                   
CCDF grant to be received during  the State fiscal year 2001.                                                                   
                                                                                                                                
SENATOR  R. PHILLIPS  asked  if the  RPL  would increase  the                                                                   
general fund match in the FY2002 budget.                                                                                        
                                                                                                                                
MR. TEAL pointed out that the  more funding received from the                                                                   
federal government,  that more  money that would  be matched.                                                                   
He did not  know if the  Department would be asking  for more                                                                   
funding in that budget.                                                                                                         
                                                                                                                                
YVONNE  CHASE,  Deputy  Commissioner  of  Early  Development,                                                                   
Department of Education and Early  Development, clarified the                                                                   
amount of the required match.                                                                                                   
                                                                                                                                
MARY  STOVALL,  Administrative  Manager,  Early  Development,                                                                   
Department  of  Education and  Early  Development,  explained                                                                   
that  there   are  two   types  of   match  for  that   fund.                                                                   
Maintenance of effort  would be a one to one  match, whereas,                                                                   
the other  would be calculated  and not a  one to one  as the                                                                   
maintenance of effort was.                                                                                                      
                                                                                                                                
SENATOR  R.  PHILLIPS  questioned  how much  money  would  be                                                                   
increased to the general fund.                                                                                                  
                                                                                                                                
MARY  STOVALL  replied  that  the  requested  increase  would                                                                   
require $437 thousand general fund dollars for FY2002.                                                                          
                                                                                                                                
REPRESENTATIVE CROFT pointed out  that the amount would be an                                                                   
increase  in federal  authority  and  that enough  exists  to                                                                   
cover the  cost for this  year.  He  added, next  year, there                                                                   
would be more required to leverage the federal funds.                                                                           
                                                                                                                                
REPRESENTATIVE  MULDER  asked where  this  year's match  came                                                                   
from.                                                                                                                           
                                                                                                                                
YVONNE  CHASE advised  that it was  general funds,  currently                                                                   
existing in the Department's budget.                                                                                            
                                                                                                                                
REPRESENTATIVE  THERRIAULT questioned  why  the current  year                                                                   
match would  not be available  in the  next fiscal year.   He                                                                   
asked the "time sensitivity" of the request.                                                                                    
                                                                                                                                
YVONNE  CHASE  explained  that   these  were  one-time  State                                                                   
general fund monies and that they  would not all be available                                                                   
next fiscal  year.  It  is anticipated  that there will  be a                                                                   
small increase  in the  federal budget.   She added  that the                                                                   
new federal fiscal  year starts at a different  time than the                                                                   
State  fiscal  year,  thus,  bringing   the  request  to  the                                                                   
Committee at this time.                                                                                                         
                                                                                                                                
REPRESENTATIVE  THERRIAULT  asked  if the  legislation  could                                                                   
wait until the full Legislature was back in session.                                                                            
                                                                                                                                
YVONNE  CHASE explained  that the Department  would not  have                                                                   
the  funds  needed to  move  forward  and  that part  of  the                                                                   
funding  has  resulted  from an  increase  written  into  the                                                                   
budget.   The additional  portion brings  the Division  up to                                                                   
the level  of expenditure based  on the funds  available from                                                                   
the past  year in  the federal  budget.   With the  transfer,                                                                   
clean-up  issues resulted  and the Division  then got  caught                                                                   
into a lapsing  situation with the Department  not having the                                                                   
funding,  which  resulted  in  the Division  not  having  the                                                                   
authority to put it in the budget.                                                                                              
                                                                                                                                
DAVID TEAL  advised that the  Department has a  different way                                                                   
in which  they record their  money.   That it is  an internal                                                                   
policy.   The Department  does this  through issuing  grants.                                                                   
They have  chosen not  to record the  money until  the entire                                                                   
amount of  the grant  is awarded.   Other Departments  record                                                                   
the money as it  occurs and then their funding  is handled by                                                                   
appropriation.   He acknowledged  that he did  not understand                                                                   
why  the Department  of Education  records their  money in  a                                                                   
different manner.   Mr. Teal  pointed out that  Karen Rehfeld                                                                   
was not present to explain the process.                                                                                         
                                                                                                                                
REPRESENTATIVE  CROFT  asked which  programs  the  allocation                                                                   
would fund.                                                                                                                     
                                                                                                                                
YVONNE CHASE reported that the  funding would go to the Child                                                                   
Care Subsidy program,  which would go to  childcare providers                                                                   
based  on the eligibility  of  each family.   Funds from  the                                                                   
program are used  for the childcare grant program  out of the                                                                   
federal  money.   Also,  funds  are  used for  the  licensing                                                                   
functions of the  facilities.  By not approving  the request,                                                                   
the State  will not be able to  post the federal money.   Any                                                                   
expenditure  from  October  until the  Legislature  meets  to                                                                   
approve it, would be held from the grantees.                                                                                    
                                                                                                                                
REPRESENTATIVE CROFT  summarized the purpose of  the request.                                                                   
He stressed that  there would be no general fund  impact.  He                                                                   
MOVED to approve RPL #05-1-0618.                                                                                                
                                                                                                                                
REPRESENTATIVE  BUNDE  OBJECTED.   He  stated  that the  full                                                                   
Finance Committees would benefit from these discussions.                                                                        
                                                                                                                                
A roll call vote was taken on the MOTION.                                                                                       
                                                                                                                                
IN FAVOR:      Representatives G. Davis, Therriault, Croft,                                                                     
               Chair Phillips                                                                                                   
                                                                                                                                
OPPOSED:       Representative Bunde                                                                                             
               Senator R. Phillips                                                                                              
                                                                                                                                
Representative  Mulder and Senators  Parnell, Wilken,  Adams,                                                                   
Halford and Pearce were not present for the vote.                                                                               
                                                                                                                                
The MOTION FAILED (4-2).                                                                                                        
                                                                                                                                
RPL Number:    09-1-0036                                                                                                      
                                                                                                                                
Department of Military and Veterans Affairs                                                                                     
Cook Inlet Tribal Council - Youth Opportunities                                                                                 
                                                                                                                                
$83,000.00 SDPR/Operating                                                                                                     
                                                                                                                                
DAVID TEAL advised  that the purpose of the  request was that                                                                   
the Cook Inlet Tribal Council  (CITC), Inc. wants to contract                                                                   
with  the  Alaska  Military Youth  Academy  (AMYA)  to  serve                                                                   
Native American  Youth who are from eligible  communities and                                                                   
are recruited to attend AMYA.   The effort is part of a five-                                                                   
year U.S. Department  of Labor Youth Opportunity  Grant.  The                                                                   
funding would  support a counselor  working at  AMYA, provide                                                                   
for  travel of  the  eligible students  and  provide for  the                                                                   
clothing,  equipment, supplies,  services and allowances  for                                                                   
each eligible  student enrolled at AMYA from  designated CITC                                                                   
villages.   He  noted that  the Finance  Committees have  not                                                                   
considered the  subject.  The  item is not incorporated  into                                                                   
the AMYA component  budget.  There would be no  impact to the                                                                   
general fund and no risk involved.                                                                                              
                                                                                                                                
CHAIR  GAIL PHILLIPS  clarified that  the Finance  Committees                                                                   
had  considered  only the  Cook  Inlet Tribal  Council  grant                                                                   
proposal and not the entire issue of the AMYA.                                                                                  
                                                                                                                                
DAVID TEAL agreed.                                                                                                              
                                                                                                                                
SENATOR R. PHILLIPS recommended  the following RPL #09-1-0037                                                                   
be considered also at the same  time with the RPL #09-1-0036.                                                                   
                                                                                                                                
CHAIR GAIL PHILLIPS agreed.                                                                                                     
                                                                                                                                
RPL Number:    09-0037                                                                                                        
                                                                                                                                
Department of Military and Veterans Affairs                                                                                     
Municipality of Anchorage-Workforce Investment Act Grant                                                                        
                                                                                                                                
$127,400 SDPR/Operating                                                                                                       
                                                                                                                              
DAVID TEAL spoke  to the request.  He noted  that the program                                                                   
was  a  continuation  of the  Job  Training  Partnership  Act                                                                   
(JTPA) under  a new Congressional  law, Workforce  Investment                                                                   
Act (WIA),  Out-of-School  Youth Programs.   Grant funds  are                                                                   
through  the   Municipality  of   Anchorage,  Department   of                                                                   
Community  Planning  and  Development.   The  AMYA  would  be                                                                   
providing  job-skills  training,  resume  writing,  interview                                                                   
skill,  vocational   assessment,  placement   counseling  and                                                                   
assistance  to  "at  risk" youth  enrolled  in  the  program.                                                                   
Grant funding  would permit the  expansion of  other services                                                                   
and provide  new services in education/vocational  counseling                                                                   
and  increase the  rate  in placement  of  students into  the                                                                   
workforce.                                                                                                                      
                                                                                                                                
SENATOR R. PHILLIPS questioned  the practical effect of these                                                                   
types of programs.                                                                                                              
                                                                                                                                
NICO  BUS,   Budget  Manager,  Department  of   Military  and                                                                   
Veterans Affairs,  spoke to the  effect of the two  RPL's and                                                                   
noted that  both projects would  help to pay for  expenses in                                                                   
related to the programs.                                                                                                        
                                                                                                                                
SENATOR  R. PHILLIPS  understood  that the  program had  been                                                                   
fully  funded.  He  assumed that  there would  be extra  kids                                                                   
taken and asked the impact of that action.                                                                                      
                                                                                                                                
TIM  JONES,   Executive  Direction,  Alaska   Military  Youth                                                                   
Academy,  Alaska National  Guard Youth  Corps, Department  of                                                                   
Military and Veterans  Affairs, noted that the  lst RPL deals                                                                   
with  the Cook  Inlet Tribal  Council.   He  stated that  the                                                                   
biggest impact on  that program is that there  currently is a                                                                   
full time  Native drug  and alcohol  counselor that  works on                                                                   
staff but is not  paid by the State of Alaska,  however, paid                                                                   
through  this  grant.  Over  the years,  there  may  be  more                                                                   
students from  the targeted village areas, and  would receive                                                                   
priority for admission.                                                                                                         
                                                                                                                                
Mr.  Jones   continued,  the   funding  in  Municipality   of                                                                   
Anchorage money  was meant to replace services  received from                                                                   
the  JTPA program.    That money  would be  used  in lieu  of                                                                   
services so that they can continue.   He noted that there are                                                                   
104 students in  Phase II, the residential phase.   There are                                                                   
175 students in the non-residential  phase.  Approximately 85                                                                   
cases  are  being processed.    The  target goal  number  has                                                                   
always been 100  per class, two classes per year.   There has                                                                   
never been enough funding to meet that target.                                                                                  
                                                                                                                                
REPRESENTATIVE THERRIAULT  asked if there had  been a request                                                                   
placed last  year by  the Municipality  of Anchorage  for the                                                                   
funding.                                                                                                                        
                                                                                                                                
NICO BUS  responded that  there had  been a budget  amendment                                                                   
for a JTPA  program.  The  total grant was for  $300 thousand                                                                   
dollars.                                                                                                                        
                                                                                                                                
REPRESENTATIVE BUNDE  pointed out that 50% of  the Cook Inlet                                                                   
Tribal  Council  grant  would   be  used  to  cover  overhead                                                                   
associated costs,  whereas, the  grant from the  Municipality                                                                   
of Anchorage would  only use $1,000 dollars  for those costs.                                                                   
He asked why the difference.                                                                                                    
                                                                                                                                
NICO BUS  explained that  $16,000 dollars  would be  used for                                                                   
travel for  the accountant to  go to the villages  to recruit                                                                   
students.  The  amount received would be based  on the number                                                                   
of students.                                                                                                                    
                                                                                                                                
REPRESENTATIVE CROFT inquired  if the funds were reserved for                                                                   
Native students living in the village area.                                                                                     
                                                                                                                                
TIM JONES stated that the funds  were strictly designated for                                                                   
Native students.                                                                                                                
                                                                                                                                
REPRESENTATIVE  BUNDE   inquired  about  the   timing  issues                                                                   
associated with recruitment.                                                                                                    
                                                                                                                                
TIM JONES explained that AMYA  recruits up to the time of the                                                                   
week prior  to filling of  the class.   He indicated  that at                                                                   
present  time, there  are 85  applications on  file and  none                                                                   
have yet been accepted.  He added  that there is presently no                                                                   
money in the budget for out-reach and recruiting.                                                                               
                                                                                                                                
NICO BUS added  that the contract with the  Cook Inlet Tribal                                                                   
Council runs  October through March.   The next  class begins                                                                   
       th                                                                                                                       
March 8.    By the time  the fast track supplemental  occurs,                                                                   
the next class would have already been started.                                                                                 
                                                                                                                                
SENATOR  R. PHILLIPS  asked about  the  status of  non-Native                                                                   
kids.                                                                                                                           
                                                                                                                                
CHAIR  GAIL PHILLIPS  advised  that  the enrollment  for  the                                                                   
program was for children from  all over Alaska.  Only funding                                                                   
from the Cook Inlet grant would be for Native kids only.                                                                        
                                                                                                                                
RICHARD  LASHER,  Administrative   Manager,  Alaska  Military                                                                   
Youth  Academy (AMYA),  Department of  Military and  Veterans                                                                   
Affairs, stated that  the grant would allow  counselors to go                                                                   
out and recruit  potential applicants and then  they would be                                                                   
screened.  In  response  to  Senator  Phillip's  concern,  he                                                                   
explained  that  the  grant does  target  a  specific  group,                                                                   
allowing for  a counselor to go  out and recruit  within that                                                                   
group.     Additionally,  the   funding  would  provide   for                                                                   
reimbursement for amenities.                                                                                                    
                                                                                                                                
SENATOR  R.   PHILLIPS  emphasized   that  the  program   was                                                                   
basically  federally  funded and  that  the  State could  not                                                                   
discriminate against the non-Native students.                                                                                   
                                                                                                                                
TIM JONES  commented that the  services would be  provided to                                                                   
all  students and  the program  would not  be reimbursed  for                                                                   
someone other  than specified  in the  grant.  He  emphasized                                                                   
that services would be provided to non-Native students.                                                                         
                                                                                                                                
REPRESENTATIVE BUNDE MOVED to  approve RPL #09-1-0036.  There                                                                   
being NO OBJECTION, the RPL was approved.                                                                                       
                                                                                                                                
CHAIR GAIL PHILLIPS MOVED to approve RPL #09-1-0037.                                                                            
                                                                                                                                
REPRESENTATIVE BUNDE  OBJECTED for a point  of clarification.                                                                   
He asked  about the timing  issue and  if the funds  would be                                                                   
spent for the current class.                                                                                                    
                                                                                                                                
NICO BUS  explained that  a class would  be started  in March                                                                   
and that for  staffing commitments, an understanding  of what                                                                   
is available is needed.                                                                                                         
                                                                                                                                
REPRESENATATIVE  BUNDE WITHDREW his  objection.   There being                                                                   
NO further OBJECTION, RPL #09-1-0037 was approved.                                                                              
                                                                                                                                
(Tape Change, LBA 00-10, Side 2).                                                                                             
                                                                                                                                
RPL Number:    12-1-0106                                                                                                      
                                                                                                                              
Department of Public Safety                                                                                                     
                             th                                                                                                 
Violence Against Women Act - 6 Year                                                                                             
                                                                                                                                
$427,000 Federal Grants                                                                                                       
                                                                                                                                
DAVID  TEAL  explained  that the  request  would  enable  the                                                                   
Council on  Domestic Violence  and Sexual Assault  (CDVSA) to                                                                   
allocate  FY2001  funding to  those  projects  funded by  the                                                                   
                                                 th                                                                             
Violence Against Women S*T*O*P  Formula Grants, 6  Year.  The                                                                   
Act  was originally  authorized in  1994 and  was to  provide                                                                   
five  years funding  to  all the  states.   The  Act was  put                                                                   
forward for reauthorization to  Congress in 1999, however, it                                                                   
was not authorized until October  2000.  Due to the delay, an                                                                   
additional  year of funding  was added  to the original  Act.                                                                   
The sixth year of funding allowed  states to maintain the on-                                                                   
going  projects  funded  by  the   grant  while  waiting  for                                                                   
reauthorization.   The  states were notified  in August  that                                                                   
there would be some support provided  for the continuation of                                                                   
on-going projects.   The amount  of the grant and  the actual                                                                   
award were not distributed until September 2000.                                                                                
                                                                                                                                
He pointed out  that the request indicates  $375,000 dollars,                                                                   
however, working  with the Department,  the number  should be                                                                   
revised to indicate $427,000 dollars.                                                                                           
                                                                                                                                
KENNETH  BISCHOFF,   Director,  Division  of   Administrative                                                                   
Services, Department of Public  Safety, offered to answer any                                                                   
questions of the Committee.                                                                                                     
                                                                                                                                
SEANTOR  R.  PHILLIPS  foresaw  an increase  to  the  State's                                                                   
general fund budget.                                                                                                            
                                                                                                                                
KEN BISCHOFF stated that these  are all federal funds.  There                                                                   
is no match requirement and there will be no State impact.                                                                      
                                                                                                                                
DAVID TEAL  noted that the reason  that the request  is going                                                                   
to  the  budget   process  is  that  the  program   has  been                                                                   
authorized  for an additional  five years.   This request  is                                                                   
the first of those five years.                                                                                                  
                                                                                                                                
REPRESENTATIVE  BUNDE  suggested   that  the  entire  Finance                                                                   
Committees would  benefit from  the discussion regarding  the                                                                   
proposal.  He asked why this timing was critical.                                                                               
                                                                                                                                
KEN   BISCHOFF  explained   the   issue   is  that   Congress                                                                   
appropriated   funds  for   which  it   has  not  passed   an                                                                   
authorization bill.   The authorization had  expired and they                                                                   
appropriated  a  sixth year  of  funding unexpectedly.    The                                                                   
Council  has   programs  in  place,  particularly   with  the                                                                   
Department of Law, that have been  in place for approximately                                                                   
five years.   To maintain  continuity in those  programs, the                                                                   
Department  is  seeking  concurrence   with  the  Legislative                                                                   
Budget and  Audit Committee (LBA)  to receive and  expend the                                                                   
allocation to keep the programs in place.                                                                                       
                                                                                                                                
REPRESENTATIVE  CROFT pointed  out  the supportive  testimony                                                                   
received  from   the  Legislative   Finance  Division.     He                                                                   
emphasized  that the women  being assisted  would be  able to                                                                   
get  out of  abusive  relationships and  that  this would  be                                                                   
federal money being for a good purpose.                                                                                         
                                                                                                                                
REPRESENTATIVE BUNDE noted that  his questions did not relate                                                                   
to the  funding of  the program, but  instead, the  timing of                                                                   
the request.   He reiterated his question if  this timing was                                                                   
critical for immediate funding.                                                                                                 
                                                                                                                                
REPRESENTATIVE CROFT  emphasized that it is  time critical as                                                                   
indicated by the Legislative Finance Division.                                                                                  
                                                                                                                                
SENATOR R. PHILLIPS MOVED to approve  RPL #12-1-0106 with the                                                                   
amended  amount   of  $427,000  dollars.     There  being  NO                                                                   
OBJECTION, it was approved.                                                                                                     
                                                                                                                                
RPL Number:    25-1-2063                                                                                                      
                                                                                                                              
Department of Transportation and Public Facilities-CIP                                                                          
Fairbanks International Airport Maintenance Facility                                                                            
                                                                                                                                
$905,000 SDPR/Capital                                                                                                         
                                                                                                                              
     and                                                                                                                      
                                                                                                                                
RPL Number:    25-1-2064                                                                                                      
                                                                                                                                
Department of Transportation and Public Facilities-CIP                                                                          
Fairbanks International Airport Equipment Purchase                                                                            
                                                                                                                              
$1,065,000 SDPR/Capital                                                                                                       
                                                                                                                              
CHAIR  G. PHILLIPS  requested Mr.  Teal to  address both  RPL                                                                   
#25-1-2063 and RPL #25-1-2064 at the same time.                                                                                 
                                                                                                                                
DAVE TEAL  explained that  the two  requests were similar  in                                                                   
that  both  of  them  request  statutory  designated  program                                                                   
receipts  for  airport capital  projects  in  Fairbanks.   He                                                                   
noted that before discussing the  merits of the projects, the                                                                   
Committee  should  determine  if  they want  to  discuss  the                                                                   
projects at all.  He stipulated the issues:                                                                                     
                                                                                                                                
     ·    There was a Legislative Budget and Audit Task                                                                         
          Force formed in 1996.   That task force recommended                                                                   
          that  the  authority  to expend  revenue  generated                                                                   
          from  the  "head  tax"   in  place  in  most  major                                                                   
          airports  should  be  made  by  the  entire  Alaska                                                                   
          Legislature; and that                                                                                                 
     ·    The source of funds may be inappropriate and may                                                                      
          have no legal authority to increase authorization                                                                     
          for the project.                                                                                                      
                                                                                                                                
Mr. Teal pointed  out that Representative Bunde  had been the                                                                   
Chair of that Committee.                                                                                                        
                                                                                                                                
Mr.   Teal   noted  that   the   Committee   could   increase                                                                   
authorization  of federal receipts  and statutory  designated                                                                   
program  receipts.   The passenger  facility charges  (PFC's)                                                                   
are the  funds from that issuance  and are restricted  by the                                                                   
federal  foundation.   They  can  be  used only  for  airport                                                                   
capital  projects.    The  PFC's   are  not  federal  project                                                                   
receipts;  the Federal  Aviation  Administration (FAA)  noted                                                                   
that this  money is clearly State  money.  The  Department of                                                                   
Transportation  and Public  Facilities has  requested use  of                                                                   
the statutory designated program receipts.                                                                                      
                                                                                                                                
He commented  that the  position of  the Legislative  Finance                                                                   
Division   is   that   fund  source   is   an   inappropriate                                                                   
classification of  the funds.   An October 1996  RPL prompted                                                                   
that  task force.   That  RPL requested  authority to  expend                                                                   
international  airport revenue funds,  which are  State funds                                                                   
derived  from  the  Permanent   Fund  Dividends  (PFD).    He                                                                   
suggested  that could be  the proper  funding source  for the                                                                   
proposed request  and that classification would  make the RPL                                                                   
ineligible for LBA's consideration.                                                                                             
                                                                                                                                
REPRESENTATIVE BUNDE  commented that the task  force provided                                                                   
a very  clear recommendation  where LBA's  authority  lies in                                                                   
regard to  that concern.   He proposed  that through  the PFC                                                                   
programs, all Alaska airports should benefit.                                                                                   
                                                                                                                                
REPRESENTATIVE  CROFT  questioned if  the  Committee had  the                                                                   
active  authority   to  delegate  the  statutory   designated                                                                   
program receipts.  The argument  is that this is a collection                                                                   
by  an airport  that is  to be  used and  limited to  capital                                                                   
construction purposes.   He asked where the  definition would                                                                   
deviate from that of statutory designated program receipts.                                                                     
                                                                                                                                
DAVID TEAL  stated that the problem  was that this  money was                                                                   
not provided  in a clear fashion.   The money comes  from the                                                                   
passengers  and the passengers  do not  have a contract  with                                                                   
the State which indicates authority of how to use it.                                                                           
                                                                                                                                
REPRESENTATIVE  CROFT  disagreed  with  that reasoning.    He                                                                   
believed that  the money had  been collected with  the intent                                                                   
to be used for capital projects.                                                                                                
                                                                                                                                
DAVID  TEAL  stated  that the  statutory  definition  of  the                                                                   
receipts indicates  that the funds must be  restricted by the                                                                   
terms of a  gift/grant contract.  The question  becomes, does                                                                   
the  State have  a  contract between  the  air carriers,  the                                                                   
airport and the passengers.                                                                                                     
                                                                                                                                
He  suggested  that it  could  be  argued  that there  is  an                                                                   
implied contract  because the FAA has a process  of approving                                                                   
these capitol projects and the  PFC's cannot be spent on just                                                                   
anything  not approved  by  the FAA.    Therefore, by  merely                                                                   
collecting  them, implies some  sort of  consent.   He agreed                                                                   
that  the  definition  could  be  "stretched"  and  that  had                                                                   
happened in the past.                                                                                                           
                                                                                                                                
REPRESENTATIVE CROFT understood  that the airports were State                                                                   
owned.   The airports  make decisions  on what projects  they                                                                   
want approved and then get them funded through the FAA.                                                                         
                                                                                                                                
DAVID TEAL  agreed.  He noted  that the passenger  fees could                                                                   
be collected only for certain  projects.  In theory, when the                                                                   
FAA approves  a specified amount  for a specific  project and                                                                   
it is  done, there would  be no more  fees.  The  FAA imposes                                                                   
restrictions and  simply "allows" the air carriers  to be the                                                                   
collectors.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CROFT pointed out  that the Legislature  does                                                                   
not have any  specific power in determining  what the airport                                                                   
projects  will be.   He suggested  that the  airports have  a                                                                   
type of  independent power and  questioned if they  should be                                                                   
the independent agency contracting with the Legislature.                                                                        
                                                                                                                                
DAVID  TEAL commented  that  the Division  did  not use  that                                                                   
approach  as  the Department  of  Transportation  and  Public                                                                   
Facilities owns the airport.                                                                                                    
                                                                                                                                
REPRESENTATIVE  THERRIAULT interjected  that the  Legislature                                                                   
does have the  power to determine in this circumstance.   The                                                                   
airport goes to  the FAA to get approval and  the Legislature                                                                   
must  authorize that  project.   He noted  that the  projects                                                                   
have been  authorized and the  funding provided for  them was                                                                   
inadequate  and that the  Department would  like to  increase                                                                   
the authorization and switch the funding source.                                                                                
                                                                                                                                
He  asked  if the  recommendations  of  the task  force  were                                                                   
specifically  about  going  through  the  normal  legislative                                                                   
process.   He suggested  by if these  projects must  wait for                                                                   
that process, the new fund source  would not take place until                                                                   
June or July 2001, which would create a "time" crunch.                                                                          
                                                                                                                                
REPRESENTATIVE BUNDE  responded that the main  concern of the                                                                   
task  force  was  if  there  should be  PFC's  at  all.    He                                                                   
reiterated  that   the  LBA  Committee  does   not  have  the                                                                   
authority to change the funding source.                                                                                         
                                                                                                                                
REPRESENTATIVE CROFT  asked if the  decision made by  the LBA                                                                   
Committee affects whether PFC's are collected.                                                                                  
                                                                                                                                
KURT    PARKAN,    Deputy   Commissioner,    Department    of                                                                   
Transportation and Public Facilities,  explained that the PFC                                                                   
authorization  was given  to  the Department  by  the FAA  to                                                                   
begin collection in October 2000.   Currently, the Department                                                                   
is collecting those  funds.  If authorization  to spend those                                                                   
funds for a particular project  is not granted, there will be                                                                   
a two-year  period  of time for  taking action  on a  capitol                                                                   
project.   If no  action is  taken on  a project within  that                                                                   
period of  time, the FAA can  take that money from  the PFC's                                                                   
and make a  corresponding reduction to the  settlement funds.                                                                   
The effect  would be the loss  of federal funds as  an offset                                                                   
to the PFC's.                                                                                                                   
                                                                                                                                
CHAIR  GAIL  PHILLIPS  asked if  there  had  been  discussion                                                                   
regarding reimbursement  of the  PFC funds to  the individual                                                                   
ticket    holders   reducing    the    amount   of    federal                                                                   
appropriations.                                                                                                                 
                                                                                                                                
KURT  PARKAN  replied  that  was   not  an  option  from  the                                                                   
viewpoint  of  the   FAA.    Instead,  it  is   part  of  the                                                                   
Congressional authorization for PFC's.                                                                                          
                                                                                                                                
REPRESENTATIVE  THERRIAULT  suggested   that  repaying  a  $3                                                                   
dollar check to  all the ticket holders that paid  would be a                                                                   
difficult task.   The federal  law was written so  that there                                                                   
would be a dollar for dollar decrement  in the normal airport                                                                   
funds if  the projects  had not  been followed through  with.                                                                   
The  fund cannot  be  built up  and then  spent  any way  the                                                                   
Legislature wants.   In fact, if  it is not spent the  way it                                                                   
was stipulated  to be,  there is a  dollar for dollar  deduct                                                                   
and penalty.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BUNDE reiterated that  LBA does not  have the                                                                   
legal authority to designate these funds.                                                                                       
                                                                                                                                
CHAIR GAIL PHILLIPS  requested that Representative  Bunde put                                                                   
that in the form of a motion for  the Committee to vote upon.                                                                   
                                                                                                                                
REPRESENTATIVE  BUNDE MOVED  that the  LBA Committee  forward                                                                   
the question  of the  PFC's to the  Legislature for  the next                                                                   
session.                                                                                                                        
                                                                                                                                
REPRESENTATIVE CROFT OBJECTED  for the purpose of a question.                                                                   
He believed  that the  outcome would  be that PFC's  continue                                                                   
everywhere  that they  currently are  in place  and that  the                                                                   
money would be collected for possible use later.                                                                                
                                                                                                                                
KURT PARKAN responded  that the money would  be collected and                                                                   
held until  the State  reached that period  of time  that the                                                                   
trigger takes place.  Then there  would be deductions for the                                                                   
federal entitlement.                                                                                                            
                                                                                                                                
He provided a history of how the  State got to the place that                                                                   
they are  today.   The initial  application was submitted  to                                                                   
the FAA  in June 1999.   After the 1999 Legislative  session,                                                                   
there was a resolution by the  House Transportation Committee                                                                   
requesting  that the Department  apply for  PFC's.   In June,                                                                   
the application  was made and  in October 2000, the  FAA said                                                                   
that the  State could have  the PFC but  would not  allow the                                                                   
exemptions that were requested.                                                                                                 
                                                                                                                                
The exemptions  were not  allowed under  the FAA  regulations                                                                   
because Congressional  action had not taken place  yet on the                                                                   
reauthorization  of  the AIP  program  to  place them.    The                                                                   
following year  in Congress, the exemptions passed  and there                                                                   
were concerns  about them  being in  place.  The  collections                                                                   
began in  October and  because the  FAA had originally  given                                                                   
the State authorization  for the PFC's in October  1999, that                                                                   
was the date that the two year  clock began to tick for going                                                                   
to grant on a project.                                                                                                          
                                                                                                                                
CHAIR  GAIL  PHILLIPS  inquired  if  the  exemption  included                                                                   
concerns regarding the size of  the aircraft or the number of                                                                   
seats.   She asked  if the concerns  were specifically  rural                                                                   
versus municipalities.                                                                                                          
                                                                                                                                
KURT  PARKAN  clarified  that  the  Department  requested  an                                                                   
exemption  for those communities  that  are not connected  to                                                                   
the road  system.  In addition  to that, there was  a request                                                                   
to exempt  aircraft with sixty  or less seats.   He clarified                                                                   
that  addressed the  problem with  the Kenai  run.   Congress                                                                   
placed an  exclusion for  the sixty  seats or less  aircraft,                                                                   
making it  mandatory.   The exemption  was approved  and made                                                                   
optional.  He advised that both now are in place.                                                                               
                                                                                                                                
REPRESENTATIVE  CROFT inquired if  the Department  planned to                                                                   
buy the  snow blower,  sand trucks and  the rescue  truck for                                                                   
this winter's operations.                                                                                                       
                                                                                                                                
JAMES   FIORENZI,   Assistant  Airport   Manager,   Fairbanks                                                                   
Airport, Department of Transportation  and Public Facilities,                                                                   
stated  that there  are sand  trucks on  order.   He did  not                                                                   
believe  that  those  trucks  would  be  available  for  this                                                                   
winter's operation.  He added  that these are all replacement                                                                   
pieces of equipment.                                                                                                            
                                                                                                                                
REPRESENTATIVE  THERRIAULT  pointed  out  that  the  way  the                                                                   
motion had  been phrased would  only allow the  consideration                                                                   
to be  carried forward to  consideration by the  Legislature.                                                                   
He  did  not  know what  that  would  mean.    Representative                                                                   
Therriault  reiterated his  concern with  the wording  of the                                                                   
motion.                                                                                                                         
                                                                                                                                
CHAIR GAIL  PHILLIPS interjected  that  the main concern  was                                                                   
whether  the   LBA  Committee  has  authority   to  make  the                                                                   
determination  at this time.   She stated  that had  been the                                                                   
purpose of the motion.                                                                                                          
                                                                                                                                
REPRESENTATIVE BUNDE  noted for the  record that he  does not                                                                   
want to preclude  further discussion of the issue  by the LBA                                                                   
Committee; however,  he strongly  would recommend  that since                                                                   
the concern  is a  taxing issue  that the entire  Legislature                                                                   
should consider it.  He believed  that there would be a broad                                                                   
base of support.                                                                                                                
                                                                                                                                
REPRESENTATIVE CROFT stated that  the appropriate way to deal                                                                   
with the  concern would  be to move  it, thus, providing  the                                                                   
approval or  rejection.   That would be  the cleanest  way to                                                                   
address  the concern.   He  reiterated his  objection to  the                                                                   
motion as moved.                                                                                                                
                                                                                                                                
REPRESENTATIVE BUNDE spoke to  the original motion.  He noted                                                                   
that the intent  of the motion was to bring the  issue to the                                                                   
Legislature.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  THERRIAULT  asked   if  Representative  Bunde                                                                   
could amend  the motion or restate  it as a  "regular" motion                                                                   
that could be passed or failed.                                                                                                 
                                                                                                                                
REPRESENTATIVE BUNDE WITHDREW his MOTION.                                                                                       
                                                                                                                                
REPRESENTATIVE THERRIAULT MOVED to approve RPL #2-1-2063.                                                                       
                                                                                                                                
SENATOR R. PHILLIPS OBJECTED.                                                                                                   
                                                                                                                                
A roll call vote was taken on the MOTION.                                                                                       
                                                                                                                                
IN FAVOR:      Representatives G. Davis, Therriault                                                                             
                                                                                                                                
OPPOSED:       Representatives Bunde, Croft & Chair Phillips                                                                    
               Senator R. Phillips                                                                                              
                                                                                                                                
Representative  Mulder and Senators  Parnell, Wilken,  Adams,                                                                   
Halford and Pearce were not present for the vote.                                                                               
                                                                                                                                
The MOTION FAILED (2-4).                                                                                                        
                                                                                                                                
REPRESENTATIVE THERRIAULT MOVED to approve RPL #25-1-2064.                                                                      
                                                                                                                                
SENATOR R. PHILLIPS OBJECTED.                                                                                                   
                                                                                                                                
A roll call vote was taken on the MOTION.                                                                                       
                                                                                                                                
IN FAVOR:      Representatives G. Davis, Therriault, Croft                                                                      
                                                                                                                                
OPPOSED:       Representatives Bunde, Chair Phillips                                                                            
               Senator R. Phillips                                                                                              
                                                                                                                                
Representative  Mulder and Senators  Parnell, Wilken,  Adams,                                                                   
Halford and Pearce were not present for the vote.                                                                               
                                                                                                                                
The MOTION FAILED (3-3).                                                                                                        
                                                                                                                                
CHAIR  GAIL   PHILLIPS  indicated  that  with   failing  both                                                                   
motions, it was understood that  the request would go forward                                                                   
either to the  Legislative Finance Committees or  back to the                                                                   
LBA Committee.                                                                                                                  
                                                                                                                              
RPL Number:    25-1-3308                                                                                                      
                                                                                                                                
Department of Transportation and Public Facilities                                                                              
Sitka Airport Extended Hours of Operation                                                                                       
                                                                                                                                
$54,500 SDPR/Operating                                                                                                        
                                                                                                                                
DAVID TEAL stated  that the Legislative Finance  Division had                                                                   
no concerns with the proposed request for funding.                                                                              
                                                                                                                                
REPRESENTATIVE BUNDE MOVED to  approve RPL #25-1-3308.  There                                                                   
being NO OBJECTION, it was approved.                                                                                            
                                                                                                                                
EXECUTIVE SESSION                                                                                                             
                                                                                                                                
SENATOR R. 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 2:30 P.M.                                                                                                  
                                                                                                                                
The Committee resumed Open Session at 2:55 P.M.                                                                                 
                                                                                                                                
(Tape Change, LBA 00-11, Side A - Tape malfunction)                                                                           
                                                                                                                                
AUDIT REPORTS                                                                                                                 
                                                                                                                                
SENATOR  R.  PHILLIPS MOVED  that  the  final audits  on  the                                                                   
agenda be released to the public:                                                                                               
                                                                                                                                
     ·    DOR/AHFC-Spruce Park Housing                                                                                          
     ·    DOR/AHFC-Housing Assistance Loan Fund                                                                                 
     ·    DCED/Board of Public Accountancy                                                                                      
     ·    DCED/Board of State Physical Therapy                                                                                  
          & Occupational Therapy Board                                                                                          
     ·    DCED/Board of Barbers and Hairdressers                                                                                
     ·    DCED/Board of Registration for Architects &                                                                           
          Engineers, and Land Surveyors                                                                                         
     ·    DOC/Alaska Correctional Industries                                                                                    
     ·    DEC/Board of Storage Tank Assistance                                                                                  
     ·    DNR/For Fiscal Year Ended June 30, 2000                                                                               
     ·    DOTPF/Alaska Marine Highway System Fund Schedule                                                                      
          of Unrestricted Revenues                                                                                              
                                                                                                                                
There being NO OBJECTION, the final audits were released to                                                                     
their respective Departments for public view.                                                                                   
                                                                                                                                
SENATOR R. PHILLIPS MOVED that the following preliminary                                                                        
audits be released for agency response:                                                                                         
                                                                                                                                
     ·    DOR/Child Support Enforcement Division                                                                                
     ·    DHSS/Divisions of Medical Assistance & Mental                                                                         
          Health & Developmental Disabilities                                                                                   
     ·    DCED/Board of Dental Examiners                                                                                        
     ·    DFG/Natural Resources, Office of the Governor,                                                                        
          Division of Governmental Coordination Mari culture                                                                    
          Development and Aquatic Farm Act                                                                                      
                                                                                                                                
There being NO OBJECTION, the preliminary audits were                                                                           
released to the respective agencies for further work.                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
REPRESENATIVE BUNDE MOVED to adjourn the meeting at 2:58                                                                        
P.M.                                                                                                                            
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects