Legislature(1995 - 1996)

03/27/1996 08:40 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         MARCH 27, 1996                                        
                            8:40 A.M.                                          
                                                                               
  TAPE HFC 96 - 96, Side 1, #000 - end.                                        
  TAPE HFC 96 - 96, Side 2, #000 - end.                                        
  TAPE HFC 96 - 97, Side 1, #000 - #100.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House  Finance Committee                 
  meeting to order at 8:40 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Mulder                          
  Representative Brown          Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly          Representative Therriault                      
  Representative Kohring                                                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Karen  Crane,  Director,  Libraries,   Archives  &  Museums,                 
  Department of Education; Mike Greany, Director,  Legislative                 
  Finance  Division;  Karen Rehfeld,  Director, Administrative                 
  Services,   Department   of    Education;   John    Shively,                 
  Commissioner,  Department of  Natural  Resources; Nico  Bus,                 
  Director, Division of Administrative Services, Department of                 
  Natural Resources.                                                           
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 412    An Act making appropriations for the operating and                 
            loan  program expenses  of  state government,  for                 
            certain programs, and to  capitalize funds; making                 
            appropriations   under   art.   IX,  sec.   17(c),                 
            Constitution  of  the State  of  Alaska,  from the                 
            constitutional budget reserve fund;  and providing                 
            for an effective date.                                             
                                                                               
            HB  412   was  HELD  in   Committee  for   further                 
            consideration.                                                     
                                                                               
  HB 413    An  Act  making appropriations  for  the operating                 
            expenses of the  state's integrated  comprehensive                 
            mental  health  program;   and  providing  for  an                 
            effective date.                                                    
                                                                               
                                1                                              
                                                                               
                                                                               
            HB   413  was  HELD   in  Committee   for  further                 
            consideration.                                                     
                                                                               
            AGENCIES:                                                          
                                                                               
            DEPARTMENT OF EDUCATION                                            
            DEPARTMENT OF FISH AND GAME                                        
            DEPARTMENT OF NATURAL RESOURCES                                    
            DEPARTMENT OF PUBLIC SAFETY                                        
                                                                               
  HB 230    An Act making appropriations  to the Department of                 
            Education  for  support of  kindergarten, primary,                 
            and secondary education and for community  schools                 
            programs  for  fiscal  year 1996  and  fiscal year                 
            1997;    making     appropriations    from     the                 
            constitutional budget reserve fund under art.  IX,                 
            sec. 17(c),  Constitution of the  State of Alaska;                 
            and providing for an effective date.                               
                                                                               
            HB  230  was   HELD  in   Committee  for   further                 
            consideration.                                                     
  HB#412                                                                       
  HB#413                                                                       
  HB#230                                                                       
  HOUSE BILL 412                                                               
                                                                               
       "An  Act  making appropriations  for the  operating and                 
       loan program  expenses of state government, for certain                 
       programs,    and    to    capitalize   funds;    making                 
       appropriations under art. IX,  sec. 17(c), Constitution                 
       of the State of Alaska,  from the constitutional budget                 
       reserve fund; and providing for an effective date."                     
                                                                               
  HOUSE BILL 413                                                               
                                                                               
       "An  Act  making   appropriations  for  the   operating                 
       expenses of the state's integrated comprehensive mental                 
       health program; and providing for an effective date."                   
                                                                               
  HOUSE BILL 230                                                               
                                                                               
       "An  Act  making  appropriations to  the  Department of                 
       Education  for support  of  kindergarten, primary,  and                 
       secondary education and  for community schools programs                 
       for  fiscal  year  1996 and  fiscal  year  1997; making                 
       appropriations from the  constitutional budget  reserve                 
       fund under  art. IX,  sec. 17(c),  Constitution of  the                 
       State of Alaska; and providing for an effective date."                  
                                                                               
  DEPARTMENT OF EDUCATION (DOE)                                                
                                                                               
                                                                               
                                2                                              
                                                                               
                                                                               
  Co-Chair Hanley noted  that DOE #3  had been moved into  the                 
  Capital Budget.  Representative Navarre pointed out that the                 
  Capital Budget currently  was not  before the Committee  for                 
  consideration and that budget  also would be cut.   He added                 
  that  DOE #3  would restore  funding to the  FY97 Governor's                 
  proposed level in order to give the State Library sufficient                 
  funds to  purchase up-to-date  materials such  as books  and                 
  periodicals.    He  stressed  that  this concern  should  be                 
  contained in the Operating Budget.                                           
                                                                               
  KAREN  CRANE,  DIRECTOR,  LIBRARIES,  ARCHIVES  &   MUSEUMS,                 
  DEPARTMENT  OF  EDUCATION,  pointed out  that  the  proposed                 
  allocation  would be  the only funds  provided to  the State                 
  Library for  library materials.   The  materials budget  has                 
  been reduced  over the  last ten  years. while  the cost  of                 
  books  during that time has risen over  80%, and the cost of                 
  periodicals has risen over 150%.                                             
                                                                               
  Representative  Navarre  MOVED to  adopt  DOE #3.   Co-Chair                 
  Hanley  OBJECTED.    Representative  Grussendorf  spoke   in                 
  support  of  the  amendment  remaining  in  the  operational                 
  budget.   Representative Navarre  recommended that a  policy                 
  call be made to determine if  the request should continue to                 
  be an  on-going operating  item.   He urged  the Committee's                 
  support.                                                                     
                                                                               
  Representative  Brown  inquired what  had  been included  in                 
  Statewide #2 amendment.                                                      
                                                                               
  KAREN   REHFELD,   DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                 
  SERVICES, DEPARTMENT OF EDUCATION,  noted that the amendment                 
  provided $150  thousand general fund  dollars for  Statewide                 
  Library  Electronic  Doorway  (SLED), $75  thousand  program                 
  receipt  dollars  for  SLED  and  $75 thousand  dollars  for                 
  library materials.                                                           
                                                                               
  A roll call was taken on the MOTION to adopt DOE #3.                         
                                                                               
       IN FAVOR:      Navarre, Brown, Grussendorf, Foster.                     
       OPPOSED:       Kohring,   Martin,   Mulder,    Parnell,                 
                      Therriault, Kelly, Hanley.                               
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
  Representative Navarre  MOVED to  adopt DOE  #5 which  would                 
  provide  partial funding  for  the 1997  Vocational  Student                 
  Leadership Organizations Joint Conference.  Co-Chair  Hanley                 
  asked  if the request  had been  included in  the Governor's                 
  FY97 budget.  Ms. Rehfeld stated that the money had been cut                 
  in last years budget.  There is no money in the Department's                 
  FY97 budget for this concern.                                                
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  A roll call was taken on the MOTION to adopt DOE #5.                         
                                                                               
       IN FAVOR:      Navarre, Brown, Grussendorf.                             
       OPPOSED:       Martin,  Mulder,  Parnell,   Therriault,                 
                      Kelly, Kohring, Hanley, Foster.                          
                                                                               
  The MOTION FAILED (3-8).                                                     
                                                                               
  Co-Chair Hanley distributed  DOE #7,  a technical change  to                 
  "other funds", which would reflect in the Governor's amended                 
  budget.  Ms.  Rehfeld advised that  the action taken by  the                 
  Committee regarding the Arts Council budget, the numbers for                 
  the federal receipts and the  gifts and grants authorization                 
  did not match the Governor's amended request.  The amendment                 
  would address that concern.                                                  
                                                                               
  In response to Representative  Brown's question, Ms. Rehfeld                 
  stated that the maximum federal anticipated amount, based on                 
  the amount allocated by the Committee for FY97 would be $296                 
  thousand  dollars.  The hope would be to raise enough in the                 
  gift and grants allocations to be able to match some portion                 
  of  that amount.    The  maximum  amount of  needed  federal                 
  authorization would be $300 thousand dollars.                                
                                                                               
  Representative   Therriault   questioned   if    local   art                 
  contributions had  been used for  FY96 match.   Ms.  Rehfeld                 
  thought that did happen.   There being NO OBJECTION,  DOE #7                 
  was adopted.                                                                 
                                                                               
  Representative Brown  MOVED  to reduce  federal receipts  to                 
  $400  thousand  dollars.    She   thought  that  would  more                 
  accurately  reflect  the  expected  utilization  of  federal                 
  funds.   Representative  Kohring  questioned  if that  would                 
  create  an  impact to  the  general fund.    Co-Chair Hanley                 
  explained  that  the motion  would  only reduce  the federal                 
  authorization.    Ms.  Rehfeld commented  that  it  would be                 
  difficult to  determine if  $400 thousand  dollars would  be                 
  excessive without  a word  from the  National Endowment  for                 
  Arts (NEA).                                                                  
                                                                               
  Representative Therriault  voiced concern that  receiving an                 
  allocation from the federal government  was in question.  He                 
  thought that Representative Brown's  motion was "premature".                 
  Representative Brown  countered  that  the  amendment  would                 
  restore the allocation  to the Governor's level.   With cuts                 
  proposed  by  the Committee,  she  thought it  would  not be                 
  possible to capture the federal funds.  The budget should be                 
  accurate  and   reflect  the   action   of  the   Committee.                 
  Representative Brown MOVED  to AMEND the earlier  motion and                 
  insert  $459  thousand  dollars  instead  of  $400  thousand                 
  dollars  as the  federal  receipt number.    There being  NO                 
  OBJECTIONS, it was adopted.                                                  
                                                                               
                                4                                              
                                                                               
                                                                               
  DEPARTMENT OF FISH AND GAME (DFG)                                            
                                                                               
  Representative Grussendorf MOVED to adopt  F&G #1.  Co-Chair                 
  Hanley MOVED to amend F&G #1 to $40 thousand dollars for the                 
  sport  fisheries.   There being  NO OBJECTION  to amend  the                 
  amendment, it was reduced.  There  being NO OBJECTION to the                 
  amendment as amended, it was adopted.                                        
                                                                               
  Representative Grussendorf MOVED to adopt  F&G #2.  Co-Chair                 
  Hanley  OBJECTED.   Representative  Grussendorf pointed  out                 
  that F&G #2  would restore  money back into  the stream  and                 
  refuge  permit,  Division  of  Habitat.    Last  year,  that                 
  component was cut by $500 thousand dollars.  Federal funding                 
  did not provide  enough for  the salmon stream  enhancement,                 
  which resulted in inadequate permitting.                                     
                                                                               
  Co-Chair  Hanley MOVED to  add back $50  thousand dollars to                 
  F&G #2.   Representative  Navarre OBJECTED.   Representative                 
  Grussendorf stated that  would not  be enough to  accomplish                 
  the necessary tasks of permitting.                                           
                                                                               
  A roll call was taken on the MOTION to amend F&G #2.                         
                                                                               
       IN FAVOR:      Parnell,  Therriault,  Kelly,   Kohring,                 
  Martin,                  Foster, Hanley.                                     
       OPPOSED:       Navarre, Brown, Grussendorf.                             
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (7-3).                                                     
                                                                               
  Representative Navarre  OBJECTED stating that  the component                 
  was inadequate and would result in less economic development                 
  and  the  Department's  ability to  deal  with  requests for                 
  permitting.   Representative  Navarre stressed  that  such a                 
  reduction  would   have  the   potential  of   excellerating                 
  destruction within the  fishery resources.   He pointed  out                 
  that $50 thousand dollars was  a "small" request to  address                 
  such a "large" concern.  Representative Navarre WITHDREW his                 
  OBJECTION.  Representative Therriault OBJECTED.                              
                                                                               
  A roll call was taken on the MOTION to adopt F&G #2.                         
                                                                               
       IN FAVOR:      Navarre,   Brown,  Grussendorf,   Kelly,                 
                      Kohring, Hanley, Foster.                                 
       OPPOSED:       Parnell, Therriault, Martin.                             
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (7-3).                                                     
                                                                               
                                                                               
                                5                                              
                                                                               
                                                                               
  Representative Grussendorf MOVED to adopt  F&G #3.  Co-Chair                 
  Hanley OBJECTED.  Representative Grussendorf explained  that                 
  F&G #3 would provide $200  thousand dollars for subsistence.                 
  He stated that if the State is to gain control over Fish and                 
  Game management, subsistence issues need to be addressed.                    
                                                                               
  Representative   Brown   observed  that   the   Division  of                 
  Subsistence  which is  most  closely tied  to the  people in                 
  rural Alaska will now  be centralized in urban Alaska.   The                 
  effects of these cuts would  close regional office functions                 
  in Dillingham and Bethel.                                                    
                                                                               
  Co-Chair  Hanley MOVED  to  amend  F&G  #3 to  $50  thousand                 
  dollars.  There being  NO OBJECTION, it was amended.   There                 
  being  NO OBJECTION  to  the amendment  as  amended, it  was                 
  adopted.                                                                     
                                                                               
  DEPARTMENT OF NATURAL RESOURCES (DNR)                                        
                                                                               
  Representative   Therriault   MOVED   to   adopt   DNR   #1.                 
  Representative  Brown  OBJECTED.   Representative Therriault                 
  explained  that the  amendment  would  address  the  special                 
  projects in the DNR  budget for gifts and grants.   Co-Chair                 
  Hanley added,  last year there  was $1.1 million  dollars in                 
  gifts and grants in DNR.  He stressed that there should  not                 
  count as general  funds in last  years budget.  This  fiscal                 
  year, the Governor has moved that forward.                                   
                                                                               
  Co-Chair Hanley explained that either it could be moved into                 
  general funds which would have the effect of increasing last                 
  year's budget, or it could be treated the same as last year.                 
  The actual budget comparison would then be the same.                         
                                                                               
  MIKE   GREANY,   DIRECTOR,  LEGISLATIVE   FINANCE  DIVISION,                 
  commented that the amendment would  provide consistency with                 
  general  budget authorization  from  the  Legislature.    He                 
  added, until  there is a long term solution to the gifts and                 
  grants scenario,  the Division  would request  that item  be                 
  viewed  as  a temporary  solution  specific to  a particular                 
  case.                                                                        
                                                                               
  (Tape Change, HFC 96-96, Side 2).                                            
                                                                               
  Representative  Brown commented that  the amendment does not                 
  appear to be  a gift or  grant.   She stressed that  program                 
  receipts are  a valid way  for the State  to function.   The                 
  decision to  treat program receipts  as part of  the general                 
  fund, and reducing them, is not  the best approach.  Program                 
  receipts   are   not   a   drain   on  the   general   fund.                 
  Representative Brown  questioned the difference  between the                 
  amount  of  the amendment  and  the  amount of  the  special                 
  projects.                                                                    
                                                                               
                                6                                              
                                                                               
                                                                               
  NICO  BUS, DIRECTOR,  DIVISION  OF ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT OF NATURAL RESOURCES, remarked that the amendment                 
  would restore two  projects back to the  Governor's request.                 
  Although,  he  added this  amendment  would not  address the                 
  North Star project.   There being  NO OBJECTION, DNR #1  was                 
  adopted.                                                                     
                                                                               
  Representative   Grussendorf   MOVED   to  adopt   DNR   #2.                 
  Representative Mulder OBJECTED.   Representative Grussendorf                 
  pointed out that the Forest  Practices Act and the functions                 
  associated with it  have been reduced  by 40%.  Fishing  and                 
  logging  industries  have  voiced  support  for  the  Forest                 
  Practices Act.                                                               
                                                                               
  Representative Mulder MOVED  to AMEND  DNR #2, reducing  the                 
  amount from $300 thousand dollars  to $150 thousand dollars.                 
  Representative  Therriault  stated   that  when  the  Forest                 
  Practices Act was  passed, it was  an unrealistic source  of                 
  funding.  He advised that the  Commissioner of DNR does have                 
  the  latitude  to  determine  that  forestry  operations  be                 
  contracted  with  private  consultants.   Then  the expenses                 
  would be picked up outside of the State general fund.                        
                                                                               
  Representative Brown asked if $150 thousand dollars would be                 
  adequate to do the inspection work required by the Division.                 
                                                                               
                                                                               
  JOHN SHIVELY, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,                 
  stated that at the $150  thousand dollar level "some"  field                 
  inspections could be  completed.   The allocation would  not                 
  allow a complete  job to  be accomplished.   He agreed  with                 
  Representative  Grussendorf, that  the Forest  Practices Act                 
  provides  an  insurance policy  for  the fishing  and timber                 
  industries.     Commissioner   Shively   also  agreed   with                 
  Representative  Therriault that  who makes  the  payment for                 
  these  concerns  should  be  addressed  as a  public  policy                 
  question.                                                                    
                                                                               
  Representative  Brown   asked  if  DNR  currently   has  the                 
  authority to  charge the  industry a  fee  for the  service.                 
  Commissioner Shively replied that regulations  would have to                 
  be  adopted  to  charge  a  fee  or  to  adopt  contracting.                 
  Representative   Brown  WITHDREW   the   OBJECTION  to   the                 
  amendment.    The amendment  to  the amendment  was adopted.                 
  There being NO OBJECTION to the amendment as amended, DNR #2                 
  was adopted.                                                                 
                                                                               
  Representative Navarre noted that he would HOLD DNR #3,  DNR                 
  presented in these amendments were  addressed in the DNR #1.                 
  Mr. Bus  clarified that DNR #3 was  addressed in DNR #1; DNR                 
                                                                               
                                7                                              
                                                                               
                                                                               
  addressed in DNR #1.                                                         
                                                                               
  Representative   Navarre    MOVED   to    adopt   DNR    #6.                 
  Representative Therriault OBJECTED.   Representative Navarre                 
  advised that  parks  and  recreation  management  could  use                 
  additional  program  receipts.    DNR  #6 would  provide  an                 
  additional   $93  thousand   dollars   to  that   component.                 
  Representative Brown asked if there  would be enough program                 
  receipts to provide  the needed funding.   Mr. Bus  remarked                 
  that  the  reduction was  to  general  funds.   In  order to                 
  accommodate the recommendation, the  Division of Parks would                 
  need  to curtail  operations resulting in  minimized revenue                 
  collections.   Representative Navarre WITHDREW the MOTION to                 
  move DNR #6.                                                                 
                                                                               
  Representative   Navarre    MOVED   to    adopt   DNR    #7.                 
  Representative Therriault OBJECTED.   Representative Navarre                 
  questioned why  there was  a reduction  to the  oil and  gas                 
  development  component,  a comity  which  drives the  entire                 
  economy of the State.   He strongly urged continued  support                 
  of the requested funding, given the stakes at risk.                          
                                                                               
  Representative  Therriault  replied  that the  Oil  and  Gas                 
  Division  has  not taken  any reductions  over the  last few                 
  years.    He   thought  this   Division  should  also   take                 
  reductions,  without  jeopardizing  their   core  functions.                 
  Representative Navarre stressed  that there was good  reason                 
  why that Division  has not taken cuts;  their activities pay                 
  for the budget.   Representative  Brown elaborated that  the                 
  reduction would be a mistake.   To maintain a stable leasing                 
  program will require an adequate number of people to provide                 
  analysis to work with the public.                                            
                                                                               
  A roll call was taken on the MOTION to move DNR #7.                          
                                                                               
       IN FAVOR:      Brown, Grussendorf, Navarre.                             
       OPPOSED:       Therriault,  Kelly,   Kohring,  Parnell,                 
                      Hanley, Foster.                                          
                                                                               
  Representatives Martin and  Mulder were not present  for the                 
  vote.                                                                        
                                                                               
  The MOTION FAILED (3-6).                                                     
                                                                               
  DEPARTMENT OF PUBLIC SAFETY (DPS)                                            
                                                                               
  Co-Chair Hanley MOVED to adopt  DPS #1.  He stated  that the                 
  Fish  and  Game  subcommittee   appropriated  $200  thousand                 
  dollars Department of Fish and Game funds derived from civil                 
  fines and forfeitures to pay for  an RSA with the Department                 
  of  Law.   The  remaining $292  thousand  dollars was  to be                 
                                                                               
                                8                                              
                                                                               
                                                                               
  divided  between Fish  and Wildlife  enforcement  within the                 
  Department of Public Safety and ComFish special projects for                 
  damaged resource studies.   The net effect would be  two new                 
  Fish and Wildlife enforcement officers and two new troopers.                 
  There being NO OBJECTION, DPS #1 was adopted.                                
                                                                               
  Representative   Kohring    MOVED   to    adopt   DPS    #2.                 
  Representative  Brown OBJECTED.   Co-Chair  Hanley  MOVED to                 
  AMEND DPS #2, deleting $561.4  thousand general fund dollars                 
  and replacing  $250 thousand  general fund  dollars.   There                 
  being  NO  OBJECTION to  the  amendment  to DPS  #2,  it was                 
  changed.                                                                     
                                                                               
  Representative Brown  indicated that  it was  Representative                 
  Kohring's intent to  cut the arts to  increase the troopers.                 
  She voiced her  OBJECTION to  taking money out  of the  Arts                 
  Council which serves people throughout the State and putting                 
  it  into   funding  troopers   which  serves   only  a   few                 
  communities.   She concluded  that the  Legislature has  not                 
  done  a  good job  looking  at  the overall  effects  of the                 
  criminal justice system.                                                     
                                                                               
  A roll call was taken on the MOTION to adopt DPS #2.                         
                                                                               
       IN FAVOR:      Grussendorf,  Kelly,  Kohring,   Martin,                 
                      Mulder,  Navarre,  Parnell,  Therriault,                 
                      Hanley, Foster.                                          
       OPPOSED:       Brown.                                                   
                                                                               
  The MOTION PASSED (10-1).                                                    
                                                                               
  Representative Grussendorf MOVED to adopt DPS #3 which would                 
  restore  the   decrement  for  program   receipt  authority.                 
  Representative Mulder OBJECTED.   Representative Grussendorf                 
  noted  that  the increment  would  address  fire suppression                 
  costs.    The cost  of fire  suppression  in Alaska  is $380                 
  million dollars annually; the state's  death toll from fires                 
  averages 1.2 persons per week.                                               
                                                                               
  Representative Parnell  MOVED to  AMEND DPS  #3 from  $180.2                 
  thousand  dollars to $50 thousand dollars designated program                 
  receipts.  The subcommittee  funded  fire suppression  level                 
  training at the same increment as last year.  Representative                 
  Brown stressed  that  the increment  should  be  recognized.                 
  This would be a fee for service operations, where the public                 
  interest is served.  She questioned why it was being reduced                 
  to $50 thousand  dollars.  Representative Brown  pointed out                 
  that the Legislative  Budget and  Audit (LBA) Committee  was                 
  not an efficient way to conduct business during the interim.                 
  She  suggested  that   the  budget  should  move   toward  a                 
  sustaining  situation,   where  industry  can   receive  the                 
  services that they need.                                                     
                                                                               
                                9                                              
                                                                               
                                                                               
  (Tape Change, HFC 96 - 97, Side 1).                                          
                                                                               
  There was NO OBJECTION to amend the amendment.  There was NO                 
  OBJECTION to adopting the amended DPS #3.                                    
                                                                               
  HB 412 was HELD in Committee for further consideration.                      
                                                                               
  HB 413 was HELD in Committee for further consideration.                      
                                                                               
  HB 230 was HELD in Committee for further consideration.                      
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:05 A.M.MARCH 27, 1996                            
                            8:40 A.M.                                          
                                                                               
  TAPE HFC 96 - 96, Side 1, #000 - end.                                        
  TAPE HFC 96 - 96, Side 2, #000 - end.                                        
  TAPE HFC 96 - 97, Side 1, #000 - #100.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the  House Finance  Committee                 
  meeting to order at 8:40 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Mulder                          
  Representative Brown          Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly          Representative Therriault                      
  Representative Kohring                                                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Karen  Crane,  Director,  Libraries,  Archives  &   Museums,                 
  Department of Education;  Mike Greany, Director, Legislative                 
  Finance  Division;  Karen Rehfeld,  Director, Administrative                 
  Services,   Department   of    Education;   John    Shively,                 
  Commissioner,  Department of  Natural  Resources; Nico  Bus,                 
  Director, Division of Administrative Services, Department of                 
  Natural Resources.                                                           
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 412    An Act making appropriations for the operating and                 
            loan  program  expenses of  state  government, for                 
            certain programs, and to capitalize funds;  making                 
            appropriations   under   art.   IX,  sec.   17(c),                 
            Constitution  of the  State  of  Alaska, from  the                 
                                                                               
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            constitutional budget reserve fund;  and providing                 
            for an effective date.                                             
                                                                               
            HB  412   was  HELD  in   Committee  for   further                 
            consideration.                                                     
                                                                               
  HB 413    An  Act  making appropriations  for  the operating                 
            expenses of the  state's integrated  comprehensive                 
            mental  health  program;   and  providing  for  an                 
            effective date.                                                    
                                                                               
            HB  413   was  HELD   in  Committee   for  further                 
            consideration.                                                     
                                                                               
            AGENCIES:                                                          
                                                                               
            DEPARTMENT OF EDUCATION                                            
            DEPARTMENT OF FISH AND GAME                                        
            DEPARTMENT OF NATURAL RESOURCES                                    
            DEPARTMENT OF PUBLIC SAFETY                                        
                                                                               
  HB 230    An Act  making appropriations to the Department of                 
            Education  for  support of  kindergarten, primary,                 
            and secondary education  and for community schools                 
            programs  for fiscal  year  1996 and  fiscal  year                 
            1997;    making     appropriations    from     the                 
            constitutional budget reserve  fund under art. IX,                 
            sec. 17(c), Constitution  of the State of  Alaska;                 
            and providing for an effective date.                               
                                                                               
            HB  230   was  HELD   in  Committee   for  further                 
            consideration.                                                     
                                                                               
  HOUSE BILL 412                                                               
                                                                               
       "An  Act making  appropriations for  the  operating and                 
       loan program expenses of state government,  for certain                 
       programs,    and    to    capitalize   funds;    making                 
       appropriations under art.  IX, sec. 17(c), Constitution                 
       of the State of Alaska,  from the constitutional budget                 
       reserve fund; and providing for an effective date."                     
                                                                               
  HOUSE BILL 413                                                               
                                                                               
       "An  Act   making  appropriations  for   the  operating                 
       expenses of the state's integrated comprehensive mental                 
       health program; and providing for an effective date."                   
                                                                               
  HOUSE BILL 230                                                               
                                                                               
       "An Act  making  appropriations to  the  Department  of                 
       Education  for  support of  kindergarten,  primary, and                 
                                                                               
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       secondary education and for  community schools programs                 
       for  fiscal  year  1996 and  fiscal  year  1997; making                 
       appropriations from the  constitutional budget  reserve                 
       fund under  art. IX,  sec. 17(c),  Constitution of  the                 
       State of Alaska; and providing for an effective date."                  
                                                                               
  DEPARTMENT OF EDUCATION (DOE)                                                
                                                                               
  Co-Chair Hanley noted  that DOE #3  had been moved into  the                 
  Capital Budget.  Representative Navarre pointed out that the                 
  Capital Budget currently  was not  before the Committee  for                 
  consideration and that budget  also would be cut.   He added                 
  that  DOE #3  would restore funding  to the  FY97 Governor's                 
  proposed level in order to give the State Library sufficient                 
  funds to  purchase up-to-date  materials such  as books  and                 
  periodicals.    He  stressed  that  this concern  should  be                 
  contained in the Operating Budget.                                           
                                                                               
  KAREN  CRANE,  DIRECTOR,  LIBRARIES,   ARCHIVES  &  MUSEUMS,                 
  DEPARTMENT OF  EDUCATION,  pointed  out  that  the  proposed                 
  allocation  would be the  only funds  provided to  the State                 
  Library for  library materials.   The  materials budget  has                 
  been reduced  over the  last ten  years. while  the cost  of                 
  books  during that time has risen  over 80%, and the cost of                 
  periodicals has risen over 150%.                                             
                                                                               
  Representative  Navarre  MOVED to  adopt  DOE #3.   Co-Chair                 
  Hanley  OBJECTED.    Representative   Grussendorf  spoke  in                 
  support  of  the  amendment  remaining  in  the  operational                 
  budget.   Representative Navarre  recommended that  a policy                 
  call be made to determine if  the request should continue to                 
  be  an on-going  operating item.   He urged  the Committee's                 
  support.                                                                     
                                                                               
  Representative  Brown  inquired what  had  been  included in                 
  Statewide #2 amendment.                                                      
                                                                               
  KAREN   REHFELD,   DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                 
  SERVICES, DEPARTMENT OF EDUCATION, noted that the  amendment                 
  provided $150  thousand general  fund dollars  for Statewide                 
  Library Electronic  Doorway  (SLED),  $75  thousand  program                 
  receipt  dollars  for  SLED  and  $75 thousand  dollars  for                 
  library materials.                                                           
                                                                               
  A roll call was taken on the MOTION to adopt DOE #3.                         
                                                                               
       IN FAVOR:      Navarre, Brown, Grussendorf, Foster.                     
       OPPOSED:       Kohring,   Martin,    Mulder,   Parnell,                 
                      Therriault, Kelly, Hanley.                               
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
                                                                               
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  Representative Navarre  MOVED to  adopt DOE  #5 which  would                 
  provide partial  funding  for the  1997  Vocational  Student                 
  Leadership Organizations Joint  Conference.  Co-Chair Hanley                 
  asked  if the  request had been  included in  the Governor's                 
  FY97 budget.  Ms. Rehfeld stated that the money had been cut                 
  in last years budget.  There is no money in the Department's                 
  FY97 budget for this concern.                                                
                                                                               
  A roll call was taken on the MOTION to adopt DOE #5.                         
                                                                               
       IN FAVOR:      Navarre, Brown, Grussendorf.                             
       OPPOSED:       Martin,  Mulder,   Parnell,  Therriault,                 
                      Kelly, Kohring, Hanley, Foster.                          
                                                                               
  The MOTION FAILED (3-8).                                                     
                                                                               
  Co-Chair Hanley distributed  DOE #7,  a technical change  to                 
  "other funds", which would reflect in the Governor's amended                 
  budget.  Ms.  Rehfeld advised that  the action taken by  the                 
  Committee regarding the Arts Council budget, the numbers for                 
  the federal receipts and the  gifts and grants authorization                 
  did not match the Governor's amended request.  The amendment                 
  would address that concern.                                                  
                                                                               
  In response to Representative Brown's question, Ms.  Rehfeld                 
  stated that the maximum federal anticipated amount, based on                 
  the amount allocated by the Committee for FY97 would be $296                 
  thousand dollars.  The hope would  be to raise enough in the                 
  gift and grants allocations to be able to match some portion                 
  of  that  amount.    The maximum  amount  of  needed federal                 
  authorization would be $300 thousand dollars.                                
                                                                               
  Representative   Therriault   questioned   if    local   art                 
  contributions had been  used for  FY96 match.   Ms.  Rehfeld                 
  thought that did happen.   There being NO OBJECTION,  DOE #7                 
  was adopted.                                                                 
                                                                               
  Representative  Brown MOVED  to reduce  federal receipts  to                 
  $400  thousand  dollars.    She   thought  that  would  more                 
  accurately  reflect  the  expected  utilization  of  federal                 
  funds.    Representative Kohring  questioned  if that  would                 
  create  an impact  to  the general  fund.   Co-Chair  Hanley                 
  explained  that  the motion  would  only reduce  the federal                 
  authorization.    Ms.  Rehfeld commented  that  it  would be                 
  difficult to  determine if  $400 thousand  dollars would  be                 
  excessive without  a word  from the  National Endowment  for                 
  Arts (NEA).                                                                  
                                                                               
  Representative Therriault voiced  concern that receiving  an                 
  allocation from  the federal government was in question.  He                 
  thought that Representative  Brown's motion was "premature".                 
  Representative  Brown  countered  that  the amendment  would                 
                                                                               
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  restore  the allocation to the  Governor's level.  With cuts                 
  proposed  by the  Committee,  she thought  it  would not  be                 
  possible to capture the federal funds.  The budget should be                 
  accurate   and  reflect   the   action  of   the  Committee.                 
  Representative Brown MOVED  to AMEND the earlier  motion and                 
  insert  $459  thousand  dollars  instead  of  $400  thousand                 
  dollars  as  the federal  receipt  number.   There  being NO                 
  OBJECTIONS, it was adopted.                                                  
                                                                               
  DEPARTMENT OF FISH AND GAME (DFG)                                            
                                                                               
  Representative Grussendorf MOVED to adopt  F&G #1.  Co-Chair                 
  Hanley MOVED to amend F&G #1 to $40 thousand dollars for the                 
  sport fisheries.   There  being NO  OBJECTION  to amend  the                 
  amendment, it was reduced.  There  being NO OBJECTION to the                 
  amendment as amended, it was adopted.                                        
                                                                               
  Representative Grussendorf MOVED to adopt  F&G #2.  Co-Chair                 
  Hanley  OBJECTED.   Representative  Grussendorf  pointed out                 
  that F&G #2  would restore  money back into  the stream  and                 
  refuge  permit,  Division  of  Habitat.    Last  year,  that                 
  component was cut by $500 thousand dollars.  Federal funding                 
  did not provide  enough for  the salmon stream  enhancement,                 
  which resulted in inadequate permitting.                                     
                                                                               
  Co-Chair Hanley  MOVED to add  back $50 thousand  dollars to                 
  F&G  #2.   Representative Navarre OBJECTED.   Representative                 
  Grussendorf stated that  would not  be enough to  accomplish                 
  the necessary tasks of permitting.                                           
                                                                               
  A roll call was taken on the MOTION to amend F&G #2.                         
                                                                               
       IN FAVOR:      Parnell,  Therriault,   Kelly,  Kohring,                 
  Martin,                  Foster, Hanley.                                     
       OPPOSED:       Navarre, Brown, Grussendorf.                             
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (7-3).                                                     
                                                                               
  Representative Navarre  OBJECTED stating that  the component                 
  was inadequate and would result in less economic development                 
  and  the  Department's  ability to  deal  with  requests for                 
  permitting.   Representative  Navarre stressed  that such  a                 
  reduction   would  have   the  potential   of  excellerating                 
  destruction within the  fishery resources.   He pointed  out                 
  that $50 thousand  dollars was a "small"  request to address                 
  such a "large" concern.  Representative Navarre WITHDREW his                 
  OBJECTION.  Representative Therriault OBJECTED.                              
                                                                               
  A roll call was taken on the MOTION to adopt F&G #2.                         
                                                                               
                                                                               
                               14                                              
                                                                               
                                                                               
       IN FAVOR:      Navarre,   Brown,   Grussendorf,  Kelly,                 
                      Kohring, Hanley, Foster.                                 
       OPPOSED:       Parnell, Therriault, Martin.                             
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (7-3).                                                     
                                                                               
  Representative Grussendorf MOVED to adopt  F&G #3.  Co-Chair                 
  Hanley OBJECTED.  Representative  Grussendorf explained that                 
  F&G #3 would provide $200  thousand dollars for subsistence.                 
  He stated that if the State is to gain control over Fish and                 
  Game management, subsistence issues need to be addressed.                    
                                                                               
  Representative   Brown  observed   that   the  Division   of                 
  Subsistence  which  is most  closely tied  to the  people in                 
  rural Alaska will now  be centralized in urban Alaska.   The                 
  effects of these cuts would  close regional office functions                 
  in Dillingham and Bethel.                                                    
                                                                               
  Co-Chair  Hanley  MOVED  to  amend F&G  #3  to  $50 thousand                 
  dollars.  There being  NO OBJECTION, it was amended.   There                 
  being  NO OBJECTION  to  the amendment  as  amended, it  was                 
  adopted.                                                                     
                                                                               
  DEPARTMENT OF NATURAL RESOURCES (DNR)                                        
                                                                               
  Representative   Therriault   MOVED   to   adopt   DNR   #1.                 
  Representative  Brown  OBJECTED.   Representative Therriault                 
  explained  that  the  amendment  would  address the  special                 
  projects in the DNR  budget for gifts and grants.   Co-Chair                 
  Hanley added,  last year there  was $1.1 million  dollars in                 
  gifts and grants in DNR.   He stressed that there should not                 
  count as general  funds in last  years budget.  This  fiscal                 
  year, the Governor has moved that forward.                                   
                                                                               
  Co-Chair Hanley explained that either it could be moved into                 
  general funds which would have the effect of increasing last                 
  year's budget, or it could be treated the same as last year.                 
  The actual budget comparison would then be the same.                         
                                                                               
  MIKE   GREANY,   DIRECTOR,  LEGISLATIVE   FINANCE  DIVISION,                 
  commented that  the amendment would provide consistency with                 
  general  budget  authorization  from  the  Legislature.   He                 
  added, until there is a long term  solution to the gifts and                 
  grants scenario,  the Division  would request  that item  be                 
  viewed  as  a temporary  solution  specific to  a particular                 
  case.                                                                        
                                                                               
  (Tape Change, HFC 96-96, Side 2).                                            
                                                                               
  Representative Brown  commented that the amendment  does not                 
                                                                               
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  appear to be  a gift or  grant.   She stressed that  program                 
  receipts are  a valid way  for the State  to function.   The                 
  decision  to treat program  receipts as part  of the general                 
  fund, and reducing them, is not  the best approach.  Program                 
  receipts   are   not   a   drain   on  the   general   fund.                 
  Representative Brown  questioned the difference  between the                 
  amount  of  the  amendment and  the  amount  of the  special                 
  projects.                                                                    
                                                                               
  NICO  BUS,  DIRECTOR, DIVISION  OF  ADMINISTRATIVE SERVICES,                 
  DEPARTMENT OF NATURAL RESOURCES, remarked that the amendment                 
  would restore two  projects back to the  Governor's request.                 
  Although,  he  added this  amendment  would not  address the                 
  North Star project.   There being  NO OBJECTION, DNR #1  was                 
  adopted.                                                                     
                                                                               
  Representative  Grussendorf   MOVED   to   adopt   DNR   #2.                 
  Representative Mulder OBJECTED.   Representative Grussendorf                 
  pointed out that  the Forest Practices Act and the functions                 
  associated with it  have been reduced  by 40%.  Fishing  and                 
  logging  industries  have  voiced  support  for  the  Forest                 
  Practices Act.                                                               
                                                                               
  Representative Mulder MOVED  to AMEND  DNR #2, reducing  the                 
  amount from $300 thousand dollars  to $150 thousand dollars.                 
  Representative  Therriault  stated  that  when  the   Forest                 
  Practices  Act was passed,  it was an  unrealistic source of                 
  funding.  He advised that the  Commissioner of DNR does have                 
  the  latitude  to  determine  that  forestry  operations  be                 
  contracted with  private  consultants.   Then  the  expenses                 
  would be picked up outside of the State general fund.                        
                                                                               
  Representative Brown asked if $150 thousand dollars would be                 
  adequate to do the inspection work required by the Division.                 
                                                                               
                                                                               
  JOHN SHIVELY, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,                 
  stated that at  the $150 thousand dollar  level "some" field                 
  inspections could be  completed.   The allocation would  not                 
  allow a complete  job to  be accomplished.   He agreed  with                 
  Representative Grussendorf,  that the  Forest Practices  Act                 
  provides  an  insurance policy  for  the fishing  and timber                 
  industries.      Commissioner  Shively   also   agreed  with                 
  Representative Therriault  that  who makes  the payment  for                 
  these  concerns  should  be  addressed  as a  public  policy                 
  question.                                                                    
                                                                               
  Representative  Brown  asked   if  DNR  currently   has  the                 
  authority to  charge the  industry  a fee  for the  service.                 
  Commissioner Shively  replied that regulations would have to                 
  be  adopted  to  charge  a  fee  or  to  adopt  contracting.                 
  Representative   Brown   WITHDREW  the   OBJECTION   to  the                 
                                                                               
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  amendment.    The amendment  to  the amendment  was adopted.                 
  There being NO OBJECTION to the amendment as amended, DNR #2                 
  was adopted.                                                                 
                                                                               
  Representative Navarre  noted that he would HOLD DNR #3, DNR                 
  presented in these amendments were addressed  in the DNR #1.                 
  Mr. Bus  clarified that DNR #3 was  addressed in DNR #1; DNR                 
  addressed in DNR #1.                                                         
                                                                               
  Representative    Navarre   MOVED    to   adopt    DNR   #6.                 
  Representative Therriault OBJECTED.   Representative Navarre                 
  advised  that  parks  and  recreation management  could  use                 
  additional  program  receipts.    DNR  #6 would  provide  an                 
  additional   $93   thousand  dollars   to   that  component.                 
  Representative Brown asked if there  would be enough program                 
  receipts  to provide the  needed funding.   Mr. Bus remarked                 
  that  the  reduction was  to  general  funds.   In  order to                 
  accommodate  the recommendation, the Division of Parks would                 
  need to curtail  operations resulting  in minimized  revenue                 
  collections.   Representative Navarre WITHDREW the MOTION to                 
  move DNR #6.                                                                 
                                                                               
  Representative   Navarre    MOVED   to    adopt   DNR    #7.                 
  Representative Therriault OBJECTED.   Representative Navarre                 
  questioned why  there was  a reduction  to the  oil and  gas                 
  development  component,  a comity  which  drives  the entire                 
  economy of the  State.  He strongly  urged continued support                 
  of the requested funding, given the stakes at risk.                          
                                                                               
  Representative  Therriault  replied  that  the  Oil  and Gas                 
  Division  has not  taken any  reductions over  the last  few                 
  years.    He   thought  this   Division  should  also   take                 
  reductions,  without  jeopardizing  their   core  functions.                 
  Representative Navarre stressed that  there was good  reason                 
  why  that Division has not  taken cuts; their activities pay                 
  for the budget.   Representative  Brown elaborated that  the                 
  reduction would be a mistake.   To maintain a stable leasing                 
  program will require an adequate number of people to provide                 
  analysis to work with the public.                                            
                                                                               
  A roll call was taken on the MOTION to move DNR #7.                          
                                                                               
       IN FAVOR:      Brown, Grussendorf, Navarre.                             
       OPPOSED:       Therriault,  Kelly,  Kohring,   Parnell,                 
                      Hanley, Foster.                                          
                                                                               
  Representatives Martin and  Mulder were not present  for the                 
  vote.                                                                        
                                                                               
  The MOTION FAILED (3-6).                                                     
                                                                               
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  DEPARTMENT OF PUBLIC SAFETY (DPS)                                            
                                                                               
  Co-Chair Hanley MOVED to adopt  DPS #1.  He stated  that the                 
  Fish  and  Game  subcommittee  appropriated  $200   thousand                 
  dollars Department of Fish and Game funds derived from civil                 
  fines and forfeitures to pay for  an RSA with the Department                 
  of  Law.   The  remaining $292  thousand  dollars was  to be                 
  divided between  Fish  and Wildlife  enforcement within  the                 
  Department of Public Safety and ComFish special projects for                 
  damaged resource studies.   The net effect would be  two new                 
  Fish and Wildlife enforcement officers and two new troopers.                 
  There being NO OBJECTION, DPS #1 was adopted.                                
                                                                               
  Representative    Kohring   MOVED    to   adopt    DPS   #2.                 
  Representative Brown  OBJECTED.   Co-Chair  Hanley MOVED  to                 
  AMEND DPS #2, deleting $561.4  thousand general fund dollars                 
  and replacing  $250 thousand  general fund  dollars.   There                 
  being  NO  OBJECTION to  the  amendment  to DPS  #2,  it was                 
  changed.                                                                     
                                                                               
  Representative Brown  indicated that  it was  Representative                 
  Kohring's intent to cut  the arts to increase the  troopers.                 
  She voiced her  OBJECTION to  taking money out  of the  Arts                 
  Council which serves people throughout the State and putting                 
  it  into   funding  troopers   which  serves   only  a   few                 
  communities.   She concluded  that the  Legislature has  not                 
  done  a  good job  looking  at  the overall  effects  of the                 
  criminal justice system.                                                     
                                                                               
  A roll call was taken on the MOTION to adopt DPS #2.                         
                                                                               
       IN FAVOR:      Grussendorf,  Kelly,   Kohring,  Martin,                 
                      Mulder,  Navarre,  Parnell,  Therriault,                 
                      Hanley, Foster.                                          
       OPPOSED:       Brown.                                                   
                                                                               
  The MOTION PASSED (10-1).                                                    
                                                                               
  Representative Grussendorf MOVED to adopt DPS #3 which would                 
  restore  the   decrement  for  program   receipt  authority.                 
  Representative Mulder OBJECTED.   Representative Grussendorf                 
  noted  that  the  increment would  address  fire suppression                 
  costs.    The cost  of fire  suppression  in Alaska  is $380                 
  million dollars annually; the state's  death toll from fires                 
  averages 1.2 persons per week.                                               
                                                                               
  Representative Parnell  MOVED to  AMEND DPS  #3 from  $180.2                 
  thousand dollars to $50 thousand  dollars designated program                 
  receipts.  The subcommittee  funded  fire suppression  level                 
  training at the same increment as last year.  Representative                 
  Brown  stressed that  the  increment  should be  recognized.                 
                                                                               
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  This would be a fee for service operations, where the public                 
  interest is served.  She questioned why it was being reduced                 
  to $50 thousand  dollars.  Representative Brown  pointed out                 
  that the Legislative  Budget and  Audit (LBA) Committee  was                 
  not an efficient way to conduct business during the interim.                 
  She  suggested  that   the  budget  should  move   toward  a                 
  sustaining  situation,  where   industry  can  receive   the                 
  services that they need.                                                     
                                                                               
  (Tape Change, HFC 96 - 97, Side 1).                                          
                                                                               
  There was NO OBJECTION to amend the amendment.  There was NO                 
  OBJECTION to adopting the amended DPS #3.                                    
                                                                               
  HB 412 was HELD in Committee for further consideration.                      
                                                                               
  HB 413 was HELD in Committee for further consideration.                      
                                                                               
  HB 230 was HELD in Committee for further consideration.                      
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:05 A.M.                                          
                                                                               
                                                                               
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