Legislature(1997 - 1998)

03/25/1997 08:17 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         MARCH 25, 1997                                        
                            8:17 A.M.                                          
                                                                               
  TAPE HFC 97 - 75, Side 1, #000 - end.                                        
  TAPE HFC 97 - 75, Side 2, #000 - end.                                        
  TAPE HFC 97 - 76, Side 1, #000 - #060.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the  House Finance  Committee                 
  meeting to order at 8:17 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kelly                           
  Co-Chair Therriault           Representative Kohring                         
  Representative Davies         Representative Martin                          
  Representative Davis          Representative Moses                           
  Representative Foster         Representative Grussendorf                     
                                                                               
  Representative Mulder was not present for the meeting.                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Remond  Henderson,  Director,  Division   of  Administrative                 
  Services, Department of Community and Regional Affairs.                      
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 75     An Act making appropriations for the operating and                 
            loan  program expenses  of  state government,  for                 
            certain  programs,  and to  capitalize  funds; and                 
            providing for an effective date.                                   
                                                                               
            HB  75   was   HELD  in   Committee  for   further                 
            consideration.                                                     
                                                                               
  HB 76     An  Act  making appropriations  for  the operating                 
            expenses of the  state's integrated  comprehensive                 
            mental  health  program;   and  providing  for  an                 
            effective date.                                                    
                                                                               
            HB   76  was   HELD  in   Committee  for   further                 
            consideration.                                                     
                                                                               
  AMENDMENTS:                                                                  
                                                                               
       DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS (DCRA)                     
                                                                               
                                1                                              
                                                                               
                                                                               
  HOUSE BILL 75                                                                
                                                                               
       "An  Act making  appropriations for  the operating  and                 
       loan program expenses of state government, for  certain                 
       programs, and to capitalize funds; and providing for an                 
       effective date."                                                        
                                                                               
  HOUSE BILL 76                                                                
                                                                               
       "An  Act  making   appropriations  for  the   operating                 
       expenses of the state's integrated comprehensive mental                 
       health program; and providing for an effective date."                   
                                                                               
  DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS (DCRA)                          
                                                                               
  Representative Grussendorf MOVED to adopt DCRA-#1.  [Copy on                 
  file].  Co-Chair Therriault OBJECTED.                                        
                                                                               
  Representative  Grussendorf  explained  that  the  amendment                 
  would provide the  authority for  the Department to  receive                 
  federal funding for the first  year of a three-year  federal                 
  grant.  The One-Stop project would aid Alaska in its efforts                 
  to  streamline  government  and  at  the same  time  enhance                 
  services for individuals at a community level.                               
                                                                               
  Co-Chair  Hanley interjected  that  his amendment,  DCRA-#7,                 
  would also  address that  concern.   The intent  was not  to                 
  allow  any  additional  programs,  but instead,  consolidate                 
  current programs in order to save money.                                     
                                                                               
  Co-Chair Therriault commented that  his reason for objecting                 
  was  that  rarely  are  federal  funds dispensed  without  a                 
  General Fund  match.  Representative Grussendorf  noted that                 
  he understood no federal match would  be required.  Co-Chair                 
  Therriault WITHDREW the OBJECTION.                                           
                                                                               
  Representative Kohring  OBJECTED  to adopting  DCRA-#1.   He                 
  elaborated that the  Subcommittee did  not believe that  the                 
  expenditure  was warranted.   Following  further discussion,                 
  Representative Kohring WITHDREW his OBJECTION to DCRA-#1.                    
                                                                               
  Representative G.  Davis inquired  if any  of the  funds had                 
  been used for lease payment.   Representative Kohring stated                 
  that there was no lease money  involved.  The money would be                 
  used   for  the   purchase   of   equipment  and   software.                 
  Representative Kohring decided to maintain his OBJECTION.                    
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Moses, J. Davies, G. Davis, Grussendorf,                 
                      Hanley, Therriault                                       
       OPPOSED:       Martin, Foster, Kelly, Kohring                           
                                                                               
                                2                                              
                                                                               
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (6-4).                                                     
                                                                               
  Representative Grussendorf MOVED to adopt DCRA-#2.  [Copy on                 
  file].  Representative Kohring OBJECTED.                                     
                                                                               
  Representative  Grussendorf  explained  that  the  amendment                 
  would  allocate  100%  federal   funds  to  provide  support                 
  services for the One-Stop Project.  One-Stop is a three-year                 
  federal  grant to aid  Alaska in  its efforts  to streamline                 
  government  and  at  the  same  time  enhance  services  for                 
  individuals  at  a  community  level.   Co-Chair  Therriault                 
  questioned the administration and  support component of  the                 
  amendment.    Representative Grussendorf  commented  that $3                 
  million dollars would be used  for computers and programming                 
  so that  each department  will be able  to more  efficiently                 
  "track" individuals.                                                         
                                                                               
  REMOND  HENDERSON,  DIRECTOR,  DIVISION   OF  ADMINISTRATIVE                 
  SERVICES,  DEPARTMENT  OF  COMMUNITY  AND REGIONAL  AFFAIRS,                 
  spoke  to  the  money flow  structure.    The  $100 thousand                 
  dollars  would be  Inter-Agency receipts  from the  One-Stop                 
  component; $3.6 million  dollars was  also established as  a                 
  One-Stop  shop  component.   The  $100 thousand  dollars was                 
  RSA'd   from  that  component  to  the  administrative  data                 
  processing (DP) component.  The DCRA  DP staff will take the                 
  lead to develop the system throughout the State.                             
                                                                               
  Co-Chair Hanley  asked if the Department had  the ability to                 
  make the  switch without  the Legislature's  approval.   Mr.                 
  Henderson pointed out  that the  request includes costs  for                 
  travel  and  directly   related  contractual   expenditures.                 
  Transferring could be processed through an RP, although, the                 
  Department  decided to  show a  true  reflection of  how the                 
  expenditures would be  spent in  data processing.   Co-Chair                 
  Hanley pointed out that the intent  was to co-locate all the                 
  training information offices to one location.                                
                                                                               
  Representative  G.  Davis  suggested  that  there  could  be                 
  double-counting  unless  DCRA-#1  was  reduced by  the  same                 
  amount.  Co-Chair  Hanley did  not agree,  pointing out  the                 
  transfer and  back-out at  the bottom.   Appropriations  are                 
  made by the budget request unit and not by component.                        
                                                                               
  Representative Kohring  echoed his concern that  the program                 
  would not  bring greater  efficiency.   Co-Chair  Therriault                 
  voiced  support  for the  amendment,  pointing out  that the                 
  money  had  already   been  authorized  and  that   now  the                 
  Department should be  given direction on how  to spend those                 
  funds.                                                                       
                                                                               
                                3                                              
                                                                               
                                                                               
  Representative Martin recommended incorporating DCRA #1, #2,                 
  & #3 into one amendment.   Mr. Henderson replied that within                 
  the DP component, the Department would not have the  federal                 
  authority  to  receive  the  funds.     DCRA-#2  allows  the                 
  Department to RSA  the money  to the proper  component.   He                 
  stressed  that  "One-Stop"   is  the   only  component   the                 
  Department could receive the federal funds in.                               
                                                                               
  Co-Chair Hanley MOVED to AMEND DCRA-#2, changing interagency                 
  receipts to federal  receipts and at the  same time reducing                 
  the  One-Stop  component  by $100  thousand  federal  dollar                 
  receipts.  There  being NO  OBJECTION, DCRA-#2 was  amended.                 
  There being  NO OBJECTION  to the  amended  DCRA-#2, it  was                 
  adopted.                                                                     
                                                                               
  Representative  Grussendorf  revised  DCRA-#3,  substituting                 
  interagency  receipts  to  federal  receipts  and  adding  a                 
  reduction  of  $97.7  thousand  dollars  from  the  One-Stop                 
  program.    Representative Grussendorf  MOVED  to adopt  the                 
  revised DCRA-#3.  [Copy on file].  There being NO OBJECTION,                 
  DCRA-#3 was adopted.                                                         
                                                                               
  Representative Grussendorf MOVED to adopt DCRA-#4.  [Copy on                 
  file].  Representative Kohring OBJECTED.                                     
                                                                               
  Representative  Grussendorf  explained  that  DCRA-#4  would                 
  provide federal  funding and  a General  Fund match for  the                 
  Rural Utility Business Assistance  (RUBA) program.   Passage                 
  of the amendment would  provide the State a savings  of $4.5                 
  million  dollars.   Without  the  funding, the  program will                 
  suffer management problems.   He added that the program  had                 
  been  created through  the  Environmental Protection  Agency                 
  (EPA).                                                                       
                                                                               
  Co-Chair  Hanley  asked  if those  funds  could  be received                 
  without the General  Fund portion.  Mr.  Henderson commented                 
  that  there was  a 25%  federal match  component.   Co-Chair                 
  Therriault questioned the need to have a separate program in                 
  DCRA when there already exists a maintenance program in  the                 
  Department  of   Environmental  Conservation  (DEC).     Mr.                 
  Henderson  responded  that RUBA  was a  technical assistance                 
  program.  Employed  individuals in that component  are local                 
  government specialists, located in Fairbanks and  Anchorage;                 
  a portion  of the  money would  also fund  contracts in  St.                 
  Mary's.   The  contracts  provide assistance  to individuals                 
  teaching techniques to operate  the utilities for generating                 
  greater revenue.                                                             
                                                                               
  Mr. Henderson clarified  that the $225 thousand  dollars was                 
  not  new  money.   It had  previously  been budgeted  in the                 
  Capital  Budget  and now  was being  moved to  the operating                 
                                                                               
                                4                                              
                                                                               
                                                                               
  budget.   Representative J. Davies  pointed out that a rural                 
  sanitation council had been established under  both Governor                 
  Hickel  and  Governor  Knowles representing  the  State  and                 
  federal government and  the private sector.   Their foremost                 
  recommendation   was  to   strengthen   the  RUBA   program.                 
  Representative  Kohring countered  that the program  to date                 
  had a "poor" track record.                                                   
                                                                               
  Representative Grussendorf argued that RUBA was an excellent                 
  program serving rural Alaska.  Co-Chair Hanley noted that he                 
  was supportive of  the federal fund receipts  portion of the                 
  amendment.  Representative Grussendorf  MOVED to AMEND DCRA-                 
  $225.0 thousand  dollars.  There  being NO OBJECTION  to the                 
  proposed change, it was incorporated.                                        
                                                                               
  Representative Martin OBJECTED to the amended DCRA-#4.                       
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Moses, J. Davies, G. Davis, Grussendorf,                 
                      Foster, Kelly, Therriault, Hanley                        
       OPPOSED:       Kohring, Martin                                          
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (8-2).                                                     
                                                                               
  Representative Grussendorf MOVED to adopt DCRA-#5.  [Copy on                 
  file].  Representative Kohring OBJECTED.                                     
                                                                               
  Representative  Grussendorf  explained  that  the  amendment                 
  would  restore  funding  to  the  Child Care  program  which                 
  provides grants to licensed child care providers and deletes                 
  the  funding  from the  Day  Care Assistance  Programs which                 
  would provide subsidies to low and moderate income families.                 
  Representative  Grussendorf  amended  DCRA-#5, changing  the                 
  General Fund  amount in  the Child  Assistance portion  from                 
  $2.3 million dollars to $1.6  million dollars.  There  being                 
  NO OBJECTION to the proposed change, it was made.                            
                                                                               
  Representative  Kohring  reiterated  his  objection  to  the                 
  amended DCRA-#5.   He discussed the subcommittee's objective                 
  to reduce  overall spending,  while investigating  subsidies                 
  that go directly  to the facilities.  The  subcommittee felt                 
  that it was  inappropriate that dollars  go directly to  the                 
  facilities and instead recommended that  all funding go into                 
  the day care assistance components.                                          
                                                                               
  (Tape Change HFC 97-75, Side 2).                                             
                                                                               
  Representative    Kohring    cited     his    "philosophical                 
                                                                               
                                5                                              
                                                                               
                                                                               
  disagreement" with the State subsidizing facility owners and                 
  businesses.        Representative    Martin   agreed    with                 
  Representative Kohring supporting that the two components be                 
  combined.                                                                    
                                                                               
  Representative  Grussendorf countered  that there was  not a                 
  single large business  in the State  that was not  receiving                 
  some sort of  State subsidy or  break.  The  purpose of  the                 
  amendment would be to provide facilities and or environments                 
  to keep children from being "warehoused".  The State must be                 
  willing to invest that kind of money into an environment for                 
  youngsters in  order to create socially  responsible people.                 
  He  emphasized that day care providers  do not make a lot of                 
  money.   Their work is  about service, providing  a valuable                 
  service to adults in the work force.                                         
                                                                               
  Representative J. Davies elaborated on  the value of funding                 
  for child  care facilities.   They  can not  operate on  the                 
  revenues received from  the parents.   Day care workers  are                 
  some of the lowest paid  workers in the State, consequently,                 
  causing  a  high turnover  rate.   He  implied that  a quick                 
  turnover of  teachers for the age group  being considered is                 
  not  a  good  thing.     Preschoolers  need  continuity  and                 
  stability.  Also,  facilities do not qualify  for the grants                 
  unless they are licensed.  That  is the important difference                 
  between grant money  and the child care  assistance program.                 
  Representative Davies  suggested that child  care facilities                 
  are as important as  the public school system.   He stressed                 
  that the child care grant program is essential.                              
                                                                               
  In response to Co-Chair Hanley, Mr. Henderson explained that                 
  the statute allows  for a maximum  of $50 dollars per  child                 
  distributed through the  child care grant program  and which                 
  is based upon children in a licensed facility program.                       
                                                                               
  Representative   Kohring  determined   that  there   was  no                 
  guarantee that the day care program  would be one of quality                 
  because they were  licensed by  the State.   He cited  known                 
  problems within child care facilities.   He believed by  not                 
  adopting the amendment, parents would then be more empowered                 
  in deciding  how the  funding for  their  children would  be                 
  spent.                                                                       
                                                                               
  Co-Chair Hanley asked if the amendment was not funded, would                 
  the grant  amount per  month per  child be  increased.   Mr.                 
  Henderson indicated that it would not.   He pointed out that                 
  most areas of the State do  not have a waiting list for  day                 
  care  assistance and perhaps  the funding  could be  used to                 
  increase the subsidy amount to lower economic parents.                       
                                                                               
  Representative J. Davies ascertained that by  not allocating                 
  funding for these  facilities would cause rates  to increase                 
                                                                               
                                6                                              
                                                                               
                                                                               
  as well as  Alaska loosing  the federal match  dollars.   He                 
  stressed that studies clearly demonstrate that  licensed day                 
  care is "better quality care" than the non-licensed care.                    
                                                                               
  Co-Chair Hanley  asked if federal funds were attached to the                 
  child  care program.   Mr.  Henderson replied  there are  no                 
  federal funds associated with the  child care grant program.                 
                                                                               
                                                                               
  Representative Kelly echoed Representative Kohring's concern                 
  with the amendment.  By putting  the money into the hands of                 
  the "users of the  service" will provide them more  power in                 
  the marketplace.  He pointed out  that the State would never                 
  offer such an advantage to the oil industry.  Representative                 
  Grussendorf strongly disagreed.   He listed multiple  breaks                 
  given  to  the  oil  industry  through  tax  reductions  and                 
  subsidies.    He  referenced  the   bulk  fuel  and  gasohol                 
  situation.   Representative  Kelly  argued that  removal  of                 
  taxes was a "far cry" from tax subsidies.  He criticized the                 
  fact that families  put their children in  day care centers,                 
  when  rather  they should  be  encouraged to  raise children                 
  themselves at home.                                                          
                                                                               
  Representative  J.  Davies rebutted  that  if the  money was                 
  placed into  the hands  of the  parents, there  would be  no                 
  direct  incentive  to   be  licensed.     The  parents   are                 
  economically strapped and they will be looking for the least                 
  costly facilities.  Those will be the ones that do not spend                 
  money on training  their staff or money  on appropriate toys                 
  for that level  of child.   Low income parents do  not often                 
  know that this is important criteria.   He stressed that the                 
  State  system will  pay in  the end with  increased juvenile                 
  delinquency,  increased problems  in  schools and  increased                 
  people in jail.                                                              
                                                                               
  Mr. Henderson noted that parents have the option of where to                 
  place their children,  whether it  be in a  licensed or  non                 
  licensed facility.   Co-Chair Hanley  asked if the  day care                 
  assistance  program   included  a  requirement   that  those                 
  children be placed  in a  licensed day care  facility.   Mr.                 
  Henderson  stated  that there  was  no requirement  that the                 
  child go to a licensed facility.                                             
                                                                               
  In  response to a comment made  by Representative Kelly, Mr.                 
  Henderson  explained that  day care  licensing was  provided                 
  through the  Department of  Health and  Social Services  and                 
  that  he   understood  licensing   requirements  were   very                 
  stringent.                                                                   
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      J. Davies, G. Davis, Grussendorf, Moses,                 
                                                                               
                                7                                              
                                                                               
                                                                               
                      Hanley, Therriault                                       
       OPPOSED:       Foster, Kelly, Kohring, Martin                           
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (6-4).                                                     
                                                                               
  Representative  Grussendorf  WITHDREW  DCRA-#6.    [Copy  on                 
  file].  There being NO OBJECTION, it was withdrawn.                          
                                                                               
  Co-Chair Hanley  WITHDREW DCRA-#7.   [Copy on file].   There                 
  being NO OBJECTION, it was withdrawn.                                        
                                                                               
  Co-Chair  Hanley MOVED  to adopt  DCRA-#8.  [Copy  on file].                 
  Representative  J.   Davies  OBJECTED  for  the  purpose  of                 
  discussion.                                                                  
                                                                               
  Co-Chair  Hanley  explained  that  DCRA-#8  would  provide a                 
  reduction to  Municipal Assistance  and Revenue  Sharing, an                 
  additional reduction  from the Governor's  request, equaling                 
  6% below the amount appropriated for FY97.                                   
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      G.  Davis,  Grussendorf,  Kelly, Martin,                 
                      Hanley, Therriault                                       
       OPPOSED:       J. Davies, Foster, Kohring, Moses                        
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION PASSED (6-4).                                                     
                                                                               
  Representative Kohring noted  for the  record that his  "no"                 
  vote   was   because  the   cuts   were  not   deep  enough.                 
  Representative J. Davies stated for the record that his "no"                 
  vote  was cast  because he  did  not support  property taxes                 
  being raised.                                                                
                                                                               
  Representative Grussendorf MOVED to adopt DCRA-#9.  [Copy on                 
  file].    Co-Chair  Hanley  OBJECTED   for  the  purpose  of                 
  discussion.                                                                  
                                                                               
  Representative  Grussendorf  explained  that  DCRA-#9  would                 
  restore the $913.4 thousand dollars, cut by the subcommittee                 
  from Energy Operations  and would spread the  restoration to                 
  the components  reduced to  fund the  circuit rider  program                 
  ($425.0).  The net effect to  the rural energy program would                 
  be a $442.7 thousand dollar reduction restoring seven of the                 
  fifteen  positions.    The  proposed subcommittee  reduction                 
  would  be  added  to the  $400.0  thousand  dollar reduction                 
  included in the Governor's proposed FY98 budget.                             
                                                                               
                                                                               
                                8                                              
                                                                               
                                                                               
  Representative  Kohring  pointed  out  that the  restoration                 
  would "blow"  the cap that  the subcommittee worked  hard to                 
  achieve.    They  decided  to  cut  this item,  following  a                 
  recommendation from a  previous House  Speaker who had  been                 
  involved in establishing the  program.  She stated that  the                 
  intent was that  there would  be seven personnel  positions.                 
  The bureaucracy has  blossomed from the original  program to                 
  twenty-four individuals.   Representative  Kohring spoke  to                 
  Representative  Ivan's  concern   that  there  be  technical                 
  assistance  within the program for  the rural areas in order                 
  to provide the needed funding to run the facilities.                         
                                                                               
  (Tape Change HFC 97-76, Side 1).                                             
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Foster, Grussendorf, Moses, J. Davies                    
       OPPOSED:       G.   Davis,   Kelly,   Kohring,  Martin,                 
  Therriault,                   Hanley                                         
                                                                               
  Representative Mulder was not present for the vote.                          
                                                                               
  The MOTION FAILED (4-6).                                                     
                                                                               
  HB  75  and  HB  76  were  HELD  in  Committee  for  further                 
  consideration.                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 9:45 A.M.                                           
                                                                               
                                                                               
                                9                                              

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