Legislature(1997 - 1998)
04/18/1998 10:35 AM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
APRIL 18, 1998
10:35 A.M.
TAPE HFC 98 - 115, Side 1
TAPE HFC 98 - 115, Side 2
TAPE HFC 98 - 116, Side 1
CALL TO ORDER
Co-Chair Co-Chair Hanley called the House Finance Committee
meeting to order at 10:35 a.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
ALSO PRESENT
Dan Spencer, Chief Budget Analyst, Office of Management and
Budget, Office of the Governor; Annalee McConnell, Director,
Office of Management and Budget, Office of the Governor;
Kyle Johansen, Staff, Representative Williams.
SUMMARY
HB 325 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.
CSHB 325 (FIN) was REPORTED out of Committee with
a "do pass" recommendation.
HB 326 An Act making appropriations for the operating
and capital expenses of the state's integrated
comprehensive mental health program; and
providing for an effective date.
CSHB 326 (FIN) was REPORTED out of Committee with
a "do pass" recommendation.
HOUSE BILL NO. 325
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 NO. 326
An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date.
FRONT SECTION
Co-Chair Hanley provided members with a proposed committee
substitute for HB 325 (FIN), 0-GH2038\F, dated 4/16/98 (copy
on file). He reviewed the changes to the Front section. He
noted that the Governor's proposal to changed "$450" to
"$472" million dollars in section 1 was adopted.
Section 6 of the Governor's bill was deleted. The
Governor's proposal included language to clarify that the
appropriation would be reduced if legislation were enacted
to change the program to needs based. If the legislation is
passed a fiscal note will accompany it to make the
reductions.
Co-Chair Hanley noted that section 6(a) was added to clarify
that if there are unrestricted general funds remaining after
funds are reappropriated from the budget reserve fund to the
subfunds and accounts from which they were transferred, it
would not go back to the unrestricted general fund account.
The Governor is in agreement with the language. Any surplus
funds would stay in the Constitutional Budget Reserve.
Language regarding the supplemental for Disaster Relief and
Fire Suppression was deleted. Co-Chair Hanley observed that
the Governor has the ability to come before the Legislature
and request a supplemental.
New language was added in section 8 to specifically identify
the types of program receipts that are appropriated
conditioned on compliance with program review provisions.
The amount of section 14, Alaska Marine Highway System Fund,
was changed to reflect the back section.
Changes were made to section 21 to reflect labor contracts.
The total dollar amounts were adjusted to reflect a lower
CPI amount. Section 21(c) is a new section:
"Funding for salary and benefits adjustments for
University of Alaska employees who are not members of a
collective bargaining unit and for the following
collective bargaining agreements is included in the
appropriations made to the University of Alaska in sec.
31 of this Act."
Co-Chair Hanley explained that the intent is that all the
contracts be funded from the University's full
appropriation.
Representative Martin referred to section 10, Four Dam Pool
Transfer Fund. He expressed concern that excess money in
the Fund has been used for capital improvement projects. He
maintained that $11 million dollars should have been
appropriated to the Fund. Co-Chair Hanley observed that
under the statutes communities are allowed to deduct some of
their expenses for maintaining the infrastructure related to
power generating sources from the payment. Expenditures have
to be approved by the Alaska Industrial Development and
Export Authority (AIDEA).
Representative Grussendorf pointed out that the intent is to
keep the rates stable.
Co-Chair Therriault MOVED to ADOPT proposed committee
substitute for HB 325 (FIN), 0-GH2038\F, dated 4/16/98.
There being NO OBJECTION, it was so ordered.
Representative Davies MOVED to ADOPT Amendment Front
Section-1 (copy on file). He explained that the amendment
is conceptual. It would add the appropriations for
University of Alaska collective bargaining agreements in
section 21.
Co-Chair Hanley stated that he would rather move all the
collective bargaining adjustments from the front section to
the back section. He stressed that the intent is that the
contracts be funded.
Co-Chair Hanley MOVED to ADOPT to amend Amendment Front
Section-1 to move contract funding to the back of the
operating budget. Representative Davies spoke in support of
keeping the University's contract and COLA language in the
front section.
A roll call vote was taken on the motion.
IN FAVOR: Kelly, Kohring, Martin, Mulder, Davis, Foster,
Hanley, Therriault
OPPOSED: Moses, Davies, Grussendorf
There being NO OBJECTION, Amendment Front Section-1 was
adopted as amended.
Co-Chair Hanley WITHDREW Amendment Front Section-2 (copy on
file).
Representative Grussendorf MOVED to ADOPT Amendment Front
Section-3 (copy on file). Amendment Front Section-3 would
amend section 8, page 3, line 26 by adding "test fishery
receipts". There being NO OBJECTION, it was so ordered.
Representative Grussendorf WITHDREW Amendment Front Section-
4 (copy on file). Co-Chair Hanley noted that fixed costs
for disasters are funded in the back section of the budget.
Representative Grussendorf MOVED to ADOPT Amendment Front
Section-5 (copy on file). Amendment Front Section-5 would
provide $6,735,460 million dollars to fund the monetary
terms of the collective bargaining agreements for salary and
benefit adjustments in the executive branch, Alaska Court
System, University of Alaska, and legislative branch.
DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR explained that the amendment
would cover confidential employees for the executive branch.
With the adoption of Amendment Front Section-1, Amendment
Front Section-5 would provide additional funding for the
University of Alaska. The appropriation would be new money.
Co-Chair Hanley clarified that the goal is not to add
dollars. He suggested that an amendment is needed to
approve collective bargaining agreements for the
Confidential Employees Association of the executive branch.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR agreed that language is
needed to fund the collective bargaining agreements for the
Confidential Employees Association of the executive branch.
Co-Chair Hanley MOVED to amend Amendment Front Section-5 by
replacing it with the following language from Amendment
Front Section-2:
"Funding for collective bargaining agreements for the
Confidential Employees Association, representing
certain employees of departments of the executive
branch of state government, is included in the
appropriations made to those departments in sec. 31 of
this Act."
Co-Chair Hanley clarified that no new funding is being
appropriated to fund these contracts. There would be an
unallocated reduction of $117 thousand dollars spread
throughout the agencies.
Ms. McConnell questioned if the intent is to set this union
apart from others. Co-Chair Hanley clarified that the
intent is not to treat the union differently, but to
accommodate the contract within the Majority's spending
plan.
Co-Chair Hanley clarified that the entire $627.4 thousand
dollars for the University of Alaska was moved to the back
section. Authorization language is maintained in the front
section.
Representative Kohring spoke against approving the
contracts. Representative Foster expressed concern with
unallocated reductions.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Davis, Foster, Grussendorf, Kelly, Martin,
Moses, Mulder, Therriault, Hanley
OPPOSED: Kohring
The MOTION PASSED (10-1).
Co-Chair Hanley explained that the Governor had proposed an
additional $1.6 million dollars for the University of Alaska
and $117 thousand dollars for the Confidential Employees
Association.
There being NO OBJECTION, Amendment Front Section-5 was
adopted as amended.
Co-Chair Hanley MOVED to ADOPT Amendment Front Section-6 on
behalf of Representative Williams (copy on file). Amendment
Front Section-6 would add $442,860 thousand dollars for
additional education support in the Ketchikan School
District.
KYLE JOHANSEN, STAFF, REPRESENTATIVE WILLIAMS spoke in
support of Amendment Front Section-6. He emphasized that
jobs have been lost in Ketchikan due to the closure of its
pulp mill. He noted that federal timber receipts have been
reduced. Ketchikan cannot increase its funding through the
foundation funding. Ketchikan has not received any hold
harmless funding to make up for the drop in their school
population.
(Tape Change, HFC 98 - 115, Side 2)
Co-Chair Therriault reiterated that Ketchikan does not rise
to the 10 percent trigger for additional funding. Mr.
Johansen stressed that the trigger is too high. Co-Chair
Therriault emphasized that the entire foundation formula
would be reviewed in SB 36.
Representative Martin maintained that all the state's school
districts should be reviewed as a whole.
Representative Grussendorf maintained that no school
district would ever trigger the 10 percent requirement for
additional funding. He spoke in support of the amendment.
Mr. Johansen explained that Ketchikan received an additional
$25 million dollars from a federal settlement. The
settlement requires the money be used to start new economic
development to replace the mill closure. Ketchikan has lost
approximately 230 students in the current school year.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder,
Therriault, Hanley
The MOTION FAILED (3-8).
MENTAL HEALTH
Co-Chair Hanley MOVED to ADOPT Amendment Mental Health-2
(copy on file). Amendment Mental Health-2 would add $530
thousand dollars for Mental Health Trust Land Management.
He explained that appropriations from the Mental Health
Trust were inadvertently left out. There being NO
OBJECTION, it was so ordered.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
Co-Chair Hanley MOVED to ADOPT Amendment HSS-2 (copy on
file). Amendment HSS-2 would transfer $70 thousand dollars
from Medicaid Services to the Department of Fish and Game,
Commissioner's Office. He observed that $100 thousand fish
and game fund dollars were deleted from the Commissioner's
office.
There being NO OBJECTION, it was so ordered.
Representative Martin MOVED to ADOPT Amendment HSS-3 (copy
on file). Amendment HSS-3 explains the intent of the House
Finance Committee in deleting funding for the General Relief
Medical program (GRM). The letter of intent states that a
major portion of GRM funding is used to pay for free
elective abortions and abortion related services. The
intent also maintained that there is little or no regulatory
overview or accountability for the expenditures.
Representative Davies OBJECTED. He spoke against the
amendment.
Representative Martin spoke in support of the amendment.
Representative Kohring added his name as a sponsor.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Kelly, Kohring, Martin, Mulder,
Therriault, Hanley
OPPOSED: Davies, Davis, Grussendorf, Moses
The MOTION FAILED (4-7).
Representative Davies MOVED to ADOPT Amendment HSS-4 (copy
on file). Amendment HSS-4, as amended by the sponsor, would
transfer $76 thousand dollars from Medicaid Services to
Confidential Employees Association Bargaining Agreements.
Representative Davies clarified that the intent is that the
bargaining unit is treated the same as all the other
bargaining units. There being NO OBJECTION, it was so
ordered.
Co-Chair Hanley MOVED to ADOPT Amendment HSS-5 (copy on
file). Amendment HSS-5 would transfer $50 thousand dollars
from Medicaid Services to the COMPASS Component in the
Department of Health and Social Services. There being NO
OBJECTION, it was so ordered.
Co-Chair Hanley MOVED to ADOPT the proposed committee
substitute for HB 326 (front section) #0-GH2040\E, dated
4/8/98 (copy on file). There being NO OBJECTION, it was so
ordered.
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Representative Davies MOVED to ADOPT Amendment DEC-21 (copy
on file). Amendment DEC-21 would restore a position in
Administrative Services. Funding for the position was
adopted in a previous amendment. There being NO OBJECTION,
it was so ordered.
Co-Chair Hanley MOVED to ADOPT Amendment DEC-22 (copy on
file). Amendment DEC-22 corrects a technical problem in
Amendment DEC-3A. It clarifies that the funding source in
Amendment DEC-3a is the Alaska Drinking Water Fund. There
being NO OBJECTION, it was so ordered.
DEPARTMENT OF PUBLIC SAFETY
Representative Davis MOVED to ADOPT Amendment PS-8 (copy on
file). Amendment PS-8 would delete $50 thousand dollars
from the Office of Public Advocacy and $50 thousand dollars
from the Alaska Public Defenders Agency; and add $50
thousand dollars for Fish and Wildlife Service,
Enforcement/Investigative Services and $50 thousand dollars
for Department of Public Safety, Alaska State Troopers
Detachments. Representative Davis spoke in support of the
amendment. Representative Davies OBJECTED.
Representative Grussendorf expressed concern with the
funding source. Co-Chair Hanley spoke in support of the
amendment. He noted that both offices have come in under
their original request during a number of years. He noted
that there is additional money in their budgets to fund some
of the Smart Start Program.
Representative Davies expressed support for the addition,
but expressed concern with the deletion. Representative
Foster and Representative Davies spoke against the
amendment.
Ms. McConnell stressed that both offices will have a
significant increase due to an intensified effort on child
abuse and neglect enforcement. She stressed that the
offices have had to keep positions open in areas where there
is a backlog because they did not know if a supplemental
request would be approved. She expressed concern with the
funding level and predicted that there would be a
significant bottleneck in the offices. Both offices have
seen increased caseloads in the last three months, related
to child abuse and neglect.
Representative Davis MOVED to amend the amendment to put all
$100 thousand dollars into the Fish and Wildlife Services.
There being NO OBJECTION, it was so ordered.
Representative Davies MOVED to amend the amendment by
changing the deletes to the Department of Law, Oil and Gas
Litigation. He maintained that the Committee is
intentionally underfunding the Office of Public Advocacy and
Permanent Fund. He stated that he would rather see the
Department of Law, Oil and Gas Litigation component
intentionally underfunded.
Co-Chair Hanley expressed frustration with the size of the
Smart Start program. He maintained that the level of the
program was designed to fit into the level that was
perceived to be available. He pointed out that the entire
Smart Start program has not being funded.
Representative Grussendorf spoke in support of the amendment
to the amendment.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Foster, Kelly, Moses
OPPOSED: Mulder, Davis, Kohring, Martin, Hanley, Therriault
The MOTION FAILED (5-6).
A roll call vote was taken on the motion to adopt Amendment
PS-8 as amended by Representative Davis.
IN FAVOR: Davis, Foster, Kelly, Kohring, Martin, Mulder,
Therriault, Hanley
OPPOSED: Davies, Grussendorf, Moses
The MOTION PASSED (8-3).
Co-Chair Hanley suggested that the additional officers be
placed in areas where the representation supports them.
Representative Davies expressed concern that vacant
positions in the Office of Public Advocacy and Permanent
Fund not be held open due to a lack of funding.
Representative Mulder expressed frustrations that actions by
unions have not supported additional placement of officers.
DEPARTMENT OF EDUCATION
Representative Grussendorf MOVED to ADOPT Amendment DOE-10
(copy on file). Amendment DOE-10 would add $163.5 thousand
dollars to the Alaska Postsecondary Education Commission for
the State Educational Incentive Grant Program. He spoke in
support of the amendment. Only 160 of 1,200 applicants
would receive grants at the current funding level. This is
a federally funded program. He expressed concern that
federal funding would be lost without state participation.
(Tape Change, HFC 98 -116, Side 1)
Representative Kelly spoke against the amendment.
Representative Davies spoke in support of the amendment. He
emphasized that the grants go to low income students.
Representative Kelly maintained that other grants and loans
are available.
Co-Chair Hanley spoke against the amendment.
Representative Grussendorf reiterated that there are 1,200
students applying for the grants per year. Grants range
from $100 to $1,500 hundred dollars. A $119 thousand dollar
state match is needed to maintain the program.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Foster, Grussendorf, Moses
OPPOSED: Davis, Kelly, Kohring, Martin, Therriault, Hanley
Representative Mulder was absent from the vote.
The MOTION FAILED (4-6).
Representative Kohring MOVED to Rescind the Committee's
action in failing to adopt Amendment CRA-1 (copy on file).
The amendment would delete $472.5 thousand dollars in
federal funds for Community Development Assistance.
Representative Grussendorf OBJECTED. He spoke against the
motion. He pointed out that the funds are purely federal.
A roll call vote was taken on the motion.
IN FAVOR: Kelly, Kohring, Martin, Mulder, Therriault, Hanley
OPPOSED: Davis, Davies, Foster, Grussendorf, Moses
The MOTION PASSED (6-5).
Representative Kohring MOVED to amend Amendment CRA-1 by
reducing the deletion to $236.25 thousand dollars. There
being NO OBJECTION, it was so ordered.
Representative Kohring spoke in support of the amendment.
He maintained that RuralCAP has not used the money
appropriately. He asserted that the money has been spent on
political purposes. He referred to an arts catalog.
Representative Grussendorf spoke against the amendment.
Representative Kelly stressed that an ombudsman report
indicated that the catalog did not fulfill its goal to
provide markets.
Representative Martin pointed out that 80 percent of the
grant for artists is going to administration.
Representative Davies spoke against the amendment. He
suggested that the funding could be put to better use in the
future.
Representative Grussendorf pointed out that the audit was
based on activities in 1993 and 1994. He questioned if
corrective actions have been taken.
Representative Kohring observed that an attorney
representing RuralCAP testified on subsistence.
Representative Davies questioned if the attorney was funded
from the money in question.
A roll call vote was taken on the motion.
IN FAVOR: Kelly, Kohring, Martin, Mulder, Davis, Therriault,
Hanley
OPPOSED: Grussendorf, Moses, Davies, Foster
The MOTION PASSED (7-4).
Representative Mulder MOVED to report CSHB 325 (FIN) and out
of Committee. There being NO OBJECTION, it was so ordered.
Representative Mulder MOVED to report CSHB 326 (FIN) out of
Committee. There being NO OBJECTION, it was so ordered.
ADJOURNMENT
The meeting adjourned at 12:55 p.m.
House Finance Committee 1 4/18/98 a.m.
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