Legislature(1999 - 2000)
04/09/1999 02:10 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 9, 1999
2:10 P.M.
TAPE HFC 99 - 73, Side 1
TAPE HFC 99 - 73, Side 2
TAPE HFC 99 - 74, Side 1
TAPE HFC 99 - 74, Side 2
TAPE HFC 99 - 75, Side 1
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 2:10 p.m.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Vice-Chair Bunde Representative Kohring
Representative Austerman Representative Moses
Representative J. Davies Representative Williams
Representative G. Davis
ALSO PRESENT
Ed Flanagan, Commissioner, Department of Labor; John Bitney,
Legislative Liaison, Alaska Housing Finance Corporation,
Department of Revenue; Dan Spencer, Chief Budget Analyst,
Office of Management and Budget, Office of the Governor;
David Teal, Legislative Finance Division; Barbara Frank,
Director, Division of Administrative Services, Department of
Environmental Conservation; Michelle Brown, Commissioner,
Department of Environmental Conservation; Dan Easton,
Director, Division of Facility Construction and Operation;
Kathryn Daughhetee, Director, Administrative Services
Division, Department of Law; Nico Bus, Administrative
Services Manager, Division of Support Services, Department
of Natural Resources.
SUMMARY
HB 50 "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."
Amendments for the following budgets were
considered:
Department of Labor
Department of Law
Department of Natural Resources
Department of Environmental Conservation
Department of Community and Regional Affairs
Department of Health and Social Services
Alaska State Legislature
Office of the Governor
Front Section
HB 50 was REPORTED out of Committee with a "do
pass" recommendation.
HB 51 "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."
HB 51 was REPORTED out of Committee with a "do
pass" recommendation.
DEPARTMENT OF LABOR
Representative Austerman MOVED to ADOPT Amendment LAB-A:
Delete:
Department of Education
Alaska Vocational Technical Center
Alaska Vocational Technical Center Operations 770.5
GF/PR
Delete:
Department of Education
Alaska Vocational Technical Center
Alaska Vocational Technical Center Operations 29.5 GF
Add:
Department of Education
Alaska Vocational Technical Center
Alaska Vocational Technical Center Operations 800.0
SDPR
Add:
Department of Labor
Labor Standards and Safety
Occupational Safety and Health 800.0 GF
1,000.0 Federal Funds
Representative Austerman explained that the amendment would
protect the private sector and allow time for the transition
to federal takeover of the Occupational Safety and Health
Inspection Program (OSHA).
Representative Grussendorf questioned how much of the
funding would be available for the private sector.
Co-Chair Mulder explained that the intention is to allow for
the inspection of public facilities during the transition
period.
Representative Austerman clarified that Amendment LAB-A is
the total amount needed to make the transition.
Representative Grussendorf question who should be
responsible for OSHA functions. He observed that under
federal supervision, problems would be addressed through
federal administrative judges. He spoke in support of an
Alaskan program.
Co-Chair Mulder acknowledged concerns and indicated that the
transition to federal oversight would not have been taken if
it were not for the current financial situation. The intent
is to make adjustments and allow for spill oversight within
OSHA. Oversight would be through the federal government.
Representative G. Davis asked for clarification of statutory
designated program receipts for the Alaska Vocational
Technical Center (AVTEC).
Co-Chair Mulder stated that the intent is that tuition from
the University of Alaska would go straight to the
university. The AVTEC receipts would be handled in the same
manner.
ED FLANAGAN, COMMISSIONER, DEPARTMENT OF LABOR provided
information about the OSHA transition to federal oversight.
He noted that the amendment is an improvement on the
subcommittee's recommendation. The amendment would allow for
an orderly transition from the existing program at the end
of the federal fiscal year to a system of federal
enforcement. The private sector consultation was reinstated.
This would allow the establishment of a public sector
consultation and enforcement program. He anticipated that
federal fines would be higher than state fines.
In response to a question by Representative Grussendorf, Mr.
Flanagan noted that a panel in Washington D.C would handle
reviews.
There being NO OBJECTION, Amendment LAB-A was adopted.
Representative Austerman Withdrew Amendment LAB-1 (copy on
file).
Representative J. Davies Withdrew Amendment LAB-2 (copy on
file.)
Representative Grussendorf Withdrew Amendment LAB -3 (copy
on file.)
Representative J. Davies MOVED to ADOPT Amendment LAB- 4 as
amended by the sponsor:
Department of Labor
Labor Standards and Safety BRU
Occupational Safety & Health Component 1,309.2 Federal
284.9 GFM 23.1 I/A Analysis:
The proposed addition to the Alaska Occupational Safety
and Health Program (AKOSH) restores the State Plan
program (23(g) Grant) for ensuring protection of Alaska
workers and also restores the federal grant monies from
EP A to provide oversight on asbestos work sites.
If the federal and general fund match for the
(23(g)Grant) program are not restored it will mean that
Alaska will no longer enforce occupational and health
standards in the work place, private or public. Without
enforcement, situations may exist that put workers at
risk of injury, such as the recent incident at the
Alaska Office Building where employees were transported
to the hospital due to air quality. The OSH staff
performed analysis sampling to determine the cause,
risk and plan for remediation before employees could
return to the building. Although the federal government
would take over private sector enforcement, public
employers and employees (municipal and state) would not
be covered unless the State was to continue to provide
general funds. Failure to continue to provide a state
funded public sector consultation and enforcement
program would result in 56,000 state and local
government workers and their employers having no
protection or assistance.
Additionally, if this funding is not restored, safety
standards that are unique to Alaska will not be
operative under federal enforcement, e.g. helicopter
logging, petroleum processing, night blasting and
confined spaces. Finally, enforcement of state asbestos
worker certification will be lost.
The elimination of all funding does not allow
sufficient resources for transitioning of an orderly
federal takeover by July 1, 1999, thus causing
confusion for employees and employers throughout the
private sector. The only other case of a state
returning a program to OSHA was the State of California
in 1987, and lack of a coherent transition was largely
responsible for a voter's initiative that restored the
state program one year later.
The appeal process for employers would change
drastically since the federal process differs from
Alaska. Currently, initial appeals are heard by our
Review Board comprised of a representative from
industry, labor and the public. Federal OSHA uses an
administrative Law Judge for the initial appeal
process, and if it is denied at that level, it is then
forwarded to a Federal OSHA Review Board. There is a
potential impact to employers and employees due to out-
of-state hearings such as out-of state- travel, long
distance phone, fax costs and other related costs.
Receipts from citation fines of approximately $280.0
per year are currently deposited into the general fund,
but would no longer be available due to the loss of
public sector enforcement and the return of private
sector enforcement to Federal OSHA.
There are 31 positions associated with the 23(g)
program funding. Program staff includes enforcement
officers, consultation and training staff, review and
non-discrimination, administrative, clerical, and
information system support positions. Positions are
located in Anchorage, Fairbanks, Juneau, Kenai, and
Ketchikan. Four of the 31 positions are Director's
Office staff.
Of the four Director's Office staff, the primary
management position affected by this reduction is the
Division Director. The AKOSH program currently funds
salary costs of $62.0 plus associated costs. These
costs will be borne by the other programs in the
Division since the position is an integral part of on-
going operations. Loss of funding will also impact the
other three Director's Office positions (Administrative
Manager, Administrative Assistant, and Secretary. These
positions assist the Director in the on- going
operations of the division by providing oversight and
support in matters pertaining to budget, financial
management, legislation, personnel, purchasing,
regulations, public inquiries, etc.
Interagency Receipts for this component, which were
also eliminated, are for administrative oversight by
the Administrative Manager of Wage and Hour, and
Mechanical Inspection; administrative oversight by
AKOSH staff to the Alaska Safety Advisory Council;
program work on asbestos; and participation in the
State Emergency Response Commission (SERC).
In response to a question by Representative Grussendorf, Mr.
Flanagan discussed the federal grant from the Environmental
Protection Agency for asbestos removal. He noted that the
state would not be eligible for the grant with the adoption
of Amendment LAB-A. Without the grant there would be no
private sector program. The grant is $50 thousand dollars a
year and can be used on public buildings.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
The MOTION FAILED (3-7).
Representative Grussendorf MOVED to ADOPT Amendment LAB-5:
Department of Labor
Labor Standards and Safety BRU
Mechanical Inspection Component 79.3 general funds
Analysis:
This amendment responds to a portion of the
Subcommittee's reduction of 124.1 that was originally
part of the FY 99 one-time belt tightening reduction.
The Subcommittee extended this reduction into FY 00 by
reducing the Commissioner's Office 124.1. The
department proposed the elimination of a Fairbanks Wage
& Hour Technician to address part of the 124.1
reduction (44:8) and the elimination of a Kenai
Electrical Inspector for the remaining portion of the
reduction (79.3).
This amendment restores the Kenai Electrical Inspector.
Loss of this position will require the two remaining
inspectors to cover the inspection areas currently
assigned to the Kenai inspector. This position
performed 410 inspections in FY 98 on the Kenai
Peninsula, in Western Alaska and the chain. The Wasilla
inspector is extremely busy with the valley, performing
670 inspections in FY 98 while the Juneau inspector
performed 352 in all of Southeast Alaska. It is
expected that the Juneau position would have to absorb
the lion' s share of the Kenai inspections, traveling
to the Peninsula, the chain and some of the West Coast.
It would be physically impossible for two inspectors to
be able to produce the same amount of inspections now
performed by three. The annual goal for each inspector
is 400. This goal has been met, or nearly so by the
Kenai and Juneau inspectors and far exceeded by the
Wasilla inspector. In all likelihood, the Wasilla
inspector will continue to cover the valley and will
travel to some other areas, while the other inspector
performs most of the inspections in outlying areas.
The overall inspection output will be reduced by an
estimated 350 inspections or approximately 25% of the
FY 98 production level. The impact to the public will
be a greater number of electrical installations in new
construction and repairs across Alaska that are not
code-compliant resulting in hazardous and unsafe
conditions.
Mr. Flanagan observed that the position in question is an
electrical inspector.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
The MOTION FAILED (3-8).
Representative Grussendorf MOVED to ADOPT Amendment LAB-6.
Representative Austerman OBJECTED.
Labor Standards and Safety BRU
Wage and Hour component 44.8 general funds
Analysis:
This amendment responds to a portion of the
Subcommittee's reduction of 124.1 that was originally
part of the FY 99 one-time belt tightening reduction.
The Subcommittee extended this reduction into FY 00 by
reducing the Commissioner's Office 124.1. The
department proposed the elimination of a Fairbanks Wage
& Hour Technician to address part of the 124.1
reduction (44.8) and the elimination of a Kenai
Electrical Inspector for the remaining portion of the
reduction (79.3). This amendment restores the Fairbanks
Wage & Hour Technician position. The loss of this
position will require the agency to abandon timely
auditing of all certified payrolls. Currently, the
technician routinely audits certified payrolls as the
information is received. With reduced staffing,
payrolls will be filed immediately (with no auditing)
and the filing will have to be performed by the
remaining staff (investigators and one clerk). Only in
cases where complaints are received, or where
investigations have been opened, will audits of
certified payrolls be performed. These audits will now
have to be performed by the investigator for the Title
36 program.
The investigator responsible for the Title 36 program
is already backlogged with his investigations. Having
to perform the audits of certified payrolls will
increase his case backlog by 50% to 75%. Presently he
can turn his audits over to a technician while he
performs his various investigative functions, both
routine and specific. Having to perform his own audits
will extend the time required to complete
investigations and reduce the time available for on-
site inspections.
If this position is not restored, the overall impact
will result in reduced effectiveness of the enforcement
program by fewer investigations being conducted and
increased time for each investigation to be concluded.
This in turn can result in a delayed collection process
for overdue wages owed employees.
Co-Chair Mulder noted that the reduction was offered by the
Administration as a part of the "belt tightening" effort. He
observed that any general fund reduction in the Department
of Labor is painful.
Mr. Flanagan clarified that there was a one-time reduction
in FY99 due to vacancy and a hiring freeze. He noted that
there were 10 wage and hour inspector positions in the
Fairbanks office ten years ago. With this reduction there
would be four positions left.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
The MOTION FAILED (3-8).
DEPARTMENT OF NATURAL RESOURCES
Representative Kohring MOVED to ADOPT Amendment DNR-A:
Department of Natural Resources BRU: Land Management
Component: Land Management
(Planning) 100.0 GF
DELETE
Department of Natural Resources BRU: Land Management
Component: Land Management
(Shore Fisheries) 100.0 PR
There being NO OBJECTION, it was so ordered.
Representative Kohring MOVED to ADOPT Amendment DNR-B:
ADD
Department of Natural Resources
BRU: Parks and Recreation Management
Component: State Historic Preservation Program
100.0 GF Match
DELETE
Department of Natural Resources BRU: Land Management
Component: Land Management
(Shore Fisheries)
100.0 PR
There being NO OBJECTION, it was so ordered.
Representative Kohring MOVED to ADOPT Amendment DNR-1:
Department of Natural Resources
BRU: Information/Data Management
INTENT:
It is the intent of the legislature for the Recorder's
Office to be able to fulfill its statutory
responsibilities under AS 40.17.070, including the
creation and maintenance of a daily log and index for
recorded documents to their owners
after recording. If workload impacts the ability of the
existing Recorder's Office staff to index documents
within 24 hours of recording, then it is the intent of
the legislature that the Recorder's Office should hire
non-permanent employees to assist with the workload and
request supplemental funding for fiscal year '00.
Representative Kohring noted that there have been backlogs
in some of the Recorder Offices. He noted that there has
been a decline in the number of real estate transactions.
The intent language was at the suggestion of the department.
There being NO OBJECTION, Amendment DNR-1 was adopted.
Representative Kohring Withdrew Amendment DNR-2 (copy on
file.)
Representative Foster Withdrew Amendment DNR-3 with the
understanding that the issue would be addressed (Nome
Recorder's Office) (copy on file.)
Representative J. Davies MOVED to ADOPT Amendment DNR-4.
Representative Kohring OBJECTED.
BRU: Mining, Geological and Water Development
Component: Water Development $135. SDPR
Representative J. Davies spoke in support of the amendment.
He noted that the amendment would restore the program
receipt amount. A $50 dollar fee is paid to record water
rights.
Co-Chair Mulder noted that the funds did not fall under the
definition of statutory designated program receipts.
Representative J. Davies argued that the funds should be
considered as statutory designated program receipts if the
department is going to continue to collect the fees. He
asked if small miners are being abandoned.
Vice Chair Bunde observed that there is an erroneous notion
that if an individual has water rights that the state will
defend them in court to protect their water rights. The
program is a database recording system.
Representative Kohring agreed that the state has a minimal
role in adjudicating water rights. He maintained that the
reduction is minimal.
(Tape Change, HFC 99 - 73, Side 2)
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
The MOTION FAILED (3-8).
Representative J. Davies Withdrew Amendment DNR-5 (copy on
file.)
Representative J. Davies MOVED to ADOPT Amendment DNR-6:
BRU: Information / Data Management
Component: Information Resources Management $100
GENERAL FUNDS
Representative J. Davies noted that the intent of the
amendment is to maintain the LANS Information Management
System at the status quo level. He noted that $75 thousand
dollars would cover a 7 percent salary increase given to all
information technology positions in an effort to bring state
salaries in line with private salaries. There was a $25
thousand dollar reduction from FY99. This would result in a
reduction of staff that handles mining claim records.
Representative Kohring spoke against the amendment. He
observed that there was an additional $50 thousand dollars
in federal receipt authority. The department intends to
pursue more federal funding.
Representative J. Davies pointed out that even with the
additional $50 thousand dollars in federal authorization
that the component is $200 thousand dollars below the
governor's request.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
The MOTION FAILED (3-8).
Vice Chair Bunde maintained that the Recorder's Office has
used state publications to encourage lobby the legislature
for more funding.
Representative J. Davies Withdrew Amendments DNR-7, DNR-8
and DNR-9 (copies on file.)
In response to a question by Representative G. Davis,
Representative Kohring discussed reductions to the state
Historical Preservation Program. He noted that federal
mandates prevented the reduction.
NICO BUS, ADMINSTRATIVE SERVICES MANAGER, DIVISION OF
SUPPORT SERVICES, DEPARTMENT OF NATURAL RESOURCES provided
information on DNR-A. He observed that it would change the
Shore Fisheries program from a lease to a permit program.
This would simplify the program. The existing shore
fisheries leases would stay in place until they expire.
After they expire they would be offered the same area under
a registered permit.
Mr. Bus noted that the additional $100 thousand dollar
reduction in the Division of Land would restore some of the
area wide planning capability. There would still be a $500
thousand dollar reduction. He added that when a reduction
occurred two years previously in the Historic Preservation
program, there was an expectation that staffing would be
reduced. Since this time there has been an increase in the
workload through the Department of Transportation and Public
Facilities. Staff has been retained through interagency
receipts from ISTEA funding.
In response to a question by Representative Austerman, Mr.
Bus stated that shore fishermen would retain their rights.
The adjudication would be faster.
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Representative Williams MOVED to ADOPT Amendment DEC-1:
DELETE
BRU: Environmental Health Component: Food Safety and
Sanitation $1,471,000 statutory designated program
receipts
Agency: Department of Environmental Conservation
ADD
BRU: Environmental Health
Component: Food Safety and Sanitation $1,471,000 GF/PR
Co-Chair Mulder OBJECTED for the purpose of discussion. He
noted that the issue is the elimination of the Food Safety
and Sanitation program. He noted that the department
recommended that the program be fee based and operated as a
statutory designated program receipts program. He observed
that the program does not meet the requirements of statutory
designated program receipts. The amendment would return the
program from statutory designated program receipts to
general fund program receipts (GFPR). He maintained that the
food inspection program is an expansion of $300 thousand
dollars.
BARBARA FRANK, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION
maintained that the amendment would not be an expansion of
the program. She clarified that there was an increment of
$330 thousand dollars that was denied. The amendment would
keep the program as it exists with a small increase in fees.
Co-Chair Mulder WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered.
Representative Williams MOVED to ADOPT Amendment DEC-2:
Delete
Agency: Department of Environmental Conservation
Unallocated Reduction $213,000 GF
Representative Williams noted that the unallocated reduction
was part of the Governor's belt tightening in the
supplemental appropriation.
(Technical Failure)
Representative Williams discussed the amendment. He
clarified that the amendment should have stated that the
unallocated reduction would be added. He MOVED to AMEND
Amendment DEC-2 by deleting "delete" and adding "add".
MICHELLE BROWN, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION discussed the proposed reduction.
(Tape resumes)
Commissioner Brown clarified that the state currently does
not have primacy of water permitting. The state has primacy
of drinking water.
Representative Grussendorf observed that the reduction would
result in federal assumption of air and water quality. He
observed that the original "belt tightening" reduction was
the result of a position that was kept vacant for the last
few months of the fiscal year. The department planned to
fill the position in the next fiscal year.
Co-Chair Mulder questioned if the hiring freeze remains in
place for FY00. Commissioner Brown did not know if the
freeze would remain. Representative J. Davies maintained
that the "belt tightening" measures were not expected to be
annualized. He argued that belt tightening reductions were
only intended for FY99 and emphasized that the measures
taken were identified due to limitations on what could be
done toward the end of the fiscal year.
Co-Chair Mulder stated that there was an expectation by the
Legislature that the belt tightening would continue.
A roll call vote was taken on the motion to amend.
IN FAVOR: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
OPPOSED: Grussendorf, Moses, Davies
The MOTION PASSED (8-3).
A roll call vote was taken on the main motion.
IN FAVOR: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
OPPOSED: Grussendorf, Moses, Davies
The MOTION PASSED (8-3).
Representative Williams MOVED to ADOPT Amendment DEC-3:
Delete
Administrative Services $68,899 general funds
Co-Chair Mulder noted that the amendment would remove a
public relations officer.
Representative J. Davies spoke against the amendment.
Co-Chair Mulder maintained that the public service can still
be provided with the remaining personnel.
Representative J. Davies WITHDREW Amendment DEC-4 (copy on
file.)
Representative J. Davies MOVED to ADOPT Amendment DEC-5 as
amended by the sponsor to read:
Environmental Health
Component: Food Safety and Inspection 330.0 (SDPR) GFPR
Representative J. Davies spoke in support of the amendment.
He stressed that the state's inspection frequency is 50
percent below the department's goal. He maintained that the
level of inspection is the minimal amount required for
health and safety. Less than a dollar a day fee increase
would be needed to implement the amendment.
Ms. Frank explained that facilities are divided into low and
high-risk categories. High-risk facilities include those
that process foods with known toxins, full service
restaurants, meat processing not covered under federal
inspection, labor camps, institutions, secondary schools,
day care and pools. The highest risk factor facilities,
which the department would like to inspect four times a
year, include those that can and smoke seafood or meat, low
acid canning and vacuum packed processing.
Vice Chair Bunde acknowledged that there are valid areas of
state concern. Representative J. Davies noted that in the
high-risk areas the average inspection is once every 18
months. The amendment would increase inspections to one and
a half to two times a year.
Co-Chair Mulder acknowledged the need but emphasized that
the budget reflects the change of the program's focus to
program receipts. He maintained his objection based on a
need to prevent budgetary expansion.
(Tape Change, HFC 99 -74, Side 1)
Representative Williams explained that the subcommittee
considered turning inspections over to communities.
In response to a question by Vice Chair Bunde, Ms. Frank
noted that the department finds serious hazards on a regular
basis. Facilities are closed on a regular basis.
Commissioner Brown added that 300,000 pounds of food was
destroyed in the last year because it couldn't be sold.
A roll call vote was taken on the motion.
IN FAVOR: Austerman, Davies, Grussendorf, Moses
OPPOSED: Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
The MOTION FAILED (4-7).
Representative J. Davies MOVED to ADOPT Amendment DEC-6:
BRU: Division of Facility Construction and Operations
Component: Construction and Operations 315.8 CIP
Receipts
Co-Chair Mulder OBJECTED. He questioned the funding source.
He asked if the positions were temporary.
DAN EASTON, DIRECTOR, DIVISION OF FACILITY CONSTRUCTION AND
OPERATION, DEPARTMENT OF ENVIRONMENTAL CONSERVATION
clarified that the funding would be for four new permanent
positions. He explained that if the new capital funds to
support the project do not materialize that the positions
would not be filled. If the capital funds cease, the
positions would be open to budget reductions. He stated that
it might be possible to contract the services.
Co-Chair Mulder stated that he would not object to the
positions being state employees if he felt assured that once
the CIP receipts were gone that the positions would be
eliminated. Commissioner Brown assured him that this would
be the logical outcome. Representative J. Davies emphasized
that the legislature can control the appropriation.
In response to a question by Representative Grussendorf, Mr.
Easton clarified that the CIP funding is for drinking water,
sewer and solid waste projects. Engineers would be working
with the design team to assure that projects are suitable to
the environment. There are currently 17 employees in the
program, of which 12 are engineers. They oversee 140 active
projects and approximately $200 million dollars.
Representative Austerman OBJECTED. He maintained that the
state has taken federal dollars that are unnecessary.
Discussion ensued regarding federal funding of state
projects. Mr. Easton pointed out that the village safe water
program serves unincorporated programs with between 25 and
600 people.
Commissioner Brown reiterated that the positions would be
eliminated when the CIP funding ends. She added that 70
cents of every dollar is spent in Anchorage and Fairbanks
because that is where the professional services are
contracted.
A roll call vote was taken on the motion.
IN FAVOR: Williams, Bunde, Davies, Davis, Foster,
Grussendorf, Moses, Mulder
OPPOSED: Austerman, Kohring, Therriault
The MOTION PASSED (8-3).
Representative J. Davies MOVED to ADOPT Amendment DEC-7:
Department of Environmental Conservation BRU: Air and
Water Quality
Component: Air Quality 80.0 CIP
Representative Williams OBJECTED.
Representative J. Davies explained that the amendment would
provide for a full time employee to investigate the issue of
state primacy of air and water quality.
Representative Williams agreed that it is a policy issue
that he did not feel comfortable taking on in the
subcommittee.
Ms. Frank noted that the department would hire one employee
that would set up a work group to complete the study. They
would be a temporary employee. She noted that the Resource
Development Council (RDC) and the Alaska Oil and Gas
Association (AOGA) want to be involved in the planning
process. They will be the ones to carry a large portion of
the costs. It would be a largely fee based program with a
price tag of approximately $2 million dollars.
Co-Chair Therriault questioned if state dollars are needed.
He noted that accepting primacy for the water program would
require legislation. He asked why a bill is not before the
committee. Ms. Frank responded that a bill cannot be placed
before the legislature until there is a plan to support it.
The amendment would provide funding to develop a plan.
Representative J. Davies spoke in support of changing the
funding source to statutory designated program receipts to
allow industry an opportunity to support development of a
plan.
Commissioner Brown felt that it would be less expensive for
the state to development a plan than to contract with the
private sector.
A motion was made to change the funding source to statutory
designated program receipts. There being NO OBJECTION,
Amendment DEC-7 was amended.
Co-Chair Therriault expressed concern that the use of state
dollars would send it down the road to further state
expenditures.
Commissioner Brown noted that some of the technical
expertise and analysis would be done by contractors. She did
not anticipate federal dollars to run part of the program.
There being NO OBJECTION, Amendment DEC-7 was adopted as
amended.
DEPARTMENT OF LAW
Representative Kohring MOVED to ADOPT Amendment Law-1:
ADD
Human Services $100.0 General Fund
DELETE
Environmental Law ($100.0) General Fund Program
Receipts
Representative Kohring explained that the addition in the
Human Services component addresses children in need of aid.
He observed that the department has submitted the net zero
amendment.
KATHRYN DAUGHHETEE, DIRECTOR, ADMINISTRATIVE SERVICES
DIVISION, DEPARTMENT OF LAW explained that the general fund
program receipts in Environmental Law have not materialized
in the last couple of years. She stated that the department
would prefer to move the funds as pure general funds to the
Human Services component to allow funding for four positions
that are already on staff. The positions were added into the
FY99 budget, but only partial year funding was authorized.
There being NO OBJECTION, it was so ordered.
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS
Representative Austerman MOVED to ADOPT Amendment CRA-7:
Representative Austerman explained that the amendment
corrects technical errors.
Co-Chair Mulder noted that the Administration supports the
amendment.
There being NO OBJECTION, it was so ordered.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
Co-Chair Therriault MOVED to ADOPT Amendment HSS-17:
DELETE
Department of Administration Senior Services BRU
Protection, Community Services & Administration
component
12.5 MHTAAR Funds
The Alaska Mental Health Trust Authority requests this
correction. This is a technical adjustment that reduces
Mental Health Trust Authority Receipts that were
incorrectly placed in the Department of Administration
for Planning of the Comprehensive Mental Health Plan.
Co-Chair Therriault spoke in support of the amendment. He
noted that it was introduced on behalf of the Trustees.
There being NO OBJECTION, it was so ordered.
Co-Chair Therriault MOVED to ADOPT Amendment HSS-18:
ADD
Department of Administration Senior Services BRU
Protection, Community Services & Administration
component
180.0 MHTAAR Funds
The Alaska Mental Health Trust Authority has approved
the use of Mental Health Trust Authority receipts of
105.0 for Rural Long Term Care Development and 75.0 for
Analysis of Economic Impacts of Declining Income of
Seniors. These projects were accepted by the
Legislature in the FY99 budget last year. The Trust
will restrict the use of these funds for FY99.
Co-Chair Therriault noted that the amendment was offered on
behalf of the Trustees.
There being NO OBJECTION, it was so ordered.
Co-Chair Therriault did not offer HSS Intent language (copy
on file.)
FRONT SECTION
Co-Chair Therriault WITHDREW Amendment Front-1 (copy on
file.)
Co-Chair Therriault MOVED to ADOPT Amendment Replacement 2
FRONT-2:
MEDICAID SCHOOL BASED CLAIM. If the federal receipts
for the School Based Services Administrative Claim
under 42 U.S.C. 1396a (1902(a)(4), Title XIX Social
Security Act) fall short of the estimate, the amount of
the shortfall is appropriated from the general fund.
Explanation:
In the FY99 Budget the legislature replaced base
general funds in the .Human Services Matching Grant and
the Maternal Child and Family Health programs with
federal revenue from the Medicaid School Based Claim.
The level of actual revenue collected in FY99 is
approximately $443,000 less than expected. The federal
revenue is determined by a formula, which includes the
number of Medicaid eligible children in Alaska as well
as a number of other factors. The Department projects
that there is a 50% chance that the revenue shortfall
can be made up if the Denali KidCare program continues
as projected to enroll Medicaid eligible children.
This language will allow the department to award grants
etc. on a timely basis. Without this language the
following reductions to the Human Services Matching
Grants could occur:
FY99 GRANT FYOO SHORTFALL FYOO GRANT Municipality of
Anchorage 1,324.4 (293.1) 1,031.3 Fairbanks North Star
Borough 427.6 (94.6) 333.0
Co-Chair Therriault spoke in support of the amendment.
There being NO OBJECTION, it was so ordered.
Co-Chair Mulder MOVED to ADOPT Amendment FRONT-3 as amended
by the sponsor to add the language as subsection 1(d).
ALASKA HOUSING FINANCE CORPORATION. (a) The sum of
$17,444,000 from the available unrestricted cash in the
general account of the Alaska housing finance revolving
fund (AS 18.56.082) is anticipated to be transferred to
the general fund during the fiscal year 2000 by the
direction of the board of directors of the Alaska
Housing Finance Corporation.
Explanation:
This places AHFC funds that were replaced by general
funds in the Department of Education into the general
fund as a dividend. There is a net 0 change in the
fiscal gap. The FY 99 base was adjusted to reflect this
adjustment, as was the FY 00 allocation.
JOHN BITNEY, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE
CORPORATION, DEPARTMENT OF REVENUE spoke in support of the
amendment. He explained that $17,444,000 million dollars was
requested by the Governor for K-12 funding.
There being NO OBJECTION, it was so ordered.
Co-Chair Mulder MOVED to ADOPT replacement Amendment FRONT-
4:
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY. The
sum of $18,000,000 from the available unrestricted cash
in the Alaska Industrial Development and Export
Authority revolving fund (AS 44.88.060) is anticipated
to be transferred to the general fund as directed by
the Alaska Industrial Development and Export Authority.
The transferred money shall be deposited in the general
fund when received during fiscal year 2000.
This amendment reflects the AIDEA dividend for FY 00.
There being NO OBJECTION, it was so ordered.
Co-Chair Mulder MOVED to ADOPT Amendment FRONT-5:
ADD
Housing Assistance Payments Section 8 Program
16,000,000 federal receipts
DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR spoke in support of the
amendment. He noted that this item was one of the
Governor's proposed budget amendments but was inadvertently
omitted from the draft CS.
There being NO OBJECTION, it was so ordered.
Representative Grussendorf MOVED to ADOPT Amendment FRONT-
6:
FEDERAL SUBSISTENCE FUNDS. (a) The United States
Congress appropriated $11,000,000 to the United States
Department of the Interior and the United States
Department of Agriculture for the State of Alaska
contingent upon the Alaska State Legislature adopting a
constitutional amendment for ratification by Alaska
voters to allow a rural subsistence priority. The full
$11,000,000 appropriated by the Congress is available
to the state if the legislature satisfies the
contingency by June 1, 1999. If the contingency is
satisfied after June 1, 1999, but by September 30,
1999, the sum of $10,000,000 will be available to the
state.
(b) If the federal contingency requirement
described in (a) of this section is satisfied by June
1, 1999, the sum of $11,000,000 is appropriated from
federal receipts to the Department of Fish and Game to
help implement a unified subsistence management system
and to provide support for the Board of Fisheries,
Board of Game, regional advisory councils, and local
advisory committees in that effort. The appropriation
made by this subsection is allocated as follows:
Support to the Board of Fisheries, Board of Game,
regional advisory councils, and local advisory
committees $3,000,000 Biological research, monitoring,
and management to 21 ensure sustained yield and to
improve utilization of fish and game for subsistence,
commercial, and sport purposes 8,000,000 (c) If the
federal contingency requirement described in (a) of
this section is satisfied after June 1, 1999, but by
September 30, 1999, the sum of $10,000,000 is
appropriated from federal receipts to the Department of
Fish and Game to help implement a unified subsistence
management system and to provide support for the Board
of Fisheries, Board of Game, regional advisory
councils, and local advisory committees in that effort.
The appropriation made by this subsection is allocated
as follows:
Support to the Board of Fisheries, Board of Game,
regional advisory councils, and local advisory
committees $2,725,000 Biological research, monitoring,
and management to ensure sustained yield and to improve
utilization of fish and game for subsistence,
commercial, and sport purposes 7,275,000"
Representative Grussendorf noted that the amendment would
restore the governor's subsistence request, with the
addition of a pro rata provision, for adoption of a
constitutional amendment after June 1, 1999.
Co-Chair Mulder stated that it was not his intention to
remove the language from the legislation, but added that he
would prefer to address the issue in a fiscal note.
Representative Grussendorf pointed out that an appropriation
bill would be needed.
Co-Chair Therriault OBJECTED.
Representative J. Davies spoke in support of the amendment.
Discussion ensued regarding the chances for resolution of
the subsistence issue during the Twenty-First Legislative
Session.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Davis, Grussendorf, Moses, Williams,
Austerman
OPPOSED: Bunde, Kohring, Therriault
The MOTION PASSED (6-5).
Representative J. Davies noted the absence of language
relating to a needs based longevity bonus program that was
contained in the Governor's submitted legislation. Co-Chair
Mulder observed that if legislation relating to the
longevity bonus program passes, funding could be reflected
in the back section of the bill. Authorization is not needed
in the front section.
RECESSED
Co-Chair Mulder recessed the meeting at 5:30 p.m. to allow
the Legislative Finance Division to review the adopted
amendments.
RECONVENED
Co-Chair Mulder reconvened the House Finance Committee
meeting at 10:00 p.m. He provided members with a Technical
Amendment-1 (copy on file).
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION reviewed
the amendment. He explained that a number of the changes
relate to fund source changes.
Amendment CED-1
Commerce and Economic Development Tourism Marketing
Council
DELETE: .2 GF/Program Receipts
ADD: .2 General Fund
Mr. Teal explained that there were $200 hundred dollars in
general funds within the general fund program receipts
deleted by the Committee.
Amendment CED-1
Commerce and Economic Development Tourism Development
DELETE: 155.3 GF/Program Receipts
ADD: 155.3 General Fund
Mr. Teal explained that there were $200 hundred dollars in
general funds within the general fund program receipts
deleted by the Committee. He added that there were 14 full-
time positions and 3 permanent part-time positions deleted
by the Committee's action in adopting Amendment CED-1,
without specific action. He noted that it would be a
technical amendment since the positions were not included in
the budget bill.
Amendment DEC-7
Department of Environmental Conservation Air Quality
80.0 Statutory Designated Program Receipts
Department of Environmental Conservation Water Quality
ADD: 80.0 Statutory Designated Program Receipts
Mr. Teal explained that Amendment DEC-7 did not specifically
mention the addition of a position. The position was added.
The affected component as listed was Air Quality. The actual
affected component is Water Quality.
Amendment HSS-7
Department of Health and Social Services Medical
Assistance Administration
ADD: 326.4 General Fund
DELETE: 326.4 GF Match
Mental Health/Developmental Disabilities Admin
ADD: 164.2 General Fund
DELETE: 164.2 GF Mental Health
Alaska Mental Health Board
ADD: 24.0 General Fund
DELETE: 24.0 GF Mental Health
Governor's Council on Disabilities and Special
Education
ADD: 5.0 General Fund
DELETE: 5.0 GF Mental Health
Advisory Board on Alcoholism and Drug Abuse
ADD: 16.8 General Fund
DELETE: 16.8 GF Mental Health
Mr. Teal noted that there were a number of fund source
changes in Amendment HSS-7.
Amendment REV-1
Department of Revenue
Child Support Enforcement
ADD: 386.0 General Fund
DELETE: 386.0 GF Program Receipts
Mr. Teal noted that general funds were deleted that should
have been general fund program receipts.
Co-Chair Mulder MOVED to ADOPT Amendment Technical-1. There
being NO OBJECTION, it was so ordered.
Co-Chair Mulder noted that, according to his office, HB 50
as amended by the House Finance Committee is $35,945,000
million dollars below the FY99 adjusted base. The
legislation is also $108,229,000 million dollars below the
Governor's submitted request. The House Finance Committee
substitute for HB 50 is below the original house draft. The
Legislative Finance Division shows CSHB 50 (FIN) to be $18.5
million dollars below FY99 authorized. He noted the
difference between summaries by Legislative Finance Division
and his office. He explained that the summary compiled by
his office took into account that education funding in FY99
should have been on budget. Education was funded through the
Alaska Housing Finance Corporation dividend. He added that
the House Finance Committee is $90,785,000 million dollars
below the Governor's submittal for FY00.
Co-Chair Therriault pointed out that funding for the
Division of Tourism was removed from the House Finance
Committee version. Approximately $5.3 million dollars would
be added back in if legislation pertaining to the
restructuring of the Division of Tourism were adopted.
INTENT
Co-Chair Mulder referred to intent language adopted by the
subcommittee for the University of Alaska:
It is the intent of the House Finance Committee to
support the University of Alaska's efforts to increase
the University general fund allocation for FY00. We
will continue our efforts to identify funds and
appropriation resources for the University to, as
nearly as possible, meet the University's request of an
additional $16.3 million general fund increment.
Co-Chair Mulder noted that the letter of intent was directed
to the House Finance Committee, not the budget as a whole.
Co-Chair Therriault MOVED to report CSHB 50 (FIN) and CSHB
51 (FIN) out of Committee with individual recommendations.
Representative Grussendorf observed that Power Cost
Equalization (PCE) was not discussed. He noted that there is
no funding source connected to the $17 million dollars
indicated for PCE.
Co-Chair Mulder observed that full funding for PCE is short
by $6-7 million dollars. He stated his intent to attempt to
find a funding source for a full appropriation.
Representative J. Davies expressed concern with deletion of
funding for revenue sharing and municipal assistance,
reduction to Occupational Safety and Health inspections,
reductions to the Department of Natural Resources and the
failure to authorize an additional $10.9 million dollars for
the University of Alaska. He acknowledged efforts by the Co-
Chairs.
Vice Chair Bunde acknowledged the difficulty to find a
responsible budget that will produce the most value per
dollar for the public.
Representative Austerman expressed appreciation to the Co-
Chairs.
Co-Chair Mulder acknowledged that the result is in some ways
a maintenance budget. He pointed out that there were shifts
in programs. He stressed that the budget emphasizes children
and public safety within the funding restraints.
(Tape Change, HFC 99 -75, Side 1)
Co-Chair Mulder thanked the staff of the Legislative Finance
Division and the Administration.
Representative G. Davis noted that there is still a
projected deficit. He observed that some constituents want
as much as $500 million dollars in further reductions.
Co-Chair Therriault referred to other legislation still
before the Committee.
A roll call vote was taken on the motion to move the
legislation from committee.
IN FAVOR: Austerman, Bunde, Davis, Foster, Kohring,
Williams, Therriault, Mulder
OPPOSED: Davies, Grussendorf, Moses
The MOTION PASSED (8-3).
HB 50 and HB 51 were REPORTED out of Committee with a "do
pass" recommendations.
ADJOURNMENT
The meeting adjourned at 10:22 p.m.
House Finance Committee 25 4/09/99 p.m.
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