Legislature(2001 - 2002)
04/06/2001 01:49 PM House FIN
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* first hearing in first committee of referral
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HOUSE FINANCE COMMITTEE
April 06, 2001
1:49 PM
TAPE HFC 01 - 75, Side A
TAPE HFC 01 - 75, Side B
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 1:49 P.M.
MEMBERS PRESENT
Representative Eldon Mulder, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Carl Moses
Representative Richard Foster
Representative Bill Hudson
Representative Ken Lancaster
Representative Jim Whitaker
MEMBERS ABSENT
Representative Bill Williams, Co-Chair
Representative John Harris
ALSO PRESENT
Nancy Slagle, Director, Division of Administrative Services,
Department of Transportation and Public Facilitates; Janet
Clarke, Director, Division of Administrative Services,
Department of Health and Social Services; Remond Henderson,
Director, Division of Administrative Services, Department of
Labor and Workforce Development; Devon Mitchell, Executive
Director, Alaska Municipal Bond Bank Authority, Department
of Revenue; Wayne Regelin, Director, Division of Wildlife
Conservation, Department of Fish and Game; Joan Brown, Chief
Budget Analyst, Office of Management and Budget, Office of
the Governor.
SUMMARY
HB 116 An Act making supplemental appropriations and
making and amending other appropriations; and
providing for an effective date.
HB 116 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 116
An Act making supplemental appropriations and making
and amending other appropriations; and providing for an
effective date.
DEPARTMENT OF FISH AND GAME
WAYNE REGELIN, DIRECTOR, DIVISION OF WILDLIFE CONSERVATION,
DEPARTMENT OF FISH AND GAME, spoke to an extra amendment
request which had been submitted by the Department of Fish
and Game.
The sum of $301,200 to be appropriated from federal
receipts to the Department, wildlife conservation
special projects components, for seasonal work on the
Steller sea lion federal project for the fiscal year
ending June 30, 2001.
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, spoke to
the fuel cost requests.
SECTION 9 (a) - Increased fuel costs:
(*) The sum of $116,900 to the Department of
Transportation and Public Facilities, southeast
region facilities;
(*) The sum of $12,900 to the Department of
Transportation and Public Facilities, central
region facilities;
(*) The sum of $387,200 to the Department of
Transportation and Public Facilities, central
region highways and aviation;
(*) The sum of $314,200 to the Department of
Transportation and Public Facilities, northern
region highways and aviation;
(*) The sum of $180,000 to the Department of
Transportation and Public Facilities, marine
highway system, southwest vessel operations;
(*) The sum of $700,000 to the Department of
Transportation and Public Facilities, marine
highway system, southeast vessel operations.
SECTION 9 (b) - Fuel Costs for Airports
Ms. Slagle noted that Section 9(b) listed the appropriations
made from the International Airports Revenue Fund
(AS 37.15.430) to the Department of Transportation and
Public Facilities, international airports, for increased
fuel and utility costs for the fiscal year ending June 30,
2001:
(*) The sum of $300,000 for Anchorage airport
facilities;
(*) The sum of $100,000 for Anchorage airport
field and equipment maintenance;
(*) The sum of $35,800 for Fairbanks airport
facilities;
(*) The sum of $11,400 for Fairbanks airport field
and equipment maintenance;
(*) The sum of $10,400 for Fairbanks airport
safety.
Ms. Slagle explained that the request would account for the
additional funding needed to deal with increased fuel costs.
There has been between a 26% - 30% increase in heating and
vehicle fuel costs this year. All fuel areas have been
impacted by the increase.
Co-Chair Mulder commented that the fuel costs are expected
to come down. Ms. Slagle stated that the request took into
account a decrease usage.
Co-Chair Mulder requested that Larry La Bolle, Staff,
Representative Foster, provide an overview of the costs
recommended by the Department.
SECTION 9 © 1&2
Ms. Slagle noted that the following appropriation and
allocation amendments were made to transfer money to pay
increased fuel costs due to higher oil prices:
(1) Section 1, ch. 133, SLA 2000, page 28, lines 25 -
31, is amended to read:
APPROPRIATION GENERAL OTHER
ALLOCATIONS ITEMS FUND FUNDS
State Equipment Fleet 19,109,400 19,109,400
[19,409,400] [19,409,400]
Central Region State 7,393,700
Equipment Fleet [7,493,700]
Northern Region State 10,056,300
Equipment Fleet [10,206,300]
Southeast Region State 1,659,400
Equipment Fleet [1,709,400]
(2) Section 1, ch. 133, SLA 2000, page 26, line 31, is
amended to read:
APPROPRIATION GENERAL OTHER
ITEMS FUND FUNDS
Administration and Support 16,804,900 7,555,100 9,249,800
[16,504,900] 8,949,800
SECTION 17
(a) The sum of $34,000 is appropriated from the
general fund to the Department of Transportation
and Public Facilities, central region facilities,
for fuel day tank replacement or retrofitting to
prevent fuel spills in state facilities for the
fiscal year ending June 30, 2001.
(b) The sum of $236,000 is appropriated from the
general fund to the Department of Transportation
and Public Facilities, northern region facilities,
for fuel day tank replacement or retrofitting to
prevent fuel spills in state facilities for the
fiscal year ending June 30, 2001.
Ms. Slagle explained that there had been a request submitted
to delete these sections. Those sections had been replaced
with a request for a reappropriation from the Department of
Environmental Conservation to use some excess funding for
underground storage tanks to be reappropriated for the
purpose of dealing with the day tank issue. The intent
would be to fix the day tank issue occurring within various
State owned buildings such as the Court Plaza Building and
elsewhere in the State.
Co-Chair Mulder clarified that 17 (a & b) became Department
of Environmental Conservation reappropriation requests
received from the Office of Management and Budget.
(c) The sum of $93,000 is appropriated from the
general fund to the Department of Transportation
and Public Facilities for additional operating
costs for the Harborview Development Center for
the fiscal year ending June 30, 2001.
Ms. Slagle noted that some of the requested monies would be
used to address the asbestos and the shutdown concerns.
Representative Hudson questioned the status of the
Harborview Development Center. Ms. Slagle stated that it
had not yet been transferred to the City of Valdez. The
appropriation would provide for continual funding for
maintenance up keep for safety.
Co-Chair Mulder advised that the City of Valdez has voiced
concern with taking the facility over at this point in time,
because of the demolition costs to Harborview. He added,
that City has been in contact with the U.S. Congressional
Delegation regarding the concern. He noted that the problem
rests with the health facility that is attached. He noted
that the Department of Transportation & Public Facilities is
attempting to stabilize the conditions of the facility.
GOVERNOR'S AMENDED 17 (b&c)
Ms. Slagle spoke to two projects:
(*) March 16 Amendment for Soldotna East Redoubt Avenue
Improvements;
March 22 amendment effective date of May 14, 2001 in
the amount of $681.1 thousand federal fund dollars; and
(*) March 16 amendment for Palmer urban revitalization;
March 22 amendment effective date of May 14, 2001 in
the amount of $187.9 thousand federal fund dollars.
Ms. Slagle noted that these were projects that had been
included in the appropriation bill that had been earmarked
funds for the two communities of Soldotna and Palmer. These
are federal funds and would require no match.
Ms. Slagle pointed out that the Fairbanks project had been
placed into the fast track supplemental. She indicated that
was a "companion" project.
Ms. Slagle addressed a project which had been included in
the fast track supplemental and had been removed - The
Copper River Highway consent decree in the amount of $400
thousand dollars. The funds would be used to perform the
environmental projects that are required to complete that
consent decree.
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT
SECTION 11
The sum of $325,700 is appropriated from the second
injury fund (AS 23.30.040(a)) to the Department of
Labor and Workforce Development, second injury fund
component, for payment of additional claims for the
fiscal year ending June 30, 2001.
REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT,
stated that this was a dedicated fund.
SECTION #19
RATIFICATION:
(2) Former Department of Community and Regional Affairs
AR52901-00 1STOP/AJCN Staff Sup
$249.68
Mr. Henderson noted that the request would cover the costs
of an accounting correction.
DEPARTMENT OF REVENUE
SECTION 15
The sum of $58,000 is appropriated from Alaska
Municipal Bond Bank receipts to the Department of
Revenue, Alaska Municipal Bond Bank Authority, for
additional bond sales for the fiscal year ending
June 30, 2001.
DEVON MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE stressed the
importance of the request.
Co-Chair Mulder commented on the bond debt reimbursement
that was received last year for the ports and harbors. He
inquired if a similar package could be used on behalf of all
those communities to consolidate the effort. Mr. Mitchell
acknowledged that would be possible through the existing
statute. He stated that Whittier would be a good example.
If it should be structured through a municipal bond bank, it
would require further consideration. Right now, there is a
two-year lag to the communities. If there were a more
timely reimbursement from the State, the communities would
have less concern.
Co-Chair Mulder indicated that he was not aware that there
had been lag time. He asked if the Legislature had ever not
fully made a bond debt that they made a commitment to. Mr.
Mitchell replied that the last time that happened was in
1992.
OFFICE OF BUDGET AND MANAGEMENT
SECTION 16 (a & b)
Section 16 (a) is the amount of the SDPR from the
Medicaid Pro-Share program used for the labor contracts
and to the amount actually used. Section 16 (b) simply
clarifies that it was only general fund lapse that
would be used for labor contracts.
JOAN BROWN, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, stated that Sections 16
(a&b) are technical corrections from HB 3001 last year.
Co-Chair Mulder asked if 16 (a) had any impact to the
current general fund budget. Ms. Brown replied that within
the Department of Health & Social Services budget, the
amount was needed to free up the Pro-Share budget.
Representative Croft asked why the State was $7.2 million
dollars off. Mr. Brown explained that originally, a little
over $8 million dollars had been calculated for Pro-Share,
however, there was a last minute amendment made that added
the $4 million dollars, and there was not a corresponding
reduction to the Pro-Share to bring it down to the $4
million dollar level. The other amendment swept the general
fund lapse.
Representative Croft noted that this was not a change in the
Pro-Share amount, but rather, it should have been reflected
in the other section.
Representative Hudson asked where the statutory designated
program receipts (SDPR) originate from. Ms. Brown explained
that they resulted from the Medicaid Pro-Share program.
Co-Chair Mulder asked if those funds were needed in order to
make the Medicaid budget for the current year. Ms. Brown
stated they were.
UNIVERSITY OF ALASKA
SECTION 16 ©
The amount of $220.3 thousand dollars for the Alaska
Higher Education Crafts, Trades and Employees union.
Ms. Brown noted that the University had submitted an
amendment for a negotiated contract increase in the amount
of $220.3 thousand dollars for the Alaska Higher Education
Crafts, Trades and Employees union. That contract does not
st
expire until December 31, 2000, so it was not part of the
HB 3001 calculation.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
SECTION 8a
The sum of $71,180,300 is appropriated to the
Department of Health and Social Services, Medicaid
services, for the fiscal year ending June 30, 2001,
from the following sources:
Federal receipts $50,642,700
General fund match $ 9,124,700
SDPR $11,412,900
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, noted that there
have been two amendments which have been added to the
request, increasing the request to $78 million dollars.
Ms. Clarke stated that the first amendment was an increase
of $6.5 million federal fund dollars for an increase in the
rates paid to the Indian Health Service facilities.
Ms. Clarke commented that the second amendment addressed a
reduction in another supplemental request in which the
Department retroactively claimed some Medicaid funds for
individuals that were on Chronic & Acute Medical Assistance
(CAMA). She acknowledged that the supplemental request for
the Medicaid program was large. Part of what lead to such a
large supplemental was that last year, in the FY01 budget,
the budget was not amended upwards based on a previous
supplemental. The Governor submitted a low case scenario
and the Department kept with that budget request throughout
the year. Last year, the supplemental request was $22
million dollars. The Department had to pay $15 million
dollars for claims from the previous fiscal year, making the
Department $37 million short at the beginning of the fiscal
year.
Ms. Clarke advised that the costs for the aging and the
disabled population are driving the Department's cost above
what had been projected. In particular, the Home and
Community Based waiver program has increased substantially.
That program allows the Department to have individuals that
are disabled or elderly, live independently in their homes
or in assisted living homes. Nursing homes do not have to
be built for them. She stated that it is a program that is
growing.
Representative Davies asked if the low case scenario had
been changed. Ms. Clarke explained that the low case
scenario had been submitted to the Legislature this year.
The Department is looking at it based on the current
spending in order to update it to a mid-case scenario. The
analysis has not yet been completed. She stated that the
State is having more customers and that the cost of those
customers is now more. She noted that there have been
increases in pharmacy costs.
Representative Davies stated that using the low case
estimates would make next year's supplemental higher.
Representative Croft asked why there was not a general fund
component in the fast track supplemental. Ms Clarke stated
that the only general fund impact for the Medicaid
supplemental is in the slow track supplemental. The other
funds in the fast track were statutory designated program
receipts (SDPR) from the hospital Pro Share program. The
Department found a "window of opportunity" to increase the
pro share payments for this fiscal year
In response to Representative Croft, Ms. Clarke explained
that the Department could use the SDPR as a match. That was
a strategic decision on part of the Department to help get
the fast track supplemental through "fast". Ms. Clarke
commented that in the Pro Share program, a payment is made
to the hospitals. First, the Department has to pay back the
initial payment. There becomes a double budgeting effect.
Representative Davies noted if there were not the luxury of
the Pro Share, the Department would have had to use some
general funds for the match. Ms. Clarke explained that the
Department would receive roughly a $10 million dollar gain.
Representative Lancaster pointed out that the cases and the
wait lists are growing. Ms. Clarke did not know what the
costs would be for the developmental disabilities wait list.
She offered to provide that information to the Committee.
Vice-Chair Bunde pointed out that the fastest growing
segment of the State's population is over 65 years old
group.
SECTION 8(b)
The sum of $57,900 is appropriated to the Department of
Health and Social Services, Medicaid services, for
facility rate setting settlements for the fiscal year
ending June 30, 2001, from the following sources:
Federal receipts $34,800
General fund match $23,100
Ms. Clarke indicated the requested item is a Medicaid
related item from some rate setting settlements for nursing
homes and hospitals. The Department has changed their
methodology to deal with the appeal issues. The small
request resulted from the Department's attempt to settle
those issues in a timelier manner. The settlement would
cover Ketchikan General Hospital, Cordova Community Medical
Center and St. Ann's Care Center.
SECTION 8 ©
The sum of $430,400 is appropriated from the general
fund to the Department of Health and Social Services
for catastrophic and chronic illness assistance
(AS 47.08) for the fiscal year ending June 30, 2001.
Ms. Clarke noted that Section 8 © had been dropped. She
stated that the Department was able to reduce the $430
thousand dollar supplemental request for the CAMA program,
as some of those people have become eligible for Medicaid.
The Department was able to go back and register those
claims. There was a slight increase in the Medicaid
supplemental, but Section 8© was dropped saving $258
thousand general fund dollars.
SECTION 8 (d)
The following $1,000,000 fund source change from inter-
agency receipts to general fund is to replace
unrealized inter-agency receipts, and the following
$323,000 fund source change from general fund to
general fund/mental health is to accurately report
mental health expenditures:
(1) Section 1, ch. 133, SLA 2000, page 15, line 10, is
amended to read:
APPROPRIATION GENERAL OTHER
ITEMS FUND FUNDS
Purchased Services 41,549,200 29,642,700 11,906,500
[28,642,700][12,906,500]
(2) Section 3, ch. 133, SLA 2000, page 45, lines 6 -
8, is amended to read:
General Fund Receipts 149,987,400
[149,310,400]
General Fund/Program Receipts 2,710,700
General Fund/Mental Health 323,000
Inter-Agency Receipts 48,953,600
[49,953,600]
Ms. Clarke stated that Section 8(d-1) was a fund source
change for the subsidized adoption and guardianship program
of $1 million dollars. Last year, the Department believed
that they could spend $1 million temporary assistance to
needy families fund (TANF) for that program, however, they
were wrong. The Department requests a funding source change
from other funds to general funds.
Ms. Clarke noted that 8(d-2) was a technical change in
moving funds. The Department of Law recommended that the
changes be submitted.
SECTION 8 (e)
The sum of $125,000 is appropriated from statutory
designated program receipts to the Department of Health
and Social Services, division of juvenile justice, for
delinquency prevention services for the fiscal year
ending June 30, 2001.
Ms. Clarke commented that the request would provide funding
for the juvenile justice system. The Department received a
juvenile federal accountability block grant in the amount of
$1.5 million dollars. The Department established an
interest bearing trust account to spend those proceeds on
the program. The interest earnings would not go back into
the State general fund. Those funds will be spent on a
training video on the judicial process and the other would
be used to help process the computer activity in the
juvenile justice system.
Vice-Chair Bunde asked who the video was aimed at. Ms.
Clarke replied that it was aimed at victims of juvenile
crime, juveniles and caregivers.
SECTION 8 (f)
The sum of $974,100 is appropriated from the general
fund/mental health to the Department of Health and
Social Services, community and mental health grants,
designated evaluation and treatment, for additional
operating costs due to caseload growth for the fiscal
year ending June 30, 2001.
Ms. Clarke noted that Section 8 (f) would provide funding
for a designated evaluation treatment program, a mental
health program that provides community based psychiatric in-
services at local hospitals for indigent Alaskans. The
program is a "fee for service" program for designated
hospitals. The program has been expanded with increases in
Fairbanks, Juneau, Ketchikan, and Mat-Su.
TAPE HFC 01 - 75, Side B
SECTION 8 (g)
The sum of $225,000 is appropriated from receipt-
supported services to the Department of Health and
Social Services, bureau of vital statistics, for
operating costs for the fiscal year ending June 30,
2001.
Ms. Clarke noted that Section 8 (g) request would be used
for the Bureau of Vital Statistics allowing the Department
to fund three primary items.
· New lease space in Fairbanks;
· Hire non permanent employee back log records; and
· Transfer general funds into the nursing component
for public health nurses pay increase.
Vice-Chair Bunde asked the amount of backlog. Ms. Clarke
advised that the Department is currently experiencing a five
to six week backlog.
Representative Hudson asked if the fees changed for the
services would adequately cover the costs. Ms. Clarke noted
that they were "almost" enough to cover costs. She added
that the fees had been increased this year.
Representative Hudson asked if there was authority to adjust
the fees according to the needs. Ms. Clarke acknowledged
that the Department does have that authority.
SECTION 18
Miscellaneous Claims and State-Dated Warrants:
Department of Health & Social Services
$217,000 dollars
Ms. Clarke noted that $140 thousand dollars of the request
would be federal funds. Included in that number are some
late invoices collectable from the federal government. The
remainder is late bills that need to be paid.
SECTION 19
Radifications.
Ms. Clarke discussed that Section 19 was a radification from
FY 2000 in the amount of $4,268,866.67 dollars. It was not
intended to be a general fund ratification in FY 2000. The
radification amount became about because the funding source
within the Medicaid program was deferred. Because of that,
the federal receipts have not been forthcoming.
The way in which the federal government system works is that
first the claim is deferred, and then reviewed, and if
disallowed, then the State goes to an appeal. She
emphasized that the Department believes that they will
prevail and that the federal funds will come through.
HB 116 was HELD in Committee for further consideration.
ADJOURNMENT
Vice-Chair Bunde adjourned the meeting at 2:45 P.M.
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