Legislature(2005 - 2006)HOUSE FINANCE 519
04/18/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB93 | |
| SB155 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 51 | TELECONFERENCED | |
| + | SB 93 | TELECONFERENCED | |
| + | SB 155 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 18, 2005
1:46 p.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:46:43 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Carl Moses
Representative Bruce Weyhrauch
MEMBERS ABSENT
None
ALSO PRESENT
Katherine Farnham, Division of Public Assistance, Department
of Health and Social Services; Ellie Fitzgerald, Chief,
Policy and Program Development, Division of Public
Assistance, Department of Health and Social Services; Angela
Salerno, Executive Director, National Association of Social
Workers Alaska Chapter; Cheryl Sutton, Staff, Senator Ben
Stevens; Frank Homan, Commissioner, Commercial Fisheries
Entry Commission; Representative Paul Seaton; Jerry McCune,
United Fishermen of Alaska; Phelan Straube, Staff, Senator
Ben Stevens; Senator Ben Stevens; Eddy Jeans, Director,
Education Support Services, Department of Education and
Early Development
PRESENT VIA TELECONFERENCE
Don Shircel, Director of Family Services, Tanana Chiefs
Conference; Ed Martin, Sr., Kenai; Petria Falkenberg, Kenai,
Red Smith, Cooper Landing; Fred Sturnam, Soldotna; Rocky
Frank, Anchor Point; James Price, Nikiski; Ian Felton, Kenai
SUMMARY
CSSB 51(FIN)
"An Act relating to contracts for the provision of
state public assistance to certain recipients in
the state; providing for regional public
assistance plans and programs in the state;
relating to grants for Alaska Native family
assistance programs; relating to assignment of
child support by Alaska Native family assistance
recipients; relating to paternity determinations
and genetic testing involving recipients of
assistance under Alaska Native family assistance
programs; and providing for an effective date."
HCSSB 51 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with four
Department of Health and Social Services fiscal
notes.
CSSB 93(FIN)
"An Act relating to commercial fishing permit and
vessel license fees; and providing for an
effective date."
CSSB 93 (FIN) was heard and HELD in Committee for
further consideration.
CSSB 155(FIN)
"An Act making appropriations from the earnings
reserve account for construction of an integrated
science complex at the University of Alaska in
Anchorage, for replacement of the virology
laboratory in Fairbanks, for expansion of the
Anchorage Museum of History and Art, for the major
maintenance grant fund, and for other capital
projects related to education; and providing for
an effective date."
HCSSB 155 (FIN) was heard and HELD in Committee
for further consideration.
1:47:30 PM
CS FOR SENATE BILL NO. 51(FIN)
"An Act relating to contracts for the provision of
state public assistance to certain recipients in the
state; providing for regional public assistance plans
and programs in the state; relating to grants for
Alaska Native family assistance programs; relating to
assignment of child support by Alaska Native family
assistance recipients; relating to paternity
determinations and genetic testing involving recipients
of assistance under Alaska Native family assistance
programs; and providing for an effective date."
KATHERINE FARNHAM, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT
OF HEALTH AND SOCIAL SERVICES, related the background of the
Temporary Assistance for Native Families (TANF) program.
She described the results of the Welfare to Work bill.
Twelve regional native non-profit organizations and
Metlakatla were designated to run temporary assistance
programs. State funds were made available along with the
federal funds. She explained the Alaska Native Family
Assistance Program and the sunset date. SB 51 would allow
this program to become permanent and would expand it from
the four initial organizations, to the thirteen designated
by the federal government. The end results have been great
successes with a 66 percent caseload reduction.
1:52:39 PM
Ms. Farnham addressed the fiscal notes. She described the
efforts of Cook Inlet Tribal Council to take on 600 new
families. This would change the funding scenario starting
July 1. There would be a reduction of $2 million in general
fund match, as well as a reduction of $2.8 million in the
federal receipt authority. She referred to a chart "FY06
Budget Impact for State-CITC Transfer", which showed the
effects of the fiscal notes (copy on file.) The federal
share goes directly to Cook Inlet and reduces the state's
federal temporary assistance receipts. The state has to
match 75 percent of the federal block grant with maintenance
of effort general funds. As the federal floor lowers, so
does the state match. She highlighted the advantages of the
Cook Inlet program. Maniilaq and Bristol Bay Native
Association are also planning to start up their own
programs. She urged passage of SB 51.
1:57:19 PM
Representative Kelly noted that tribal governments are not
recognized in Alaska. He asked why they are included in
this funding. Ms. Farnham explained that the language used,
"tribal TANF program", is from the federal level, and in
Alaska they are regional Native non-profit programs. Each
receiving grantee waives sovereignty immunity.
Representative Kelly asked if it has no impact on the
sovereignty issue. Ms. Farnham replied yes. Representative
Kelly suggesting calling them 501(c)(3)'s. Ms. Farnham
replied that they are. Representative Kelly maintained that
it is a misuse of federal language. Ms. Farnham pointed out
that in the actual statutory language "regional Native non-
profits" is used.
2:00:33 PM
Representative Croft stressed that Alaska does recognize
tribes, just not as governmental entities, for the purposes
of receiving federal monies. Representative Kelly expressed
concern about allowing Indian Reservations to be established
in Alaska.
2:02:20 PM
Ms. Farnham noted that "tribal" is used appropriately in the
bill.
Representative Kelly clarified that he is not commenting
negatively on the merits of the program.
2:03:29 PM
Representative Holm asked why Metlakatla is mentioned
separately. Ms. Farnham explained that it was a late
addition to the program. She noted that not all regional
non-profits have the capacity to participate in a program.
Representative Holm asked if Sealaska Corporation is a
participant. She replied that Tlingit & Haida serves this
area and the state serves Metlakatla. Representative Holm
noted that Metlakatla is a federal reservation.
2:05:33 PM
In response to a question from Co-Chair Chenault, Ms.
Farnham reported that "fair and equitable" is a process that
examines caseloads for what the state currently spends on
those families for work services, child support, etc. Co-
Chair Chenault asked if that is for the three largest
grantees. Ms. Farnham replied it is for the three current
grantees and will be used for Cook Inlet, also. Co-Chair
Chenault asked if race is a factor. Ms. Farnham replied
that the aim is to assure that native nonprofits can serve
the families in a way that is at least as well financed as
when it was run by the state.
2:08:14 PM
MOLLY MERRITT DUREN, EMPLOYMENT & TRAINING SERVICES, COOK
INLET TRIBAL COUNCIL (CITC), pointed out that her program
has been providing case management services for eight years.
She referred to the handout "Cook Inlet Tribal Council"
(copy on file.) She described the reductions since the 1994
caseload. She related the mission of the tribal council and
the services they provide. She indicated that CITC is ready
to assume this responsibility.
2:11:44 PM
Representative Hawker endorsed the program and thanked Ms.
Merritt Duren for her hard work.
2:12:34 PM
DON SHIRCEL, DIRECTOR OF FAMILY SERVICES, TANANA CHIEFS
CONFERENCE, spoke with pride about the work done by the
tribes of the interior. He testified in support of SB 51
because it allows for continuation and expansion of these
programs.
2:15:48 PM
Co-Chair Chenault asked for an explanation of fiscal note #1
by the Department of Health and Social Services. He
wondered if some of the money is federal money that goes
back to the grant recipient. He suggested there might be
general fund savings. He wondered if any state employees
would be lost.
2:17:40 PM
Ms. Farnham responded that some federal money is leaving the
department's budget and going directly to Cook Inlet. She
explained the transfer and real savings. The first
component is the Native Family Assistant Program, which
increases by $4 million. She pointed out that each fiscal
note has a summary.
Ms. Farnham explained that the second fiscal note, the work
services component related to case management, shows a
reduction of $1.3 million because of a move from grants to
contracts.
Ms. Farnham explained that the third fiscal note relates to
childcare benefits. It will no longer be spent directly,
but will be part of the Cook Inlet program. This note does
the best job of integrating the whole story. It shows the
reduction of federal receipts because of high performance
success. The match is at 75 percent. It is a $5.7 million
general fund reduction.
2:24:16 PM
Representative Croft questioned that number. Ms. Farnham
replied that the net numbers show that the general fund
reduction is actually $2 million. Cook Inlet is the largest
one that will be operating this way. Representative Croft
asked how the difference between the $5.7 million and the $2
million is reconciled. Ms. Farnham replied that the largest
difference is that $3.6 million is being transferred to the
native family assistance component. Representative Croft
summarized that it is not a savings of $5.7 million. Ms.
Farnham replied that the $2 million is the net savings.
Representative Foster asked how non-native families are
served in rural areas. Ms. Farnham replied that there is a
contract to serve both natives and non-natives. She termed
it valuable to work with AVCP as a partner. This may work
for Bristol Bay as well. Representative Foster asked if
there is an administrative fee. Ms. Farnham related that
there is an acceptable small fee. It funds only two things:
cash benefits to the family and administrative expenses.
2:28:16 PM
Representative Holm noted that CITC numbers have gone from
1,000 to 600. He inquired if there is true savings in
employment and if those in state employment are considered
unbiased and those in corporations, biased. He wondered if
state and federal funds should be put into facility
providers that would have a bias. Ms. Farnham addressed the
impact to state workers. She reported that there would be
no reduction in state employees and personnel. Caseloads
are changing post-welfare reform dramatically, and a study
needs to be done to track the increases and decreases. Some
staff rearrangements are being considered. The department
will do an analysis to better understand the trends.
Ms. Farnham addressed the fairness issue. She explained
that native corporations use multiple funding strands and
focus them on the family. The department is trying to
integrate services more like Cook Inlet. The native
organizations can provide a more integrated program. The
department is looking at marketing family centered services.
2:35:23 PM
Representative Holm expressed appreciation for the
presentation. He addressed a concern about an increase in
staff when services are reduced. Ms. Farnham explained the
success of the program depends on taking the savings and
putting it back into services. Some of the families on
public assistance still have serious needs, and at the end
of the 5-year time limit would need more resources. Another
reason is that the agency receiving the funds can use them
in a variety of ways, some of which need more employers.
2:39:08 PM
Representative Kelly asked whether a person employed in a
job out of the region counts, in areas with a 50 percent
unemployment rate. Ms. Farnham responded that employment is
employment; the end game is employment and self-sufficiency.
Representative Kelly asked for statistics on out-of-region
jobs. Ms. Farnham said they are not tracked once they exit
the program and are employed.
2:41:37 PM
ELLIE FITZGARRALD, PROGRAM DEVELOPMENT, DIVISION OF PUBLIC
ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
explained the successes of the Leaver's Study. She related
that there is no data kept after six months. Representative
Kelly suggested those would be interesting numbers to track.
2:43:05 PM
Representative Kelly asked about the permanence of the
program. He wondered if the direction is wrong due to the
loss of federal funds. Ms. Farnham clarified that this
federal program is not on the "down slope" and has wide
national support. She spoke about safeguards and explained
that Senate Finance did add language to the bill that would
protect Alaska from backfilling future holes. She referred
to page 9, line 19, which addresses this concern. Each
grant is negotiated annually, and the program is not
destined to be cut.
Representative Foster thanked the department for the
presentation. He MOVED to report CSSB 51 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes.
Representative Kelly OBJECTED. He explained that he wants
the word "tribal" out of the statutes. Ms. Farnham
indicated that tribal is only referenced in conjunction with
the federal tribal assistance program.
2:47:26 PM
Representative Croft noted that the 12 references to tribal
in the bill are all in the context of a federally approved
tribal family assistance program.
Representative Kelly referred to page 3, line 17, a
reference to operating a tribal assistance program. He
suggested "federal" should be added. Ms. Farnham explained
the meaning of the line, noting that the intent is clear.
Representative Foster noted that it is easy to confuse
sovereign and tribal. He related that the 13 native
corporations are tribal organizations.
Representative Kelly WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
2:50:16 PM
At ease.
2:52:03 PM
CS FOR SENATE BILL NO. 93(FIN)
"An Act relating to commercial fishing permit and
vessel license fees; and providing for an effective
date."
CHERYL SUTTON, STAFF, SENATOR BEN STEVENS, explained that
the bill addresses the commercial fisheries entry
commission, which is fee-based funded. She related
contributing factors which led up to the bill. SB 93 would
bring the state into compliance with recent rulings in
Carlson v. State of Alaska, raise the $300 artificial cap on
the base fee for annual permit renewal to $3,000, and
charges a non-resident fee differential of $115 only once.
She explained vessel license fees as they are related to the
various categories.
2:55:42 PM
FRANK HOMAN, COMMISSIONER, COMMERCIAL FISHERIES ENTRY
COMMISSION, concurred with Ms. Sutton's testimony regarding
the need for the bill. He noted that the alternatives are
not very good; to seek general funds or to reduce staff.
2:56:59 PM
Vice-Chair Stoltze asked Commissioner Homan if he has
thought about not filling a commissioner position.
Commissioner Homan responded that the commissioner's salary
at the limited entry commission are set in statute.
2:58:24 PM
JERRY MCCUNE, UNITED FISHERMEN OF ALASKA, stated support for
the Alaska Commercial Fisheries Entry Commission (CFEC) and
for the committee substitute for SB 93.
3:00:19 PM
Representative Weyhrauch MOVED to ADOPT Amendment 1:
Page 2, lines 21 - 23:
Delete all material and insert:
"(4) over 75 feet - 100 feet ............ 225
(5) over 100 feet - 125 feet ............ 300
(6) over 125 feet - 150 feet ............ 375
(7) over 150 feet - 175 feet ............ 450
(8) over 175 feet - 200 feet ............ 525
(9) over 200 feet - 225 feet ............ 600
(10) over 225 feet - 250 feet ........... 675
(11) over 250 feet - 275 feet ........... 750
(12) over 275 feet - 300 feet ........... 825
(13) over 300 feet .................... 900."
Vice-Chair Stoltze OBJECTED for the purpose of discussion.
REPRESENTATIVE PAUL SEATON, spoke in support of Amendment 1,
which would break the fees into 25-foot categories for
smaller vessel levels. It would generate the same amount of
money, but be more appropriate.
3:02:31 PM
In response to a question by Vice-Chair Stoltze,
Representative Seaton explained that in the amendment CFEC
addressed his concern that appropriate charges accompany the
appropriate size of vessel.
3:04:13 PM
Ms. Sutton spoke in opposition to Amendment 1. She observed
that the bill is a compromise between different areas of the
state.
Representative Weyhrauch asked if there were not some basis
for size delineations.
Ms. Sutton noted that she did not see the amendment prior to
the meeting and the sponsor would not approve of it.
3:05:50 PM
Co-Chair Meyer felt that the amendment has some merit.
Representative Croft summarized that the same amount of
money would be raised, but that the fee would be tilted
toward the larger vessels. Representative Seaton noted that
the fee would increase according to the size of the vessel.
The top fee would be $900.
3:08:18 PM
Commissioner Homan, provided information about the
intention of the amendment. He noted that CSSB 93 (FIN)
provides a straight 20 percent increase as a compromise
between larger and smaller vessels. The amendment changes
the amount by adding more categories, which spreads out the
costs.
Mr. Homan explained that there are more boats in the smaller
fee categories. He expressed concern that the amendment not
jeopardize the legislation.
3:11:04 PM
Co-Chair Meyer questioned if the smaller boats are generally
owned by Alaskans and the larger boats are owned by out-of-
state interests. Mr. Homan confirmed that idea.
SB 93 was HELD in Committee for further consideration.
3:13:18 PM
At ease.
3:17:55 PM
CS FOR SENATE BILL NO. 155(FIN)
"An Act making appropriations from the earnings reserve
account for construction of an integrated science
complex at the University of Alaska in Anchorage, for
replacement of the virology laboratory in Fairbanks,
for expansion of the Anchorage Museum of History and
Art, for the major maintenance grant fund, and for
other capital projects related to education; and
providing for an effective date."
SENATOR BEN STEVENS, sponsor, explained that SB 155 is a
one-time appropriation bill for major projects across the
state. The bill retires the entire deferred maintenance
list of the Department of Education and Childhood and Early
Development, $142 million for 70 projects across the state.
The bill funds new construction of schools and some
rehabilitation projects. The third part of the bill funds
university projects across the state. The fourth part of
the bill appropriates money for a museum in Anchorage. He
suggested that all projects are a lasting investment,
education-related, and affect future generations of
Alaskans. He encouraged support of the bill.
3:24:38 PM
Co-Chair Meyer spoke about the possibility of adding new
funding amendments. He asked how flexible the sponsor is.
Senator Stevens said the flexibility is contingent upon the
three criteria of the bill. He said he is opposed to a one-
time debt service relief such as the request from his school
district.
3:26:19 PM
Representative Hawker applauded the bill. He asked for
comments on the fund source and the impact on future
permanent fund dividends. Senator Stevens referred to the
last page of a handout by the Department of Education and
Early Development on the Effect of "One-Time" Earnings
Reserve Account Withdrawal in FY06 on the Dividend Check
(copy on file.) He stated that the money he has paid for
education as a property tax owner over 15 years has been ten
times greater than the impact on future dividends.
Representative Hawker summarized that the cost absorbed by
individual Alaskans over 15 years is $300. Senator Stevens
shared that that would be his kindergarten son's impact. He
emphasized that it is well worth the effort.
3:29:51 PM
Representative Croft referred to the 1999 permanent fund
vote and asked why the permanent fund would be used now that
oil is at $50 per barrel and there is a great reserve in the
government's saving account. Senator Stevens related that
the difference is that this is a one-time source. He opined
that "earnings reserve for government" means the annual
operation expenses and a continuing fund source. This bill
is an investment in state assets, a transfer of an asset,
not expenditure. He implied that the return of the
investment is non-tangible, due to the savings in school
improvements and the benefits to students.
3:32:53 PM
Representative Kelly asked what chance the bill has.
Senator Stevens replied "one step at a time". He said he
hoped there is enough evidence for the House Finance
Committee to consider this bill.
3:34:34 PM
Representative Hawker requested more discussion about the
capital projects major maintenance list.
Co-Chair Meyer inquired if this bill is part of the capital
budget. Senator Stevens replied it is not, it is a stand-
alone appropriation.
3:36:18 PM
Senator Stevens referred to the Department of Education and
Early Development list and reported that there are 71
projects throughout Alaska (copy on file.) He related that
it would be many years before so many maintenance needs
would surface again. Current appropriation bills only
address the top 20 projects.
3:38:34 PM
Vice-Chair Stoltze stated appreciation for the efforts of
Senator Stevens. He speculated that the bill would not wipe
out all maintenance needs and there would be new requests
next year. Senator Stevens noted that in order to be
eligible for this list, schools had to have a department-
approved maintenance program.
Co-Chair Meyer asked if some of the new school projects
could be completed with the 70/30 match. He wondered if
this bill would set a precedent. Senator Stevens replied
that it was not a major consideration when the bill was
written. He related a story about his children, M & M's and
issues of fairness. He noted that the same concept applies
to this bill, which is an attempt to meet many needs.
3:43:44 PM
Co-Chair Meyer noted that this is a bold bill.
Representative Foster commented that there is nothing in the
capital budget for his district. He agreed with the use of
the funding source. He repeated that his district receives
nothing.
3:45:26 PM
Senator Stevens said that the competition for resources is
fierce. This bill is an attempt to eliminate one of the
areas of competition, the deferred maintenance list. He
addressed whether Alaska is benefiting in the best way, the
way the fund is currently being managed. He related the
history of the fund and the how checks are paid out. He
suggested that the fund is an underutilized asset, and it
should be transferred to facilities that generate a
different type of return instead of a monetary return.
3:48:39 PM
Co-Chair Meyer pointed out that school maintenance is a good
use for these funds. He questioned if Amerada Hess funds
should be used for these projects. Senator Stevens replied
that the Senate has not mingled the two sources. Co-Chair
Meyer suggested that is another funding source. He implied
that the Amerada Hess is also "dead money".
3:50:55 PM
Representative Weyhrauch noted that the debate on this bill
is a tune up for future debates about the use of the
permanent fund. He stated that he analyzes this bill on an
independent basis. He opined that the most valuable return
on the investment is the contribution that kids will make in
the future.
3:52:49 PM
ED MARTIN, SR., KENAI, opined that raiding the permanent
fund is against the Alaskan's will, which was expressed by a
statewide vote in 1999. He suggested that there is very
strong support against the bill. He testified against SB
155.
3:55:43 PM
PETRIA FALKENBERG, KENAI, spoke in opposition to HB 155.
She referenced the vote in 1999 against tapping the
permanent fund. She shared details of a recent survey where
the majority voiced opinion against the bill.
3:58:41 PM
RED SMITH, COOPER LANDING, voiced concern about using the
permanent fund for projects in this bill. He maintained
that the people own the fund. He testified in opposition to
HB 155.
4:01:03 PM
FRED STURNAM, SOLDOTNA, testified in opposition to HB 155.
4:03:17 PM
JAMES PRICE, NIKISKI, spoke in opposition to HB 155 because
the people voted not to use the permanent fund for this
purpose.
4:06:36 PM
IAN FELTON, KENAI, testified in opposition to HB 155.
4:06:59 PM
ROCKY FRANK, ANCHOR POINT, speaking as a senior citizen,
spoke in opposition to HB 155. He suggested giving a one-
time permanent fund payout.
4:09:08 PM
Co-Chair Meyer closed public testimony.
Co-Chair Meyer related that a new CS for SB 155,
incorporating new amendments, would be drafted.
ADJOURNMENT
The meeting was adjourned at 4:10 PM
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