Legislature(1993 - 1994)

03/08/1994 01:30 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                          March 8, 1994                                        
                            1:30 p.m.                                          
                                                                               
  TAPE HFC 94-51, Side 2, #000 - end.                                          
  TAPE HFC 94-52, Side 1, #000 - end.                                          
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Larson called the House  Finance Committee to order                 
  at 1:30 p.m.                                                                 
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Larson                                                              
  Co-Chair MacLean            Representative Martin                            
  Vice-Chair Hanley           Representative Navarre                           
  Representative Brown        Representative Therriault                        
  Representative Grussendorf                                                   
                                                                               
  Representatives Parnell, Foster and Hoffman were not present                 
  for the meeting.                                                             
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative  Pat  Carney; Representative  Cliff Davidson;                 
  Mike  Greany, Director,  Legislative  Finance Division;  Dan                 
  Spencer, Fiscal Analyst,  Office of  Management and  Budget,                 
  Office of the Governor;  Diane Schenker, Special  Assistant,                 
  Department  of  Corrections;   Shirley  Minnich,   Director,                 
  Division   of   Administrative   Services,   Department   of                 
  Corrections; Bob Poe, Director, Division of Information  and                 
  Administrative   Services,   Department   of   Environmental                 
  Conservation;  Ron  Lind,  Director,  Director, Division  of                 
  Administrative  Services,  Department of  Transportation and                 
  Public  Facilities;   Alison  Elgee,  Director   of  Budget,                 
  University of Alaska; Arthur H. Snowden,  II, Administrative                 
  Director,  Alaska  Court  System;  Nancy  Slagle,  Director,                 
  Division  of  Budget Review,  Office  of the  Management and                 
  Budget, Office of the Governor.                                              
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  HB 441    "An Act reducing certain appropriations for fiscal                 
            year 1994; and providing for an effective date."                   
                                                                               
            HB  441   was  HELD   in  Committee   for  further                 
            discussion.                                                        
                                                                               
  HB 455    "An Act  making and amending operating and capital                 
            appropriations   and   ratifying   certain   state                 
            expenditures;  and  providing  for   an  effective                 
                                                                               
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            date."                                                             
                                                                               
            HB  455   was  HELD   in  Committee   for  further                 
            discussion.                                                        
                                                                               
  HB 505    "An  Act  making appropriations  to  and from  the                 
            constitutional budget reserve fund  under art. IX,                 
            sec. 17(c), Constitution of  the State of  Alaska,                 
            for  operating  and   capital  expenses  of  state                 
            government for fiscal year 1994; and providing for                 
            an effective date."                                                
                                                                               
            HB   505  was   HELD  in  Committee   for  further                 
            discussion.                                                        
                                                                               
  Co-Chair Larson noted  that a  request was  issued from  the                 
  House Finance  Committee to  the Administration  to identify                 
  areas of  the  FY 94  budget  that  could be  reduced.    He                 
  observed that the intent  is that the FY 94  supplemental be                 
  funded by  reductions in  the FY  94 operating  budget.   He                 
  provided  members  with   a  letter  from  Shelby   Stastny,                 
  Director,  Office  of  Budget and  Management  to department                 
  commissioners, dated March 2, 1994 (copy on file).                           
  HOUSE BILL NO. 455                                                           
                                                                               
       "An Act  making  and  amending  operating  and  capital                 
       appropriations    and    ratifying     certain    state                 
       expenditures; and providing for an effective date."                     
                                                                               
  NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF                 
  MANAGEMENT AND  BUDGET, OFFICE  OF THE  GOVERNOR provided  a                 
  sectional overview of HB 455.                                                
                                                                               
  DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                           
                                                                               
       *    Sec. 39   Highways and Aviation                                    
            $1,550.0                                                           
                                                                               
            This is a fund source change from program receipts                 
            to general  fund dollars to  reflect uncollectible                 
            rural airport fees.                                                
                                                                               
  RON  LIND, DIRECTOR,  DIVISION  OF ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT OF TRANSPORTATION explained  that the Court ruled                 
  that  the   Department  had   incorrectly  implemented   the                 
  procedures for rural rate landing fees.  Collection of rural                 
  landing fees  was  discontinued.   He  observed that  FY  94                 
  legislative   intent   stated   that   "the  Department   of                 
  Transportation  and  Public  Facilities  not  reinstate  the                 
  landing fees at  the rural airports and  that the Department                 
  submit   for   legislative   consideration  a   supplemental                 
                                                                               
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  appropriation next session to fund the resulting shortfall."                 
                                                                               
  In response to a question by Co-Chair Larson, Mr. Lind noted                 
  that an additional aviation fuel tax  of $0.07 would be need                 
  to make up the shortfall.                                                    
                                                                               
                                                                               
       *    Sec. 40   Fairbanks International Airport    $34.7                 
                                                                               
            This request would pay court ordered reinstatement                 
            of PERS for a discharged employee.  The request is                 
            required by a court settlement.                                    
                                                                               
  DEPARTMENT OF CORRECTIONS                                                    
                                                                               
       *    Sec. 41   Inmate Health Care                                       
            $1,631.3                                                           
                                                                               
            The   request   will  fund   inmate   health  care                 
            requirements for remaining FY 94.                                  
                                                                               
  SHIRLEY  MINNICH,  DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                 
  SERVICES, DEPARTMENT OF CORRECTIONS discussed cost effective                 
  measures  instigated by  the Department  since FY  93.   She                 
  noted   that   contractual  services   have   been  reduced.                 
  Referrals for specialists and  surgical procedures have also                 
  been  reduced.   Third  party  payers are  being introduced.                 
  There was a  $2 million dollar  reduction for inmate  health                 
  care in FY 94.                                                               
                                                                               
  Representative  Navarre  suggested  that  outside audits  be                 
  conducted to discern if  further health care savings can  be                 
  achieved.                                                                    
                                                                               
       *    Sec. 42   Administrative Services            $85.1                 
                                                                               
            This will appropriate  funding for an  arbitration                 
            settlement.   It includes salary and  benefits for                 
            back pay.                                                          
                                                                               
       *    Sec. 43   Institutions                       $39.5                 
                                                                               
            This  request  funds  a court  ordered  monitor as                 
            required by Cleary.                                                
                                                                               
  In  response  to  a question  by  Representative  Brown, Ms.                 
  Minnich clarified that the  monitor operated during previous                 
  fiscal years.                                                                
                                                                               
  ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT                 
  SYSTEM   clarified  that  the   position  will  monitor  the                 
  settlement  agreed  to  by  the  executive  branch  and  the                 
                                                                               
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  plaintiffs.  The monitor was requested by the plaintiffs and                 
  the defendants  during hearings.   The  monitor has  been in                 
  existence since the settlement.                                              
                                                                               
  DIANE SCHENKER, SPECIAL ASSISTANT, DEPARTMENT OF CORRECTIONS                 
  added that  the  monitor  was  reappointed  specifically  to                 
  review issues related to overcrowding.                                       
                                                                               
       *    Sec. 44   Spring Creek Correctional Center                         
            $200.0                                                             
                                                                               
            This would allow  50 maximum  security beds to  be                 
            operational  at  the  Spring   Creek  Correctional                 
            Center.  The request covers remaining FY 94.                       
                                                                               
  In response to a question  by Representative Therriault, Ms.                 
  Minnich explained that  the beds are  on line.  Funding  for                 
  the  beds  has been  requested  in  the  Department's FY  95                 
  budget.   She stressed the  importance of additional beds to                 
  alleviate  overcrowding.     Only   costs  associated   with                 
  supervision, contractual, supplies and inmate gratuities are                 
  included.                                                                    
                                                                               
  Ms. Schenker discussed the need  for additional beds to meet                 
  the courts requirement for staff/inmate  ratio.  She further                 
  explained costs associated with the request.  She emphasized                 
  that the beds are in place.                                                  
                                                                               
       *    Sec. 45   Commissioner's Office              $73.0                 
                                                                               
            This requests  covers legal  expenses owed  to the                 
            Department of  Law related to  the growing  number                 
            and complexity of cases brought by inmates against                 
            the state.                                                         
                                                                               
       *    Sec. 46   Community Corrections Directors Office                   
                                                                               
            This would extend the lapse date on appropriations                 
            for community residence center (CRC) beds.                         
                                                                               
  In response  to a  question by  Representative Navarre,  Ms.                 
  Slagle  clarified  that  $688.0  thousand dollars  would  be                 
  extended.                                                                    
                                                                               
  Representative Hanley clarified that the funding has already                 
  lapsed  into  the  general  fund.    Representative  Navarre                 
  suggested that section 46 (a) is confusing. He asserted that                 
  the  funding  should  be  allowed to  lapse  and  a separate                 
  appropriation made.                                                          
                                                                               
  In response to  a question by Co-Chair  MacLean, Ms. Minnich                 
  noted that CRC beds were funded in FY 94 at $6,220.6 million                 
                                                                               
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  dollars.  She clarified that inmates will be moved from hard                 
  beds into the soft CRC beds.                                                 
                                                                               
  Representative Hanley pointed out that more money was lapsed                 
  than  is   being  extended.    Ms.  Slagle  noted  that  the                 
  Department wants to identify the need  for CRC beds in order                 
  to verify their FY 95 funding request.                                       
                                                                               
  (Tape Change, HFC 94-52, Side 1)                                             
                                                                               
  Members continued  discussion regarding  the lapsed  funding                 
  contained in section 46.                                                     
                                                                               
  DEPARTMENT OF ENVIRONMENTAL CONSERVATION                                     
                                                                               
       *    Sec. 47   Air Quality/Solid Waste Management $36.7                 
                                                                               
            This would reimburse the  Environmental Protection                 
            Agency (EPA)  for disallowed  costs determined  in                 
            federal CERCLA audit.                                              
                                                                               
  BOB   POE,   DIRECTOR,    DIVISION   OF   INFORMATION    AND                 
  ADMINISTRATIVE   SERVICES,   DEPARTMENT   OF   ENVIRONMENTAL                 
  CONSERVATION explained that the CERCLA agreement was between                 
  June 1985 and  January 1988.   The amount  was reduced  from                 
  $115,988 thousand dollars.                                                   
                                                                               
  UNIVERSITY OF ALASKA                                                         
                                                                               
       *    Sec. 49   Fairbanks Campus Physical Plant                          
            $220.0                                                             
                                                                               
       This  request funds  the installation  of an  emergency                 
       water  well.    The  well   will  replace  the  benzine                 
       contaminated water system at the Fairbanks campus.                      
                                                                               
  Ms. Slagle explained that 470 funding  was used for clean up                 
  of the contaminated  well.   Representative Martin asked  if                 
  the University's risk management account could be used.                      
                                                                               
  ALISON ELGEE,  DIRECTOR  OF  BUDGET,  UNIVERSITY  OF  ALASKA                 
  explained that the risk management pool  has been used as an                 
  interim measure.  She stressed that the risk management pool                 
  was not designed to cover this kind of expense.  The benzine                 
  contamination  at the  existing  site  required ground  work                 
  prior to  winter.   In response  to a  question by  Co-Chair                 
  MacLean,  Ms. Elgee  noted  that the  total  cost is  $320.0                 
  thousand dollars.  She noted that the appropriation will not                 
  be rolled into the University's base FY 95 request.                          
                                                                               
  MISCELLANEOUS CLAIMS AND STALE DATED WARRANTS                                
                                                                               
                                                                               
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       *    Sec. 50   Miscellaneous  claims  and  stale  dated                 
            warrants.                                                          
                                                                               
  Ms. Slagle explained  that payments by  the state of  Alaska                 
  not cashed within two  years must be reappropriated.   Small                 
  miscellaneous claims are also included  if they are over two                 
  years old.  She noted that AS 37.25.010 states that:                         
                                                                               
       "An indebtedness arising  from a  prior year for  which                 
       the appropriation  has lapsed  shall be  paid from  the                 
       current year's  appropriation, if (1)  this expenditure                 
       does  not  exceed  the  balanced  lapsed; and  (20  the                 
       original obligation  date is  not more  than two  years                 
       from the requested date of disbursement."                               
                                                                               
  HB 455 was HELD in Committee for further discussion.                         
                                                                               
  Co-Chair  Larson discussed  the  majority's FY  95  spending                 
  plan.  Co-Chair MacLean discussed  plans for capital project                 
  legislation.                                                                 
  HOUSE BILL NO. 505                                                           
                                                                               
       "An  Act   making  appropriations   to  and   from  the                 
       constitutional budget reserve fund under art. IX,  sec.                 
       17(c),  Constitution  of  the   State  of  Alaska,  for                 
       operating  and capital expenses of state government for                 
       fiscal year 1994; and providing for an effective date."                 
                                                                               
  Co-Chair  Larson  brought HB  505  before the  Committee for                 
  public testimony.  No one wished to testify on HB 505.                       
                                                                               
  HB 505 was HELD in Committee for further discussion.                         
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 2:50 p.m.                                           
                                                                               
                                                                               
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