Legislature(2003 - 2004)

03/30/2004 01:57 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   HOUSE FINANCE COMMITTEE                                                                                      
                       March 30, 2004                                                                                           
                           1:57 PM                                                                                              
                                                                                                                                
TAPE HFC 04 - 71, Side A                                                                                                        
TAPE HFC 04 - 71, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Harris  called the  House Finance Committee  meeting                                                                   
to order at 1:57 PM.                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Bruce  Weyhrauch;   Kevin  Brooks,  Director,                                                                   
Division of  Administrative Services, Department  of Fish and                                                                   
Game;  Tom  Wright,  Staff,  Co-Chair   Harris;  David  Teal,                                                                   
Director,   Legislative  Finance   Division;  Janet   Clarke,                                                                   
Director, Division of Administrative  Services, Department of                                                                   
Health and Social Services; Bob  Bartholomew, Chief Operating                                                                   
Officer,  Alaska Permanent  Fund  Corporation, Department  of                                                                   
Revenue; Eddy  Jeans, Manger,  School Finance and  Facilities                                                                   
Section, Department of Education and Early Development.                                                                         
                                                                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Josh Fink, Public Advocate, Office of Public Advocacy;                                                                          
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 375    "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; and providing                                                                    
          for an effective date."                                                                                               
                                                                                                                                
          CSHB 375 (FIN) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation.                                                                                           
                                                                                                                                
HB 377    "An Act making appropriations for the operating                                                                       
          and capital expenses of the state's integrated                                                                        
          comprehensive mental health program; and providing                                                                    
          for an effective date."                                                                                               
                                                                                                                                
          CSHB 377 (FIN) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation.                                                                                           
HOUSE BILL NO. 375                                                                                                            
                                                                                                                                
     "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; and providing  for an effective                                                                   
     date."                                                                                                                     
                                                                                                                                
Co-Chair Williams MOVED to ADOPT the proposed committee                                                                         
substitute for HB 375: Work Draft 23-Gh2040\S. There being                                                                      
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
AMENDMENT ADMIN-1                                                                                                             
                                                                                                                                
Representative Hawker MOVED to ADOPT Amendment ADMIN-1:                                                                         
                                                                                                                                
     ADD                                                                                                                        
     Appropriation: Administration                                                                                              
     Allocation:  Office of Public Advocacy                                                                                     
                                                                                                                                
     Fund Source:   Alcohol   &   Drug  Abuse   Treatment   &                                                                   
                    Prevention Fund                                                                                             
      Amount:   $66,000                                                                                                         
                                                                                                                                
     Description:                                                                                                               
     Establish Full Funding for  a Social Services Specialist                                                                   
     H - ANC $66,000                                                                                                            
                                                                                                                                
     A  District  Branch  of  the  Wellness  Court  has  been                                                                   
     established under the direction  of District Court Judge                                                                   
     Sam  Adams. The funding  requested  is essential  to the                                                                   
     proper  functioning  of  the  Wellness  Court,  as  this                                                                   
     position  serves  as  the  Case  Coordinator  for  state                                                                   
     participants in the Anchorage Wellness Court.                                                                              
                                                                                                                                
     The expansion  of the Anchorage Wellness  Court includes                                                                   
     another  unit to  serve state  misdemeanants,  including                                                                   
     Anchorage residents  arrested for DUI in  the Palmer and                                                                   
     Kenai Judicial Districts.  The new unit expands upon the                                                                   
     proven cost  savings and public benefits  that have been                                                                   
     achieved  through Judge Wanamaker's  Wellness  Court for                                                                   
     municipal   misdemeanants.   All  that   is  needed   is                                                                   
     assurance   of  the   ongoing  funding   for  the   Case                                                                   
     Coordinator.                                                                                                               
                                                                                                                                
     Currently, Partners  for Progress, Inc.  in coordination                                                                   
     with the Alaska Court System  has committed to fund this                                                                   
     position  for  the remainder  of  FY 04.  LB&A  approved                                                                   
     $33,000   in   Statutory  Designated   Program   Receipt                                                                   
     authority for  the Office of Public Advocacy  during the                                                                   
     December 12, 2003 meeting.  There are no funds reflected                                                                   
     in the FY 05 Governor's budget for this position.                                                                          
                                                                                                                                
Co-Chair Harris OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Representative  Hawker  spoke in  support  of the  amendment,                                                                   
which was  introduced on  behalf of Representative  Rokeberg.                                                                   
He  maintained  that  Wellness   Courts  offer  a  successful                                                                   
alternative within  the court system for people  convicted of                                                                   
alcohol vehicle  violations. The amendment would  fund a case                                                                   
coordinator  to allow  monitoring of  additional persons  [in                                                                   
Anchorage, which  would take pressure  off of the  Palmer and                                                                   
Kenai judicial districts                                                                                                        
                                                                                                                                
JOSH  FINK,  PUBLIC  ADVOCATE,  OFFICE  OF  PUBLIC  ADVOCACY,                                                                   
testified  via teleconference  in support  of the  amendment.                                                                   
The  funding would  allow participation  of misdemeanors  and                                                                   
allow additional areas to participate.  There are no Wellness                                                                   
Courts in the Matsu or Kenai.  Anchorage residents charged in                                                                   
these areas would be able to participate in Anchorage.                                                                          
                                                                                                                                
Representative  Hawker noted  that the  fund source  would be                                                                   
the Alcohol and Drug Abuse Treatment and Prevention Fund.                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Fate,   Hawker,  Joule,   Meyer,  Moses,   Stoltze,                                                                   
          Harris, Williams                                                                                                      
OPPOSED: Chenault, Foster                                                                                                       
                                                                                                                                
Representative Croft absent from the vote.                                                                                      
                                                                                                                                
The MOTION PASSED (8-2).                                                                                                        
                                                                                                                                
[Amendment ADMIN-1 was further amended: see below.]                                                                             
                                                                                                                                
AMENDMENT F&G-1                                                                                                               
                                                                                                                                
Representative Fate MOVED to ADOPT Amendment F&G - 1:                                                                           
                                                                                                                                
     ADD:                                                                                                                       
                                                                                                                                
     Department: Fish and Game                                                                                                  
     Appropriation: Commercial Fisheries                                                                                        
                                                                                                                                
     13. Southeast Region Fisheries Management     49.2                                                                         
     18. Central Region Fisheries Management       72.2                                                                         
     20. AYK Region Fisheries Management           165.1                                                                        
     22. Westward Region Fisheries Management      32.7                                                                         
     24. Headquarters Fisheries Management         27.7                                                                         
     26. Fisheries Development                     30.8                                                                         
                                                                                                                                
     Total  $377.7                                                                                                              
     Fund Source: General Fund                                                                                                  
     Amount: $377.7                                                                                                             
                                                                                                                                
Co-Chair Harris OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Representative  Fate explained  that the appropriations  were                                                                   
originally  funded through the  Commercial Fishing  Revolving                                                                   
Loan  Fund  (CFRLF).  The  items were  taken  out,  with  the                                                                   
understanding   that    there   would   be    an   additional                                                                   
appropriation,  which did not  occur. He observed  that CFRLF                                                                   
funds are no longer available,  which necessitated the use of                                                                   
general funds.                                                                                                                  
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Amendment ADMIN-1                                                                                                             
                                                                                                                                
Co-Chair Harris  noted that there were insufficient  funds in                                                                   
the Alcohol and Drug Abuse Treatment  and Prevention Fund for                                                                   
the  appropriation in  Amendment  ADMI-1. Therefore,  general                                                                   
funds would  be used  for the  appropriation. There  being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
AMENDMENT F&G-2                                                                                                               
                                                                                                                                
Representative Fate MOVED to ADOPT Amendment F&G 2:                                                                             
                                                                                                                                
     ADD            Page 13, Line 18                                                                                            
     Department:    Fish and Game                                                                                               
     Appropriation: Administration and Support                                                                                  
     Allocation:    State Subsistence                                                                                           
                                                                                                                                
     Description:                                                                                                               
     Transfer funding from State Subsistence to page 12,                                                                        
     line 20.                                                                                                                   
                                                                                                                                
     Appropriation: Commercial Fisheries                                                                                        
     Allocation:    AYK Region Fisheries                                                                                        
                                                                                                                                
   To purchase and operate SONAR in the Porcupine River.                                                                        
                                                                                                                                
     Total     164                                                                                                              
     Fund Source: General Funds                                                                                                 
     Amount: 164.0                                                                                                              
                                                                                                                                
Co-Chair Harris OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Representative  Fate noted that  there is sufficient  funding                                                                   
on the  Porcupine River  to get  a fledgling program  started                                                                   
but   insufficient  funding   to  operate   the  sonar.   The                                                                   
appropriation would  allow a game  management tool  to assess                                                                   
the stock and obtain accountability.                                                                                            
                                                                                                                                
In   response  to   a  question   by  Representative   Joule,                                                                   
Representative  Fate clarified  that the  funding would  come                                                                   
from  the  Division  of  Subsistence.   Representative  Joule                                                                   
questioned  the  affect  on  the   Division  of  Subsistence.                                                                   
Representative Fate noted that  the amendment would take $164                                                                   
thousand  from  the Division's  $1  million  dollar  [general                                                                   
fund] appropriation.                                                                                                            
                                                                                                                                
KEVIN BROOKS, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT  OF  FISH  AND  GAME,  express  concern  with  the                                                                   
reduction  and  noted  that  the   Division  is  small,  with                                                                   
$1,064,000 [in general funds].  The reduction would leave the                                                                   
Division $900 thousand, which  is a 15 percent reduction.  He                                                                   
pointed  out that  there  was a  $200  thousand reduction  in                                                                   
FY04. He estimated  that there would be  significant impacts.                                                                   
He observed that  the $164,000 reduction would  result in the                                                                   
loss  of  a  couple [full-time]  positions  or  a  number  of                                                                   
seasonal staff.  There are 30 [full-time] employees.  The job                                                                   
of the Division of Subsistence  is to qualify the subsistence                                                                   
harvest and provide  the data to the Board of  Fish and Games                                                                   
for allocation  decisions. There  are seasonal hires.  He did                                                                   
not know  if seasonal employees  or full time staff  would be                                                                   
affected. He expressed support for the addition.                                                                                
                                                                                                                                
Co-Chair Harris  stated that he  would support  the amendment                                                                   
but would  continue to  look for  additional funding  for the                                                                   
Division.                                                                                                                       
                                                                                                                                
Representative   Joule   OBJECTED   to  the   amendment.   He                                                                   
acknowledged the need for the  sonar, but questioned if there                                                                   
are other fund sources.                                                                                                         
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Fate,  Hawker,  Meyer, Stoltze,  Chenault,  Harris,                                                                   
          Williams                                                                                                              
OPPOSED: Foster, Joule, Moses                                                                                                   
                                                                                                                                
Representative Croft absent from the vote.                                                                                      
                                                                                                                                
The MOTION PASSED (7-3).                                                                                                        
                                                                                                                                
AMENDMENT GOV-1                                                                                                               
                                                                                                                                
Representative Harris MOVED to ADOPT Amendment GOV-1:                                                                           
                                                                                                                                
     FUND SOURCE CHANGE AMENDMENT:                                                                                              
                                                                                                                                
     Department:  Office of the Governor                                                                                        
     Appropriation: Executive Operations                                                                                        
     Allocation:  Executive Office                                                                                              
     1175 Business License Receipts $610,300                                                                                    
     1004 General Fund  ($610,300)                                                                                              
                                                                                                                                
     DESCRIPTION:                                                                                                               
     Since  submitting  the Governor's  budget,  it has  been                                                                   
     determined  that  the  Governor's   Office  can  utilize                                                                   
     business  license   receipts  for  international   trade                                                                   
     activities.  This  amendment   reflects  a  fund  source                                                                   
     change  to business  license receipts  (the fund  source                                                                   
     used  for   trade  activities   in  the  Department   of                                                                   
     Community and Economic Development).                                                                                       
                                                                                                                                
Co-Chair Williams OBJECTED for the purpose of discussion.                                                                       
                                                                                                                                
TOM  WRIGHT,  STAFF,  CO-CHAIR  HARRIS,  explained  that  the                                                                   
Governor  requested  the  fund   change.  The  Governor  also                                                                   
requested  a fund  change  for statutory  designated  program                                                                   
receipts.  He maintained that  there was  no point  in giving                                                                   
the   Governor's  Office   business   license  receipts   for                                                                   
statutory  designated  program  receipts  and  observed  that                                                                   
expenditures  of this  type are  dependent  on receipts  from                                                                   
trade shows. He noted that there  would be a net zero effect.                                                                   
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
AMENDMENT HSS-1                                                                                                               
                                                                                                                                
Representative Hawker MOVED to ADOPT Amendment HSS-1:                                                                           
                                                                                                                                
      Department:   Health and Social Services                                                                                  
     Appropriation: Various                                                                                                     
     Allocation:    Various                                                                                                     
      Fund Source:  1003 General Fund Match                                                                                     
     Amount:        $949,700                                                                                                    
                                                                                                                                
     DESCRIPTION:                                                                                                               
     This fund  change is necessary  to correct the  ratio of                                                                   
     General  Fund  to  General  Fund  Match  resulting  from                                                                   
     internal  department transfers  in/out. See table  below                                                                   
     for   changes   in   funding   to   appropriations   and                                                                   
     allocations.                                                                                                               
                                                                                                                                
Appropriation           Allocation               GF      GFM                                                                  
Juvenile Justice        Probation                23,900 -23,900                                                               
Health Care Services    Medical            Asst. 25,400 -25,400                                                               
                        Administration                                                                                          
Public Assistance       Public        Assistance 9,700   -9,700                                                               
                        Administration                                                                                        
Public Assistance       Public Assistance Field 32,800 -32,800                                                                
                        Services                                                                                                
Senior & Disabilities SDS Administration         10,200 -10,200                                                               
Services                                                                                                                        
Senior & Disabilities SDS Medicaid               688,400 -688,400                                                             
Services                                                                                                                        
Departmental    Support Administrative Support 159,300 -159,300                                                               
Services                Services                                                                                                
                        Total                    949,700 -949,700                                                             
                                                                                                                                
Co-Chair Harris OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Representative Hawker observed that the components in the                                                                       
amendment were identified as ministerial changes between                                                                        
general funds and general fund matching funds.                                                                                  
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
AMENDMENT HSS-2                                                                                                               
                                                                                                                                
Co-Chair Harris MOVED to ADOPT Amendment HSS-2:                                                                                 
                                                                                                                                
     ADD/DELETE                                                                                                                 
                                                                                                                                
     Department: Health and Social Services                                                                                     
     Appropriation: Public Assistance                                                                                           
     Allocation: Alaska Temporary Assistance Program ATAP                                                                       
     Fund Source Number 1002 Federal Funds                                                                                      
     Amount: $900,000                                                                                                           
                                                                                                                                
     Appropriation: Public Assistance                                                                                           
     Allocation: Adult Public Assistance                                                                                        
     Fund Source Number & Name: 1004 General Fund Match                                                                         
     Amount: -$900,000                                                                                                          
                                                                                                                                
     ADD/DELETE                                                                                                                 
                                                                                                                                
     Department: Health and Social Services                                                                                     
     Appropriation: Public Health                                                                                               
     Allocation: Community Health                                                                                               
     Fund Source Number & Name: 1004 General Fund Match                                                                         
     Amount: $500,000                                                                                                           
     Fund Source: 1168 Tobacco Use Education & Cessation                                                                        
     Amount: -$500,000                                                                                                          
                                                                                                                                
     ADD/DELETE                                                                                                                 
                                                                                                                                
     Department:    Education and Early Development                                                                             
     Appropriation: Alaska Library and Museums                                                                                  
     Allocation:    Library Operations                                                                                          
                                                                                                                                
     Fund Source:  1004 General Fund                                                                                            
     Amount:        $174,500                                                                                                    
                                                                                                                                
     ADD                                                                                                                        
     Department:    Education and Early Development                                                                             
     Appropriation: Alaska Library and Museums                                                                                  
     Allocation:    Archives                                                                                                    
     Fund Source:  1004 General Fund                                                                                            
     Amount:        $138,800 (and 2 positions)                                                                                  
                                                                                                                                
     ADD                                                                                                                        
     Department:    Education and Early Development                                                                             
     Appropriation: Alaska Library and Museums                                                                                  
     Allocation:    Museum Operations                                                                                           
     Fund Source:  1004 General Fund                                                                                            
     Amount:        $52,600 (and 1 position)                                                                                    
                                                                                                                                
     Description                                                                                                                
                                                                                                                                
     This  amendment substitutes  the remaining federal  TANF                                                                   
     (Temporary  Assistance for  Needy Families) bonus  award                                                                   
     of $900,000 for general fund match in ATAP.                                                                                
                                                                                                                                
     $500,000  of GF is  substituted  for Tobacco funds  used                                                                   
     for  Community   Health  Grants.  The   newly  available                                                                   
     tobacco  funds  are  not  spent  in  FY05;  they  remain                                                                   
     available in the fund and  can be spent in future years.                                                                   
                                                                                                                                
     $365,900 of  GF is used  in the Department  of Education                                                                   
     for:                                                                                                                       
                                                                                                                                
     1.   Contractual   services  and  supplies   in  Library                                                                   
          Operations,                                                                                                           
     2.   Two new positions in Archives, and                                                                                    
     3.   Restoration of a Curator  position in the Sheldon J                                                                   
          Jackson Museum                                                                                                        
                                                                                                                                
     ADD                                                                                                                        
     Department:    Public Safety                                                                                               
      Appropriation: CDVSA                                                                                                      
     Allocation: Council on Domestic  Violence/Sexual Assault                                                                   
     Fund Source:  1004 General Fund                                                                                            
     Amount:        $900,000                                                                                                    
                                                                                                                                
Co-Chair Williams OBJECTED for the purpose of discussion.                                                                       
                                                                                                                                
DAVID TEAL, DIRECTOR, LEGISLATIVE  FINANCE DIVISION discussed                                                                   
the  amendment.  He  observed  that  there  was  a  bonus  in                                                                   
Temporary  Assistance to  Needy Families  (TANF) funds  of $6                                                                   
million, $900,000  of which  remained unspent. The  amendment                                                                   
takes  the   $900  thousand  [in   excess  TANF   funds]  and                                                                   
appropriates it  to the Division of Public  Assistance, which                                                                   
frees up $900 thousand general  funds dollars in the Division                                                                   
of Public  Assistance. Of  the $900  thousand freed  up, $500                                                                   
thousand would  be appropriated  to community health  grants,                                                                   
to replace  tobacco funds. This  $500 thousand would  stay in                                                                   
the Tobacco Fund for use in future years.                                                                                       
                                                                                                                                
Mr. Wright  observed that the  $500 thousand appropriated  to                                                                   
the Tobacco  Fund would allow  the 20 percent  requirement to                                                                   
be reached  for FY05. Mr. Teal  observed that the  20 percent                                                                   
cash flow is  approximately $4.4 million dollars;  $4.9 would                                                                   
be  spent  in  FY05 for  tobacco  cessation.  He  noted  that                                                                   
approximately  $2 million dollars  was left  on the  table in                                                                   
FY03. There was approximately  $1 million left in FY04, which                                                                   
would have been spent if they had been available.                                                                               
                                                                                                                                
Representative  Foster  observed  that  the funding  is  from                                                                   
TANF, which are federal funds.                                                                                                  
                                                                                                                                
Vice-Chair  Meyer  noted  that  the 20  percent  funding  for                                                                   
tobacco cessation education has  been used by the Legislature                                                                   
in previous  years. The  amendment would  give back  the full                                                                   
amount.                                                                                                                         
                                                                                                                                
Co-Chair  Williams WITHDREW  his  OBJECTION.  There being  NO                                                                   
OBJECTION, Amendment HSS-2 was adopted.                                                                                       
                                                                                                                                
In  response  to  a question  by  Representative  Joule,  Mr.                                                                   
Wright  clarified that  the  remaining [$150  thousand]  were                                                                   
appropriated to  the Council on Domestic Violence  and Sexual                                                                   
Assault (CDVSA)  to reach the $900,000 level.  [New Amendment                                                                   
HSS 2 inadvertently  incorporated and adopted  Amendment DPS-                                                                   
1.]                                                                                                                             
                                                                                                                                
[Further discussion regarding  Amendment HSS-2 occurs below.]                                                                   
                                                                                                                                
AMENDMENTS DPS-1                                                                                                              
                                                                                                                                
In response to  a question by Representative  Joule, Co-Chair                                                                   
Harris clarified  that Amendment DPS-1 would  not be offered,                                                                   
as it duplicated the previous amendment.                                                                                        
                                                                                                                                
Mr.  Wright  reiterated  that  there  was  $150  thousand  in                                                                   
general fund dollars left after  the funds shift in Amendment                                                                   
HSS-2. That money was added to CDVSA to make $900 thousand.                                                                     
                                                                                                                                
Representative Joule  questioned if the entire  $900 thousand                                                                   
would be available for grants.  Co-Chair Harris observed that                                                                   
the  amendment  replaced PFD  felony  funds,  which were  not                                                                   
realized.  He  clarified  that  the $900  thousand  does  not                                                                   
represent their entire budget.                                                                                                  
                                                                                                                                
AMENDMENTS DPS-2                                                                                                              
                                                                                                                                
Mr. Wright observed  that Amendment DPS-2 is  intent language                                                                   
that   would   allow   the   Administration   to   streamline                                                                   
administrative operations within CDSVA.                                                                                         
                                                                                                                                
Co-Chair Harris  observed that  Representative Ogg  submitted                                                                   
the amendments.                                                                                                                 
                                                                                                                                
AMENDMENT HSS-2                                                                                                               
                                                                                                                                
Vice-Chair  Meyer  spoke  to tobacco  cessation  funding.  He                                                                   
questioned if there was a manner to separate the funding.                                                                       
                                                                                                                                
JANET CLARKE, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT  OF HEALTH  AND SOCIAL SERVICES,  stated that  the                                                                   
department  would  work  with   the  Tobacco  Alliance  on  a                                                                   
consolidate grant  process for all the components  related to                                                                   
tobacco education  and prevention in the FY05  and FY06 award                                                                   
process.                                                                                                                        
                                                                                                                                
AMENDMENT DNR-1                                                                                                               
                                                                                                                                
Co-Chair Harris MOVED to ADOPT Amendment DNR-1:                                                                                 
                                                                                                                                
     ADD                                                                                                                        
     Department:    Natural Resources                                                                                           
     Appropriation: Resource Development                                                                                        
     Allocation:    Recorder's Office/Uniform CommercialCode                                                                    
     Fund Source:  1156 Receipt Supported Services                                                                              
     Amount:        $6,200                                                                                                      
                                                                                                                                
Mr. Wright observed  that the amendment would  provide office                                                                   
space in the Seward recording office.                                                                                           
                                                                                                                                
Co-Chair Williams OBJECTED for the purpose of discussion.                                                                       
                                                                                                                                
Representative Chenault observed  that the office was funding                                                                   
but  no money  was retained  for lease  space. The  amendment                                                                   
allows the office to remain open.                                                                                               
                                                                                                                                
Co-Chair  Williams WITHDREW  his  OBJECTION.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
AMENDMENT DPS-1                                                                                                               
                                                                                                                                
Amendment DPS-1  was WITHDRAWN [as it was  previously adopted                                                                   
in Amendment HSS-2.]                                                                                                            
                                                                                                                                
AMENDMENT DPS-2                                                                                                               
                                                                                                                                
Co-Chair Harris MOVED to ADOPT Amendment DPS-2:                                                                                 
                                                                                                                                
     Department Public Safety                                                                                                   
     Allocation: CDVSA                                                                                                          
                                                                                                                                
     [Not withstanding  AS 43.23.028(b)(2), up to  10% of the                                                                   
     amount  allocated for the  Council on Domestic  Violence                                                                   
     and  Sexual under  AS  43.23.028(b)(2), may  be used  to                                                                   
     fund operations and grant administration.]                                                                                 
                                                                                                                                
     Add:                                                                                                                       
                                                                                                                                
     It  is the intent  of the  Legislature that  $200,000 be                                                                   
     transferred  from Council  administrative  funds to  the                                                                   
     grants line  to offset reductions to grants  provided to                                                                   
     local  shelters and rape  crisis programs  for immediate                                                                   
     safety and crisis intervention.                                                                                            
                                                                                                                                
     Rationale:  Due  to reduction  in  PFD  felon funds  and                                                                   
     TANF  funds,  the grants  to  shelters  and rape  crisis                                                                   
     centers  is $1.1 million  less than  in FY04,  while the                                                                   
     Council's  administration  received  no reduction.  This                                                                   
     amendment  transfers $200,000 within this  budget to the                                                                   
     grants  line. The  funds are anticipated  to be  made up                                                                   
     in   administration    through   a   Denali   Commission                                                                   
     administrative   fee  on  capital  funds   (see  letter,                                                                   
     attached).                                                                                                                 
                                                                                                                                
There being NO OBJECTION, it was so ordered. [Further action                                                                    
was taken to rescind the Committee's action in adopting                                                                         
Amendment DPS-2: see below.]                                                                                                    
                                                                                                                                
AMENDMENT DOR-1                                                                                                               
                                                                                                                                
Co-Chair Harris MOVED to ADOPT Amendment DOR-1:                                                                                 
                                                                                                                                
     Page 30, following line 23:                                                                                                
          Insert    "No    money   appropriated    by    this                                                                   
     appropriation   may   be  used   to   advocate  to   the                                                                   
     Legislature  or the  public  in favor  of  passage of  a                                                                   
     resolution  submitting to  the  voters a  constitutional                                                                   
     amendment   relating  to   the  method  of   calculating                                                                   
     distribution from the Alaska  permanent fund or in favor                                                                   
     of the adoption of such an amendment by the voters."                                                                       
                                                                                                                                
     Page 51, following line 4:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(e) No money appropriated by this section may be                                                                     
     used  to advocate to  the Legislature  or the  public in                                                                   
     favor  of  passage of  a  resolution submitting  to  the                                                                   
     voters  a  constitutional   amendment  relating  to  the                                                                   
     method  of  calculating  distribution  from  the  Alaska                                                                   
     permanent fund  or in favor  of the adoption of  such an                                                                   
     amendment by the voters."                                                                                                  
                                                                                                                                
Co-Chair Williams OBJECTED for the purpose of discussion.                                                                       
                                                                                                                                
Mr. Wright  explained that the  amendment would  prohibit the                                                                   
Alaska  Permanent  Fund  Corporation   from  using  money  to                                                                   
advocate  to  the  Legislature  or the  public  in  favor  of                                                                   
passage  of  a  resolution  or   a  constitutional  amendment                                                                   
(should  one pass  the  Legislature)  for Percent  of  Market                                                                   
Value approach (POMV).                                                                                                          
                                                                                                                                
Co-Chair Harris  observed that  the amendment would  prohibit                                                                   
advocacy  by  the  Alaska  Permanent  Fund  Corporation.  The                                                                   
Corporation would  be allowed to  educate. They would  not be                                                                   
authorized to take a position  or be able to advocate failure                                                                   
or  passage of  the  Percent of  Market  Value approach.  The                                                                   
Board could  not take a position  on POMV, but  could explain                                                                   
the issue.  The intent  is to  allow the  public to  sell the                                                                   
idea.                                                                                                                           
                                                                                                                                
Vice-Chair   Meyer   observed   that  no   money   would   be                                                                   
appropriated for education.                                                                                                     
                                                                                                                                
BOB BARTHOLOMEW,  CHIEF OPERATING  OFFICER, ALASKA  PERMANENT                                                                   
FUND CORPORATION,  DEPARTMENT OF REVENUE, clarified  that the                                                                   
Board   only  wants  to   take  action   authorized   by  the                                                                   
Legislature. The number one priority  is to provide education                                                                   
to  the  public. Without  specific  authorization  the  Board                                                                   
could  not  influence   the  outcome  of  the   election.  He                                                                   
expressed  concern that  some aspects  of education  could be                                                                   
construed  as  affecting the  outcome.  The Board  may  state                                                                   
their position only  if they are [directly]  asked. The Board                                                                   
feels  that they  could  not continue  the  current level  of                                                                   
education on the basis of the amendment.                                                                                        
                                                                                                                                
Co-Chair Williams  expressed concern that the  Board needs to                                                                   
help educate  the public  and observed  that the more  people                                                                   
that understand the issue the better.                                                                                           
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Stoltze,  Chenault,  Fate,  Hawker,  Joule,  Meyer,                                                                   
          Moses, Harris                                                                                                         
OPPOSED: Foster, Williams                                                                                                       
                                                                                                                                
Representative Croft absent from the vote.                                                                                      
                                                                                                                                
The MOTION PASSED (8-2).                                                                                                        
                                                                                                                                
AMENDMENT LEG-1                                                                                                               
                                                                                                                                
Co-Chair Harris MOVED to ADOPT Amendment LEG-1:                                                                                 
                                                                                                                                
     ADD Agency:         Legislature                                                                                            
     Appropriation:      Council and Subcommittees                                                                              
     New Allocation:     Office of Victims Rights                                                                               
                                                                                                                                
     DESCRIPTION:                                                                                                               
                                                                                                                                
     Create a new allocation for the Office of Victims                                                                          
     Rights with the following funding:                                                                                         
                                                                                                                                
     153,000        general funds                                                                                               
     328,600        PFD Criminal                                                                                                
     60,000         FY04 PFD Criminal (reappropriation)                                                                         
                                                                                                                                
     All funding listed is included  in the draft bill before                                                                   
     the committee.                                                                                                             
                                                                                                                                
     The Office  is presently included  in the budget  of the                                                                   
     Legislative Council. Identifying  funding for the office                                                                   
     was not a  problem when the only funding  source was PFD                                                                   
     Criminal  funds,  but  the  addition  of  general  funds                                                                   
     causes  the  Office  to lose  its  identifiable  funding                                                                   
     source.  A separate allocation  will allow the  Office's                                                                   
     budget to be tracked.                                                                                                      
                                                                                                                                
Co-Chair Harris OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Mr.  Teal explained  that the  amendment would  create a  new                                                                   
allocation  for   the  Office   of  Victims'  Rights,   which                                                                   
currently   exists  under   the   Legislative  Council.   The                                                                   
component is now using some general  funds due to the decline                                                                   
in PFD  felon funds. The change  would allow the  Division to                                                                   
better  track  the budget.  Co-Chair  Harris  clarified  that                                                                   
there are no new funds.                                                                                                         
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
AMENDMENT LANGUAGE-1                                                                                                          
                                                                                                                                
Co-Chair Harris MOVED to ADOPT Amendment Language-1:                                                                            
                                                                                                                                
      Amend section 20, Fund Transfers, by adding a new                                                                         
      subsection to read:                                                                                                       
                                                                                                                                
          ( ) The balance of the electrical service extension                                                                   
      fund (AS 42.45.200) is appropriated to the general fund.                                                                  
                                                                                                                                
      (This subsection needs a July 1, 2004 effective date.)                                                                    
                                                                                                                                
     DESCRIPTION:                                                                                                               
     The transfer  of the balance  (estimated to  be $85,000)                                                                   
     of the Electrical Service  Extension Fund to the general                                                                   
     fund  was part  of the  administration's  FY 05  revenue                                                                   
     proposals.  Alaska Energy  Authority legislation, HB 485                                                                   
     and SB 337, was introduced  on February 16 to repeal the                                                                   
     fund, along with several other changes.                                                                                    
                                                                                                                                
Mr.   Teal  explained   that  the   Governor  has   submitted                                                                   
legislation to repeal the Electrical  Service Extension Fund.                                                                   
The amendment  would transfer  the remaining $85  thousand to                                                                   
the General Fund.                                                                                                               
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
AMENDMENT LANGUAGE-2                                                                                                          
                                                                                                                                
                                                                                                                                
Co-Chair Williams MOVED to ADOPT Amendment Language 2:                                                                          
                                                                                                                                
     Page 53, lines 15 - 23:                                                                                                    
                                                                                                                                
     Delete all material and insert:                                                                                            
          "(b) The sum of $35,500,000 is appropriated from                                                                      
     the  general fund  to the Alaska  marine highway  system                                                                   
     fund (AS 19.65.060)."                                                                                                      
                                                                                                                                
     Page 60, line 4:                                                                                                           
     Delete "Section 22 of this Act takes"                                                                                      
     Insert "Sections 20(b) and 22 of this Act take"                                                                            
                                                                                                                                
Co-Chair Harris OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Co-Chair Williams  explained that the amendment  would add $5                                                                   
million dollars  into the Alaska  Marine Highway  System Fund                                                                   
for ferry  system operations.  He observed  that the  cost of                                                                   
fuel has increased by $3.5 million dollars.                                                                                     
                                                                                                                                
Representative  Joule   spoke  to  the  effective   date.  He                                                                   
questioned if  funding for  FY05 would come  out of  FY04. He                                                                   
noted that  the entire  amount would  be funded with  general                                                                   
funds,  which would  replace unrestricted  federal  receipts,                                                                   
AHFC   and   AIDEA  funds.   Co-Chair   Williams   concurred.                                                                   
Representative  Joule questioned  if these  dollars would  be                                                                   
available for other appropriations.                                                                                             
                                                                                                                                
Mr. Teal acknowledged  that the funds would  be available for                                                                   
other  appropriations.  Co-Chair  Harris  observed  that  the                                                                   
funds might  provide a source  for additional support  to the                                                                   
Division of Subsistence.                                                                                                        
                                                                                                                                
Representative  Joule questioned why  the funding  was coming                                                                   
out of the FY04 appropriation,  but expressed support for the                                                                   
amendment.                                                                                                                      
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
AMENDMENT LANGUAGE-3                                                                                                          
                                                                                                                                
Co-Chair Harris MOVED to ADOPT Amendment Language 3:                                                                            
                                                                                                                                
      Amend sec. 36 to read:                                                                                                    
                                                                                                                                
          * Sec. 36.  The appropriations made in sec. 1 of                                                                      
     this  Act that  appropriate  either  the unexpended  and                                                                   
     unobligated  balance   of  specific  fiscal   year  2004                                                                   
     program  receipts  or  the  unexpended  and  unobligated                                                                   
     balance on  June 30, 2004,  of a specified  account take                                                                   
     effect  July 1, 2004  and  are retroactive  to June  30,                                                                   
     2004 solely for the purpose  of carrying forward a prior                                                                   
     year balance [JUNE 30, 2004].                                                                                              
                                                                                                                                
Mr. Wright observed that the amendment  was at the request of                                                                   
the Attorney General's office  and would satisfy two concerns                                                                   
expressed  by state accountants  and attorneys.   First,  the                                                                   
amendment would  make the appropriations financed  with carry                                                                   
forward balances  effective in  FY 05 rather  than FY  04. As                                                                   
presently  written, state  accountants  would consider  these                                                                   
appropriations to  cover two fiscal  years.  By  making these                                                                   
appropriations  effective  on  July 1,  2004,  the  amendment                                                                   
avoids accounting  actions covering  two fiscal years  rather                                                                   
than a single  fiscal year.  Second, once  the appropriations                                                                   
take   effect,  the   amendment   makes  the   appropriations                                                                   
retroactive  to  the  end  of the  previous  fiscal  year  to                                                                   
preserve the Legislature's intent  that the year end balances                                                                   
of the  account involved  will  not lapse and  are to  remain                                                                   
available to finance the FY 05 appropriations.                                                                                  
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
AMENDMENT DPS-2                                                                                                               
                                                                                                                                
Co-Chair Harris  MOVED to Rescind  the Committee's  action in                                                                   
passing Amendment  DPS-2.  There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
Amendment DPS-2 was not moved.                                                                                                  
                                                                                                                                
AMENDMENT EDUC-1                                                                                                              
                                                                                                                                
Vice-Chair Meyer MOVED to ADOPT Amendment EDUC-1:                                                                               
                                                                                                                                
     Page 59, following line 27:                                                                                                
          Insert a new bill section to read:                                                                                    
        "* Sec. 35.  GRANTS FOR  CHARTER SCHOOLS.  The sum of                                                               
     $206,000 is  appropriated from  the general fund  to the                                                                   
     Department  of Education and  Early Development  for the                                                                   
     fiscal year ending June 30,  2005, for payment as grants                                                                   
     to each school  district that operates a  charter school                                                                   
     with  an average  daily membership  of 150  or less  for                                                                   
     support  of those  charter schools  in those  districts.                                                                   
     The amount  appropriated for  grants by this  section is                                                                   
     to be allocated  among eligible school districts  in the                                                                   
     proportion   that  the  average   daily  membership   of                                                                   
     eligible  charter schools  in  a district  bears to  the                                                                   
     total average  daily membership of all  eligible charter                                                                   
     schools  in   all  school  districts  that   operate  an                                                                   
     eligible charter school."                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 60, line 5:                                                                                                           
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 37 and 38"                                                                                              
                                                                                                                                
Co-Chair Harris OBJECTED for the purpose of discussion.                                                                         
                                                                                                                                
Vice-Chair  Meyer explained  that the  amendment pertains  to                                                                   
charter schools.  He noted that ADM calculations  for charter                                                                   
schools are  based on  the largest  school in the  community.                                                                   
The  process  is adversely  affecting  charter  schools.  The                                                                   
Department calculated  the ADM  based on the smallest  school                                                                   
in  the  community  and  identified   a  difference  of  $206                                                                   
thousand.  The amendment  would  appropriate  this amount  to                                                                   
help  charter  schools  [with  less than  150  students]  in:                                                                   
Juneau, Craig, Kenai, Matsu, and Nome.                                                                                          
                                                                                                                                
TAPE HFC 04 - 71, Side B                                                                                                      
                                                                                                                                
REPRESENTATIVE  BRUCE  WEYHRAUCH,  spoke  in support  of  the                                                                   
amendment.  He  observed  that  a  long-term  solution  would                                                                   
involve  amendment of  the foundation  formula, which  is not                                                                   
feasible  at  this  time. He  explained  that  small  charter                                                                   
schools (Nome -  44, Kenai - 32, and Juneau -  59) are lumped                                                                   
with  the largest  school  in the  district.  In Juneau,  the                                                                   
charter school, with 59 students,  is lumped in with the high                                                                   
school, which has 1,600 students.  The practice substantially                                                                   
reduces the amount of per student  funds going to the charter                                                                   
school.  He  observed  that  the  amendment  would  allow  an                                                                   
equitable distribution  of funds in the current  year without                                                                   
attempting to change the formula.                                                                                               
                                                                                                                                
EDDY JEANS,  MANGER, SCHOOL  FINANCE AND FACILITIES  SECTION,                                                                   
DEPARTMENT OF EDUCATION AND EARLY  DEVELOPMENT, observed that                                                                   
an  amendment  to the  foundation  formula program  would  be                                                                   
needed to continue  the level of funding for  charter schools                                                                   
below  150  students.  Amendment EDUC-1  would  provide  one-                                                                   
year's relief while the Legislature looks at the issue.                                                                         
                                                                                                                                
Co-Chair  Harris questioned  if the  Department of  Education                                                                   
and  Early  Development  supports the  amendment.  Mr.  Jeans                                                                   
stated that it  is a [legislative] policy issue.  He observed                                                                   
that the Juneau  Charter School, which serves  elementary age                                                                   
children,  is calculated at  a high  school level.  Under the                                                                   
amendment, the ADM  for the charter school would  be the same                                                                   
as Gastineau Elementary school.                                                                                                 
                                                                                                                                
Representative  Weyhrauch observed  that  the Juneau  Charter                                                                   
School would face  a $60 thousand shortfall. He  did not know                                                                   
if the school would be able to make up the shortfall.                                                                           
                                                                                                                                
Vice-Chair  Meyer felt  that  the whole  issue  needed to  be                                                                   
reviewed.                                                                                                                       
                                                                                                                                
In  response to  a question  by  Representative Stoltze,  Mr.                                                                   
Jeans observed  that schools over  150 students would  not be                                                                   
affected.                                                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
AMENDMENT TECHNICAL-1                                                                                                         
                                                                                                                                
Co-Chair  Harris  MOVED  a  verbal   technical  amendment  to                                                                   
authorize   the   Legislative   Finance  Division   to   make                                                                   
conforming or technical amendments  to the legislation. There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Co-Chair  Williams MOVED  to  report CSHB  375  (FIN) out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  375 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation.                                                                                                           
HOUSE BILL NO. 377                                                                                                            
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
Co-Chair Williams  MOVED to ADOPT Work Draft  23-GH2042\Q for                                                                   
HB 377. There being NO OBJECTION, it was so ordered.                                                                            
                                                                                                                                
Co-Chair  Williams MOVED  to  report CSHB  377  (FIN) out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Co-Chair Harris thanked the Minority for their work.                                                                            
                                                                                                                                
CSHB  377 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation.                                                                                                           
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:05 PM                                                                                            

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