Legislature(2013 - 2014)HOUSE FINANCE 519

02/06/2014 01:30 PM FINANCE


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01:34:54 PM Start
01:35:28 PM HB299
01:35:37 PM Fy 14 Supplemental Budget Overview: Office of Management and Budget
02:26:16 PM HB266 || HB267
02:26:21 PM Fy15 Budget Overview: Department of Law
03:31:18 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ - Governor's FY14 Supplemental Budget Overview TELECONFERENCED
by Karen Rehfeld, Director, Office of
Management & Budget
+= HB 266 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 267 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ - FY15 Governor's Budget Overview: TELECONFERENCED
Dept. of Law
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 6, 2014                                                                                           
                         1:34 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:34:54 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the House Finance Committee meeting                                                                     
to order at 1:34 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Lindsey Holmes                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Karen Rehfeld,  Director, Office  of Management  and Budget,                                                                    
Office of  the Governor; Mary Siroky,  Director, Division of                                                                    
Administrative  Services, Department  of Transportation  and                                                                    
Public  Facilities;  Michael   Geraghty,  Attorney  General,                                                                    
Department of Law;  Dave Blaisdell, Director, Administrative                                                                    
Services Division, Department of Law.                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 266    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          HB 266 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 267    APPROP: MENTAL HEALTH BUDGET                                                                                          
          HB 267 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 299    SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS                                                                             
                                                                                                                                
          HB 299 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
FY  14 SUPPLEMENTAL  BUDGET OVERVIEW:  OFFICE OF  MANAGEMENT                                                                    
AND BUDGET                                                                                                                      
                                                                                                                                
FY 15 BUDGET OVERVIEW: DEPARTMENT OF LAW                                                                                        
                                                                                                                                
HOUSE BILL NO. 299                                                                                                            
                                                                                                                                
     "An  Act  making supplemental  appropriations,  capital                                                                    
     appropriations,  and   other  appropriations;  amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:35:28 PM                                                                                                                    
                                                                                                                                
^FY 14  SUPPLEMENTAL BUDGET  OVERVIEW: OFFICE  OF MANAGEMENT                                                                  
AND BUDGET                                                                                                                    
                                                                                                                                
1:35:37 PM                                                                                                                    
                                                                                                                                
KAREN REHFELD,  DIRECTOR, OFFICE  OF MANAGEMENT  AND BUDGET,                                                                    
OFFICE  OF  THE  GOVERNOR,  presented  an  overview  of  the                                                                    
supplemental bill. She spoke to  2 supporting documents: the                                                                    
FY15  supplemental  spreadsheet  and the  FY15  supplemental                                                                    
summary  (copy on  file). She  shared that  the supplemental                                                                    
bill totaled $53,370,100; less than  $1 million was specific                                                                    
to agency operations $8 million  was specifically related to                                                                    
fire suppression activities and  disaster relief funding, $2                                                                    
million was for settlements  and judgments, and $2.4 million                                                                    
was for  emergency repairs  that had  not been  eligible for                                                                    
disaster funding.                                                                                                               
                                                                                                                                
1:37:28 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld spoke to Page 1, line 2 of the spreadsheet:                                                                         
                                                                                                                                
     Department of Administration                                                                                             
     Office of Public Advocacy                                                                                                
     Caseload Capacity and Appellant Backlog                                                                                  
     Funding to accommodate case  load increases and address                                                                    
     the appellant backlog. The  impact of this supplemental                                                                    
    is being considered for a FY2015 budget amendment.                                                                          
     General Fund                                                                                                             
     $193.0                                                                                                                   
                                                                                                                                
Ms. Rhefeld continued to Line 3:                                                                                                
                                                                                                                                
     Department of Administration                                                                                             
     Public Defender Agency                                                                                                   
     Caseload Capacity and Appellant Backlog                                                                                  
     Funding  to   address  case  load  increases   and  the                                                                    
     appellant backlog.  The impact of this  supplemental is                                                                    
     being considered for a FY2015 budget amendment.                                                                            
     General Fund                                                                                                             
     $650.0                                                                                                                   
                                                                                                                                
1:38:48 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld spoke to Line 4:                                                                                                    
                                                                                                                                
     Department of Military and Veterans Affairs                                                                              
     Alaska Military Youth Academy                                                                                            
     Replace Unavailable Receipt Authority for                                                                                
     Alaska State Employees Association One- Time Payment                                                                     
     The  Alaska  Military  Youth Academy  (AMYA)  does  not                                                                    
     receive nor  is able to request  federal or interagency                                                                    
     receipts from the U.S.  Department of Defense ChalleNGe                                                                    
     grant  or through  the Alaska  Department of  Education                                                                    
     and  Early Development  formula  funding. The  one-time                                                                    
     $755 lump  sum payment  was made to  General Government                                                                    
     Unit  employees  in the  second  pay  period of  August                                                                    
     2013. This is a one-time request.                                                                                          
     General Fund                                                                                                             
     48.0                                                                                                                     
     Interagency                                                                                                              
     Receipts                                                                                                                 
     (24.9)                                                                                                                   
     Federal Receipts                                                                                                         
     (23.1)                                                                                                                   
                                                                                                                                
1:39:21 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld continued to Slide 5:                                                                                               
                                                                                                                                
     Department of Natural Resources                                                                                          
     Fire Suppression Activity                                                                                                
     FY2014 Fire Activity                                                                                                     
     This  request provides  general funds  for expenditures                                                                    
     incurred  under the  Declaration of  Disaster Emergency                                                                    
     process  for  the  fall 2013  fire  season.  Additional                                                                    
     authorization for  this purpose is requested  each year                                                                    
    due to the unpredictable cost of each fire season.                                                                          
     General Fund                                                                                                             
     $22,769.4                                                                                                                
                                                                                                                                
1:40:14 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld spoke to lines6, 7, and 8:                                                                                          
                                                                                                                                
     Department of Revenue                                                                                                    
     Treasury Division                                                                                                        
     Investment Management of Public School Trust Fund                                                                        
     Investment management fees are  charged as a percent of                                                                    
     the market  value of invested assets  under management.                                                                    
     Market fluctuations affect the  value of the assets and                                                                    
     therefore  the  amount  of the  management  fees.  This                                                                    
     amount covers  the costs for  the remainder  of FY2014.                                                                    
     This is a one-time request.                                                                                                
     Public School Trust Fund                                                                                                 
     $19.0                                                                                                                    
                                                                                                                                
     Department of Revenue                                                                                                    
     Treasury Division                                                                                                        
     Investment Management of Retiree Health                                                                                  
     Insurance Fund/Long Term Care Management                                                                                 
     Investment management fees are  charged as a percent of                                                                    
     the market  value of invested assets  under management.                                                                    
     Market fluctuations affect the  value of the assets and                                                                    
     therefore  the  amount  of the  management  fees.  This                                                                    
     amount covers  the costs for  the remainder  of FY2014.                                                                    
     This is a one-time request.                                                                                                
     Retiree Health Insurance Fund/Long Term Care                                                                             
     $7.0                                                                                                                     
                                                                                                                                
     Department of Revenue                                                                                                    
     Treasury Division                                                                                                        
     Investment  Management   of  Power   Cost  Equalization                                                                  
     Endowment Fund                                                                                                           
     Investment management fees are  charged as a percent of                                                                    
     the market  value of invested assets  under management.                                                                    
     Market fluctuations affect the  value of the assets and                                                                    
     therefore  the  amount  of the  management  fees.  This                                                                    
     amount covers  the costs for  the remainder  of FY2014.                                                                    
     This is a one-time request.                                                                                                
     Endowment Fund                                                                                                           
     $16.0                                                                                                                    
                                                                                                                                
Ms. Rehfeld spoke to capital supplemental items. She began                                                                      
with Page 2, line 11:                                                                                                           
                                                                                                                                
     Department   of  Commerce,   Community,  and   Economic                                                                  
     Development                                                                                                              
     Capital                                                                                                                  
     Inter-Island Ferry Authority                                                                                             
     This  funding is  designed to  assist the  Inter-Island                                                                    
     Ferry  Authority  in  providing daily  service  between                                                                    
     Ketchikan  and  the  Prince   of  Whales  Island  given                                                                    
     current revenue  and expenditures. These funds  are not                                                                    
     intended  to be  provided  annually  but considered  as                                                                    
     needed to continue this vital service.                                                                                     
     General Fund                                                                                                             
     $500.0                                                                                                                   
                                                                                                                                
1:41:51 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld continued to Line 12:                                                                                               
                                                                                                                                
    Department of Transportation and Public Facilities                                                                        
     Capital                                                                                                                  
     Northern Region Emergency Flooding Disaster May 2013                                                                     
     Repair  damaged areas,  due to  flooding and  ice jams,                                                                    
     which   resulted  in   substantial  damage   to  public                                                                    
     infrastructure.  These projects  are  not eligible  for                                                                    
     reimbursement from  the Federal  Highway Administration                                                                    
     or the Federal Emergency Management Agency.                                                                                
     General Fund                                                                                                             
     $2,408.1                                                                                                                 
                                                                                                                                
Ms. Rehfeld discussed the language section beginning on                                                                         
Line 16:                                                                                                                        
                                                                                                                                
     Department of Environmental Conservation                                                                                 
     Capital                                                                                                                  
     Reappropriate    balances    from    several    smaller                                                                    
     municipalities'  water  and  sewer projects  that  have                                                                    
     been completed under budget,  stalled, or canceled. The                                                                    
     unexpended and unobligated balances,  estimated to be a                                                                    
     total of  $3,358,421, of the  following appropriations,                                                                    
     are reappropriated  to the Department  of Environmental                                                                    
     Conservation  for  Village  Safe Water  and  Wastewater                                                                    
     Infrastructure   Projects  and   Technical  Assistance,                                                                    
     First Time Service Projects.                                                                                               
     Federal Receipts                                                                                                         
     2,517.7                                                                                                                  
     General Fund Match                                                                                                       
     200.0                                                                                                                    
     Alaska Housing Finance Corporation Receipts                                                                              
     640.7                                                                                                                    
                                                                                                                                
Ms. Rehfeld spoke to Line 17:                                                                                                   
                                                                                                                                
     Department of Environmental Conservation                                                                                 
     Capital                                                                                                                  
     Scope  Change:  Sec1  Ch17 SLA2012  P114  L5  Haines  -                                                                    
     Barnett  and  Tower  Road Water  Tank  Replacement  and                                                                    
     Infrastructure Improvements                                                                                                
     This  will allow  roof replacement  at  the Tower  Road                                                                    
     tank using  excess funds  appropriated for  the Barnett                                                                    
     tank replacement  which is anticipated to  be completed                                                                    
     under budget.                                                                                                              
     General Fund                                                                                                             
                                                                                                                                
Ms. Rehfeld continued to Line 18:                                                                                               
                                                                                                                                
     Department of Health and Social Services                                                                                 
     Capital                                                                                                                  
     Reappn: Sec13 Ch29 SLA2008 P149 L14                                                                                        
     Reappropriation  for   Eligibility  Information  System                                                                    
     Replacement                                                                                                                
     This will  further the  development of  the replacement                                                                    
     of  the  eligibility  system for  the  State's  welfare                                                                    
     programs.  The  unexpended   and  unobligated  balance,                                                                    
     estimated to  be $81,232, of the  appropriation made in                                                                    
     sec. 13,  ch. 29,  SLA 2008,  page 149,  lines 14  - 17                                                                    
     (Department  of Health  and  Social Services,  Evaluate                                                                    
     Eligibility Information System                                                                                             
     Alternatives,  Phase 2  - $864,300),  is reappropriated                                                                    
     to  the Department  of Health  and Social  Services for                                                                    
     eligibility information system replacement.                                                                                
     Federal Receipts                                                                                                         
     66.4                                                                                                                     
     General Fund                                                                                                             
     14.8                                                                                                                     
                                                                                                                                
1:44:06 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld continued to Lines 19 and 20:                                                                                       
                                                                                                                                
     Department of Law                                                                                                        
     Deputy Attorney General's Office                                                                                         
     Judgments and Settlements                                                                                                
     Actual  judgment and  settlement costs  received as  of                                                                    
     February 3, 2014.                                                                                                          
     General Fund                                                                                                             
     $1,570.2                                                                                                                 
                                                                                                                                
     Department of Law                                                                                                        
     Deputy Attorney General's Office                                                                                         
     Judgments and Settlements                                                                                                
     Actual judgment  and settlement  costs incurred  in the                                                                    
     fiscal year ending  June 30, 2014 but  not yet included                                                                    
     in the previous subsection.                                                                                                
     General Fund                                                                                                             
                                                                                                                              
1:44:55 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld directed committee attention to Page 4, lines                                                                       
21 through 24:                                                                                                                  
                                                                                                                                
     Department of Military and Veterans Affairs                                                                              
     Capital                                                                                                                  
     Reappn: Sec1 Ch16 SLA2013 P70 L9                                                                                           
     Reappropriation for Alcantra Facilities Projects                                                                           
     This  Army Guard  Facilities  Projects allocation  will                                                                    
     provide  needed  capital  improvement projects  at  the                                                                    
     Alcantra   Armory.  The   original   project  will   be                                                                    
     completed using  U.S. Army  active duty  resources that                                                                    
     do not flow through the state budget.                                                                                      
     The   unexpended  and   unobligated   balance  of   the                                                                    
     appropriation made  in sec. 1,  ch. 16, SLA  2013, page                                                                    
     69, lines  23 -  24 (Army  Guard Facilities  Projects -                                                                    
     $5,589,000), and  allocated on  page 70,  lines 9  - 10                                                                    
     (Fort Greely  - Covered Shelter Buildings  - $350,000),                                                                    
     estimated  to be  $350,000,  is  reappropriated to  the                                                                    
     Department  of  Military  and Veterans'  Affairs,  Army                                                                    
     Guard Facilities  Projects, and allocated  for Alcantra                                                                    
     Facilities Projects.                                                                                                       
     General Fund                                                                                                             
                                                                                                                              
     Department of Military and Veterans Affairs                                                                              
     Capital                                                                                                                  
     Reappn: Sec7 Ch17 SLA2012 P166 L28                                                                                         
     Reappropriation for Eielson Covered Storage                                                                                
     A  reappropriation of  the original  appropriation will                                                                    
     provide needed protection of assets  for the 168th Wing                                                                    
     at Eielson Air Force Base.  The original purpose of the                                                                    
     appropriation  is  no   longer  necessary  because  The                                                                    
     STARBASE program has been discontinued.                                                                                    
     The   unexpended  and   unobligated   balance  of   the                                                                    
     appropriation made  in sec. 7,  ch. 17, SLA  2012, page                                                                    
     166,  lines  28  -  30   (Move  and  Renovate  STARBASE                                                                    
     Building  - $195,000),  estimated  to  be $195,000,  is                                                                    
     reappropriated  to  the   Department  of  Military  and                                                                    
     Veterans'  Affairs for  covered storage  for the  168th                                                                    
     Wing at Eielson Air Force Base.                                                                                            
     General Fund                                                                                                             
                                                                                                                              
     Department of Military and Veterans Affairs                                                                              
     Office of the Commissioner                                                                                               
     Arbitration Settlement - ASEA v. SOA, DMVA, AMYA                                                                           
     The sum  of $111,328  is appropriated from  the general                                                                    
     fund  to  the  Department   of  Military  of  Veterans'                                                                    
     Affairs, Office  of the  Commissioner, for  the purpose                                                                    
     of  paying judgments  and  settlements  for the  fiscal                                                                    
     year ending June 30, 2014.                                                                                                 
     General Fund                                                                                                             
     $111.3                                                                                                                   
                                                                                                                                
Ms. Rehfeld spoke to Page 5, line 24:                                                                                           
                                                                                                                                
     Department of Natural Resources                                                                                          
     Fire Suppression Activity                                                                                                
     FY2014  Projected   Spring  Costs  for   Wildland  Fire                                                                  
     Protection                                                                                                               
     Additional authorization for  this purpose is requested                                                                    
     each year  due to the  unpredictable cost of  each fire                                                                    
     season.  It   is  difficult   to  predict   the  amount                                                                    
     necessary  for spring  2014 fire  suppression activity.                                                                    
     The estimate of $5.0 million  will be adjusted based on                                                                    
     costs incurred through June 30, 2014.                                                                                      
     General Fund                                                                                                             
     $5,000.0                                                                                                                 
                                                                                                                                
1:46:26 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld continued to Line 25:                                                                                               
                                                                                                                                
    Department of Transportation and Public Facilities                                                                        
     Central Design and Engineering Services                                                                                  
     Settlement  and Legal  Fees  Related  to Old  Quinhagak                                                                  
     Airport Litigation                                                                                                       
     In  November  2013  (FY2014),  a  legal  settlement  of                                                                    
     $100.0 was negotiated. Associated  legal fees amount to                                                                    
     $64.6 for  a total  cost of $164.6  related to  the Old                                                                    
     Quinhagak Airport  litigation. The  sum of  $164,617 is                                                                    
     appropriated from  the general  fund to  the Department                                                                    
     of Transportation and Public  Facilities, office of the                                                                    
     commissioner,   for  the   purpose   of  paying   costs                                                                    
     associated  with Old  Quinhagak Airport  litigation for                                                                    
     the fiscal year ending June 30, 2014.                                                                                      
     General Fund                                                                                                             
     $164.6                                                                                                                   
                                                                                                                                
Ms. Rehfeld related the request on Line 26:                                                                                     
                                                                                                                                
     Office of the Governor                                                                                                   
     Fuel Branch-wide Unallocated                                                                                             
     Amend: Sec22(e)(2) Ch14 SLA2013 P75 L29                                                                                    
     Amend Fuel Allocation Percentage                                                                                           
     This  will increase  the  University  of Alaska's  fuel                                                                    
     trigger cap  of 10% of  the total appropriated  plus or                                                                    
     minus three percent  to 15% of the total  plus or minus                                                                    
     three  percent to  cover  an  anticipated $1.6  million                                                                    
     shortfall  for fuel  and  utility  costs. The  governor                                                                    
     shall allocate  amounts appropriated in (a)  and (b) of                                                                    
     this section as follows:                                                                                                   
     (2) to  the University  of Alaska,  15 [10]  percent of                                                                    
     the total plus or minus three percent.                                                                                     
                                                                                                                                
1:48:24 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld stated that Lines 27 and 28 related to debt                                                                         
service:                                                                                                                        
                                                                                                                                
     Debt Service                                                                                                             
     General Obligation                                                                                                       
    Amend Sec25(h) Ch14 SLA2013 P81 L31 through P82 L22                                                                         
     Fund Source Change for Series 2010AB                                                                                       
     Federal  reimbursement  for  eligible state  bonds  has                                                                    
     been  reduced by  8.7%  in  FY2014. General  obligation                                                                    
     bonds  series 2010A  and  2010B federal  reimbursements                                                                    
     were reduced by a total of $414,540.                                                                                       
     General Fund 414.6                                                                                                       
     Federal ARRA                                                                                                             
                                                                                                                                
     Debt Service                                                                                                             
     General Obligation                                                                                                       
    Amend Sec25(h) Ch14 SLA2013 P81 L31through P82 L22                                                                          
     Series 2013 Federal Reimbursement Eligibility                                                                              
     General obligation  bond series  2013A is  eligible for                                                                    
     federal reimbursement, but this  funding source was not                                                                    
     included in the FY2014 operating budget.                                                                                   
     General Fund                                                                                                             
     (430.1)                                                                                                                  
     Federal ARRA                                                                                                             
     430.1                                                                                                                    
                                                                                                                                
1:49:07 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld spoke to Lines 29 and 30:                                                                                           
                                                                                                                                
     Debt Service                                                                                                             
     International Airport Revenue Bonds                                                                                      
     Repeal and reenact Sec25(i) Ch14 SLA2013                                                                                   
     P83 L4                                                                                                                     
     Debt Service Fund Source Changes                                                                                           
     This   changes   fund   sources  relating   to   FY2014                                                                    
     International   Airport  debt   service  in   order  to                                                                    
     increase  the  amount  of  Passenger  Facility  Charges                                                                    
     (PFC)  currently approved,  and to  change the  federal                                                                    
     subsidy funding  code from  federal receipts  (1002) to                                                                    
     federal stimulus:                                                                                                          
     ARRA 2009 (1212).                                                                                                          
     As with previous supplemental  requests in years' past,                                                                    
     this  request  utilizes  amounts   deemed  by  AIAS  as                                                                    
     surplus  and available  in order  to help  minimize the                                                                    
     amount of  revenue needed to be  collected from airport                                                                    
     customers  while meeting  debt service  coverage ratios                                                                    
     required under the bond resolution rate covenant.                                                                          
     International Airports Revenue Fund                                                                                      
     (1,962.6)                                                                                                                
     Passenger Facility Charges                                                                                               
     2,000.0                                                                                                                  
     Federal Receipts                                                                                                         
     (429.8)                                                                                                                  
     Federaln ARRA                                                                                                            
     392.4                                                                                                                    
                                                                                                                                
     Debt Service                                                                                                             
     International Airport Revenue Bonds                                                                                      
     Amend Sec25(m) Ch14 SLA 2013 P83 L3                                                                                        
     Early Redemption Fund Source Change                                                                                        
     In  review  of  2014  activity for  its  Optional  Bond                                                                    
     Redemption  plan  which  was  initiated  in  2010,  the                                                                    
     Alaska International Airports  System (AIAS) determined                                                                    
     the use  of International Airports Revenue  Fund as the                                                                    
     funding   source  for   the  full   amount  of   FY2014                                                                    
     redemptions  provided more  optimal benefit  in context                                                                    
     of updated  capital improvement program needs  and debt                                                                    
     management than does the partial  funding from the AIAS                                                                    
     Construction Fund.                                                                                                         
     International Airports Revenue Fund                                                                                      
     23,000.0                                                                                                                 
     International Airports Construction Fund                                                                                 
     (23,000.0)                                                                                                               
                                                                                                                                
1:49:35 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld continued to Line 31:                                                                                               
                                                                                                                                
     Fund Capitalization                                                                                                      
     Disaster Relief Fund                                                                                                     
     Recovery Efforts from the 2013 Spring Flood Disaster                                                                     
     The  sum  of  $19,961,480   is  appropriated  from  the                                                                    
     general   fund  to   the  disaster   relief  fund   (AS                                                                    
     26.23.300(a)).                                                                                                             
     General Fund                                                                                                             
     $19,961.5                                                                                                                
                                                                                                                                
1:50:07 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld turned to Page 7, line 32:                                                                                          
                                                                                                                                
     Fund Capitalization                                                                                                      
     Disaster Relief Fund                                                                                                     
     Potential Disaster Relief Efforts                                                                                        
     This   language  provides   authorization  for   actual                                                                    
     disaster  relief  costs  incurred in  the  fiscal  year                                                                    
     ending June  30, 2014 but  not included in  sec14(a) of                                                                    
     the   Governor's   supplemental    bill.   The   amount                                                                    
     necessary,    after   application    of   the    amount                                                                    
     appropriated  in  (a)  of  this  section,  to  pay  for                                                                    
     disaster  activities is  appropriated from  the general                                                                    
     fund  to the  disaster relief  fund (AS  26.23.300(a)),                                                                    
     subject to  AS 26.23.020 and 26.23.025,  for the fiscal                                                                    
     year ending June 30, 2014.                                                                                                 
     General Fund                                                                                                             
                                                                                                                                
Ms.  Rehfeld  stated   that  Line  33  began   the  list  of                                                                    
ratifications, which were  listed at the end  of the summary                                                                    
Lines 41  through 52. She  said that the  ratifications were                                                                    
for   terminated  appropriations,   for   prior  year   over                                                                    
expenditures,  where federal  funds were  unrealizable or  a                                                                    
cost  was  disallowed;  the allowance  of  the  ratification                                                                    
would allow  for the zero  balancing of  the appropriations.                                                                    
She shared  that the description  of the  ratification would                                                                    
indicate the fiscal year the appropriation came from.                                                                           
                                                                                                                                
1:51:59 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld backtracked to Lines 34 through 36:                                                                                 
                                                                                                                                
     Lapse of Appropriations                                                                                                  
     The appropriations made by secs. 6, 7, 9(a) and 9(b)                                                                       
     of this Act are for capital projects and lapse under                                                                       
     AS 37.25.020.                                                                                                              
                                                                                                                                
     Lapse of Appropriations                                                                                                  
     The appropriations made by sec. 14 of this Act are for                                                                     
     the capitalization of a fund and do not lapse.                                                                             
                                                                                                                                
     Effective Date                                                                                                           
     This Act takes effect April 20, 2014.                                                                                      
                                                                                                                                
1:52:45 PM                                                                                                                    
                                                                                                                                
Representative Wilson asked about  a major fire in Fairbanks                                                                    
in  2014 that  was caused  by another  entity. She  wondered                                                                    
whether the state  was recouping the costs of  the fire from                                                                    
the   responsible  party.   Ms.  Rehfeld   replied  in   the                                                                    
affirmative. She  added that  the majority  of the  fire had                                                                    
been on federal land and  the costs were being recouped from                                                                    
the federal government.                                                                                                         
                                                                                                                                
1:53:19 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  about  the  private land.  Ms.                                                                    
Rehfeld reiterated  that funds were being  recouped from the                                                                    
federal government.                                                                                                             
                                                                                                                                
1:53:32 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze spoke  to fire  concerns in  his area.  He                                                                    
asked whether  discussions had occurred with  the Department                                                                    
of Natural Resources (DNR)  concerning possible fire issues.                                                                    
Ms. Rhefeld said yes. She  furthered that DNR could speak to                                                                    
their  concerns and  their game  plan to  mitigate risk  and                                                                    
train local crews.                                                                                                              
                                                                                                                                
1:55:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman understood  that the item on  Line 11 had                                                                    
been  in the  FY14  and FY15  budget  requests. Ms.  Rehfeld                                                                    
responded in the affirmative; it  had not been the intent to                                                                    
make the request  an annual operating expanse  to the state,                                                                    
but it had  been recognized that the ferry  provided a vital                                                                    
service to  Prince of  Whales Island. She  said that  if the                                                                    
authority could  not provide the service,  the Alaska Marine                                                                    
Highway System (AMHS) would bear  the burden, which would be                                                                    
costly and  complicated. She shared  that the  authority had                                                                    
made significant modifications to  its operations to be able                                                                    
to operate without state assistance.                                                                                            
                                                                                                                                
1:56:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman  noted that  the request had  been turned                                                                    
down  the prior  year.  He recalled  from conversations  the                                                                    
previous year  that the authority  had been  providing 7-day                                                                    
per week service to Prince  of Whales Island from Ketchikan.                                                                    
He thought that costs could  be lowered by reducing service.                                                                    
He expressed  disappointment with seeing the  request in the                                                                    
budget  again, particularly  since  Kodiak received  service                                                                    
twice per week and was happy  with the service. He wanted to                                                                    
see  something  from the  authority  that  showed they  were                                                                    
controlling costs.  Ms. Rehfeld  explained that part  of the                                                                    
challenge  was  stability  issues with  the  AMHS  providing                                                                    
statewide  service with  an aging  fleet. She  asserted that                                                                    
the  authority was  trying to  generate enough  revenue with                                                                    
the  one  run  to  keep  sailing.  She  explained  that  the                                                                    
administrations  concern  was  the degree  that  the  state,                                                                    
through AMHS, would  need to reinstate any  service that the                                                                    
authority was unable to provide.                                                                                                
                                                                                                                                
2:00:23 PM                                                                                                                    
                                                                                                                                
Representative Gara  spoke to a controversial  runway at the                                                                    
Anchorage airport. He wondered if  the state were to ask the                                                                    
city  to  pause  the  project  would the  state  be  paid  a                                                                    
dividend  or  would  the  airport   money  stay  inside  the                                                                    
airport.   Ms.  Rehfeld   deferred  the   question  to   the                                                                    
Department   of   Transportation   and   Public   Facilities                                                                    
(DOT&PF).  She  understood  that  the master  plan  for  the                                                                    
runway  had  been a  required  document  that updated  their                                                                    
annual plan,  whether or not  they intended to  move forward                                                                    
with the plan was uncertain.                                                                                                    
                                                                                                                                
2:02:30 PM                                                                                                                    
                                                                                                                                
Representative Gara  guessed that  the airport  was spending                                                                    
millions  of  dollars  on   community  meetings  and  design                                                                    
discussions.  He hoped  the governor  would look  at whether                                                                    
this was  a wise use of  money. He queried whether  the fund                                                                    
could be put back into  the general fund. Ms. Rehfeld stated                                                                    
that  the funds  were a  component of  the general  fund but                                                                    
were separate. She deferred the question to the department.                                                                     
                                                                                                                                
2:03:35 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman spoke  to Line  12. He  question why  the                                                                    
request  was being  made again.  He referred  to a  previous                                                                    
conversation with  Commissioner Kemp,  which had led  him to                                                                    
understand that  DOT&PF had the  funds for  projects already                                                                    
within its budget. Ms. Rehfeld  deferred the question to the                                                                    
commissioner of DOT&PF.                                                                                                         
                                                                                                                                
2:05:47 PM                                                                                                                    
                                                                                                                                
MARY SIROKY, DIRECTOR,  DIVISION OF ADMINISTRATIVE SERVICES,                                                                    
DEPARTMENT   OF   TRANSPORTATION  AND   PUBLIC   FACILITIES,                                                                    
indicated that  Commissioner Kemp  had been speaking  to his                                                                    
operating  budget needs,  while this  request was  a capital                                                                    
budget request for  the funding for the  actual repairs. She                                                                    
asserted that  the commissioner  worked to  clear avalanches                                                                    
and patch pot holes  without asking for additional operating                                                                    
budget supplementals.                                                                                                           
                                                                                                                                
2:06:47 PM                                                                                                                    
                                                                                                                                
Representative  Gara  reiterated   his  question  about  the                                                                    
redistribution  of  funds  for the  airport  expansion.  Ms.                                                                    
Siroky  replied  that  the Federal  Aviation  Administration                                                                    
required that revenue  generated from the airport  had to be                                                                    
spent at the airport.                                                                                                           
                                                                                                                                
Representative  Gara inquired  if  the  state supported  the                                                                    
airport with any general funds. Ms. Siroky replied no.                                                                          
                                                                                                                                
Representative  Gara  inquired  whether  there  was  ever  a                                                                    
review by  the department to  see assess whether  funds were                                                                    
being spent appropriately. Ms. Siroky  responded that one of                                                                    
the  highest priorities  of the  commissioner was  to assure                                                                    
that projects  were examined  and were  shelf ready  so that                                                                    
funding was spent where there was the greatest need.                                                                            
                                                                                                                                
2:09:56 PM                                                                                                                    
                                                                                                                                
Co-Chair  Austerman  understood  that  the  legislature  had                                                                    
given DOT&PF the authority to  transfer unused fund from one                                                                    
project  to another  without coming  before the  legislature                                                                    
for approval.                                                                                                                   
                                                                                                                                
2:10:17 PM                                                                                                                    
                                                                                                                                
Representative  Gara said  that he  had heard  concerns that                                                                    
projects  were being  completed,  even though  they did  not                                                                    
need to  be completed,  just to  assure that  the department                                                                    
spend  the  available  general   fund  money.  He  expressed                                                                    
concern  that  the  department   was  spending  money  "just                                                                    
because it was  there", rather than because it  needed to be                                                                    
spent. Ms.  Siroky contended that  the department  spent its                                                                    
money as wisely as possible.                                                                                                    
                                                                                                                                
2:11:14 PM                                                                                                                    
                                                                                                                                
Representative  Holmes  commented  that the  department  had                                                                    
done a  good job  reaching out  to the  community concerning                                                                    
the potential airport expansion project.                                                                                        
                                                                                                                                
2:12:35 PM                                                                                                                    
                                                                                                                                
Representative  Costello   asked  about  how   other  states                                                                    
addressed  the need  for fire  suppression. She  wondered if                                                                    
there  was an  alternative way  the state  could accommodate                                                                    
the  fire suppression  portion of  the  budget. Me.  Rehfeld                                                                    
responded  that all  western states  were wresting  with the                                                                    
issue. She said that there  were other approaches that could                                                                    
be considered.                                                                                                                  
                                                                                                                                
2:14:08 PM                                                                                                                    
                                                                                                                                
Representative  Wilson spoke  to the  ratifications for  the                                                                    
Department of  Labor. She  wondered whether  only a  part of                                                                    
the  request should  be honored,  leaving the  department to                                                                    
take responsibility for the rest of the mistake.                                                                                
                                                                                                                                
2:15:00 PM                                                                                                                    
Ms. Rehfeld  stated that the ratification  items had already                                                                    
occurred in  the fiscal  year reflected in  the back  up for                                                                    
each item.  She said that  there were no  additional general                                                                    
funds being approved for the items.                                                                                             
                                                                                                                                
2:16:02 PM                                                                                                                    
                                                                                                                                
Representative Wilson asked if the  money had been paid, was                                                                    
it paid by  the department or the general  fund. Ms. Rehfeld                                                                    
stated that  they were  over-expenditures that  were unknown                                                                    
at  the time;  they  were accounting  transactions that  had                                                                    
already occurred  and needed  to be zeroed  out in  order to                                                                    
balance the old accounts.                                                                                                       
                                                                                                                                
2:17:09 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze related a story  that illustrated the point                                                                    
of ratifications.                                                                                                               
                                                                                                                                
Representative  Wilson asserted  that  she  was looking  for                                                                    
accountability.                                                                                                                 
                                                                                                                                
HB  299  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
2:18:35 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:26:09 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 266                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain  programs,   capitalizing  funds,   and  making                                                                    
     reappropriations; making appropriations  under art. IX,                                                                    
     sec. 17(c),  Constitution of the State  of Alaska, from                                                                    
     the constitutional budget reserve fund."                                                                                   
                                                                                                                                
HOUSE BILL NO. 267                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health program."                                                                                      
2:26:16 PM                                                                                                                    
                                                                                                                                
^FY15 BUDGET OVERVIEW: DEPARTMENT OF LAW                                                                                      
                                                                                                                                
2:26:21 PM                                                                                                                    
                                                                                                                                
MICHAEL  GERAGHTY,  ATTORNEY  GENERAL,  DEPARTMENT  OF  LAW,                                                                    
began the  PowerPoint presentation, "Department of  Law FY15                                                                    
Budget Overview." He spoke to Slide 2:                                                                                          
                                                                                                                                
     Mission:                                                                                                               
     The Alaska Department of Law prosecutes crime and                                                                          
     provides legal services to state government for the                                                                        
     protection and benefit of Alaska's citizens.                                                                               
                                                                                                                                
     Core Services                                                                                                          
        · Protecting the safety and financial well-being of                                                                     
          Alaskans                                                                                                              
                                                                                                                                
        · Fostering conditions for responsible development                                                                      
          of our natural resources                                                                                              
                                                                                                                                
        · Protecting the fiscal integrity of the State of                                                                       
          Alaska                                                                                                                
                                                                                                                                
        · Promoting good governance                                                                                             
                                                                                                                                
Mr.  Geraghty   turned  to  Slide   3,  which   contained  a                                                                    
departmental  organizational   chart  outlaying   the  three                                                                    
divisions: Criminal, Administrative Services, and Civil.                                                                        
                                                                                                                                
Mr.  Geraghty  spoke  to  Slide 4,  which  listed  the  FY15                                                                    
operating budget requests by  division. The department would                                                                    
be  taking  a 5percent  reduction  in  general funding  from                                                                    
FY14.                                                                                                                           
                                                                                                                                
Mr. Geraghty  continued to  Slide 5,  which contained  a bar                                                                    
graph  showing  the  percentage of  the  total  department's                                                                    
budget  by  fund  group. The  percentage  of  general  funds                                                                    
(UGF&DGF) in the  Department of Law's budget  was 64 percent                                                                    
in FY06 and is 68 percent in the FY15 governor's request.                                                                       
                                                                                                                                
2:28:55 PM                                                                                                                    
                                                                                                                                
Mr. Geraghty spoke  to Slide 6, "Key  Statistics." The slide                                                                    
listed  planned  personnel  reductions, the  bulk  of  which                                                                    
would  be  the  loss  of   6  attorneys  and  1  law  office                                                                    
assistant. The  attorneys were divided between  the criminal                                                                    
and  civil   division  and  three  of   the  positions  were                                                                    
currently vacant. He thought  that remaining attorneys could                                                                    
work across divisions.                                                                                                          
                                                                                                                                
2:31:41 PM                                                                                                                    
                                                                                                                                
Mr.   Geraghty  turned   to  Slide   7,  which   showed  the                                                                    
department's   share  of   total   agency  operations.   The                                                                    
department's  general  fund  budget grew  by  $19.1  million                                                                    
between the  FY06 and FY15  governor's requests,  an average                                                                    
annual growth  rate of 4.1  percent. The  department's total                                                                    
FY15  governor's request  general fund  budget equaled  $191                                                                    
per resident  worker. In  FY08, the  department's percentage                                                                    
of all  agency overall operations  was 1.1 percent,  and had                                                                    
been as high  as 1.5 percent in FY12.   In FY15, projections                                                                    
were  at 1.2  percent.   The  main  reason the  department's                                                                    
budget  had  fluctuated  was  because of  the  need  to  use                                                                    
Outside Counsel  for cases  such as  BP Corrosion,  TAPS and                                                                    
the  Fast Ferries.   Personal  services had  increased $25.5                                                                    
million between FY06 and FY14.                                                                                                  
                                                                                                                                
2:33:00 PM                                                                                                                    
                                                                                                                                
Representative Gara  inquired what the blue  line across the                                                                    
bars  represented.  Mr.  Geraghty   responded  that  he  was                                                                    
unsure.                                                                                                                         
                                                                                                                                
2:33:42 PM                                                                                                                    
                                                                                                                                
DAVE BLAISDELL, DIRECTOR,  ADMINISTRATIVE SERVICES DIVISION,                                                                    
DEPARTMENT   OF  LAW,   interjected  that   the  red   lines                                                                    
represented  the  total agency  budget  of  $63 million.  He                                                                    
added  that  the blue  line  represented  the percentage  of                                                                    
agency budget to total state agencies budgets.                                                                                  
                                                                                                                                
2:34:33 PM                                                                                                                    
                                                                                                                                
Mr.  Geraghty  continued  to  Slide   8,  which  showed  the                                                                    
continued  budget growth  compared to  the 10-year  plan for                                                                    
all funds.  He shared  that spikes  for the  department were                                                                    
the result of  large cases such and BP  Corrosion, TAPS, and                                                                    
Point Thomson.  The flatter  growth curve  in out  years did                                                                    
not  project any  of  those cases.  Mr.  Geraghty said  that                                                                    
Slide  9 reflected  the same  comparison using  only general                                                                    
funds.                                                                                                                          
                                                                                                                                
Mr.  Geraghty addressed  Slide  10, which  was  a pie  chart                                                                    
detailing   personal  services   as   75   percent  of   the                                                                    
department's budget.                                                                                                            
                                                                                                                                
2:35:53 PM                                                                                                                    
                                                                                                                                
Mr.  Geraghty  directed  committee attention  to  Slide  11,                                                                    
which  listed the  adjustments to  the FY14  management plan                                                                    
that would  be needed to  arrive at  the base. He  said that                                                                    
one-time  items had  been removed  and  statewide items  had                                                                    
been re-added.                                                                                                                  
                                                                                                                                
2:36:40 PM                                                                                                                    
                                                                                                                                
Mr. Geraghty spoke to Slide  12, which showed the increments                                                                    
that  had been  added  back in  and the  deletion  of the  7                                                                    
aforementioned  positions. Reduced  expenditure levels  were                                                                    
1.5  percent  of   the  total  budget.  He   said  that  the                                                                    
department would  work to  curb the  use of  outside council                                                                    
and to improve vacancy rate  management. He noted that there                                                                    
were two  attorney positions that  were partially  funded by                                                                    
the Department of Corrections.                                                                                                  
                                                                                                                                
2:40:05 PM                                                                                                                    
                                                                                                                                
Mr. Geraghty turned  to Slide 13. The slide  contained a pie                                                                    
chart that broke down the  priority programs as a percentage                                                                    
of the budget FY15 management plan.                                                                                             
                                                                                                                                
Mr.  Geraghty  directed  committee attention  to  Slide  14,                                                                    
which  listed the  numbers for  the  FY15 priority  programs                                                                    
totaling $93,458.4.                                                                                                             
                                                                                                                                
Mr. Geraghty addressed Slide 15,  which listed the return on                                                                    
investment for the Civil Division budgets in FY12 and FY13.                                                                     
                                                                                                                                
2:42:27 PM                                                                                                                    
                                                                                                                                
Mr. Geraghty continued to the  individual topics pictured on                                                                    
Slides 16  through 24. He  said that between 2010  and 2012,                                                                    
the state had 6 convictions  for Medicaid fraud. Since 2012,                                                                    
the  state  had  had  72   cases  charged,  44  convictions,                                                                    
restitution judgments  in excess of $225,000,  21 cases were                                                                    
pending with restitution expected  between $1 million and $3                                                                    
million. He said that Medicaid  providers had been suspended                                                                    
and payments had  been suspended for claims  that were under                                                                    
suspicion. Mr.  Geraghty shared  that in  summer of  2013 he                                                                    
had   instituted  a   change   in   the  department's   plea                                                                    
negotiation  policy,   mostly  for  serious   crimes,  which                                                                    
eliminated  the ability  of the  persecutor and  the defense                                                                    
attorney  to  agree on  a  sentence  resulting in  the  case                                                                    
having  to be  resolved by  a  judge. He  believed that  the                                                                    
policy chance had been successful.                                                                                              
                                                                                                                                
                                                                                                                                
2:46:31 PM                                                                                                                    
                                                                                                                                
Mr. Geraghty spoke  to the backlog of appeals.  He said that                                                                    
in the court  of criminal appeals had  a significant backlog                                                                    
of appeals  that had built  up over  the past few  years. He                                                                    
shared  that  currently, between  the  time  between when  a                                                                    
notice of  appeal was filed  and the briefing  was completed                                                                    
was  approximately  500  days.  He said  that  many  of  the                                                                    
appeals were sentence appeals and  could be handled by civil                                                                    
attorneys.                                                                                                                      
                                                                                                                                
2:49:56 PM                                                                                                                    
                                                                                                                                
Mr.  Geraghty moved  on to  the issue  of the  Voting Rights                                                                    
Act.  He said  that the  state had  challenged the  coverage                                                                    
formula  provision, which  had  required the  state to  pre-                                                                    
clear   all   election   changes  before   they   could   be                                                                    
implemented. The  case was dismissed with  the Department of                                                                    
Justice  agreeing  that  the  requirements  were  null.  The                                                                    
effort  should  reduce  the  re-appointment  fights  in  the                                                                    
future,  which should  result  in saving  to  the state.  He                                                                    
continued to the  Katie John case. He stated  that an amicus                                                                    
brief had  been filed  by 14 states  in support  of Alaska's                                                                    
Certiorari Petition,  which he believed spoke  to the merits                                                                    
of  the  case  and  the issue  of  encroachment  of  federal                                                                    
authority on state's rights.                                                                                                    
                                                                                                                                
2:51:16 PM                                                                                                                    
                                                                                                                                
Mr.  Geraghty  spoke  to  the  Endangered  Species  Act.  He                                                                    
related  that the  major species  implicated were  the polar                                                                    
bear and  the bearded  seal. He relayed  that the  state had                                                                    
won  the critical  habitat case  before the  district court.                                                                    
The  critical habitat  established  by  the National  Marine                                                                    
Fisheries  Service (NMFS)  covered 187,000  square miles  of                                                                    
the  state; the  rule was  currently  on appeal  to the  9th                                                                    
circuit.  He spoke  to  the challenge  of  the bearded  seal                                                                    
designation, which  was based by  NMFS on a 100  year model.                                                                    
He hoped  for a decision in  the current year. He  said that                                                                    
the stellar  sea lion was  still designated  that litigation                                                                    
would most likely resume on the issue.                                                                                          
                                                                                                                                
2:53:05 PM                                                                                                                    
                                                                                                                                
Mr.  Geraghty  opined  that Alaska's  right  to  access  and                                                                    
manage land  was an ongoing issue.  He spoke to the  case of                                                                    
John  Sturgeon who  was prohibited  from using  a hovercraft                                                                    
inside the  Yukon-Charley Rivers National Preserve.  He said                                                                    
that the  state was  appealing the  case with  Mr. Sturgeon,                                                                    
and  that  other cases  were  pending.  He stated  that  the                                                                    
Roadless  Rule continues  to  be litigated  as  well as  the                                                                    
Lease Sale 193 among others.                                                                                                    
                                                                                                                                
2:55:18 PM                                                                                                                    
                                                                                                                                
Mr. Geraghty  discussed consumer protection. He  shared that                                                                    
he  was  working on  the  issue  of on-board  port  shopping                                                                    
programs that were  nefarious and unethical. He  said that a                                                                    
consent decree  had been negotiated with  the three on-board                                                                    
promotion companies that served  the cruise lines working in                                                                    
Alaska.                                                                                                                         
                                                                                                                                
2:59:33 PM                                                                                                                    
                                                                                                                                
Mr.  Geraghty spoke  to Slide  24,  which listed  challenges                                                                    
faced by the department:                                                                                                        
                                                                                                                                
     · Increases in the number of criminal cases brought to                                                                     
        trial                                                                                                                   
                                                                                                                                
     · Increased facility costs                                                                                                 
                                                                                                                                
     · Gasline funding                                                                                                          
                                                                                                                                
     · Elections issues in 2014                                                                                                 
                                                                                                                                
     · Effective use of outside counsel                                                                                         
                                                                                                                                
Mr.  Geraghty said  that in  2011 the  department tried  130                                                                    
cases in Anchorage,  2012 148 cases were tried,  and in 2013                                                                    
176  cases  were tried.  He  stated  the  all of  the  state                                                                    
offices in Western Alaska faced  challenges, but that Bethel                                                                    
was the priority.  He relayed that the  Fairbanks office had                                                                    
been  moved,  which  had  added  expense.  He  listed  other                                                                    
facility challenges.                                                                                                            
3:03:57 PM                                                                                                                    
                                                                                                                                
Co-Chair    Stoltze   expressed    appreciation   for    the                                                                    
department's work  on victim's rights. Mr.  Geraghty replied                                                                    
work would continue on the issue.                                                                                               
                                                                                                                                
3:06:26 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze inquired what  the relevance was of telling                                                                    
the committee  what percentage  his department's  budget was                                                                    
of the  total agency budgets.  Mr. Geraghty thought  that it                                                                    
was useful  to track  what percentage of  a state  budget an                                                                    
agency spent.                                                                                                                   
                                                                                                                                
Co-Chair  Stoltze   did  not  appreciate   the  departmental                                                                    
comparisons.                                                                                                                    
                                                                                                                                
3:08:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman  commented that  past chairmen  had found                                                                    
the information  helpful. Co-Chair  Stoltze agreed  that the                                                                    
charts could be useful.                                                                                                         
                                                                                                                                
Co-Chair  Stoltze  queried  the  return  on  investment  for                                                                    
successful cases  and agency advice. Mr.  Geraghty said that                                                                    
it was hard to quantify.                                                                                                        
                                                                                                                                
3:11:07 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  said  that he  was  speaking  to  federal                                                                    
litigation.  Mr. Geraghty  reiterated  that it  was hard  to                                                                    
quantify.                                                                                                                       
                                                                                                                                
3:12:25 PM                                                                                                                    
                                                                                                                                
Representative Costello asked for  Mr. Geraghty's opinion on                                                                    
the amount of  time and energy the state  spent dealing with                                                                    
issues related  to federal  overreach. Mr.  Geraghty replied                                                                    
that the  department spent  a lot of  time dealing  with the                                                                    
issues.  He shared  that much  time  had been  spent on  the                                                                    
Pebble Mine issue.  He spoke again to the  Sturgeon Case. He                                                                    
thought that  it would  be hard to  measure the  time spent,                                                                    
but that it was an ongoing battle.                                                                                              
                                                                                                                                
3:14:54 PM                                                                                                                    
                                                                                                                                
Representative Costello  requested a  short overview  of the                                                                    
status of the RS2477 issue.  Mr. Geraghty responded that the                                                                    
district  court  judge granted  a  summary  judgment to  the                                                                    
native allotment holders  that were involved in  some of the                                                                    
trails  in  the  Chicken  area. He  stated  that  the  judge                                                                    
believed that it was an issue  that should be decided by the                                                                    
9th circuit.                                                                                                                    
                                                                                                                                
3:16:44 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze thought  that  the issue  would be  better                                                                    
addressed  by the  Citizens  Advisory  Committee on  Federal                                                                    
Areas. Mr.  Geraghty said that  the Chicken claims  were the                                                                    
main cases the  state was dealing with, but  that there were                                                                    
more, smaller cases that the department was handling.                                                                           
                                                                                                                                
3:18:03 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman probed  the issue  of Medicaid  fraud. He                                                                    
understood that  the department recovered  $1 million  to $3                                                                    
million per  year. Mr. Geraghty  replied that there  were 21                                                                    
cases pending  where the restitution  available would  be $1                                                                    
million to $3 million.                                                                                                          
                                                                                                                                
Vice-Chair Neuman  asked where the recovered  funds would be                                                                    
used. Mr. Geraghty said that  the funds would be returned to                                                                    
the Department of Health and Social Services (DHSS).                                                                            
                                                                                                                                
Vice-Chair Neuman  understood that the department  saved $15                                                                    
million  per   year  by  discovering  Medicaid   fraud.  Mr.                                                                    
Geraghty replied  that when there  was credible  evidence of                                                                    
fraud  DHSS would  suspend payment.  He said  that in  those                                                                    
cases the projected money saved was $15 million.                                                                                
                                                                                                                                
3:21:03 PM                                                                                                                    
                                                                                                                                
Representative Gara commented that the number of non-                                                                           
violent  offenders in  prison  had  grown significantly.  He                                                                    
asked whether the department could  work with the Department                                                                    
of Corrections and  the governor in order to  compose a list                                                                    
of  criminal  sentences  and   misdemeanors  that  had  been                                                                    
changed  to  felonies,  but were  non-violent  crimes,  that                                                                    
could be examined in order  to reduce the prison population.                                                                    
Mr.   Geraghty  thought   that   the   problem  was   multi-                                                                    
dimensional. He  said that studies had  shown that one-third                                                                    
of  defendants  would  not  reoffend,  another  third  would                                                                    
reoffend  no matter  how much  help they  received, and  the                                                                    
final third rested in the middle.  He said he would be happy                                                                    
to study the issue.                                                                                                             
                                                                                                                                
3:25:13 PM                                                                                                                    
                                                                                                                                
Representative   Gara  thought   that  there   had  been   a                                                                    
substantial  increase  in   the  non-violent  offenders.  He                                                                    
requested  that  a hard  look  be  taken  in order  to  find                                                                    
solutions.  Mr.  Geraghty  assured the  committee  that  the                                                                    
issue would be examined.                                                                                                        
                                                                                                                                
Representative Gara discussed  the department's plea policy.                                                                    
He  requested  assurance  that   the  policy  was  fair  and                                                                    
equitable.  Mr.  Geraghty that there were  exceptions to the                                                                    
policy for individual case reviews.                                                                                             
                                                                                                                                
Representative Gara asked what would  happen if a person did                                                                    
not commit the  crime. Mr. Geraghty said that  if the person                                                                    
did not  commit the crime then  they would not go  to trial.                                                                    
He countered that if the  person did commit the crime, there                                                                    
should be no fear of taking it to trial.                                                                                        
                                                                                                                                
3:29:49 PM                                                                                                                    
                                                                                                                                
Representative  Munoz expressed  appreciation  for the  work                                                                    
done by the department.                                                                                                         
                                                                                                                                
3:30:50 PM                                                                                                                    
                                                                                                                                
HB  266  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  267  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Austerman discussed housekeeping.                                                                                      
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:31:18 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:31 p.m.                                                                                          

Document Name Date/Time Subjects
Dept of Law FY 15 Overview House Finance (3).pdf HFIN 2/6/2014 1:30:00 PM
LAW Overview Budget HFIN