Legislature(1993 - 1994)
03/29/1994 01:40 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 29, 1994
1:40 p.m.
TAPE HFC 94-98, Side 2, #000 - end.
TAPE HFC 94-99, Side 1, #000 - end.
TAPE HFC 94-99, Side 2, #000 - end.
TAPE HFC 94-100, Side 1, #000 - 514.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 1:40 p.m.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
ALSO PRESENT
Representative Tom Brice; Mike Greany, Director, Legislative
Finance Division; Nancy Slagle, Director, Division of Budget
Review, Office of Management and Budget, Office of the
Governor; Arthur H. Snowden, II, Administrative Director,
Alaska Court System; Margaret Lowe, Commissioner, Department
of Health and Social Services; Janet Clarke, Director,
Division of Administrative Services, Department of Health
and Social Services; Jay Livey, Deputy Commissioner,
Department of Health and Social Services; Deborah Smith,
Executive Director, Mental Health Board; Jay Hogan,
Contract, House Finance Committee; Pam Stoops, Director,
Legislative Affairs Agency; Jim Kelly, Liaison Officer,
Alaska Permanent Fund Corporation, Department of Revenue.
SUMMARY INFORMATION
HB 370 "An Act making appropriations for the operating
and loan program expenses of state government and
to capitalize funds; and providing for an
effective date."
HB 370 was HELD in Committee for further
discussion.
HOUSE BILL NO. 370
"An Act making appropriations for the operating and
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loan program expenses of state government and to
capitalize funds; and providing for an effective date."
LEGISLATURE
PAM STOOPS, DIRECTOR, LEGISLATIVE AFFAIRS AGENCY discussed
the miscellaneous increases in the Legislature's operating
budget. She noted that FY 94 unallocated reductions were
zeroed out. She observed that the unallocated reductions
would result in a decrease of 19 positions. The positions
were funded by the roll forward. She estimated the FY 94
total Legislative operating budget at approximately $5.0
million dollars.
In response to a question by Representative Brown, she noted
that office space rental was spread among the corresponding
components. She noted that $500.0 thousand dollars budgeted
for office space rental was not sufficient. She observed
that excess office space rental had been taken from the
Legislative Affairs Agency's budget. She emphasized the
need to continue the carry forward.
Representative Martin referred to increased health costs.
Ms. Stoops noted that increased health costs would be
absorbed.
Ms. Stoops acknowledged that the proposed budget contains
the increased per diem funding for all members.
Representative Martin expressed his opposition to increased
per diem expenses. Representative Martin MOVED to delete
the per diem increase of $405.6 thousand dollars.
Representative Hoffman OBJECTED.
A roll call vote was taken on the MOTION.
IN FAVOR: Martin, Parnell, Therriault, Brown, Grussendorf
OPPOSED: Foster, Hoffman, MacLean, Larson
Representatives Navarre and Hanley were not present for the
vote.
The MOTION PASSED (5-4).
OFFICE OF THE GOVERNOR
Representative Brown MOVED to ADOPT AMENDMENT 1 (copy on
file). She explained that the amendment would add an
increment of $272.0 thousand dollars for Maternal, Child,
and Family Health, Department of Health & Social Services.
An equal decrement would be taken from the Media Center,
Office of the Governor. She spoke in support of amendment
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1.
Representative Brown provided members with AMENDMENT 2 (copy
on file). She explained that amendment 2 would provide
intent language for the operation of the program, funded by
amendment 1.
Representative Martin questioned the practice of
establishing a new program through legislative intent.
Representative Brown noted that the concept was discussed by
the Children's Caucus. She pointed out that the Social
Services Block Grant program was begun through a budget
appropriation.
Co-Chair Larson noted that funding for the Media Center
contains $121.0 thousand dollars in interagency receipts.
He MOVED to AMEND Amendment 1 to take a decrement of $247.7
thousand dollars from the Media Center. There being NO
OBJECTION, it was so ordered.
A roll call vote was taken on the main MOTION
IN FAVOR: Brown, Grussendorf, Hoffman, Navarre
OPPOSED: Foster, Martin, Parnell, Therriault, MacLean,
Larson
Representative Hanley was not present for the vote.
The MOTION FAILED (4-6).
Representative Brown WITHDREW AMENDMENT 2.
ALASKA COURT SYSTEM
Representative Parnell MOVED to ADOPT AMENDMENT 1 (copy on
file). He explained that amendment 1 would increase funding
for trial courts by $700.0 thousand dollars and take an
unallocated reduction of $700.0 thousand dollars from the
Legislature's budget.
ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM explained that the amendment would not appropriate
funding for travel.
MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION
explained that the $700.0 thousand dollars unallocated
reduction in the Legislature's budget could be adjusted for
in the reappropriation legislation. Discussion pursued
regarding the carry forward funding available to the
Legislature through reappropriation.
Representative Brown MOVED to DIVIDE the Question, to
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separate the increment from the decrement. She spoke
against a further, unrestored, reduction to the
Legislature's budget. She WITHDREW the motion to divide the
question.
Co-Chair Larson noted that the decrement will be reflected
in HB 370 as a reduction. He expressed his intention to
restore the reduction through the reappropriation budget.
A roll call vote was taken on the MOTION to adopt AMENDMENT
1.
IN FAVOR: Hanley, Parnell, Therriault, Foster, MacLean,
Larson
OPPOSED: Brown, Hoffman, Martin
The MOTION PASSED (8-3).
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
Co-Chair MacLean MOVED to ADOPT AMENDMENT 1 (copy on file).
She explained that amendment 1 would add $6,175.0 million
dollars for Alcohol and Drug Abuse grants. She emphasized
that programs will be closed without the restoration.
Representative Navarre spoke in support of increased alcohol
and tobacco taxes. Discussion pursued regarding the cost of
alcohol and tobacco on society versus revenues which could
be raised by excise taxes.
Representative Grussendorf spoke in support of amendment 1.
Co-Chair MacLean noted that the state has lost $1.0 million
federal dollars as a result of actions taken in FY 94. She
noted that grants have been reduced by 5 percent.
Representative Martin spoke in support of local solutions to
drug and alcohol problems.
Co-Chair Larson expressed concern that funding not be used
to cover administrative costs.
Representative Hanley suggested that recipients provide a
match for state grants to alcohol and drug abuse programs.
A roll call vote was taken on the MOTION to adopt AMENDMENT
1.
IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Foster,
Hanley, Parnell, MacLean, Larson
OPPOSED: Therriault, Martin
The MOTION PASSED (8-2).
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Representative Hanley MOVED to ADOPT AMENDMENT 2 (copy on
file). Amendment 2 would increase the Medicaid Non-Facility
component by $550.0 thousand dollars and reduce the Medicaid
Facility component by $550.0 thousand dollars. He observed
that the amendment is a net zero and properly reflects the
intent to implement a co-payment plan.
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES spoke in support of
amendment 2. She stressed that the amendment would help the
Department to contain costs.
Representative Hanley MOVED to ADOPT AMENDMENT 2 (copy on
file). There being NO OBJECTION, AMENDMENT 2 was adopted.
Representative Hanley MOVED to ADOPT AMENDMENT 3 (copy on
file). He explained that amendment reduces travel by 2.5
percent below the FY 94 level.
MARGARET LOWE, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES noted that administrative travel would be reduced.
She observed that a large share of the department's travel
funding is through federal dollars.
Ms. Clarke pointed out that travel is required in the Public
Health Nursing and Family and Youth Services components.
She added that travel allows direct services to the public.
A roll call vote was taken on the MOTION.
IN FAVOR: Navarre, Foster, Hanley, Martin, Parnell,
Therriault, MacLean, Larson
OPPOSED: Brown, Grussendorf, Hoffman
The MOTION PASSED (8-3).
Representative Hanley MOVED to ADOPT AMENDMENT 4 (copy on
file). Amendment 4 would delete an increment of $100.0
thousand mental health trust account dollars which would be
transferred as a RSA to the Department of Administration.
DEBORAH SMITH, EXECUTIVE DIRECTOR, MENTAL HEALTH TRUST BOARD
observed that the increment was recommended by the Board to
serve the Alzheimer's beneficiary group.
A roll call vote was taken on the MOTION to adopt AMENDMENT
4.
IN FAVOR: Hanley, Martin, Parnell, Therriault, MacLean,
Larson
OPPOSED: Brown, Foster, Grussendorf, Hoffman, Navarre
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The MOTION PASSED (6-5).
Representative Hanley MOVED to ADOPT AMENDMENT 5 (copy on
file). He explained that amendment 5 would reduce $50.0
thousand dollars for medicaid audits.
JAY LIVEY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES spoke in opposition to amendment 5. He
observed that federal law limits the department's control of
expenditures to hospitals and nursing homes. He emphasized
that audits are a beneficial tool to determine how medicaid
funding is spent. He estimated that each audit position can
identify $1.3 million dollars in excess cost to the state.
Ms. Clarke added that a $50.0 thousand dollars reduction was
taken by the Subcommittee.
A roll call vote was taken on the MOTION to adopt amendment
5.
IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault,
MacLean
OPPOSED: Brown, Grussendorf, Hoffman, Navarre, Larson
The MOTION FAILED (5-6).
Representative Hoffman MOVED to ADOPT AMENDMENT 6 on behalf
of Representative Brice (copy on file).
REPRESENTATIVE TOM BRICE observed that the amendment would
duplicate previous reductions. He recommended that the
amendment be amended to leave an increment of $400.0
thousand dollars for the Designated Evaluation and Treatment
component.
There being NO OBJECTION, AMENDMENT 6 was amended to reflect
a $400.0 thousand dollars increment to the Designated
Evaluation and Treatment component.
Commissioner Lowe noted that the department lacks funds to
reimburse hospitals willing to provide designated treatment
beds for the mentally ill at a level required by the
hospitals. Hospitals in Anchorage and Juneau have withdrawn
from the program.
Representative Hanley reviewed the Subcommittee's treatment
of the increment.
A roll call vote was taken on the MOTION to adopt AMENDMENT
6.
IN FAVOR: Brown, Grussendorf, Hoffman
OPPOSED: Navarre, Foster, Hanley, Martin, Parnell,
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Therriault, MacLean, Larson
The MOTION FAILED (3-8).
Representative Navarre MOVED to ADOPT AMENDMENT 7 (copy on
file). Amendment 7 would reduce interagency receipts by
$200.0 thousand dollars and add $200.0 general fund dollars
for the Infant Learning Program; and reduce the Legislative
Operating Budget by $200.0 thousand general fund dollars.
Representative Hanley spoke against amendment 7.
(Tape Change, HFC 94-99, Side 2)
Commissioner Lowe noted that the department has begun to
implement co-payment or partial payment for infant learning
programs.
Ms. Clarke recommended that interagency receipts not be
reduced.
Representative Navarre MOVED to AMEND Amendment 7 to delete
the decrement, allow the interagency receipts and reduce the
general fund dollar increment to $100.0 thousand dollars.
The amendment as amended would add $100.0 thousand dollars
to the Infant Learning Program. There being NO OBJECTION,
it was so ordered.
A roll call vote was taken on the MOTION to adopt AMENDMENT
7 as amended.
IN FAVOR: Brown, Grussendorf, Hoffman, Navarre
OPPOSED: Foster, Hanley, Martin, Parnell, Therriault,
MacLean, Larson
The MOTION FAILED (4-7).
Representative Hoffman WITHDREW AMENDMENT 8.
Representative Brown MOVED to AMEND Amendment 9, reduce the
increment to $1,700.7 million dollars for Human Services
Community Match Grant. She explained that the amendment
would increase the grant by $51.6 thousand dollars. She
reviewed the history of the grant. There being NO
OBJECTION, it was so ordered.
Representative Brown MOVED to ADOPT AMENDMENT 9 as amended.
She stressed that the program serves the poor and needy.
She noted that 11 percent of those served are from areas
outside of Anchorage.
A roll call vote was taken on the MOTION to adopt AMENDMENT
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9.
IN FAVOR: Therriault, Brown, Grussendorf, Hoffman, Navarre
OPPOSED: Foster, Hanley, Martin, Parnell, MacLean, Larson
The MOTION FAILED (5-6).
Representative Hanley MOVED to ADOPT AMENDMENT 10 (copy on
file). He explained that the amendment would add intent
language to the Department of Health & Social Services. The
intent language states that it is the "intent of the
Legislature that the Department of Health & Social Services
begin to implement a drug formulary for the Medicaid
program. The Department will investigate further savings to
be achieved from full implementation of a formulary." There
being NO OBJECTION, it was so ordered.
Representative Hanley MOVED to ADOPT AMENDMENT 11 (copy on
file). He explained that the amendment would add intent
language to the Department of Health & Social Services,
Medicaid Non-Facility. The intent language states that it
is the "intent of the Legislature that the Department of
Health & Social Services begin to implement, when
financially sound, recipient deductibles, co-insurance and
co-payments for medical services to the fullest extent
practicable under federal law and regulation." There being
NO OBJECTION, it was so ordered.
Representative Hanley MOVED to ADOPT AMENDMENT 12 (copy on
file). He explained that the amendment would add intent
language to the Department of Health & Social Services,
Medicaid Non-Facility. The intent language states that it
is the "intent of the Legislature that the Department of
Health & Social Services begin to implement, when
financially sound, recipient deductibles, co-insurance and
co-payments for medical services to the fullest extent
practicable under federal law and regulation." There being
NO OBJECTION, it was so ordered.
Representative Hanley MOVED to ADOPT AMENDMENT 13 (copy on
file). He explained that the amendment would add intent
language to the Department of Health & Social Services,
Residential Child Care. The intent language states that it
is the "intent of the Legislature that the reduction in this
component is intended to reduce the number of beds purchased
from Alaska Children's Services and will not result in the
reduction of purchased beds in other facilities."
Ms. Clarke explained that there is excess capacity in Alaska
Children's Services, Family and Youth Services.
There being NO OBJECTION, AMENDMENT 13 was adopted.
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Representative Martin MOVED to ADOPT AMENDMENT 14 (copy on
file). He explained that amendment 14 would reduce the
General Relief Medical program in order to cease state
funding of abortions. He spoke in support of amendment 14.
Representative Brown OBJECTED. She spoke in opposition to
amendment 14.
A roll call vote was taken on the MOTION.
IN FAVOR: Hanley, Martin, Parnell, Therriault
OPPOSED: Foster, Brown, Grussendorf, Navarre, MacLean,
Larson
Representative Hoffman was not present for the vote.
The MOTION FAILED (4-6).
Representative Martin MOVED to ADOPT AMENDMENT 15 (copy on
file). He explained that amendment 15 would add legislative
intent to deny state funding of abortions unless the
procedure is necessary to save a life. Representative Brown
OBJECTED. A roll call vote was taken on the MOTION.
IN FAVOR: Hanley, Martin, Parnell, Therriault
OPPOSED: Foster, Brown, Grussendorf, Navarre, MacLean,
Larson
Representative Hoffman was not present for the vote.
The MOTION FAILED (4-6).
FRONT SECTION
Co-Chair Larson reviewed the front section of HB 370 by
section in order to entertain amendments.
There being NO OBJECTION, sections 1 and 2 were adopted.
Co-Chair Larson questioned if "may" should be deleted and
"shall" inserted in section 3, line 13. He noted that
section 3 states that an excess in federal funds "may"
result in a reduction of state funds.
Representative Martin MOVED to delete "may" and insert
"shall" on page 1, line 13.
Representative Grussendorf queried the effect on Medicaid
funds.
MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION pointed
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out that if a federal maintenance of effort level is
required the "shall" could cause problems. He added that
the change could constitute a delegation of legislative
appropriation authority to the administration.
Representative Therriault reiterated concerns that the
change could interfere with state/federal match levels.
Discussion pursued regarding the proposed change from "may"
to "shall".
JAY HOGAN, CONTRACT STAFF, HOUSE FINANCE COMMITTEE noted
that the agency which receives an excess of federal funds
would be responsible for making the reduction of state funds
under the instruction of the Office of Budget and
Management. He observed that "may" has been used by
previous legislatures.
Representative Martin WITHDREW his Motion to amend section
3. There being NO OBJECTION, section 3 was adopted.
There being NO OBJECTION, section 4 was adopted.
Representative Martin MOVED to delete section 5. Section 5
would allow state funds to replace federal funds in the case
of a shortfall of federal receipts.
Ms. Clarke pointed out that the Title 20, Social Services
Block Grant offset is a component in the Department of
Health & Social Services. She spoke in support of retaining
the component in the front section of HB 370.
Representative Hanley noted that the department's estimates
have been on track. He acknowledged that the department
will not have the exact amount until the end of the fiscal
year.
Representative Brown OBJECTED to the motion to delete
section 5. A roll call vote was taken on the MOTION.
IN FAVOR: Martin, Therriault
OPPOSED: Brown, Grussendorf, Hanley, Hoffman, MacLean,
Foster, Larson
Representatives Parnell and Navarre were not present for the
vote.
The MOTION FAILED (2-7).
Representative Brown MOVED to HOLD section 6. There being
NO OBJECTION, it was so ordered.
There being NO OBJECTION, sections 7 and 8 were adopted.
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Representative Martin asked if debt service for
international airport bonds could be renegotiated.
NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR explained that
the Department of Revenue has reviewed debt service payments
and found that there were some errors in their original
calculations. She noted that refinancing occurred on the
international airport revenue bonds.
(Tape Change, HFC 94-100, Side 1)
Co-Chair Larson MOVED to AMEND section 9 to $5,779.34
million dollars. There being NO OBJECTION, it was so
ordered. There being NO OBJECTION, section 9 was adopted as
amended.
Ms. Slagle explained that an error was made in calculations
of the amount needed in section 10. She added that the
amount did not include the Anchorage court house building.
Co-Chair Larson MOVED to delete "$9,029,663.0" and insert
"$11,243,993.0" million dollars and add "Alaska Court
System". There being NO OBJECTION, it was so ordered.
Discussion pursued regarding the annual lease cost of the
Anchorage court building. Ms. Slagle clarified that the
purchase of the Anchorage building would help defray some
additional rental that will occur if they do not vacate
their current location. Representative Martin suggested
that the Alaska Court System lease costs be reevaluated.
There being NO OBJECTION, section 10 was adopted as amended.
There being NO OBJECTION, section 11 was adopted.
Representative Martin recommended that a letter of intent be
adopted to request the Department of Revenue to renegotiate
debt service financing contained in sections 9, 10 and 11.
Co-Chair Larson noted that the sections in question were
adopted.
Representative Martin suggested a cap be placed on permanent
fund dividend payments, to limit payments to $1,000 thousand
dollars. Representative Navarre noted that statutory
authority is needed. He encouraged debate regarding capping
of permanent fund divided payments.
Co-Chair Larson announced that section 12 would be HELD
open.
Co-Chair MacLean MOVED to delete section 13.
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JIM KELLY, LIAISON OFFICER, ALASKA PERMANENT FUND
CORPORATION noted that the deletion of section 13 would
diminish the value of the fund principle by $372 million
dollars.
Representative Martin spoke in support of inflation proofing
the fund.
Mr. Kelly pointed out that inflation proofing has added
approximately $3.5 billion dollars to the principle of the
fund or $300 million dollars a year in income. He noted
that the earnings reserve is not calculated for inflation
proofing.
Section 13 was HELD.
There being NO OBJECTION, sections 14 and 15 were adopted.
Co-Chair Larson noted that section 16 was added back into
the main body of HB 370. He MOVED to delete section 16.
There being NO OBJECTION, it was so ordered.
There being NO OBJECTION, section 17 was adopted.
In response to a question by Representative Navarre, Mr.
Greany explained that section 17 lapses unexpended funds for
the STEP program to the Employment Assistance and Training
Program from which it was appropriated. He noted that
section 17 was contained in the FY 94 appropriation
legislation.
Section 18 was HELD open.
HB 370 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 4:57 p.m.
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