Legislature(1999 - 2000)
03/08/1999 01:47 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 8, 1999
1:47 P.M.
TAPE HFC 99 - 39, Side 1.
TAPE HFC 99 - 39, Side 2.
TAPE HFC 99 - 40, Side 1.
TAPE HFC 99 - 40, Side 2.
TAPE HFC 99 - 41, Side 1.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:47 P.M.
PRESENT
Co-Chair Therriault Representative Foster
Co-Chair Mulder Representative Grussendorf
Vice-Chair Bunde Representative Kohring
Representative Austerman Representative Moses
Representative J. Davies Representative Williams
Representative G. Davis
ALSO PRESENT
Representative Carl Morgan; Representative Kapsner; Nancy
Slagle, Director, Division of Administrative Services,
Department of Transportation; Nancy Slagle, Director,
Division of Administrative Services, Kevin Brooks, Director,
Division of Administrative Services, Department of Fish and
Game; Annalee McConnell, Director, Office of Management and
Budget, Office of the Governor; Nico Bus, Administrative
Services Manager, Division of Support Services, Department
of Natural Resources; Margaret Ugh, Commissioner; Janet
Clark, Director, Division of Administrative Services,
Department of Health and Social Services, Department of
Corrections; Barbara Brink, Director, Public Defender
Agency; Kenneth Bischoff, Director, Division of
Administrative Services, Department of Transportation.
.
TESTIFIED VIA TELECONFERENCE
Yvonne Chase, Director, Division of Community and Rural
Development; Lamar Cotton, Deputy Commissioner, Department
of Community and Regional Affairs; Percy Frisby, Director,
Division of Energy, Department of Community and Regional
Affairs.
SUMMARY
HB 100 "An Act making and amending capital, supplemental,
and other appropriations, and appropriations to
capitalize funds; ratifying certain expenditures;
and providing for an effective date."
HB 100 was HELD in Committee for further
consideration.
HOUSE BILL NO. 100
"An Act making and amending capital, supplemental, and
other appropriations, and appropriations to capitalize
funds; ratifying certain expenditures; and providing
for an effective date."
AMENDMENTS
Co-Chair Mulder provided members with proposed committee
substitute, work draft 1-GH1023\H, 3/7/99 (copy on file).
Co-Chair Therriault MOVED to ADOPT work draft 1-GH1023\H,
3/7/99. There being NO OBJECTION, it was so ordered.
Co-Chair Therriault MOVED to ADOPT Amendment 1 (copy on
file). He explained that the amendment would amend page 7 on
line 23.
Delete: 13,264,600 and 15,132,200
Insert: 13,921,500 and 14,475,300
Co-Chair Therriault explained that excess federal funds in
the Temporary Assistance to Needy Families (TANF) account
would be shifted to Daycare Assistance in the Department of
Community and Regional Affairs. The amendment would limit
the transfer of funds to the specific amount needed to fund
the shortfall in the Chronic and Acute Medical Assistance
program (CAMA) for FY 99. The proposed committee substitute
made more of a shift than was necessary.
In response to a question by Representative J. Davies, Co-
Chair Therriault clarified that the amount needed is $1,145
million dollars.
There being NO OBJECTION, Amendment 1 was adopted.
Co-Chair Mulder MOVED to ADOPT Amendment 2a (copy on file).
He explained that the amendment is a technical correction.
The reduction proposed by the Department of Corrections was
$35 thousand dollars, not $50 thousand dollars. The
amendment would correct this error. There being NO
OBJECTION, it was so ordered.
Co-Chair Mulder MOVED to ADOPT Amendment 2b (copy on file).
He explained that the amendment balances the Department of
Transportation and Public Facilities section to account for
the deletion of the former subsection 18(e), which would
have authorized an increase of $100 thousand dollars in
program receipts. In response to a question by
Representative J. Davies, he explained that section 18(e)
was the transfer of unused general fund program receipts to
design and engineering. The amendment was introduced on the
recommendation of Representative Williams.
Representative J. Davies asked if the intent is to include
the request in the FY00 operating budget. Representative
Williams stated that the department indicated that the delay
would not cause a problem.
DENNY DEWITT, STAFF, CO-CHAIR MULDER explained that the
amendment would be a net zero. He stated that it could be
taken care of in the FY00 operating budget. Representative
J. Davies questioned why it was included in the
supplemental. Mr. Dewitt stated that his information was
that the transfer could occur in FY00. Representative J.
Davies questioned if plans would be delayed to the following
summer. Mr. DeWitt did not think that there would be any
delays. He stated that there were concerns that there would
not be enough money in the Energy Fund, but that it had been
resolved.
NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF TRANSPORTATION clarified that projects would
be delayed if the funding is not approved. The Department of
Transportation and Public Facilities would not be able to
issue permits to utility companies and others that need the
permits for construction purposes. The Department of
Transportation and Public Facilities has authority for $330
thousand dollars for right-of-way permit issuance. They
anticipate they need an additional $100 thousand dollars to
cover spring work. Without the additional authorization
permits would not be issued.
Co-Chair Mulder maintained that the bill needs to be
consistent. Representative J. Davies recommended that the
change be made in the existing committee substitute.
Representative Williams reiterated that his impression was
that the department had enough money to finish this year's
projects.
Ms. Slagle clarified that the Department of Transportation
and Public Facilities does not have enough authority to
expend. They cannot generate revenues for the permit process
without the expenditure authority. They cannot charge it to
federal projects. She explained that, in the past, the
department resolved the problem by transferring authority
from within the department. The department's current budget
structure does not allow transfers within the department.
Co-Chair Mulder suggested that the amendment be adopted to
make the bill consistent. He stressed that the
misunderstanding can be clarified later.
Representative Grussendorf recommended that the amendment be
withdrawn.
Co-Chair Mulder WITHDREW his motion to adopt Amendment 2b.
Representative Austerman MOVED to ADOPT Amendment 3 (copy on
file). He observed that Amendment 3 would add $500 thousand
dollars in program receipts to the Department of Fish and
Game for pink salmon pre-emergent fry sampling in the Kodiak
Management Area.
KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF FISH AND GAME explained that they would be
statutory designated program receipts.
Co-Chair Therriault ascertained that there would be a
negotiated contract signed with the individuals that are
bringing the money to the table. Mr. Brooks agreed that
there would be a written agreement.
Representative Austerman MOVED to amend Amendment 3, add,
"statutory designated". There being NO OBJECTION, it was so
ordered.
Representative Kohring questioned if the appropriation is an
emergency. Representative Austerman explained that the fry
must be counted at this point time. This is a management
tool used to predict the salmon run. He noted concerns that
more fry may have been killed by the extremely cold winter.
The count is used to determine processing needs. The count
is needed before the ice moves out and the spring thaw. The
Department of Fish and Game indicated that they did not have
enough authorization.
There being NO OBJECTION, Amendment 3 was adopted as
amended.
Representative Foster MOVED to ADOPT Amendment 4 (copy on
file).
Section 16 page 10, line 10, Maintenance
and Operations, Northern Region Highways
and Aviation, is amended to add $ 235,650
increasing the total appropriation to
$37,342,650 and the General Fund to
$36,558,450
The increment is for manually opening the
following roads spring of 1999.
Taylor Highway $132,000
Boundary Spur 10,500
McCarthy Road 8,700
Nome/Teller Road 35,700
Nome/Council Road 34,700
Glacier Creek/Nome 10,100
Fairbanks Creek Rd. 3,950
Tofty Road/Manley;
Eureka/Rampart
REPRESENTATIVE CARL MORGAN spoke in support of Amendment 4.
He read from written remarks. He express concerns over the
opening of the Taylor highway. He noted that the Alaska
portion of the Taylor highway is about 200 miles long and
runs from Tok, through Chicken, Eagle, and Boundary. It
connects to the top of the world highway in the Yukon
Territory. The Department of Transportation and Public
Facilities has outlined FY99 cost savings of $316,000 for
not opening several highways this spring, including the
Tayor, Denali, Copper River and Nome highways. He addressed
the $142,500 thousand dollars cost savings proposed for the
Taylor highway. He stated that reducing funds for snow
removal creates life, health, safety and economic issues
that far out way the cost savings.
Representative Morgan noted that he traveled to his district
and the people voiced their concerns regarding the delay in
opening the Taylor Highway. He received numerous letters and
phone calls.
Representative Morgan noted that when the Governor brought
forth his reductions for FY99, he stated that these
reductions were targeted to areas, which would have minimum
impact on the citizens of the state. He maintained that the
costs to the residents, visitors and businesses of South
Central Alaska far exceed the $142,500 cost savings. He
asserted that the reduction is not a 'minimum impact' as
stated by Commissioner Perkins.
Representative Morgan emphasized that the delay would result
in a significant loss to the tourism trade in the region and
will adversely effect the efforts of businesses and
individuals to promote the "top of the world" highway as an
alternate route to the Alaska Highway. If the Taylor highway
is not maintained as in the past, alternative measures for
the tourism industry of flying passengers or canceling
operations until June 1, could result in a potential revenue
loss of $1.4 million dollars. The state will be responsible
for the large buses and their passengers when the road
proves hazardous,
Representative Morgan noted that there are an estimated 80
permitted mines in the area. These miners will be impacted
because they have only a small window of opportunity to
acquire fuel and food for the mining season. They will be
unable to reach their claims if they cannot haul their
freight by April 1, losing the entire mining season. These
communities are counting on the delivery of fuel, food and
building materials and cannot wait until June 1, to receive
them.
Representative Morgan stressed that having Mother Nature
take care of the Taylor highway opening may result in a road
washout. The cost to repair the culverts/washouts would
greatly exceed the estimated savings,
Representative Morgan acknowledged the Legislature's and the
Governor's commitment in covering the current year's
shortfall, but concluded that the cost saving measures
proposed by the governor should be done by other means.
Representative Morgan read from a letter by Holland America
(copy on file).
This year we will begin our operation on the Taylor
Highway May 19, Our capacity for this tour is 110
passengers in each direction. If the Taylor Highway is
inaccessible we will be forced to fly passengers
between Tok and Eagle. With the cost of chartering
aircraft to fly 220 people between Tok and Eagle at
$15,000 per day, we are looking at a total cost of
$195,000. If in the future we could not depend on the
Taylor Highway being maintained as in the past, and we
were forced to cancel operations until June I our
company could see a potential revenue loss of
$1,478,620. This figure was calculated assuming 220
passengers traveling each day between Fairbanks and
Dawson from May 19 to June 1. The price of the tour
between Fairbanks and Dawson is $517 per person.
Representative Morgan read from a letter by Marina Trudelle
(copy on file).
You see I am 16 years old and I work on the Yukon
Queen. They are building another boat so that two
coaches can come in. And if the road was closed then
that would mean that I and others will be out of a job.
so please can you take into consideration of keeping
the roads nice for us to drive in.
Representative Foster read provided members with a statement
in support of Amendment 4 (copy on file). He stated that the
Administration's decision to implement austerity measures by
allowing rural roads to melt open rather than manually
clearing them has serious impact. The first issue is that,
if roads are not manually opened and instead allowed to melt
off, culverts will still be frozen and there will be a
larger number of washouts, which will lead to a loss of
portions of the roadbed.
Representative Foster stated that the second issue is that
the delayed openings were not announced until this winter.
Since these roads were already closed at the time of the
announcement it did not allow miners and other persons with
personal and commercial interests in the area an opportunity
to have needed supplies on site so that the normal spring
activities could be carried out. The fuel needed for mining
operation is a prime example. The seasons are already short
and delaying mobilization reduces the season seriously.
Mining start-up costs are high and in a shortened season it
is impossible to reach the point in production where a
profit can be realized.
The third issue is the economic impact on persons living in
Nome and the outlying communities. The Nome/Teller road
connects to the town of Teller and is also utilized by
residents living in Brevig Mission, since materials are
brought to Teller by road and then brought across the ice to
Brevig Mission. This year for instance, the materials to
rebuild the Brevig Mission store, which burned this winter,
need to be brought to Teller by truck and brought across the
ice to reduce costs and to speed construction of the new
store. He observed that there would be an impact to tourism
and the guided fishing industry in the Nome Region.
Representative Foster emphasized that if roads are going to
be allowed to melt open, this decision needs to be made in
advance so that other arrangements can be made. He
maintained that shortening the season substantially reduces
profitability and discourages the economic development.
Co-Chair Mulder acknowledged the Administration's efforts,
but emphasized that there are unanticipated repercussions.
He maintained that this reduction affects needed services in
terms of road access.
Representative Bunde asked if there have been emergency
funds allocated to assist miners in moving their supplies
during the winter.
Ms. Slagle clarified that $50 thousand dollars was allocated
to assist miners in getting their oil fuel to the 40 mile
area while the road is still frozen. Co-Chair Mulder asked
if the money could be used toward an earlier opening date.
Ms. Slagle could not answer.
Representative Bunde noted that miners would move their
equipment from the road access to their mining sites with
their own equipment. He questioned if the miners could use
their own equipment to come further out to the Taylor
Highway. He asked if the state has every let the road clear
by nature. Ms. Slagle understood that the roads have been
allowed to open up naturally in the past 15 years. She did
not know the savings.
Representative J. Davies noted that he had prepared a
similar amendment (Amendment 7). It is identical to
Amendment 4 except for the inclusion of the Kougarok Road in
Nome. He asked if the Kougarok Road should be included in
Amendment 4.
Co-Chair Mulder suggested that the $50 thousand dollars that
the department set aside for assistance to miners could be
added to the appropriation in Amendment 4 in order to fund
the opening of the Kougarok Road. Ms. Slagle stated that the
funding should be sufficient to cover the roads in Amendment
4 and the Kougarok Road.
Co-Chair Therriault suggested that the Kougarok Road be
added to the list. He noted that identified roads in order
to show how the total was reached, but that the Department
of Transportation and Public Facilities would allocate the
funding.
Representative J. Davies MOVED to amend Amendment 4 by
including the Kougarok Road/Nome Dexter Bypass. He explained
that the funding level would remain the same. The additional
$43 thousand dollar cost required to open the Kougarok Road
would be shown and the projects prorated. He clarified that
the numbers identified for the roads are allocation numbers
not appropriation amounts. There being NO OBJECTION, it was
so ordered.
(Tape Change, HFC 99 - 39, Side 2)
Co-Chair Therriault explained that he would support the
amendment because areas were not allowed time to take action
on the reduction. He suggested that the department's plan to
delay openings should be addressed in subcommittee. He
emphasized that residents need sufficient time to plan for
closures.
Representative J. Davies underscored that the Administration
was pressured to find methods of reductions. He stressed
that the roads foster economic activity in some areas. He
emphasized that there are some instances where state
services help the economy.
Representative Bunde stated that he did not criticize the
department for cutting services that did not traditionally
exist and where major economic activity was not impacted. He
expressed frustrations that there are individuals that pride
themselves on their self-sufficiency and their ability to
get along without services, do not pay taxes and are vocal
in requesting state reductions, until the cuts come close to
home.
Co-Chair Mulder observed that there would still be a little
over $80 thousand dollars in savings.
Representative Kohring agreed that there are areas that
should be fully funded. He stressed that road maintenance is
a primary function of government.
There being NO OBJECTION, Amendment 4 was adopted as
amended.
Representative Foster pointed out that if the miners use
their own equipment to reach supplies that they could
damaged the roads in areas where the road is not covered
with ice.
Representative Grussendorf MOVED to ADOPT Amendment 5 (copy
on file). Amendment 5 would add a new section on page 4,
line 6:
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS. The sum
of $1,400,000 is appropriated from the power cost
equalization and rural electric cavitalization fund
(AS 42.45.100) to the Department of Community and
Regional Affairs for the power cost equalization
program for the fiscal year endine June 30, 1999.
Co-Chair Therriault noted that the colder than usual
winter affected the consumption of fuel. He pointed out
that Power Cost Equalization (PCE) was underfunded in the
FY99 budget. He noted that the shortfall would impact
residents and vendors. He spoke in support of the
amendment and emphasized that the issue should be
addressed at another time.
Co-Chair Mulder questioned if the appropriation allowed a
rateable reduction based upon the PCE funding level.
PERCY FRISBY, DIRECTOR, DIVISION OF ENERGY, DEPARTMENT OF
COMMUNITY AND REGIONAL AFFAIRS provided information via
teleconference. He responded that the department has the
authority to prorate PCE in years where funds are not
available to fully fund the program.
Co-Chair Mulder asked why the department went forward to
spend more than was allocated. Mr. Frisby explained that PCE
exceeded the $17 million dollar cap two years ago. Since
that time PCE has been funded at 85 percent. The Division of
Energy continued the 85 percent funding level.
Representative Austerman asked where the hundred percent
figure came from.
Mr. Percy explained that full funding would be almost $23
million dollars. The amount was determined from monthly
reports by participating communities. He explained that the
number spent in the last fiscal year is used to estimate the
next.
Representative Foster spoke in support of the amendment. He
observed that PCE has been short-funded for several years.
He stressed the need to provide future funding for PCE.
Representative Grussendorf referred to legislation passed in
1983, relating to PCE. He maintained that PCE should at
least be funded at the 85 percent level.
Representative Austerman stressed that he is willing to work
on an endowment for Power Cost Equalization. He stressed
that he did not approve of the department spending more than
the amount that was appropriated by the legislature.
Representative J. Davies stressed that the legislature did
send a strong message that the ratable portion should be
used. He noted that it is hard to anticipate all the costs
and demand on the fund. He observed that there was a
particularly cold winter. It was the third coldest winter on
record in Fairbanks. He did not think that it was
unreasonable to expect that PCE would be funded at 85
percent. He pointed out that the funding would come from the
Power Cost Equalization Fund.
Co-Chair Mulder pointed out that there would only be $9
million dollars in the account for the following year if the
appropriation were approved.
Representative Bunde acknowledged arguments that the state
should do things that the people cannot do for themselves.
He noted that energy is an area that is unclear as to how
much the state should do. He stated that he reviewed gross
bingo receipts in communities that are eligible for PCE in
an attempt to identify disposal income. He observed that
there were 40 communities that receive PCE that had gross
bingo receipts in access of $1 million dollars. Some were as
high as $6 million dollars. He questioned if the state
should subsidize electrical costs in areas that have
disposal income.
In response to a question by Co-Chair Mulder, Mr. Percy
stated that in January 1999, the division identified that an
additional $1.7 million dollars would be needed. He noted
that there was a decrease in fuel cost, but an increase in
demand.
Co-Chair Mulder asked if there were discussions last fall
that there would be shortfalls. Mr. Percy stated that they
did know that they would be short. Representative J. Davies
questioned if the intent of the legislature was to fund PCE
at 85 percent.
Representative Austerman noted that his area receives a
subsidy for their ferry service. The subsidy is adjusted
during the slow time to pay for the rest of the year. There
are times when the ferry is shut down. He felt that the
amount should have been prorated when they realized there
was a shortfall.
Representative Grussendorf acknowledged concern with how the
department handled the shortfall. He emphasized that rural
Alaskans are the ones that will be impacted.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR stated that the expectation
was that the 85 percent level would be reached. She noted
other budget items were intentionally short-funded, such as
leasing. She felt that it was appropriate to fund PCE at 85
percent and noted that it had been funded at 85 percent over
the last few years. She noted that the PCE task force has
made recommendations that would bring the cost down. She
stressed that there is an opportunity to address the issue
in order to find a long-term solution to PCE. The rate in
rural Alaska is twice as high as in urban Alaska. She
recommended using the PCE fund to keep things stable this
year.
Co-Chair Mulder asked if the Administration has decided
which proposal would be supported. Ms. McConnell stated that
options are being reviewed. She stressed that they need to
check with those that will be affected to assess overall
impact. She acknowledged that there is a need to scale
back.
Representative Kapsner spoke in support of Amendment #5. She
observed that her communities have been hit be two
consecutive fish disasters.
Representative Foster stated that there are 30 villages in
his district. He observed that winters are long and that
there is not much social life. He noted that villagers use
BINGO as a way to raise money. The money stays in those
villages.
Representative J. Davies questioned the meaning of 85
percent. He stressed that the average cost of power in urban
Alaska is approximately .10 cents per kilowatt-hour. The
cost of power in rural areas is approximately .30 cents with
100 percent power cost equalization.
Mr. Percy clarified that the cost of power in Anchorage and
Fairbanks is .10 cent per kilowatt-hour. The cost in rural
Alaska is .32 cents a kilowatt-hour with 85 percent power
cost equalization. Representative Foster clarified that
rural residents pay the first ten and a half cents. The
state pays the balance 95 percent, between ten and a half
cents and fifty-four cents. Anything over .54 cents is not
paid for by the state. He observed that the actual cost per
kilowatt is approximately .40 to .50 cents.
A roll call vote was taken on the motion to adopt Amendment
6.
IN FAVOR: Davies, Foster, Grussendorf, Moses, Williams
OPPOSED: Davis, Kohring, Austerman, Bunde, Mulder,
Therriault
The MOTION FAILED (5-6).
Representative Grussendorf MOVED to ADOPT Amendment 6 (copy
on file). Co-Chair Therriault OBJECTED. Representative
Grussendorf explained that the amendment would appropriate
$11,997 thousand dollars for Perseverance Trail repairs. He
noted that the legislature appropriate funding in the FY99
budget for trail repair with the condition that the trail be
taken over by the city and borough of Juneau. The
conditional language was rejected and the trail was later
repaired through private donations. He observed that the
current appropriation would repair another portion of the
trail. He stressed that the trail needs to be repaired to
prevent liability to the state of Alaska.
Co-Chair Mulder observed that the legislature is interested
in transferring the trail to the city. He noted that program
receipt authority was considered as an encouragement. He
emphasized that it is a local trail. He observed that the
legislature is considering not plowing roads at the same
time that an upgrade of a local access trail is being
considered for funding. He emphasized that the two items are
at different levels of priority. He stated that by not
funding the repair a clear message is being sent that the
legislature is sincere about the transfer and that it needs
to happen.
Representative J. Davies stressed that the appropriation
would repair an existing park facility. He observed that the
state maintains parks facilities in other areas. He
questioned why this facility is being transferred when
others are not being transferred to the local entities.
(Tape Change, HFC 99 - 40, Side 1)
Representative J. Davies spoke in support of the amendment.
He emphasized the issue of state liability.
Co-Chair Mulder noted that this is the second request in
three years for repair to this trail. He observed that there
is no fee associated with the trail.
Representative Grussendorf reiterated concern over liability
to the state of Alaska. Representative Bunde suggested that
tort reform would protect the state from liability. He
stressed the need to sort out wants from needs.
Representative Austerman clarified that the trail is state
owned.
NICO BUS, ADMINISTRATIVE SERVICES MANAGER, DIVISION OF
SUPPORT SERVICES, DEPARTMENT OF NATURAL RESOURCE explained
that the trail is maintained by a nonprofit organization.
There is no funding through the Department of Natural
Resources.
In response to a question by Co-Chair Therriault, Mr. Bus
clarified that the request is part of the Department of
Military and Veterans Affairs' emergencies services request.
The Division of Emergency Services made a commitment to the
Division of Parks to fix the infrastructure in the Division
of Parks.
Co-Chair Therriault asked if it is time critical. Mr. Bus
explained that the request would allow the work to be down
before the heavy use period. The request is for a new bridge
on the Granite Creek Trail. The request is for general funds
to be put into the Disaster Relief Fund to reimburse the
Division of Parks.
Representative J. Davies restated his understanding that the
state would still have liability even if a sign were put up
on the trail. He noted that there have been a number of
disasters around the state where general funds were used to
repair infrastructure.
Representative Bunde disagreed that the state would be
liable for use of a trail that is clearly hazardous.
In response to a question by Representative Austerman, Mr.
Bus clarified that there is a sizable bridge that needs to
be replaced. The bridges were placed by the state Division
of Parks.
Representative Grussendorf suggested that a barrier would be
needed to prevent liability.
Representative Bunde reiterated that he did not believe the
state would be liable.
Representative Austerman stated that he was concern about
the state's liability.
Representative Williams suggested that the trail be shut
down.
Representative J. Davies responded that the state could
spend $100 thousand dollars to build a barrier to keep
people out when $135 thousand dollars would repair a
recreational facility.
A roll call vote was taken on the motion to adopt Amendment
6.
IN FAVOR: Foster, Grussendorf, Moses, Austerman, Davies
OPPOSED: Davis, Kohring, Williams, Bunde, Therriault,
Mulder
The MOTION FAILED (5-6).
Representative J. Davies WITHDREW Amendment 7.
Representative J. Davies MOVED to ADOPT Amendment 8 (copy on
file).
Page 1, Section 2. Disaster Relief Fund.
Page 1, line 10
Delete "$11,997,000"
Insert "$13,673,600"
Page 1, line 13
Delete "$9,597,000"
Insert "$11,273,600"
Representative J. Davies explained that the amendment would
restore the capital match for the Western Alaska fisheries
disaster. He stated that requiring communities to use their
FY00 matching grant funds would be the equivalent of
requiring Anchorage to use municipal assistance and revenue
sharing funds as a match to a disaster.
REPRESENTATIVE KAPSNER observed that the appropriation was
promised to the department and obligated
Ms. McConnell stated that the Governor declared the Western
Alaska fisheries a disaster. The legislature was informed
that $1.5 million dollars would be spent to match the $7
million dollars in federal funds that were made available.
She emphasized that Senator Stevens has secured $7 million
dollars in federal aid. The Administration is trying to find
alternatives. Some communities have provided matches to
their projects. She maintained that the proposed committee
substitute would prevent local communities from providing a
match. The match is required for the federal funding. She
stressed that the funding replaces wages that were lost in
the fishing industry.
Co-Chair Mulder noted that authority granted in FY99 would
allow communities to provide the match. Ms. McConnell agreed
that if money were available communities could provide the
match. She stressed that communities have loss other
revenues due to a turn down in the fisheries. She stated
that the Administration is pursuing the possibility that
communities that can provide the match might share with
others. She did not know if this were possible under the
federal program.
In response to a question by Co-Chair Therriault, Ms.
McConnell clarified that she did not know if the ability of
communities to make the match would be affected by the
proposed committee substitute.
Co-Chair Therriault referred to the Community Matching
Grants Capital program. He noted that communities receiving
money could carry forward a balance. He asked if there are
any carry-forward balances in the Municipal Matching program
that could be used to make the match.
Ms. McConnell emphasized that communities would be asked to
give up job opportunities that were provided under the
matching grant program. She emphasized that two jobs cannot
be made out of one pot of money. She reiterated that $1.5
million state dollars would leverage $7 million federal
dollars.
Co-Chair Therriault stressed that communities are being
asked to pick and chose between programs.
Ms. McConnell stressed that disasters have been treated
differently. She noted that Kenai was not asked to give up
its capital matching grant projects after the South Central
flood in order to provide the match for federal disaster
funds. She added that this is not how the Miller's Reach
fire disaster was handled. She noted that the villages have
limited resources. This is outside of the normal capital
budget area.
Co-Chair Therriault stated that there is a difference
between physical and economic disasters. Co-Chair Mulder
agreed with Co-Chair Therriault. He reviewed some of the
projects that would be funded. He maintained that the
projects in question belong in the capital budget.
Ms. McConnell stressed that it is dangerous to say that a
collapse in fisheries that comes from weather conditions is
not a disaster. She compared the fisheries disaster to a
draught. The federal government directed that the projects
be capital in nature.
Representative J. Davies stated that he would agree that the
funding should go in the capital budget if there were new
funds available. He did not think it would be fair to
require these areas to be singled out.
Co-Chair Mulder asked if the option of using the Capital
Matching Grant program was discussed and supported by the
Administration during the previous session.
Ms. McConnell clarified that the legislature made it clear
that there would be no general funds for these projects. The
Administration made its best effort to provide funding. She
noted that Bethel and Dillingham have provided matches. She
stressed that the Administration did not indicate that they
would be able to find alternative funding for the match. She
stressed that there is not a lot of cash in the villages to
be used as matching funds without sacrificing other projects
that are going to produce jobs.
Co-Chair Therriault asked if an effort was made to compare
the jobs that would be created under projects in this
appropriation to what would be created under the Capital
Matching Grant program. He emphasized that communities would
get more for their capital matching grants if they are used
to leverage federal dollars through the disaster funding.
Ms. McConnell stated that the Department of Community and
Regional Affairs worked with villages, but that there are
few villages that store up their matching grants.
Co-Chair Therriault noted that in the case of a Midwestern
draught the relief would go to the individual farmer. He did
not think that a direct comparison could be made to a
Midwestern crop failure due to draught.
Ms. McConnell noted that the future federal aid for the
disaster would be configured differently. Federal relief in
FY00 would come as direct aid to those affected.
Representative Foster asked if a match was requested during
the collapse of the timber industry. Ms. McConnell stated
that there was not a match requirement for relief to the
Southeast timber industry. She reviewed job creation
relating to the Southeast timber industry. Representative
Williams pointed out that federal relief for the Southeast
timber industry did not go through the state.
Representative Bunde noted that fisheries run in cycles. He
asked if the Administration has given thought to when a
natural disaster becomes normal economic activity. Ms.
McConnell stated that they Administration have not resolved
the issue of future years. She explained that communities
were turned down if their impact was due to low prices or
lack of market. Only communities affected by a warming of
waters were included.
Representative Kapsner questioned if funding is going to
economic diversification. She observed that one village has
a 77 percent below poverty level while 55 percent of the
community is involved in the fisheries industry.
Ms. McConnell stated that the second round of federal aid do
is structured more toward economic diversification. Projects
in the first year of relief were selected because they could
provide cash assistance in the form of wages.
Representative Austerman noted there are problems with the
fisheries in his area. He found it difficult to classify the
salmon downturn as an economic disaster.
(Tape Change, HFC 99 - 40, Side 2)
Representative Kohring stressed that relief should come from
private and non-profit assistance.
A roll call vote was taken on the motion to adopt Amendment
8.
IN FAVOR: Foster, Grussendorf, Moses, Davies
OPPOSED: Austerman, Bunde, Davis, Kohring, Williams,
Mulder, Therriault
The MOTION FAILED (4-7).
Co-Chair Mulder commented on Amendment 8. He stressed that
the Legislature and Administration still need to come to
terms with the definition of "natural disaster". He observed
that the Legislature is not in step with the current
Administration.
Representative J. Davies MOVED to ADOPT Amendment 9 (copy on
file). Co-Chair Mulder OBJECTED.
Section 5, add a new subsection
(Z) "The sum of $170,000 is appropriated from the
general fund to the Department of Corrections, division
of institutions, for staffing related costs at the Cook
Inlet Correctional Center for the fiscal year ending
June 30, 1999."
MARGARGET PUGH, COMMISSIONER, DEPARTMENT OF CORRECTIONS,
explained that the amendment would restore $170 thousand
dollars to the Cook Inlet Correctional Unit. She explained
that the original supplemental request was reduced due to a
reduction in last quarter's prison population.
Co-Chair Mulder acknowledged that the Institution was funded
a bit below their FY99 request, but emphasized that overall
prison population was decreased by at least 600 prisoners,
which were sent out of state last year. Tent camps were also
used to alleviate overcrowding. This cost in access of $10
million dollars. He maintained that the overhead at
institutions should have been diminished with the reduction
of prisoners. He felt that the department had a comfortable
cushion and should have the ability to deal with the
situation.
Representative J. Davies pointed out that they were funded
below the national norm. The original request was reduced.
He noted that $170 thousand dollars is needed to cover the
expected overtime levels.
Commissioner Pugh clarified that there are 13 institutions
within the system. She stated that the department has not
been able to identify an alternate funding source for the
supplemental request.
Co-Chair Mulder acknowledged that the budget was short
funded by $2 million dollars. He clarified that the short
funding was directly attributable to anticipated reductions
from inmates sent out-of-state. He emphasized that other
institutions had reduced populations.
Commissioner Pugh clarified that a reduction in population
was already factored into their FY99 request for in-state
institutions.
A roll call vote was taken on the motion to adopt Amendment
9.
IN FAVOR: Grussendorf, Moses, Davies
OPPOSED: Kohring, Williams, Austerman, Davis, Foster,
Therriault, Mulder
Representative Bunde was absent from the vote.
The MOTION FAILED(3-7).
Representative J. Davies MOVED to ADOPT Amendment 10 (copy
on file). Co-Chair Mulder OBJECTED.
Section 5(c) The sum of "$3,130,000" [$3,050,0001 is
appropriated from the general fund to the Department of
Corrections, division of institutions, for increased
costs associated with out-of-state contract beds for
the fiscal year ending June 30, 1999.
Commissioner Pugh repeated that the department has managed
to reduce their total supplemental request by over $1
million dollars. This request is for $80 thousand dollars.
Co-Chair Mulder observed that the request relates is for an
additional probation officer that was not approved by the
legislature. The department hired two hearing officers,
although only one was authorized in the FY99 budget. He
spoke against the request. He emphasized that the issue
would be evaluated in the full operating budget.
Representative J. Davies spoke in support of the amendment.
Commissioner Pugh clarified that probation officers, in the
institutions, act as case managers. They have a lot of paper
work associated with release. They are responsible for
making arrangements for release and for monitoring security
and treatment programs.
Representative J. Davies stated that the caseload is
unacceptably high. Co-Chair Mulder pointed out that the
bulk of work occurs prior to release. He noted that
probation officers have been increased over the last years.
A roll call vote was taken on the motion to adopt Amendment
10.
IN FAVOR: Grussendorf, Moses, Davies
OPPOSED: Kohring, Williams, Austerman, Davis, Foster,
Therriault, Mulder
Representative Bunde was absent from the vote.
The MOTION FAILED (3-7).
Representative J. Davies MOVED to ADOPT Amendment 11 (copy
on file). Amendment 11 would delete on page 13, lines 10 -
11. This amendment would delete the repeal of Section 24
(VPSO Parole Supervision Pilot Program).
Commissioner Pugh stated that the program has potential for
the future. It will allow the department to contract for a
VPSO pilot program training in probation duties.
Co-Chair Mulder stated was brought forth by his office as an
effort to increase the outreach in rural Alaska. It is
difficult to release individuals into their home communities
without supervision. The program would allow VPSO officers
to help with the transition. He noted that the program has
not been begun.
Representative J. Davies spoke in support of the amendment.
A roll call vote was taken on the motion to adopt Amendment
11.
IN FAVOR: Grussendorf, Davies
OPPOSED: Austerman, Davis, Foster, Kohring, Williams,
Mulder, Therriault
Representatives Bunde and Moses were absent from the vote.
The MOTION FAILED (2-7).
Representative Foster expressed concern with the loss of a
probation office in Nome.
Representative J. Davies MOVED to ADOPT Amendment 12 (copy
on file). Co-Chair Therriault OBJECTED.
Section 12, on page 8, line 12
Amended to read "*Sec 12. Department of Natural
Resources. The sum of $78,270 is"
Representative J. Davies explained that the amendment would
fund program service aides in the Fairbanks and Anchorage
Recorder's Office.
Co-Chair Mulder clarified that there were three portions to
the request for funding in the Recorder's Office. Two of the
portions relate to fixed costs. The other portion relates to
personal services. The proposed committee substitute covered
the fixed costs.
Representative Kohring questioned why the reduction was
recommended. He observed that the personal services would be
funded through program receipts. Co-Chair Mulder responded
that the program receipts are deposited into the General
Fund. He noted that the Recorder's Office receives receipts
in access of the amount needed to operate the program. He
pointed out that the budget gap would be increased if the
appropriation is approved.
Representative Austerman stressed that there needs to be
improvements in the system used by the Recorder's Office to
record documents.
Representative J. Davies spoke in support of the amendment.
He stressed that the Recorder's Office is purchasing
equipment to allow them to reduce the backlog. He noted that
the funding is for temporary hires. The intent is to reduce
the delay to the private sector.
Representative Austerman maintained that the problem should
be addressed in the FY00 budget. He pointed out that the
supplemental is for crisis items. He did not consider the
workload at the Recorder's Office to be a crisis.
Representative J. Davies maintained that the supplemental is
not just about authorizing items in crisis. He emphasized
that the supplemental allows fine tuning because it is
impossible to forecast some items.
Mr. Bus clarified that the Department of Natural Resources
does not control the workload. The additional positions
would stimulate the economy and result in more revenues to
the general fund. He stressed that funding would be through
program receipts. Four temporary people were hired in
September to help with the backlog. Documents were waiting
for up to five months. The money has already been spent. The
positions were hired for six months.
Representative Grussendorf noted that the cost of each
position is approximately $8 thousand dollars. He stressed
that the request would be funded through program receipts.
He stressed that miners need to have their claims recorded
in addition to having their roads plowed. He pointed out
that it is a consumer service.
Representative J. Davies observed that the state would
probably take in less money as a result of not hiring these
temporary positions.
Representative Kohring stated that if money were going to be
put back in, it should be straight across the board.
Representative Kohring MOVED to amend Amendment 12 to
reinstate full funding for the request at $92 thousand
dollars. There being NO OBJECTION, it was so ordered.
There being NO OBJECTION, Amendment 12 was adopted as
amended.
Representative J. Davies WITHDREW Amendment 13 (copy on
file).
Co-Chair Therriault MOVED to ADOPT Amendment 14 (copy on
file). Amendment 14 would increase other funds authorization
for the Public Assistance Administration to $41,090,100
million dollars.
Co-Chair Therriault observed that the authorization to
accept federal funds in the childcare benefits component had
to be increased to allow acceptance of federal Temporary
Assistance to Needy Families (TANF) funds.
JANET CLARK, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES added that the
amendment also clarifies corrects a mistake in the Public
Assistance Administration component. She explained that the
reduction that the department suggested in the grants line
of the Public Assistance Administration should have been $30
thousand dollars.
There being NO OBJECTION, Amendment 14 was adopted.
Co-Chair Mulder MOVED to ADOPT Amendment 15 (copy on file).
Page 13 Line 2 & 3
Delete: "NOT TO EXCEED $700,000,001,"
Insert: ", not to exceed 900,000,001,"
Co-Chair Mulder explained that the amendment would increase
the authority for the draw from the Constitutional Budget
Reserve from $700 million to $900 million dollars.
Representative J. Davies stated that the amount would have
to be revisited in May 1999. Co-Chair Mulder agreed and
stated that it would be included in the final appropriation.
Representative J. Davies suggested the amount be adjusted
later.
Representative J. Davies OBJECTED. He spoke against the
amendment.
A roll call vote was taken on the motion to adopt Amendment
15.
IN FAVOR: Grussendorf, Davies
OPPOSED: Austerman, Davis, Foster, Kohring, Williams,
Mulder, Therriault
Representatives Bunde and Moses were absent from the vote.
The MOTION FAILED (2-6).
Ms. McConnell clarified that the Department of
Transportation and Public Facilities will not receive
federal funding for their request of $1,513,800 million
dollars if the federal Emergency Response Fund is not
replenished. If the request is not funded the Department of
Transportation and Public Facilities will bring an amendment
to the Committee for funding.
DEPARTMENT OF ADMINISTRATION
BARBARA BRINK, DIRECTOR, PUBLIC DEFENDER AGENCY discussed
the agency's request for additional office space. She
explained that there are 14 additional positions.
(Tape Change, HFC 99 - 41, Side 1)
Ms. Brink emphasized that the agency only has a total of 36
employees. She stated that she had been looking for office
space for the past four years. She pointed out that it would
be expensive to locate office space in another building. She
noted that office space became available on the floor above.
She stressed that the location saves money, since they can
share the receptionist and library. She stressed that there
would be a cost savings. She emphasized that the agency will
still be crowed and cramped. She pointed out that the agency
has become more efficient
DEPARTMENT OF PUBLIC SAFETY
Representative G. Davis questioned if the Department of
Public Safety considered not training all of the officers.
KENNETH BISCHOFF, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF TRANSPORTATION clarified that the
intent was to train necessary new troopers not to keep the
Academy open. He noted that there is a large number of
retiring troopers. He stressed that there are moving costs
associated with replacing retiring troopers. He noted that
there were 258 authorized positions. The legislature
provided funding for 8 new troopers.
Co-Chair Mulder asked if the department hired 17 new
troopers. Mr. Bischoff confirmed that the department planned
to employ 17 additional troopers.
Co-Chair Therriault asked how replacement of retiring
troopers is decided. Mr. Bischoff explained that it varies
with bargaining units. The Public Safety Employees
Association has a seniority list. When positions open the
department is required to bid the open slots. Any employee
can submit a bid. Co-Chair Therriault noted that an officer
could be move from Barrow to Ketchikan due to the system of
seniority. Mr. Bischoff explained that there is more control
on the management level.
Co-Chair Mulder emphasized that the legislature has not cut
trooper positions.
Representative Foster expressed his frustrations in his
inability to find Department of Public Safety personnel to
contact in regards to a missing child. He attempted to
locate help on a Saturday.
HB 100 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 5:05 p.m.
HFC 2 3/08/99
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