Legislature(1993 - 1994)
01/24/1994 09:00 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
January 24, 1994
9:00 a.m.
TAPES
SFC-94, #11, Side 1 (000-510)
CALL TO ORDER
Senator Steve Frank, Co-chair, convened the meeting at
approximately 9:00 a.m.
PRESENT
In addition to Co-chairs Frank and Pearce, Senators Rieger,
Sharp, Kerttula, and Jacko were present. Senator Kelly
joined committee after the meeting was in progress.
ALSO ATTENDING:
Senator Mike Miller, Senator Robin Taylor; Randy Welker,
Legislative Auditor, Legislative Audit Division; Nancy
Slagle, Director, Division of Budget Review, Office of
Management & Budget; Tracy Cramer, Budget Analyst, Office of
Management & Budget; Mike Greany, Director, Legislative
Finance Division; and aides to committee members and other
members of the legislature.
SUMMARY INFORMATION
SB 135: An Act making a special appropriation to the
Department of Transportation and Public Facilities
to determine the cost of acquiring real property
within the right-of-way of the proposed extension
of the Alaska Railroad from Eielson Air Force Base
to the Alaska-Canada border; and providing for an
effective date.
Senator Mike Miller testified in support of SB
135. The committee voted to adopt amendment #1 by
Senator Sharp. The appropriation bill CSSB 135
($10.0) was REPORTED OUT of committee as amended.
SB 160: An Act relating to memorial scholarship loans.
Senator Robin Taylor testified in support of SB
160. SB 160 was REPORTED OUT of committee with
individual recommendations with updated zero
fiscal notes from the Department of Public Safety
and the Department of Education.
SB 243: An Act relating to the four dam pool transfer
fund.
Senator Robin Taylor and Randy Welker, Legislative
Auditor testified in support of SB 243. The bill
was HELD in committee for additional review.
SB 246: An Act relating to reimbursable service agreements
and other agreements between state agencies for
the purchase of services.
Randy Welker, Legislative Auditor, testified in
support of SB 246. Nancy Slagle, Director,
Division of Budget Review, Office of Management &
Budget, and Tracy Cramer, Budget Analyst, Office
of Management & Budget, voiced their concerns
regarding SB 246. In addition, Mike Greany,
Director, Legislative Finance Division, listed his
concerns. The bill was HELD in committee for
additional review.
SENATE BILL NO. 135:
An Act making a special appropriation to the Department
of Transportation and Public Facilities to determine
the cost of acquiring real property within the
right-of-way of the proposed extension of the Alaska
Railroad from Eielson Air Force Base to the
Alaska-Canada border; and providing for an effective
date.
(Due to machine malfunction, this part of the meeting was
not taped.)
CO-CHAIR FRANK announced that SB 135 was before committee
and invited Senator Mike Miller, sponsor of the bill, to
join the committee at the table.
SENATOR MIKE MILLER testified in support of SB 135.
Discussion was held by Senators Jacko, and Miller regarding
the possibility of a Canadian link with the proposed
extension of the Alaska Railroad. In response to Co-chair
Pearce's question of why the Alaska Railroad or Department
of Natural Resources were not involved, Senator Miller said
that Department of Transportation & Public Safety (DOT&PF)
had originated the study. Again, in response to Senator
Pearce, Senator Miller believed that DOT&PF could do this in
house but it would probably be contracted out.
(Minutes from this point reflect transcription of tape
recorded portion of the meeting.)
SENATOR SHARP MOVED for adoption of amendment #1. No
objection being raised, amendment #1 was ADOPTED.
Co-chair Frank pointed out that the fiscal note received
from the Department of Transportation & Public Safety would
not be moved with SB 135 since it is an appropriations bill.
Senator Sharp MOVED that SB 135 as amended pass from
committee with individual recommendations. No objections
being raised, CSSB 135 was REPORTED OUT of committee. Co-
chairs Pearce and Frank, Senators Rieger, Jacko and Sharp
signed the committee report with a "do pass" recommendation.
SENATE BILL NO. 160:
An Act relating to memorial scholarship loans.
Co-chair Frank directed that SB 160 be brought before the
committee and invited Senator Taylor to speak to the bill.
SENATOR ROBIN TAYLOR explained that SB 160 was introduced at
the request of Kathleen Niles, admissions clerk at the
University Alaska Southeast, Sitka. This bill would modify
the eligibility requirements for the Alaska State Troopers
under the Murphy scholarship fund to include this
certificate in the program. He went on to explain the loan
forgiveness if the graduate remains in Alaska and said that
63 percent of Sitka program graduates are employed in the
state as law enforcement personnel. He pointed out the bill
carried a zero fiscal note and had received a unanimous due
pass recommendation from the Senate HESS committee.
Co-chair Pearce MOVED that SB 135 pass from committee with
individual recommendations. No objections being raised, SB
160 was REPORTED OUT of committee with zero fiscal notes
from the Department of Education and the Department of
Transportation & Public Safety. Co-chairs Pearce and Frank,
Senators Rieger, Jacko and Sharp signed the committee report
with a "do pass" recommendation.
SENATE BILL NO. 243:
An Act relating to the four dam pool transfer fund.
Co-chair Frank directed that SB 243 be brought before the
committee and invited Senator Taylor to speak to the bill.
Senator Taylor said that SB 243 was introduced by Senate
Rules Committee at the request of Legislative Budget & Audit
after it approved a specific motion reaffirming the intent
of the legislature to appropriate from the Four Dam Pool
Transfer fund to the Southeast Energy Fund. He cited
letters from the Department of Law and maintained that if
the legislation retains current language, the needed fund
transfer cannot be accomplished in the current fiscal year.
Senator Sharp voiced his surprise at the overview from DC&RA
showing a new general fund requirement for $525,000 to
administer the electrical division. Discussion followed by
Senators Rieger and Taylor whether SB 243 would address
Senator Sharp's concern.
Co-chair Frank invited Randy Welker, Legislative Auditor, to
speak to SB 243. RANDY WELKER explained that when the Four
Dam Pool Transfer Fund was established the language
accompanying it directed sub-accounts for that money into
the three different funds including the "subject to
appropriation" language. The corresponding appropriations
were then written directly out of the sub-funds and the
appropriation link between the Transfer Fund and the sub-
funds was inadvertently left out. He said that SB 243 is a
technical amendment to accomplish the legislature's original
intent and would not cause any inter-fund problems since all
sub-accounts are within the general fund.
Co-chair Frank asked for a flow chart prepared by
Legislative Finance to be included in the members' files.
Senator Sharp requested the Department of Community &
Regional Affairs to give the committee an update on the new
energy division. It was decided that on January 28, 1994
during the budget overview, the energy division would be
reviewed. Senator Kerttula asked that Donald Harris from
McGrath be invited to come before committee and speak to
these issues.
Co-chair Frank announced that SB 243 would be HELD in
committee.
SENATE BILL NO. 246:
An Act relating to reimbursable service agreements and
other agreements between state agencies for the
purchase of services.
Co-chair Frank directed that SB 246 be brought before the
committee and invited Randy Welker, Legislative Auditor, to
speak to the bill.
Randy Welker said that SB 246 dealt with RSAs (reimbursable
service agreements). The primary impetus for this
legislation was an auditor's report released last interim on
the commissioner's office in the Department of Health &
Social Services. The audit objected to the manner in which
the commissioner's office was using RSAs to bring money into
the commissioner's office appropriation increasing the level
of expenditure authority for the Commissioner after the
legislature and Governor had established a lower expenditure
authority amount. He did not want to apply that all RSAs
were troublesome or invalid but felt this legislation will
provide some clarification in statute. He did not believe
it would add any additional requirements that do not exist
in the system at present. It provides focus and emphasis
from the legislature on the appropriate use of RSAs. He
said the statute as amended would state that an RSA could
not be used to transfer money between appropriations and
provides several rules for the use of RSAs. First, it would
require legal authority to request the service requested,
secondly, legal authority to provide the service requested,
and finally, when that service has been provided, the
billing for the service is based on an actual cost of the
service provided.
Co-chair Frank asked if the service had to be provided. Mr.
Welker answered that unless a service has been provided,
there is no executed agreement, and no basis for billing.
In answer to Senator Rieger's question whether LB&A
routinely peruses RSAs, Mr. Welker said that they did not go
out of the way but staff is aware of the potential for abuse
or misuse of RSAs. In answer to another question by Senator
Rieger, Mr. Welker reiterated that SB 246 will help clarify
what the legislature believes to be the legitimate use of
RSAs.
Senator Jacko asked if OM&B had a position statement
available. Co-chair Frank invited Nancy Slagle, Director,
Division of Budget Review, Office of Management & Budget,
and Tracy Cramer, Budget Analyst, Office of Management &
Budget to join the committee at the table.
NANCY SLAGLE explained that until the mid-80s there were
such statutory requirements in the purchasing area of the
statutes. The administration feared that under SB 246
instances may occur where there may be the lack of statutory
authority but some expertise may be needed to be purchased
from another agency. Another area of concern is if the
legislature in their budget process decided to put money
into a certain component for accountability purposes and
approved the transfer of those funds to other components to
provide the services, it may be questionable under SB 246
whether there is an actual contractual arrangement between
those components.
In answer to Senator Rieger, Ms. Slagle replied that a
written agreement has historically been used as a
contractual agreement between agencies. The only problem
would be if the money is placed in a particular component
but the services are not provided in that component but
provided elsewhere. She said that OM&B provides written
procedures for RSAs to the agencies. It provides not only
the procedures but oversight for those RSA agreements. She
assured the committee that the department is very careful
about what it approves and disapproves.
Senator Sharp asked if OM&B had the authority to prohibit
RSAs between divisions or sections within a department. Ms.
Slagle answered that OM&B was able to oversee all RSAs
between divisions or departments. Senator Rieger wanted to
know if there was a technical definition of agency and if an
agency could move appropriations within an agency. Ms.
Slagle believed there was a definition of agency but would
provide that information to the committee.
Co-chair Frank requested OM&B, Randy Welker and Mike Greany
to propose a mutually agreed upon amendment that would not
unduly restrict but eliminate potential for abuse of RSAs.
Mike Greany cautioned the committee that any amendment made
should not effect the legislature's ability to build in
transfers within the budgeting process.
Co-chair Frank announced that SB 246 would be HELD in
committee.
ADJOURNMENT
The meeting was adjourned at approximately 10:00 a.m.
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