Legislature(2003 - 2004)
03/26/2004 09:01 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
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MINUTES
SENATE FINANCE COMMITTEE
March 26, 2004
9:01 AM
TAPES
SFC-04 # 59, Side A
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:01 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice Chair
Senator Fred Dyson
Senator Donny Olson
Senator Ben Stevens
Also Attending: DENNY DEWITT, Special Assistant to the Governor;
LUCKY SCHULTZ, Staff to Senator Fred Dyson; CHERYL FRASCA,
Director, Office of Management and Budget, Office of the Governor
Attending via Teleconference: From Ketchikan: JAMES VAN HORN, State
Commander, Alaska Department of the American Legion, From
Anchorage: LEON BERTRAN, State Services Officer, Alaska American
Legion
SUMMARY INFORMATION
SB 301-PIONEERS' HOMES/VETERANS' HOMES
The Committee heard from the Office of the Governor and took public
testimony. Three amendments were adopted, and the bill reported
from Committee.
SJR 3-CONST AM: APPROPRIATION/SPENDING LIMIT
The Committee heard from the bill's sponsor and the Office of
Management and Budget. One amendment was adopted, one was offered
but withdrawn from consideration, and two were provided for
Committee review. The bill was held in Committee.
CS FOR SENATE BILL NO. 301(HES)
"An Act relating to the Alaska Pioneers' Home and the Alaska
Veterans' Home; relating to eligibility for admission to the
Alaska Pioneers' Home and Alaska Veterans' Home; relating to
the eligibility of residents for the Alaska Pioneers' Home and
the Alaska Veterans' Home for general relief assistance;
relating to state veterans' home facilities; making conforming
amendments; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that the Senate Rules Committee by Request
of the Governor sponsors this legislation. He noted that the
legislation would establish "a statutory framework for the
operation of a Veterans Home in accordance with federal law," and
would provide the Department of Health and Social Services the
ability to acquire additional funding sources for the Alaska
Pioneers' Home and Alaska Veterans' Home systems. He noted that a
Letter of Intent accompanies the bill.
DENNY DEWITT, Special Assistant to the Governor, Office of the
Governor stated that CS SB 301(HES) would allow the Palmer Pioneer
Home to be converted into the State's Veterans' Home, culminating
twenty years of efforts to create such a Home in the State. He
reviewed that, at the direction of Governor Frank Murkowski, the
Administration worked with the federal Veterans Administration (VA)
to determine workable parameters through which a Home could become
a reality; and it was through this process, he continued, that it
was concluded that converting the existing Palmer Pioneers' Home
into a Veterans' Home could enable veterans to be able "to secure
the veterans benefits to which they are entitled."
Mr. DeWitt continued that, initially, the VA has specified that 79
of the Home's 82 total bed capacity would be for veterans. However,
he furthered, after lengthy discussions, the VA is contemplating
granting a waiver to the State through which the entire 82 beds
would be available for veterans. He mentioned that after an the
Palmer Home inspection and a review of the both the Palmer and
Anchorage Pioneers' Home programs, the VA was "somewhat amazed at
the quality and type of care" being offered in the Pioneers' Home
system, and were contemplating incorporating some of the State's
program into its national VA system.
Mr. DeWitt noted that the VA would pay approximately 65 percent of
the estimated $3.5 million capital improvements that would be
required to align the Palmer facility with VA construction
standards, and he stated that a final agreement with the VA is
nearing completion. He clarified that the State's funding support
for this endeavor is included in the FY 04 Supplemental
Appropriations bill, and he expressed that the adoption of this
bill would provide for the Veteran's Home authorization and would
allow the State to move forward were the supplemental funding
request authorized.
Mr. DeWitt explained that the bill's drafting incorporates the term
"and Veteran's Home" everywhere in Statute that there is a
reference to the Pioneers' Home. He also noted that the bill would
provide the State the ability to require Home residents to seek
other forms of assistance, such as Medicaid, prior to using the
assistance provided by the Home.
He noted that the Administration has worked with veterans and
Pioneers' Home groups to address their concerns. He also pointed
out that this committee substitute addresses the preponderance of
the concerns expressed regarding the transition phase of the
project. He stressed that the bill would specify that no current
resident of the Palmer Pioneers' Home would be displaced as a
result of this legislation. He stated that the State has received
transitional authority from the VA that would allow for a gradual
transition to the 75-percent veterans/25-percent non-veteran
ultimate occupancy, as required by the federal VA home system. He
reminded that additional information had been provided to the
Committee during the February 5, 2004 Veteran's Home Presentation.
Senator Dyson asked regarding the correctness of the grammatical
language change regarding the word "voter" to "voter's" in Sec. 2,
subsection (10) on page three, line three that reads as follows.
(10) The address of a voter as it appears on an official voter
registration card is presumptive evidence of the person's
voting residence. This presumption is negated only by the
voter's [VOTER] notifying the director in writing of a change
of voting residence.
New Text Underlined [DELETED TEXT BRACKETED]
Co-Chair Green stated that the question should be deferred to the
bill's drafter.
Mr. Dewitt agreed that this was a drafting change.
Senator Dyson asked regarding how the Statute change would affect
the other Pioneers' Homes in the State.
Mr. Dewitt understood that this change would not have any affect on
the State's other Pioneers' Homes as the change would be limited to
adding the term "and Veterans' Home" following any Statutory
references to the Pioneers' Home.
Senator Dyson asked whether the reference to the Pioneers' Home
should more correctly be referenced as "Pioneers' Homes" in the
bill's title and in body of the bill.
Mr. Dewitt again deferred to the bill's drafter.
Co-Chair Wilken stated that this question would be addressed with
the bill's drafter.
[NOTE: The bill's drafter, Jean Mischel, Attorney, Legislative
Legal Services, stated that drafting regulations require the
singular rather than the plural noun to be used, and use of such is
not a limiting factor.]
Amendment #1: This amendment inserts the words "Sitka and at other"
following "at" in Sec. 15, subsection (a) page 6, line 31. This
language would read as follows.
Sec. 15. AS 47.55.010 is repealed and reenacted to read:
Sec. 47.55.010. Maintenance of Alaska Pioneers' Home and
Alaska Veterans' Home. (a) The state shall maintain facilities
known as the Alaska Pioneers' Home at Sitka and at other sites
designated by the commissioner of health and social services.
Co-Chair Green, by request, moved for the adoption of Amendment #1.
Co-Chair Wilken objected for explanation.
Co-Chair Green explained that this language was included in the
original Statute; however, she continued, as the Statute was
repealed and reenacted, this phrase was deleted. She noted that the
Pioneers' Home and others have requested that the original language
be retained.
Mr. DeWitt stated that the language was omitted as the result of a
"stylist drafting decision", and, he noted that the Administration
supports the amendment.
Co-Chair Wilken removed his objection.
There being no further objection, Amendment #1 was ADOPTED.
Amendment #2: This amendment inserts ", up to 50 percent of the
total floor space in a home," in Sec. 15 (e) on page eight, line
seven, following "space".
Co-Chair Green moved to adopt Amendment #2.
Co-Chair Wilken objected.
Mr. Dewitt explained that one component of this legislation is to
address the leasing of excess space in the Pioneers' Home system in
order to allow them to be financially viable.
Co-Chair Green asked for clarification regarding where this
proposed language should be inserted, as she noted, it might be
more correctly placed on line six as opposed to line seven.
Mr. DeWitt understood the location of inserting the language to be
correct.
Co-Chair Wilken removed his objection.
There being no other objection, Amendment #2 was ADOPTED.
Senator Dyson noted that language on page six, line 26 also
contains language pertinent to his earlier concern regarding the
singular and plural correctness of Pioneers' "Home" verses "Homes."
JAMES VAN HORN, State Commander, Alaska Department of the American
Legion, testified via teleconference from Ketchikan in support of
the bill. He stated that the veterans groups in Alaska have been
actively involved in the long-term efforts to establish a Veterans'
Home in the State. He noted that the minimum per veteran VA
monetary contribution is $26.95 per day. This he calculated would,
for an 82-bed facility, amount to $800,000 in new federal monies to
be available to the State, per year, to assist in offsetting the
cost of operating the facility.
LEON BERTRAN, State Services Officer, Alaska American Legion,
testified via teleconference from Anchorage and also spoke in favor
of this legislation.
Mr. Van Horn voiced his appreciation for Legislature's efforts in
support of establishing a Veterans' Home and for their funding
appropriation to support the 2003 Veterans' Home Study.
Co-Chair Wilken clarified that the funding support for this
legislation is included in the FY 04 Fast Track Supplement bill
rather than in the Department of Health and Social Services fiscal
note #1 which is a zero fiscal note.
AT EASE 9:20 AM / 9:20 AM
Conceptual Amendment #3: This amendment corrects the placement of
the language being inserted by Amendment #2 to specify that the
words being inserted should be inserted on page eight, line six
rather than line seven. This language would read as follows.
(e) The department may engage in activities directed to
increase revenue from a home. These activities may include the
lease of excess bed or floor space, up to 50 percent of the
total floor space in a home, or lease of space or buildings
that are not in use or are underutilized.
Co-Chair Green moved for the adoption of Conceptual Amendment #3.
Without objection, Conceptual Amendment #3 was ADOPTED.
Co-Chair Green moved to report the bill, as amended, and the HES
Committee Letter of Intent from Committee with individual
recommendations and accompanying fiscal note.
There being no objection, CS SB 301(FIN) was REPORTED from
Committee accompanied by the HES Committee Letter of Intent and
with zero fiscal note #1 from the Department of Health and Social
Services.
CS FOR SENATE JOINT RESOLUTION NO. 3(JUD)
Proposing an amendment to the Constitution of the State of
Alaska relating to an appropriation limit and a spending
limit.
This was the sixth hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this legislation would result in a
Constitutional spending limit.
Amendment #4: This amendment deletes language in the committee
substitute, Version 23-LS0296\B on page one, line two as follows.
, and to deposits into the budget reserve fund
In addition, this amendment deletes all language on page two, line
30 through page three, line four of the Version "B" committee
substitute. The language being deleted reads as follows.
Sec. 2. Article IX, sec. 17 (c), Constitution of the State of
Alaska, is amended to read:
(d) The [IF AN APPROPRIATION IS MADE FROM THE BUDGET
RESERVE FUND, UNTIL THE AMOUNT APPROPRIATED IS REPAID, THE]
amount of money in the general fund available for
appropriation at the end of each [SUCCEEDING] fiscal year
shall be deposited in the budget reserve fund. The legislature
shall implement this subsection by law.
New Text Underlined [DELETED TEXT BRACKETED}
Furthermore, the amendment deletes language on page three, lines
nine through eleven of the committee substitute, version "B" as
follows.
…The 2004 amendment relating to deposits to the budget reserve
fund (art. IX, sec. 17(d) first applies at the end of the
fiscal year 2005 and applies thereafter.
Senator Dyson, the bill's sponsor, moved to adopt Amendment #4. He
stated that this amendment is being offered in response to a
question from Senator Hoffman regarding whether this legislation
violates the single subject rule, by specifying "in this
Constitutional amendment legislation" where the money would be
deposited.
Co-Chair Wilken objected for further clarification.
Senator Dyson explained that this amendment would delete language
that specified, "where any excess monies above the limit would be
deposited." As a result, he continued, the original Constitutional
language that specifies that excess funds would be deposited into
an interest bearing account would be retained. The original
language, he continued, provides the Legislature with the
flexibility to deposit those funds wherever they decided, to
include the Constitutional Budget Reserve (CBR) and the Statutory
Budget Reserve.
LUCKY SCHULTZ, Staff to Senator Fred Dyson, noted that this
amendment would eliminate the section in the Version "B" committee
substitute that referenced the deposit of funds into the CBR. He
shared that in order to avoid violating the single rule order, "the
decision was made to not encumber the resolution" with this CBR
issue.
Co-Chair Wilken understood therefore that the affect of the
amendment would be to remove the requirement that any excess funds
must be deposited into the CBR. Continuing, he stated that the
removal of this language would provide the Legislature the option
of depositing funds either into the CBR or the budget reserve.
Mr. Shultz summarized that were this amendment adopted, the
original CBR language would be unchanged. Furthermore, he stated,
the requirement that any draw from the CBR fund must be repaid,
would continue.
Co-Chair Wilken removed his objection.
There being no further objection, Amendment 4 was ADOPTED.
Amendment #3: This amendment inserts "and except as provided in (d)
and (e) of this section" after "section" in Section 1, Section 16
on page one, line six of the Version "B" committee substitute.
Furthermore, this amendment deletes all material in Version "B",
Section 16, subsection (d) on page two, lines 23-29 and replaces it
with the following.
(d) An appropriation that exceeds the appropriation limit
under this section may be made for any public purpose
identified in a declaration of emergency that is issued by the
governor as prescribed by law.
(e) If the governor declares that an extraordinary
circumstance exists, upon the affirmative vote of at least
two-thirds of the members of each house, this legislature may
adopt an appropriation that exceeds the appropriation limit
under this section to address the extraordinary circumstance.
The declaration shall identify the specific extraordinary
circumstance, specify the amount of each appropriation the
governor requests, and identify the time period during which
expenditures under each appropriation will be made.
Senator Dyson moved to adopt Amendment #3, and objected for
explanation.
Mr. Shultz explained that during previous Committee hearings on
this bill, there was disagreement as to whether extraordinary
circumstances and emergencies "should be lumped together." Upon
further review, he continued, the determination was that the
Governor should be able to declare an emergency "as he does now
without the necessity of having to convene the Legislature" in
order to acquire a two-thirds approval. Therefore, he continued,
this amendment would serve to separate the extraordinary
circumstance language from the emergency language and thereby allow
the Governor to declare an emergency, as currently allowed under
law. Furthermore, he stated, the extraordinary circumstances
language has been retained in that the Governor could declare an
extraordinary circumstances with the requirement that its
appropriation must be approved by a two-thirds vote of the
Legislature. This action, he declared, would provide the Governor
and the Legislature "with broad latitude" to address whatever
extraordinary circumstance might develop.
Co-Chair Green asked whether the Committee would be addressing, for
the record, the definition of what would be recognized as an
extraordinary circumstance.
Mr. Shultz stated that rather than identifying what would
constitute an extraordinary circumstance in this legislation, the
sponsor desires to allow the Governor and the Legislature to make
that determination "at the time."
Co-Chair Green voiced objection to the amendment.
Co-Chair Green removed her objection.
Co-Chair Wilken acknowledged that there is concern about the
definition of extraordinary circumstance.
Co-Chair Green reminded the Committee that, approximately four
years prior, there had been "terrible difficulty" in arriving at
the definition of an emergency and the declaration of an emergency.
Therefore, she expressed her "concern that the term extraordinary
circumstances could be expanded to mean anything." She requested
that, before the Committee includes this language in any Statute,
further legal analysis be conducted, as there could be a variety of
interpretations. She asked whether other states' experiences in
this field could be provided.
Mr. Shultz noted that the State of Connecticut, which has similar
legislation in their Constitution, segregates emergencies and
extraordinary circumstances. Continuing, he identified the
limitations or "sidebars" that Connecticut has placed on
extraordinary circumstances, are limited to specifying that
"repayment of bonds, loans, or other forms of indebtedness" would
not be allowed under that definition.
Senator Dyson voiced that the amendment's language should be
included in the Legislation in order to allow the State to address
things "that are unforeseen at the present time:" to include "major
construction projects" that might be in the State's future that
might require the State to expand its infrastructure, train
craftsmen, and to expand the State's ability "to supervise and
regulate major projects." He stated that this amendment was
carefully drafted to separate the terms emergency and extraordinary
circumstances, in order for an emergency to be declared as
currently allowed, and in order to provide the Governor with the
ability to exceed the spending limit for an extraordinary
circumstances, provided the Legislature supports it with a two-
thirds vote.
Co-Chair Wilken stated that this language suggests that the
extraordinary circumstance determination must begin with the
Governor. He asked whether the Legislature could initiate it, and
in that case, how would the situation be coordinated with the
Governor, who may or may not support the Legislature's position.
Senator Bunde voiced the desire that both the Legislature and the
Governor could initiate the extraordinary circumstance action and
that both must agree before it advances. He reminded the Committee
of the unforeseen disruption caused by the Good Friday earthquake
in 1969 that required $900 million to address. Therefore, he
stated, substantial flexibility must be maintained in order to
continue the balance of power between the Governor and the
Legislature.
Co-Chair Wilken stated that such things as earthquakes and oil
spill disasters are not the concern being raised, as, he continued,
the concern arises "more from things that are probably less
important to the people but more important to the politics that
could get out of hand here."
Senator B. Stevens voiced agreement with the concept of providing a
mechanism for the Legislature to initiate extraordinary
circumstance action, and he declared that the Governor's ability to
veto Legislative action would provide the tool to agree or disagree
with that action. Therefore, he stated, the Governor's ability to
veto or support the Legislative initiative and the Legislature's
ability to approve or disapprove by way of the two-thirds vote
requirement would provide the balance of power.
Senator Dyson asked that thought be given to the mechanism through
which the Legislature could initiate extraordinary circumstance
action.
CHERYL FRASCA, Director, Office of Management and Budget, Office of
the Governor, observed that the Legislature would be able to
indicate their wishes regarding a Governor's extraordinary
circumstance initiative by their lack of or support by a two-thirds
vote.
Senator Dyson asked Ms. Frasca her opinion in regards to whether
the Legislature should be able to declare an extraordinary
circumstance.
Ms. Frasca responded that she would check with the Department of
Law; as she noted, an issue could result were the Legislature's
declaration in the form of a resolution, as the Governor is not
permitted to veto a resolution.
Senator Dyson understood therefore, that while Senator B. Stevens
would be correct in that the Legislature could initiate a
resolution declaring an extraordinary circumstance and appropriate
funds in support of that resolution, the Governor could veto the
appropriation.
Senator Dyson moved to withdraw Amendment #3.
There being no objection, Amendment #3 was WITHDRAWN from
consideration.
AT EASE 9:41 AM / 9:44 AM
Amendment #5: This amendment, drafted to Version "B" deletes the
word "Reconsideration" in Section 30, page three, line seven and
replaces it with "Repeal."
In addition, Amendment #5 deletes "and applies thereafter" in
Section 30, page three, line nine.
Furthermore, Amendment #5 deletes all material in Section 30 (b) on
page three, lines 12- 17 and replaces it with "(b) Section 16 of
Article IX (appropriation limit) is repealed on July 1, 2009."
Senator Dyson explained that this amendment is offered for review
purposes only as it would result, if adopted, in "a significant
policy change."
Co-Chair Wilken reiterated that this amendment is for review
purposes and that it might be formally offered at a later time.
Senator Dyson concurred. He explained that this amendment would
provide a termination date for this legislation, "four years out,"
unless the Legislature provides for another Constitutional
amendment on a State election ballot. He stated that this approach
would provide a four-year window to observe how the legislation
performs. He noted that the citizens of the State would be provided
the ability to support the legislation, or a modified version of
the legislation at that time were the Legislature to support its
being offered for continuation.
Senator Dyson opined that a spending limit would be supported by
those voters who might not understand some of the issues that might
be negatively affected in the future by a unforeseen situation.
Continuing, he noted that in four years time, there might be a need
to modify the spending limit legislation, and he noted that as the
resolution is now written, it would be automatically placed on the
ballot, without the requirement for modification. He declared that
spending caps are popular with the voting public. The decision
regarding whether the legislation might require some modification
before it is again placed on the ballot should be, he attested, a
policy call made in this Committee.
Amendment #6: This amendment, drafted to Version "B," deletes the
word "Reconsideration" in Section 30 on page three, line seven and
replaces it with "Repeal."
In addition, Amendment #6 deletes "and applies thereafter" in
Section 30, page three, line nine.
Furthermore, Amendment #6 deletes all material in Section 30 (b) on
page three, lines 12-17 and replaces it with the following
language.
(b) On July 1, 20009, Section 16 of Article IX (appropriation
limit) is repealed and readopted as it read on January 1,
2003.
Senator Dyson stated that Amendment #6 is presented for Committee
review, in the same manner as Amendment #5. This amendment, he
continued, would repeal the legislation but would reinstitute the
spending cap that was put into effect in approximately 1982, which
he stated, some argue to have been ineffective. He stated that this
language would leave the Legislature with nothing and require that
"one-third of the budget be expended on capital."
Senator Dyson asked the Members to review these amendments and the
subsequent policy calls they might present.
Senator Dyson stated that the Legislative Finance Division would be
forthcoming with an additional amendment, as they have determined
that language in the bill pertaining to an "average in the formula"
does not do what was intended.
Ms. Frasca also noted that there would be another Legislative
Finance amendment that would address a duplication in services
issue.
Senator Dyson commented that he is "frustrated by the process but
absolutely delighted by the product" that is being developed. He
noted that similar legislation with "similar conclusions" is being
addressed in the House of Representatives.
The bill was HELD in Committee.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 09:51 AM.
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