Legislature(1993 - 1994)

03/26/1994 10:05 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                         March 26, 1994                                        
                           10:05 a.m.                                          
  SFC-94, #38, Side 2 (000-end)                                                
  SFC-94, #40, Side 1 (000-end)                                                
  SFC-94, #40, Side 2 (575-135)                                                
  CALL TO ORDER                                                                
  Co-chairman   Steve   Frank   convened    the   meeting   at                 
  approximately 10:05 a.m.                                                     
  In addition to Co-chairs Frank and Pearce, Senators Kerttula                 
  and  Sharp were present.   Senators Jacko, Kelly, and Rieger                 
  did not attend.                                                              
  ALSO ATTENDING:  Bruce Botelho,  Attorney General, Dept.  of                 
  Law;  Richard Burton, Commissioner,  Dept. of Public Safety;                 
  Jim Baldwin, Assistant Attorney General,  Dept. of Law; Dick                 
  Pegues, Director, Administrative Services Division, Dept. of                 
  Law; C.W. Swackhammer, Deputy  Commissioner, Dept. of Public                 
  Safety; Janet  Clarke, Director, Division  of Administrative                 
  Services,  Dept.  of  Health  and Social  Services;  Shirley                 
  Minnich,  Director,  Division  of  Administrative  Services,                 
  Dept. of Corrections; Kim Elton, Executive  Director, Alaska                 
  Seafood Marketing Institute, Dept.  of Commerce and Economic                 
  Development; Nancy Slagle, Director of Budget Review, Office                 
  of  Management and  Budget; Bill  Andrews, Finance  Officer,                 
  Dept. of  Natural Resources;  Alison  Elgee, Budget  Review,                 
  University   of  Alaska;   Dana   Latour,  fiscal   analyst,                 
  Legislative Finance Division; and aides to committee members                 
  and other members of the legislature.                                        
  SUMMARY INFORMATION                                                          
  SB 288 -  APPROP: GOVERNOR'S SUPPLEMENTAL                                    
            Overview was had  of Secs. 15  through the end  of                 
            the bill  as well  as amendments.   Testimony  was                 
            presented  by  Nancy  Slagle, Janet  Clarke,  Bill                 
            Andrews,  Shirley  Minnich, C.W.  Swackhammer, and                 
            Kim  Elton.   The  bill  was subsequently  HELD in                 
            committee for further review.                                      
  HB 454 -  APPROP: COST OF OIL/GAS LITIGATION                                 
            The committee met in an extended Executive Session                 
  with           Attorney General Bruce Botelho  and Assistant                 
                 Attorney   General   Jim   Baldwin.      Upon                 
                 reconvening  in  regular  session,  CSHB  454                 
                 (Fin)  was REPORTED OUT  of committee  with a                 
                 "do pass" recommendation.                                     
  SB 288 -  APPROP: GOVERNOR'S SUPPLEMENTAL                                    
       An  Act  making  and  amending  operating  and  capital                 
       appropriations    and    ratifying     certain    state                 
       expenditures; and providing for an effective date.                      
  HOUSE BILL NO. 455                                                           
       An  Act  making  and  amending  operating  and  capital                 
       appropriations    and    ratifying     certain    state                 
       expenditures; and providing for an effective date.                      
  [Cross reference  between SB  288 and HB  455.  Most  of SFC                 
  discussion of supplemental  funding relates to  SB 288.   HB
  455 was  the supplemental  bill that  ultimately passed  the                 
  1994 legislature.]                                                           
  Co-chair Frank  directed  that  SB  288 be  brought  on  for                 
  discussion and that  sectional review of the bill  (begun at                 
  the  March  24,  1994,  meeting)  continue.   NANCY  SLAGLE,                 
  Director of Budget Review, Office  of Management and Budget,                 
  again came before committee to conduct the following review:                 
  Sec. 15.  Contains a $244.4 appropriation for permanent fund                 
  dividend  hold  harmless  funding   in  direct  relation  to                 
  caseload increases  generated by  AFDC  and other  programs.                 
  Senator Kerttula  noted that  the funding  derives from  the                 
  permanent  fund and  suggested that  hold  harmless coverage                 
  should no longer be provided.                                                
  Sec  16.    Provides  a  $7,674.5 appropriation  to  medical                 
  assistance  for judgments  and settlements.   JANET  CLARKE,                 
  Director, Division  of  Administrative  Services,  Dept.  of                 
  Health and Social  Services, explained that funding  relates                 
  to  three  primary  cases,  the  first   two  of  which  are                 
  relatively small.  The first is a $604.6 (50% federal funds)                 
  superior court judgment for Our Lady of Compassion, relating                 
  to a rate appeal case.   The second involves Alaska Regional                 
  Hospital (formerly Humana Hospital) and  relates to a $704.9                 
  (50% federally funded) attorney general settlement of a 1986                 
  rate appeal case.  The major  portion of the request relates                 
  to  a  $5.8  million judgment  by  the  supreme  court in  a                 
  decision relating to the department's Medicaid  rate setting                 
  system for nursing homes.  The superior court ruled, and the                 
  supreme  court reaffirmed,  that  the state's  Medicaid plan                 
  violated procedural  requirements of  federal law.   Federal                 
  law requires that state payment rates be reasonably adequate                 
  to meet costs  of an  efficiently and economically  operated                 
  facility.  The court found that  the state Medicaid plan had                 
  procedural  flaws  in  determining  what were  "economically                 
  operated and efficiently operated facilities."                               
  In  the  major dispute,  the state  was  sued by  the Alaska                 
  Hospital Nursing Home Association on behalf of nursing homes                 
  statewide.  Ms.  Clarke stressed that  85 to 90% of  revenue                 
  for nursing homes in Alaska flows from the Medicaid program.                 
  The federal government  did not participate in  the lawsuit.                 
  Normally, 50%  would be  funded by  the federal  government.                 
  The  decision not  to participate has  been appealed  by the                 
  state for several of the years with approved Medicaid plans.                 
  The department is hopeful of  a determination by the federal                 
  government that will  allow for  reduction of general  funds                 
  and  replacement  with  federal  moneys.    However,  it  is                 
  unlikely the  $5.8 million  supreme court  judgment will  be                 
  split 50/50.                                                                 
  Co-chair Frank asked why the federal government was not sued                 
  along with the state.  Ms. Clarke deferred to staff from the                 
  Dept. of Law.   Discussion  followed between Co-chair  Frank                 
  and Ms.  Clarke regarding  the federal  claim process.   The                 
  department hopes for a decision by the end of March.                         
  Sec. 17.  Provides a $5,045 million appropriation to medical                 
  assistance to cover  increased participation and payment  of                 
  FY 93 bills  in FY 94.  Co-chair Frank asked how the request                 
  relates to  department efforts  to reduce  Medicaid.   Janet                 
  Clarke explained that  last year, based on  early projection                 
  numbers, the  department "gave out  $4.5 million out  of our                 
  Medicaid  program."   Projections  remained  on track  until                 
  April, May, and  June, the last  three months of the  fiscal                 
  year, when the  department determined that the  money should                 
  have  remained in the Medicaid program.  The department thus                 
  ended up "pushing" $7.8 million  in FY 93 bills into  FY 94.                 
  In FY  94, the  legislature reduced  the Medicaid  budget by                 
  $4.5 million  and  asked the  department  to look  for  cost                 
  containment to live within provided funding.  The department                 
  found $7 million in cost containment,  but it was not enough                 
  to make up for  the cumulative effect of FY  93 bills pushed                 
  into FY 94 and the reduction.                                                
  Discussion  followed  concerning   the  number  of  eligible                 
  Medicaid recipients and growth projections.  Co-chair  Frank                 
  voiced concern that  increases in  the number of  recipients                 
  appear to be outstripping the population growth.                             
  Further comments  followed regarding attempts to limit rates                 
  and effect cost containment.                                                 
  Responding  to  a  question  from  Senator  Sharp concerning                 
  reductions to the  statutory list of priority  services, Ms.                 
  Clarke said that the Governor was reluctant to reduce any of                 
  the listed services.  The department followed his direction.                 
  Ms. Slagle added that the Governor believes  there are other                 
  means of achieving cost reductions.                                          
  In the course of further discussion with Co-chair Frank, Ms.                 
  Clarke said  that one  cost containment  effort denied  rate                 
  increases for  physicians and dentists.   In  response to  a                 
  question  from Senator Kerttula,  Ms. Clarke  explained that                 
  60% of the Medicaid budget is either mandatory or related to                 
  difficulties in reducing facility rates.   Other states have                 
  also been hamstrung by federal law.   State efforts in court                 
  continue to lose.                                                            
  Sec.  18.   Contains  a  $1,842.5 appropriation  for medical                 
  assistance.    It  relates  to  the  disproportionate  share                 
  reimbursement to private hospitals  (Charter North and North                 
  Star) for indigent care.  Ms. Clarke distributed information                 
  (copy appended  to these  minutes as  Attachment A)  showing                 
  disproportionate share payments.  She then read printed text                 
  from the document and described  the movement of funding  as                 
  set forth on the accompanying flow  chart.  The $5.4 million                 
  GF/MHT  savings  results  from the  fact  that  more federal                 
  dollars are available  to replace  current general funds  in                 
  API's budget.  However, in order to achieve the savings from                 
  API, the department must pay private hospitals more.   Rules                 
  governing the program do not allow the state to discriminate                 
  against private hospitals.                                                   
  Sec. 19.  Provides a $3,567.4 appropriation in federal funds                 
  for  increased Indian  health service  payments for  medical                 
  assistance.   Janet Clarke explained that the program is all                 
  federal funds through Medicaid.  Senator Kerttula asked that                 
  department staff inquire concerning a  proposal to merge the                 
  federal  program  into  state health  care  offerings.   Ms.                 
  Clarke  said   that  the   department  is  concerned   about                 
  maintenance  of effort requirements  for the  Medicaid state                 
  match in any health care reform activity.                                    
  Sec. 20.  Appropriates $887.5 for general relief medical due                 
  to the increased number of  participants and includes $246.6                 
  for  FY 93 bills carried into FY 94.  Janet Clarke explained                 
  that the division is looking into the cause of the increase.                 
  The general relief  medical program has existed  since 1953.                 
  It   primarily   serves    unemployed   and    underemployed                 
  individuals.   The  primary caseload  is those  who  are not                 
  eligible for other Medicaid services.   The population group                 
  spans 21 to 64.  To qualify, one must have an income of less                 
  than $300 per month, resources of  less than $500 per month,                 
  and no  other medical coverage.   Co-chair Frank  voiced his                 
  understanding that because of general relief medical, no one                 
  is without coverage.   Ms. Clarke  concurred.  The  Co-chair                 
  then asked how  many people  the program covers  for the  $7                 
  million in  funding.   Ms. Clarke  advised of  approximately                 
  700.   She further  noted that  a number  of very  expensive                 
  cases drive the average  up.  She agreed to  provide numbers                 
  relating to  the cost  of individual  cases as  well as  the                 
  Sec. 21.   Appropriates the  $7 million in  federal receipts                 
  for the disproportionate share program flowing to API.                       
  Sec. 22.   Transfers  funds from  the waivers  authorization                 
  back to community  DD grants to  cover individuals who  were                 
  not switched  over to  the waivers  program because  of late                 
  start up.   Janet Clarke  noted that Sec.  22 duplicates  SB
  Sec. 23.   Appropriates $238.7 for McLaughlin  Youth Center.                 
  Funding is needed to cover population increases due to youth                 
  gang activities.  Janet Clarke spoke to an increase, at both                 
  McLaughlin and the  Johnson Center,  of "more violent  youth                 
  than  we  have  seen  in  recent  times."    The  McLaughlin                 
  detention center capacity is  25.  The last census  showed a                 
  population of 89.   For the safety  of both staff  and other                 
  residents of McLaughlin, the department  has had to increase                 
  overtime and use of non-permanent employees.                                 
  Senator Kerttula  asked if  a separate  facility is  needed.                 
  Ms.  Clarke  explained  that  the  department  is  exploring                 
  capacity   and  renovation  costs  at  the  Fairbanks  Youth                 
  Facility for "another closed detention unit."                                
  Sec.  24.  Contains  a $41.9  appropriation for  the Johnson                 
  Youth  Center.    The  situation  here  is the  same  as  at                 
  McLaughlin.   In response to a question from Co-chair Frank,                 
  Ms.  Clarke  explained  that  population  increases  at  the                 
  Fairbanks Youth Facility have been  covered from other areas                 
  of the youth facility budget, particularly from vacancies at                 
  the Nome facility.                                                           
  Sec.  25.  Shows a $323.7 fund  source change to reflect the                 
  uncollectability  of laboratory  fees.   It  was anticipated                 
  that regulations would  be in place to  commence collections                 
  for services.  That effort has been delayed.  In response to                 
  questions  from  Co-chair Frank,  Ms. Clarke  explained that                 
  tests performed  by the  state lab  are those  that are  not                 
  profitable for the private sector, or they relate  to issues                 
  for which the state must  have information (tuberculosis was                 
  cited as an example).                                                        
  Sec. 26.  Deleted.                                                           
  Sec. 27.  Deleted.                                                           
  Sec.   28.       Contains   remaining   funding    for   the                 
  disproportionate share  program.  It  involves a realignment                 
  of  funding  sources  for  API  and  program  receipts  from                 
  increased collections from  third-party payors.   Responding                 
  to  a question  from Co-chair  Frank, Ms.  Clarke said  that                 
  average  occupancy  at  API is  approximately  100  per day.                 
  There are 1,100 admissions each year.                                        
  End:      SFC-94, #38, Side 2                                                
  Begin:    SFC-94, #40, Side 1                                                
  Discussion followed  between  the Co-chair  and  Ms.  Clarke                 
  concerning negotiations with local  hospitals for evaluation                 
  and short-term care of mental health patients.  API has been                 
  downsized in an effort to provide psychiatric care closer to                 
  home  for many  patients.    Costs  at local  hospitals  are                 
  substantially higher than  API because  of hospital need  to                 
  cover the cost of medical infrastructure.                                    
  Sec. 29.  Funds $548.2 for Harborview Development  Center to                 
  cover  increased  costs   of  the   steam  heat  plant   and                 
  certification deficiencies.   Costs relating to  the heating                 
  plant  total   $50.0.      The   remaining   $498.2   covers                 
  Sec.  30.   Contains  $37.5 for  the  Dept. of  Military and                 
  Veterans Affairs to  cover an under-estimation of  50 in the                 
  FY 93 death gratuity.  The  program is no longer functioning                 
  in FY 94.                                                                    
  Sec. 31.  Provides a $4,643.8  appropriation to the Dept. of                 
  Natural Resources for fire suppression.   Funding will cover                 
  shortages in fixed costs, moneys due the federal government,                 
  and  anticipated fire  activity for the  rest of  the fiscal                 
  year.   Senator Kerttula  stressed need  to  allow fires  in                 
  uninhabited areas  to simply  burn out.   In  response to  a                 
  question from Co-chair  Frank, Mrs. Slagle advised  that the                 
  Office of Management  and Budget reduced the  agency request                 
  by  $1 million.   Co-chair  Frank  requested a  breakdown of                 
  fixed  costs.    BILL  ANDREWS,  Finance Officer,  Dept.  of                 
  Natural  Resources, directed  attention  to backup  material                 
  showing  detail  for aviation  contracts,  pilots, etc.   He                 
  further explained that  the contract  with BLM provides  for                 
  smoke jumpers.  He agreed to  provide a further breakdown as                 
  well as department policy relating to fires in remote areas.                 
  Sec. 32.  Relates  to ratification of past Dept.  of Natural                 
  Resource expenditures.   There is no  impact on the  general                 
  Sec.  33.  Appropriates $20.0 to the  Dept. of Fish and Game                 
  for additional vendor compensation for increased king salmon                 
  tag   activity.    KEVIN   BROOKS,  Director,   Division  of                 
  Administration,  Dept.  of  Fish and  Game,  explained  that                 
  vendors generally withhold a portion of the cost of licenses                 
  for compensation.  For  the salmon tag, vendors are  paid an                 
  additional amount after the department  completes a tally of                 
  sales.    This  additional  compensation  is   thus  handled                 
  differently  than  normal  compensation.   The  fiscal  note                 
  estimated $120.0.   In response to  a question from the  Co-                 
  chair, Mr.  Brooks agreed to provide  additional information                 
  on the reason for special  handling of compensation for king                 
  salmon tag sales.                                                            
  Sec. 34.  Shows a fund  source change from federal  funds to                 
  general fund program  receipts.  It  relates to an error  in                 
  budgeting of  a $60.5 grant  derived from the  University of                 
  Utah rather  than the  federal government.   Co-chair  Frank                 
  commented that supplemental requests from  the Dept. of Fish                 
  and Game are  relatively small and  asked why they were  not                 
  accommodated within  existing funds.   He referenced  intent                 
  language in last year's budget advising that the legislature                 
  would not look  favorably on supplemental requests  that are                 
  not large in relation to the  department budget.  Mr. Brooks                 
  explained  that  the  majority  of  the  budget  relates  to                 
  commercial  fisheries   (70%)  and   management.     Smaller                 
  divisions such as subsistence have very tight  budgets.  The                 
  department cannot shift funds between appropriations.                        
  Sec.  35.     Relates  to  an  additional   ratification  of                 
  expenditures  by the Dept.  of Fish and  Game.  There  is no                 
  dollar impact on the general fund.                                           
  Sec. 36.   Contains a language change,  reappropriation, and                 
  $10.0 reduction in  funding for a Wood  River sonar project.                 
  Kevin Brooks explained that the $55.0 project for Wood River                 
  was  reduced  to $45.0.   Funding  is  now proposed  for the                 
  Ugashik River.   Work on  this legislative add-on  from last                 
  year has  been conducted in conjunction  with Representative                 
  Moses' office.                                                               
  Sec. 37.   Contains a $331.9 appropriation of  motor vehicle                 
  license fee program  receipts to the Dept. of Public Safety,                 
  Motor Vehicle Administration, for data processing chargeback                 
  costs.  Nancy Slagle  explained that a portion the  fees and                 
  taxes  collected by  the  department  is  used to  fund  the                 
  division of  motor vehicles.   The remainder accrues  to the                 
  general fund.   Shortfalls  in the  chargeback have  existed                 
  since  FY  93.   The  Governor's  FY 95  budget  contains an                 
  additional $375.0 to "take care of this problem."                            
  Discussion followed  between Mrs. Slagle  and Co-chair Frank                 
  concerning use of revenues from license fee and taxes.                       
  Further comments followed by the  Co-chair regarding lack of                 
  use  of  full data  processing  chargeback funding  in other                 
  departments that  might  offset increased  need  within  the                 
  Dept. of Public Safety.                                                      
  Sec. 38.   Provides  an appropriation of  $70.4 to  contract                 
  jails  for prisoner  transportation.    C.  W.  SWACKHAMMER,                 
  Deputy Commissioner,  Dept.  of Public  Safety, came  before                 
  committee and provided a brief recap of progress made by the                 
  task force on contract jails.  He noted that  municipalities                 
  submitted  contract jail  budgets that  exceeded the  amount                 
  funded by $1.3  million.  Standards  must be applied to  the                 
  budget process so  that there is  equity and some  rationale                 
  behind the funding  mechanism.   Mr. Swackhammer advised  of                 
  two components within contract jails which interact with the                 
  Dept.  of  Corrections  for  prisoner  transportation.    An                 
  appropriation of $180.7 is used by the Dept. of Corrections'                 
  transportation  division for  airline tickets  for transport                 
  within institutions.  The inmate population within the Dept.                 
  of Corrections is above emergency  capacity.  The department                 
  is continually attempting  to even it out  among the various                 
  facilities.    A  second component  of  $317.6  provides for                 
  charter aircraft to accomplish the  same purpose, when there                 
  is need for transport of one or more prisoners.                              
  The  budget for  contract jails  was shorted  $70.4.   Costs                 
  associated  with  the Dept.  of Corrections  have increased.                 
  The last 60 days of the  fiscal year, funds for transport of                 
  prisoners will not be available.                                             
  Sec. 39.  Involves  a $1.5 million change in  funding source                 
  (from  general fund  program  receipts  to straight  general                 
  funds) for the Dept. of Transportation and Public Facilities                 
  due to the  uncollectability of rural airport  landing fees.                 
  Senator Sharp  attested to  intent within  the FY  94 budget                 
  that the department should not  collect the fees but  should                 
  instead  "look  to  other  sources  of  revenue."    The new                 
  approach is a tax increase on aviation fuel.                                 
  Sec. 40.   Contains a  $34.7 appropriation of  international                 
  airport revenue  funds to  the Dept.  of Transportation  and                 
  Public  Facilities for  a court-stipulated  settlement  of a                 
  discharged employee's retirement costs.  Senator Sharp noted                 
  need to move  $77.0 out of Sec.  9 funding for the  Dept. of                 
  Law, since that  amount reflects  attorney fees relating  to                 
  the $34.7 settlement.  Co-chair Frank asked that Mrs. Slagle                 
  review  legal  and   technical  aspects  of   proceeding  as                 
  suggested by Senator Sharp and report back to committee.                     
  Sec. 41.  Provides $1,631.3 to  the Dept. of Corrections for                 
  inmate health care for  FY 94.  Co-chair Frank  advised that                 
  funding would be further explored in subcommittee review.                    
  Sec. 42.  Appropriates $85.1 to the Dept. of Corrections for                 
  an arbitration award between the state and ASEA relating  to                 
  reinstatement of  an employee.   SHIRLEY MINNICH,  Director,                 
  Division of  Administrative Services, Dept.  of Corrections,                 
  explained that the  employee was laid  off in FY  93 due  to                 
  lack of funding.   An  arbitration settlement required  that                 
  the  department  reinstate   the  individual,  however,  the                 
  department did not receive funds for reinstatement in FY 94.                 
  Co-chair Frank requested additional information.                             
  Sec. 43.   Contains a  $39.5 appropriation to  the Dept.  of                 
  Corrections for  a court-appointed  monitor.   Senator Sharp                 
  suggested  that  the  request be  transferred  to  the court                 
  system budget.                                                               
  Sec.  44.  Appropriates  $200.0 to the  Dept. of Corrections                 
  for  operating costs of 50  additional beds at Spring Creek.                 
  Co-chair Frank  asked if  the beds  are presently  occupied.                 
  Shirley  Minnich  said   that,  due  to  an   emergency  cap                 
  situation, the facility utilized 15 of  the beds for a short                 
  period two  weeks ago.   That  was  done without  additional                 
  funding  and at  risk to  both staff  and  inmates.   If the                 
  requested  supplemental  is  approved,  the department  will                 
  attempt  to  immediately  utilize  the  beds.   The  request                 
  corresponds to a budget increment for FY 95.                                 
  Senator Sharp voiced  his understanding that more  than just                 
  bed  costs  are  involved.   Ms.  Minnich  concurred, citing                 
  personnel costs for  additional staff as  well as costs  for                 
  food and clothing for the inmates.                                           
  Sec. 45.  Provides  a $73.0  appropriation  to the  Dept. of                 
  Corrections  for additional  legal costs.   Shirley  Minnich                 
  explained  that during FY  94, the Office  of Management and                 
  Budget required that  the department pay for the services of                 
  an additional  attorney within  the Dept.  of Law  to handle                 
  "just Dept. of Corrections cases."   The department is  thus                 
  seeking supplemental  funding for  the position  for FY  94.                 
  Funding for FY  95 is  contained within the  budget for  the                 
  Dept.  of Law.   Co-chair  Frank asked  for a  comprehensive                 
  report on  legal costs  associated with  incarceration.   He                 
  requested   that   it  deal   only   with   costs  following                 
  incarceration and involve the Dept. of Corrections, Dept. of                 
  Law, Public Defender, Office of Public Advocacy, etc.                        
  Sec.  46.    Requests  extension  of  a  lapse  date  on  an                 
  appropriation for  community residential  center beds  in FY                 
  93.  The amount involved is $688.0.                                          
  Sec. 47.  Appropriates  $36.7 to the Dept.  of Environmental                 
  Conservation to  reimburse EPA for  disallowed expenditures.                 
  Co-chair Frank suggested that the  department should be able                 
  to  accommodate  the request  within  its total  $50 million                 
  budget.  Mrs.  Slagle advised that the  Office of Management                 
  and Budget turned  down several  smaller requests, but  this                 
  one includes disallowed costs dating back to 1988.                           
  Sec. 48.  Removed and place in a different bill.                             
  Sec. 49.  Contains a $220.0 appropriation to  the University                 
  of Alaska for installation  of an emergency water well  as a                 
  result  of Benzene  contamination at  the  Fairbanks campus.                 
  Moneys from the  470 fund  were received last  year to  deal                 
  with the cleanup.   In response to a question  from Co-chair                 
  Frank, ALISON  ELGEE, Budget Review,  University of  Alaska,                 
  explained  that costs  associated  with  the emergency  well                 
  exceeded  $300.0.   The  supplemental  request reflects  the                 
  actual  cost  of  drilling a  well  that  serves the  entire                 
  Sec. 50.  Appropriates a total  of $337.9 in various amounts                 
  to  various   departments  for   stale-dated  warrants   and                 
  miscellaneous claims.  Co-chair Frank  again asked why small                 
  requests  could not be accommodated within existing budgets.                 
  Mrs. Slagle  noted need to follow statutory provisions.  She                 
  further advised that  warrants have a statutory  life of two                 
  years.  After that  time, they can no longer be  cashed by a                 
  bank and  must be presented  to the Dept.  of Administration                 
  for  an appropriation.    Further discussion  of  situations                 
  involving  stale-dated  warrants followed.    Co-chair Frank                 
  question the policy  behind the  two-year limitation on  the                 
  End:      SFC-94, #40, Side 1                                                
  Begin:    SFC-94, #40, Side 2                                                
  Mrs. Slagle noted  that provisions  within the omnibus  bill                 
  change the limitation  to four years.   That is intended  to                 
  cut down on supplemental funding for miscellaneous claims.                   
  New Secs.                                                                    
  Mrs. Slagle next  directed attention to new  sections within                 
  the bill and noted the following:                                            
       DOA -  A  $35.0  appropriation  for  ethics  complaints                 
       grievance awards.   And a  request for ratification  of                 
       DOTPF - Ratification of prior year expenditures.                        
       DE&ED - Extension of receipts from processor taxes from                 
       FY 93 into FY 94 for  utilization by the Alaska Seafood                 
       Marketing Institute. (See below*)                                       
       DPS - Ratification of expenditures.                                     
       DOC  -  Funding of  $163.9  for settlement  of overtime                 
       litigation relating to the canine unit.  (See below**)                  
       DEC/DF&G/DNR - Extension  of the  lapse date for  Exxon                 
  Valdez    funding for restoration projects.  (See below***)                  
  Co-chair Frank asked for a listing of requested ratification                 
  of expenditures for all departments.   Mrs. Slagle explained                 
  that many relate  to audit  exceptions noted by  Legislative                 
  Audit in the course of review of accounting records.  Actual                 
  amounts  are  identified  in  the   bill  or  in  amendments                 
  submitted to committee.                                                      
  *In  response  to  questions raised  by  Senator  Sharp, KIM                 
  ELTON,   Executive   Director,   Alaska  Seafood   Marketing                 
  Institute,  Dept.  of  Commerce  and  Economic  Development,                 
  explained that the  institute is  seeking authority to  move                 
  approximately $608.0 from FY 93 into FY 94.  Funding derives                 
  from two sources.  One involves FY 93 receipts in the amount                 
  of $436.0 that the institute did not receive until August of                 
  FY  94.  The  remainder represents unexpended  funds from FY                 
  93.   The institute  does not  know the  total of  processor                 
  receipts until  April, approximately  three-quarters of  the                 
  way through the fiscal year.  That results in a small amount                 
  of unexpended funds.                                                         
  **Co-chair  Frank  requested  information concerning  canine                 
  unit  overtime.   Mrs. Slagle  explained  that the  Dept. of                 
  Corrections, at one  time, had a  unit which utilized  dogs.                 
  Concern arose  over how  the dogs  would be  cared for,  and                 
  staff members utilizing the dogs  were required to care  for                 
  them.   The employees felt they should  receive overtime for                 
  those services.  The  canine units were disbanded in  May of                 
  last year, after  the grievances were filed.   The requested                 
  $163.9  represents   final  settlement   amounts  for   four                 
  individuals  receiving   overtime  pay.     Co-chair   Frank                 
  requested thorough details.                                                  
  ***Mrs. Slagle referenced the request to extend Exxon Valdez                 
  Trustee funding approved by the Legislative Budget and Audit                 
  Committee and noted that the original RPL requested approval                 
  through next year  to accommodate  the federal fiscal  year.                 
  The supplemental request seeks  provision of that authority.                 
  Co-chair  Frank  asked for  a  budgetwide report  on lapsing                 
  funds  for FY  93.   He then  directed  that the  meeting be                 
  briefly recessed prior to proceeding with the agenda.                        
                       RECESS - 11:45 A.M.                                     
                     RECONVENE - 12:10 P.M.                                    
  CS FOR HOUSE BILL NO. 454(FIN)                                               
       An  Act  making  a supplemental  appropriation  to  the                 
       Department of Law  to pay  costs of certain  continuing                 
       legal proceedings; and providing for an effective date.                 
  Upon reconvening  the  meeting, Co-chair  Frank  asked  that                 
  representatives from the Dept. of Law come forward and speak                 
  to the department's supplemental request.  ATTORNEY  GENERAL                 
  BRUCE BOTELHO; JIM BALDWIN,  Assistant Attorney General; and                 
  DICK PEGUES, Director, Division  of Administrative Services,                 
  Dept. of Law,  came before committee.   Co-chair Frank noted                 
  ongoing  litigation,  advised  that the  supplemental  seeks                 
  funding  for  litigation costs,  and  asked if  an executive                 
  session would be  appropriate for  discussion of the  issue.                 
  The  Attorney  General concurred  in  need for  an executive                 
  session  since  confidential taxpayer  information  would be                 
  part of  the discussion.   Senator Kerttula  MOVED that  the                 
  committee meet in EXECUTIVE SESSION for consideration of the                 
  Dept. of Law supplemental.  No objection having been raised,                 
  IT WAS SO ORDERED.                                                           
           EXECUTIVE SESSION - 12:12 p.m. to 1:30 p.m.                         
  [Only  committee members  and staff  from the  Dept. of  Law                 
  remained in the committee room during the executive session.                 
  No recording  was made nor  were minutes  taken during  that                 
  Upon reconvening the  meeting at  1:30 p.m., Co-chair  Frank                 
  queried  members  regarding  action on  the  bill.   Senator                 
  Kerttula MOVED for passage of CSHB  454 (Fin).  No objection                 
  having  been raised,  CSHB  454 (Fin)  was  REPORTED OUT  of                 
  committee  with a  "do pass"  recommendation from  Co-chairs                 
  Pearce and Frank, and  Senators Kerttula and Sharp.   (Other                 
  members had left the meeting and did not sign the report.)                   
  The meeting was adjourned at approximately 1:35 p.m.                         

Document Name Date/Time Subjects