Legislature(2001 - 2002)

04/04/2001 06:13 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          April 04, 2001                                                                                      
                              6:13 PM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-01 # 68, Side A                                                                                                             
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Dave Donley convened the meeting at approximately 6:13 PM.                                                             
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Dave Donley, Co-Chair                                                                                                   
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Jerry Ward, Vice Chair                                                                                                  
Senator Loren Leman                                                                                                             
Senator Lyda Green                                                                                                              
Senator Gary Wilken                                                                                                             
Senator Alan Austerman                                                                                                          
Senator Lyman Hoffman                                                                                                           
Senator Donald Olson                                                                                                            
                                                                                                                                
Also Attending:  JANET CLARKE, Director, Division  of Administrative                                                          
Services,  Department of  Health and  Social  Services; DAVID  TEAL,                                                            
Director,  Division  of  Legislative  Finance;  ANNALEE   MCCONNELL,                                                            
Director, Office of Management and Budget                                                                                       
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 103-APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                     
HB 104-APPROP:MENTAL HEALTH BUDGET                                                                                              
                                                                                                                                
The Committee considered amendments to the committee substitute and                                                             
the bill was held.                                                                                                              
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 103(FIN)(brf sup maj fld)                                                                            
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize  funds; and providing for an effective date."                                                            
                                                                                                                                
     CS FOR HOUSE BILL NO. 104(FIN)                                                                                             
     "An  Act making appropriations  for the  operating and  capital                                                            
     expenses of the state's  integrated comprehensive mental health                                                            
     program; and providing for an effective date."                                                                             
                                                                                                                                
                                                                                                                                
The Committee  continued  its considerations  of  amendments to  the                                                            
committee substitute, 22-LS0410\S.                                                                                              
                                                                                                                                
University of Alaska                                                                                                          
                                                                                                                                
UNIV: #4: This amendment  attaches intent language to the University                                                            
of Alaska  Budget Request  Unit (BRU),  Budget Reductions/Additions                                                             
Systemwide  on page  34, lines 13  through 15.  The intent  language                                                            
reads as follows.                                                                                                               
                                                                                                                                
     It  is  the intent  of  the  legislature  that  the  additional                                                            
     general  funds appropriated  above the  FY 01 funding  level be                                                            
     allocated  to  the  colleges  and campuses  on  a student-hour                                                             
     basis.                                                                                                                     
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
UNIV #5: This amendment adds                                                                                                    
                                                                                                                                
     UNIV #1: This amendment  adds $2 million Alaska Housing Finance                                                            
     Corporation (AHFC)  Dividend funds for the University of Alaska                                                            
     Budget   Request  Unit  (BRU),   Budget  Reductions/Additions-                                                             
     Systemwide component on page 34, lines 13 through 15.                                                                      
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
UNIV  #6: This  amendment  adds  $4,500,000  general funds  for  the                                                            
University  of Alaska  BRU, Budget  Reductions/Additions-Systemwide                                                             
component on page 34, lines  13 through 15. Accompanying explanatory                                                            
language reads as follows.                                                                                                      
                                                                                                                                
     This   amendment  provides  the   necessary  funding   for  the                                                            
     University  of Alaska to continue its educational  initiatives.                                                            
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
UNIV  #7: This  amendment  adds $2  million Alaska  Housing  Finance                                                            
Corporation (AHFC) Dividend  funds for the University of Alaska BRU,                                                            
Budget Reductions/Additions-Systemwide  component  on page 34, lines                                                            
13 through 15.                                                                                                                  
                                                                                                                                
Senator Wilken moved for adoption.                                                                                              
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
Department of Health and Social Services                                                                                      
                                                                                                                                
H&SS  #28:  This amendment   deletes $300  general  funds  from  the                                                            
Alcohol  & Drug  Abuse Services  BRU, Alcohol  &  Drug Abuse  Grants                                                            
component  on page  20, lines 27  and 31.  Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     The subcommittee adopted a decrement of $326.3.                                                                            
     The Committee restored $326.6. This amendment deletes $0.3.                                                                
                                                                                                                                
This amendment  also changes the funding  source from general  funds                                                            
to General  Fund Mental  Health funds  of $43,400  in the  Community                                                            
Mental Health  Grants BRU,  General Community  Mental Health  Grants                                                            
component on page 21, lines  16 through 19. Accompanying explanatory                                                            
language reads, "Corrects fund source for Senate amendment."                                                                    
                                                                                                                                
Senator Green moved for adoption.                                                                                               
                                                                                                                                
Senator Hoffman objected for an explanation.                                                                                    
                                                                                                                                
Senator Green  explained this amendment  corrects an input  error in                                                            
the budget subcommittee report.                                                                                                 
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
H&SS #29:  This amendment  changes the funding  source from  general                                                            
funds to general  funds match of $288,600 in the Medical  Assistance                                                            
BRU, Medicaid  Services component on page 17, line  31, and page 18,                                                            
line 3.                                                                                                                         
                                                                                                                                
Senator Green moved for adoption.                                                                                               
                                                                                                                                
Senator Hoffman objected for an explanation.                                                                                    
                                                                                                                                
Senator Green  stated that when another  amendment was adopted,  the                                                            
wrong funding source was used.                                                                                                  
                                                                                                                                
Senator  Hoffman  requested  the Department   of Health  and  Social                                                            
Services comment on the amendment.                                                                                              
                                                                                                                                
JANET  CLARKE,  Director,   Division  of  Administrative   Services,                                                            
Department of  Health and Social Services detailed  H&SS #1, adopted                                                            
at  the  previous   hearing,  which   provided  funds  for   tobacco                                                            
prevention  and control from the Medicaid  budget. She asserted  the                                                            
department supports the corrective amendment.                                                                                   
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Department of Military and Veterans Affairs                                                                                   
                                                                                                                                
M&VA  #6:  This  amendment  removes  the  Local  Emergency  Planning                                                            
Committee Grants component  from the Disaster Planning & Control BRU                                                            
and allocates the $40,800  general funds contained in that component                                                            
to the  new Local Emergency  Planning Committee  Grants BRU  on page                                                            
24, line  31 and page 25,  lines 3 and  4. Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This  amendment transfers  all  of the funding  from the  Local                                                            
     Emergency  Planning Committee Grants component  in the Disaster                                                            
     Planning  & Control  appropriation to  the new Local  Emergency                                                            
     Planning Committee Grants appropriation.                                                                                   
                                                                                                                                
Senator Leman moved for adoption.                                                                                               
                                                                                                                                
Senator Hoffman requested an explanation.                                                                                       
                                                                                                                                
Senator  Leman  shared  that the  Division  of  Legislative  Finance                                                            
fiscal analyst had pointed  out that the funds from the previous BRU                                                            
were not transferred into the newly created one.                                                                                
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
Department of Transportation and Public Facilities                                                                            
                                                                                                                                
DOT  #6: This  amendment  changes  the funding  source  from  Marine                                                            
Highway  funds to  Alaska  Marine Highway  System  (AMHS)  Duplicate                                                            
funds of  $27,909,700 in  the Marine Highway  System BRU,  Southeast                                                            
Vessel Operations  component on page 33, line 32,  and page 34, line                                                            
6. Accompanying explanatory language reads as follows.                                                                          
                                                                                                                                
     Identifies  the amount of funding from the Marine  Highway Fund                                                            
     that is capitalized  with general funds in the language section                                                            
     (versus  that amount  which is actual  revenue from the  Marine                                                            
     Highway  System  receipts for  the sale  of  ferry tickets  and                                                            
     onboard purchases).                                                                                                        
                                                                                                                                
DAVID TEAL,  Director, Division  of Legislative  Finance,  testified                                                            
that this is a  technical amendment that allows for  better tracking                                                            
through an automated production of a fiscal summary.                                                                            
                                                                                                                                
[Note: No formal motion was made to adopt the amendment.]                                                                       
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Department of Community and Economic Development                                                                              
                                                                                                                                
C&ED #6: This  amendment changes the  name of the Municipal  Revenue                                                            
Sharing  BRU to  State  Revenue Sharing  on  page 6,  line 16.  This                                                            
amendment also deletes  $15,638,200 general funds from the Municipal                                                            
Assistance component in  the newly named BRU on page 6, lines 16 and                                                            
20. This  amendment also  adds $16,775,500  general funds for  a new                                                            
Safe  Communities   Program  component.   Accompanying  explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     Explanation:  Creates  a separate  appropriation  for the  Safe                                                            
     Communities  Program and adds  $1,137,335. It also changes  the                                                            
     name of  the Municipal Revenue  Sharing appropriation  to State                                                            
     Revenue Sharing to  more accurately reflect the function of the                                                            
     appropriation.                                                                                                             
                                                                                                                                
Co-Chair Donley  stated this amendment  provides a funding  increase                                                            
to reflect inflation and the cost of living index.                                                                              
                                                                                                                                
Co-Chair Kelly moved for adoption.                                                                                              
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
AT EASE 6:22 PM / 6:22 PM                                                                                                       
                                                                                                                                
Department of Transportation and Public Facilities                                                                            
                                                                                                                                
DOT  #6: This  amendment  changes  the funding  source  from  Marine                                                            
Highway  funds to  Alaska  Marine Highway  System  (AMHS)  Duplicate                                                            
funds of  $27,909,700 in  the Marine Highway  System BRU,  Southeast                                                            
Vessel Operations  component on page 33, line 32,  and page 34, line                                                            
6. Accompanying explanatory language reads as follows.                                                                          
                                                                                                                                
     Identifies  the amount of funding from the Marine  Highway Fund                                                            
     that is capitalized  with general funds in the language section                                                            
     (versus  that amount  which is actual  revenue from the  Marine                                                            
     Highway  System  receipts for  the sale  of  ferry tickets  and                                                            
     onboard purchases).                                                                                                        
                                                                                                                                
[This amendment was considered earlier in the meeting.]                                                                         
                                                                                                                                
Co-Chair Kelly moved for adoption.                                                                                              
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
Department of Education and Early Development                                                                                 
                                                                                                                                
E&ED  #11:   This  amendment   increases   the  appropriation   from                                                            
$6,187,000  in Section  14  on page  14, lines  20  through 25.  The                                                            
amended language reads as follows.                                                                                              
                                                                                                                                
          Sec. 14. LEARNING OPPORTUNITY GRANTS. The sum of                                                                      
     $12,374,200  is  appropriated  from  the  general fund  to  the                                                            
     Department  of Education and  Early Development for  the fiscal                                                            
     year ending June 30,  2002, for payment as learning opportunity                                                            
     grants  to school  districts  based  on the  school  district's                                                            
     average  daily  membership  to  pay  for supplemental   student                                                            
     instructional programs  intended to improve student performance                                                            
     on  the  high   school  graduation  examination   or  benchmark                                                            
     examinations.                                                                                                              
                                                                                                                                
Co-Chair Kelly  moved for adoption and objected for  an explanation.                                                            
                                                                                                                                
Co-Chair   Donley    explained   this   amendment   increases    the                                                            
appropriation from the amount appropriated in FY 01.                                                                            
                                                                                                                                
AT EASE 6:23 PM / 6:24 PM                                                                                                       
                                                                                                                                
Co-Chair Kelly removed his objection.                                                                                           
                                                                                                                                
Senator Hoffman  asked how this compares to the amount  requested in                                                            
the governor's budget.                                                                                                          
                                                                                                                                
Co-Chair Donley  responded it is an increase. He noted  however that                                                            
the governor has submitted  a supplemental request for "all kinds of                                                            
different education funding."                                                                                                   
                                                                                                                                
AT EASE 6:25 PM / 6:26 PM                                                                                                       
                                                                                                                                
Senator  Hoffman informed  that he  had further  matters to  discuss                                                            
regarding this issue that he would address at a later date.                                                                     
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
E&ED  #12:  This  amendment  adds  intent   language  to  the  Early                                                            
Development  BRU, Child Care Assistance  and Licensing component  on                                                            
page 11, lines 29, 31 and  32. The intent language reads as follows.                                                            
                                                                                                                                
     It  is the intent  of the  Legislature that  the Department  of                                                            
     Education and Early  Development revise and implement the Child                                                            
     Care Eligibility Rate Schedule in FY 02.                                                                                   
     It is  also the intent of the  Legislature that the  Department                                                            
     implement the market rate survey in FY 02.                                                                                 
     It is  further the intent of  the Legislature that given  these                                                            
     changes,  expenditures be  held in check  and that there  be no                                                            
     substantial increase in the programs based on implementation                                                               
     within Child Care Assistance and Licensing.                                                                                
                                                                                                                                
Senator Wilken moved for adoption.                                                                                              
                                                                                                                                
Senator Green objected for an explanation.                                                                                      
                                                                                                                                
Senator Wilken  stated this is the  second year that the  Department                                                            
of Education  and Early  Development has  administered this  program                                                            
after the dissolution  of the Department  of Community and  Regional                                                            
Affairs. He shared  that the budget subcommittee and  the department                                                            
have been working  to understand the funding the program,  noting it                                                            
has  been  "generously  funded"  recently  with  federal  funds.  In                                                            
reviewing the  matter, he said, "we are finding more  questions then                                                            
we  are  answers."  Specifically,  he pointed  out  the  process  of                                                            
determining who is eligible  for the program as well as the mandated                                                            
market  study.  He voiced  concern  that  an  effort to  expand  the                                                            
program could be undertaken without justification of the demand.                                                                
                                                                                                                                
Senator Wilken  suggested the Committee "take a breath"  and work on                                                            
the  issue  over   the  legislative  interim  with   the  intent  of                                                            
addressing  the matter again the following  session. He pointed  out                                                            
that the waitlist  is completely funded  and as a result  is "zero",                                                            
with  the exception  of  Anchorage, where  it  is just  a matter  of                                                            
"working through it" as there is adequate funding.                                                                              
                                                                                                                                
Senator Green removed her objection.                                                                                            
                                                                                                                                
Senator Hoffman  asked who would actually  be working on  this issue                                                            
during the interim.                                                                                                             
                                                                                                                                
Senator Wilken answered the department would.                                                                                   
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
AT EASE 6:29 PM / 6:36 PM                                                                                                       
                                                                                                                                
Statewide                                                                                                                     
                                                                                                                                
STWIDE  #1: This  amendment  changes the  funding  source from  AHFC                                                            
Dividend  funds to general  funds in the  following amounts  for the                                                            
following BRUs and components.                                                                                                  
                                                                                                                                
     Department of Administration                                                                                               
          BRU: Alaska Longevity Programs Management                                                                             
                Component: Pioneers' Homes                                                                                      
                     Amount: $604,500                                                                                           
          BRU: Division of Motor Vehicles                                                                                       
                Component: Motor Vehicles                                                                                       
                     Amount: $318,500                                                                                           
     Department of Corrections                                                                                                  
          BRU: Administration and Operations                                                                                    
                Component: Inmate Health Care                                                                                   
                     Amount: $327,300                                                                                           
     Department of Health and Social Services                                                                                   
          BRU: Front Line Social Workers                                                                                        
               Component: Front Line Social Workers                                                                             
                     Amount: $6,700                                                                                             
          BRU: Juvenile Justice                                                                                                 
                Component: McLaughlin Youth Center                                                                              
                     Amount: $29,200                                                                                            
                Component: Fairbanks Youth Facility                                                                             
                     Amount: $9,900                                                                                             
                Component: Johnson Youth Center                                                                                 
                     Amount: $5,900                                                                                             
                Component: Bethel Youth Facility                                                                                
                     Amount: $4,500                                                                                             
                Component: Mat-Su Youth Facility                                                                                
                     Amount: $5,500                                                                                             
                Component: Ketchikan Regional Youth Facility                                                                    
                     Amount: $5,500                                                                                             
          BRU: State Health Services                                                                                            
                Component: Nursing                                                                                              
                     Amount: 432,700                                                                                            
          BRU: Institutions and Administration                                                                                  
                Component: Alaska Psychiatric Institute                                                                         
                     Amount: 600,000                                                                                            
     Department of Natural Resources                                                                                            
          BRU: Oil and Gas Development                                                                                          
                Component: Oil and Gas Development                                                                              
                     Amount: $425,000                                                                                           
          BRU: Facilities Maintenance                                                                                           
                Component: Fairbanks Office Building Chargeback                                                                 
                     Amount: $103,600                                                                                           
     University of Alaska                                                                                                       
          BRU: University of Alaska                                                                                             
                Component: Budget Reductions/Additions-Systemwide                                                               
                     Amount: $2,000,000                                                                                         
                                                                                                                                
Accompanying explanatory language for the amendment reads as                                                                    
follows.                                                                                                                        
                                                                                                                                
     Replace all AHFC Dividends appropriated in Section 1 with                                                                  
     general funds. Total AHFC Dividend fund source replaced with                                                               
     general funds is $4,878,800.                                                                                               
                                                                                                                                
Senator Ward moved for adoption.                                                                                                
                                                                                                                                
Mr. Teal explained  this amendment replaces all AHFC  Dividend funds                                                            
appropriated  in Section  1  of the  bill totaling  $4,878,900  with                                                            
general  funds.  He  remarked  that AHFC  Dividends  were  used  for                                                            
purposes that are not one-time  items but rather continuing, such as                                                            
funding nurses'  salaries. He stressed  that if AHFC Dividends  were                                                            
used for these purposes,  "we would get into another battle in FY 03                                                            
about what  the base  is" with  regards to  future budget  planning.                                                            
This amendment,  he stated, clarifies  the expenditures are  general                                                            
funds and therefore included in the FY 03 base.                                                                                 
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
STWIDE   #2:  This   amendment   reduces  the   appropriation   from                                                            
$39,578,400  in Section 24, subsection  (c) on page 53, lines  8 and                                                            
9. The amended language reads as follows.                                                                                       
                                                                                                                                
          (c) The sum of $32,578,400 is appropriated from the                                                                   
     general   fund  to   the  Alaska  debt   retirement  fund   (AS                                                            
     37.15.011).                                                                                                                
                                                                                                                                
This amendment  also increases  the appropriation  from $100,000  in                                                            
Section  24, subsection  (d) on page  53, lines  10 through  13. The                                                            
amended language reads as follows.                                                                                              
                                                                                                                                
          (d) The sum of $1,100,000 is appropriated from the                                                                    
     lapsing balance  of the appropriation made in  sec. 1. ch. 133,                                                            
     SLA  2000,  page 13,  line 29,  and  allocated  on lines  30-31                                                            
     (public   assistance-Alaska   temporary   assistance   program-                                                            
     $66,112,800)   to   the  Alaska   debt  retirement   fund   (AS                                                            
     37.15.011).                                                                                                                
                                                                                                                                
This amendment  also changes the funding  source from AHFC  Dividend                                                            
funds  in Section  17 on page  50, lines  3 through  7. The  amended                                                            
language reads as follows.                                                                                                      
                                                                                                                                
          Sec. 17. OFFICE OF THE GOVERNOR. The sum of $947,700 is                                                               
     appropriated  from  the  general  fund  to the  Office  of  the                                                            
     Governor,   division   of   elections,   for   reapportionment                                                             
     implementation costs  for the fiscal year ending June 30, 2002.                                                            
                                                                                                                                
This amendment  also inserts a new subsection to Section  24 on page                                                            
54, following line 10 to read as follows.                                                                                       
                                                                                                                                
          (m) The sum of $6,000,000 from the fiscal year 2002                                                                   
     dividend  that is  declared by  the board of  directors  of the                                                            
     Alaska Housing Finance  Corporation is appropriated from Alaska                                                            
     Housing Finance Corporation corporate receipts to the Alaska                                                               
     debt retirement fund (AS 37.15.011).                                                                                       
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Reduce   general  fund  capitalization   of  the  Alaska   Debt                                                            
     Retirement  Fund  by $7,000,000.  Capitalize  the  Alaska  Debt                                                            
     Retirement  Fund with  the remaining  $6,000,000 AHFC  Dividend                                                            
     funds and  an additional $1,000,000 reappropriation  of surplus                                                            
     FY  01  Alaska  Temporary  Assistance  Program  (ATAP)  general                                                            
     funds.                                                                                                                     
                                                                                                                                
Senator Ward moved for adoption.                                                                                                
                                                                                                                                
Mr. Teal detailed  the different parts of the amendment.  Section 24                                                            
(d), he began, would transfer  $1 million of surplus money from ATAP                                                            
to the debt retirement  fund. He pointed out this  does not count as                                                            
an FY 02 expenditure  because the funds were appropriated  in FY 01.                                                            
The second  portion of the amendment,  he said, pertains  to Section                                                            
24(c)  and reflects  a $7  reduction of  general funds  to the  debt                                                            
retirement fund.  He continued that Section 24 (m)  provides that $6                                                            
million of  this amount would  be replaced  with AHFC funds  and the                                                            
remaining $1 million would  be ATAP funds. He concluded that Section                                                            
17 replaces AHFC Dividends with general funds.                                                                                  
                                                                                                                                
Senator Hoffman requested a comment from the Administration.                                                                    
                                                                                                                                
ANNALEE  MCCONNELL,  Director,   Office  of  Management  and  Budget                                                            
clarified  that  the  AHFC  dividend  fund  is  the  "Ah  Head  Fish                                                            
Cleaning" fund.                                                                                                                 
                                                                                                                                
Ms. McConnell  applauded the funding  organization. She stated  that                                                            
it simplifies  the accounting  and  the structures  and as Mr.  Teal                                                            
mentioned, it  also would clarify in the following  year, that these                                                            
are on-going expenditures.                                                                                                      
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
Co-Chair  Donley announced  his intent  to hold  the bill until  the                                                            
next day.                                                                                                                       
                                                                                                                                
Co-Chair Donley  pointed out this  budget contains $278,000  less in                                                            
general   funds  than   the   version  passed   by   the  House   of                                                            
Representatives. He also  noted it adds over $8 million to education                                                            
funding  and 12  new Alaska  State Troopers  and  Fish and  Wildlife                                                            
Protection Officers. Therefore,  he commented, it reflects the focus                                                            
on "our highest priorities of education and public safety."                                                                     
                                                                                                                                
Co-Chair Donley ordered the bill HELD in Committee.                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Dave Donley adjourned the meeting at 06:42 PM                                                                          

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