Legislature(2003 - 2004)

03/05/2003 09:02 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                          March 05, 2003                                                                                      
                              9:02 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-03 # 15, Side A                                                                                                             
SFC 03 # 15, Side B                                                                                                             
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Gary Wilken convened  the meeting at approximately 9:02 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Lyda Green, Co-Chair                                                                                                    
Senator Con Bunde, Vice-Chair                                                                                                   
Senator Ben Stevens                                                                                                             
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Robin Taylor                                                                                                            
                                                                                                                                
Also Attending:  REPRESENTATIVE  NANCY DALHSTROM;  KIMBERLY  HANGER,                                                          
Staff  to Representative  Nancy  Dahlstrom;  DAVID  ANTHONY  MURROW,                                                            
Guest  Page; COL.  CRAIG CAMPBELL,  Adjutant  General/Commissioner,                                                             
Department of Military  and Veterans Affairs; JOHN CRAMER, Director,                                                            
Division  of Administrative  Services,  Department  of Military  and                                                            
Veterans Affairs;  TOM LAWSON, Director, Division  of Administrative                                                            
Services,  Department of  Community and  Economic Development;  EDDY                                                            
JEANS, Manager,  School Finance and Facilities Section,  Division of                                                            
Education  Support  Services,  Department  of  Education  and  Early                                                            
Development; NICO BUS,  Administrative Services Manager, Division of                                                            
Support  Services, Department  of  Natural Resources;  MARY  SIROKY,                                                            
Legislative Liaison,  Department of Environmental  Conservation; TOM                                                            
WRIGHT,  Staff to Representative  John Harris;  KIM DUKE,  Executive                                                            
Director, Arctic Power                                                                                                          
                                                                                                                                
Attending  via  Teleconference:  From  an  Offnet  Site:  AL  ADAMS,                                                          
Volunteer and Co-chair of Arctic Power                                                                                          
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 20-BOARD OF MARINE PILOTS                                                                                                    
                                                                                                                                
A committee  substitute  was  adopted, and  the bill  reported  from                                                            
Committee.                                                                                                                      
                                                                                                                                
HB 74-EXTEND BOARD OF NURSING                                                                                                   
                                                                                                                                
The Committee  heard  testimony from  the sponsor  and reported  the                                                            
bill from Committee.                                                                                                            
                                                                                                                                
SB 75-SUPPLEMENTAL APPROPRIATIONS: FAST TRACK                                                                                   
SB 76-SUPPLEMENTAL APPROPRIATIONS                                                                                               
                                                                                                                                
The Committee  heard testimony from  the Department of Military  and                                                            
Veterans  Affairs,   the  Department   of  Community  and   Economic                                                            
Development,   the  Department   of  Natural   Resources,  and   the                                                            
Department of  Education and Early Development. The  bills were held                                                            
in Committee.                                                                                                                   
                                                                                                                                
HB 101-APPROP: GRANT TO ARCTIC POWER FOR ANWR                                                                                   
                                                                                                                                
The Committee  heard testimony  from the  sponsor and Arctic  Power.                                                            
The bill was held in Committee.                                                                                                 
                                                                                                                                
[NOTE: The recording quality of this tape is poor.]                                                                             
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 20                                                                                                         
     "An Act extending the termination date of the Board of Marine                                                              
     Pilots; and providing for an effective date."                                                                              
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken informed  the Committee that this legislation would:                                                            
extend the sunset date  for the Board of Marine Pilots; maintain the                                                            
use  of marine  pilots on  inland  and coastal  waterways;  regulate                                                            
licensing  and training  of  marine pilots;  and  regulate fees.  He                                                            
conveyed that the Division  of Legislative Audit recommends that the                                                            
Board be extended to June 30, 2007.                                                                                             
                                                                                                                                
Co-chair  Wilken informed  that  the proposed  committee  substitute                                                            
requires drug  testing of marine pilots,  extension of the  Board to                                                            
June 30,  2007, and exempts  Canadian Navy  and Coast Guard  vessels                                                            
from the marine pilot requirement.                                                                                              
                                                                                                                                
Co-Chair  Green moved to  adopt CS SB 20,  23-LS0274\I as a  working                                                            
draft.                                                                                                                          
                                                                                                                                
There being no  objections, the Committee Substitute  was ADOPTED as                                                            
a working draft.                                                                                                                
                                                                                                                                
Senator  Olson asked  whether language  relating  to vessel  length,                                                            
specifically yachts, is included in the committee substitute.                                                                   
                                                                                                                                
Co-Chair Wilken  clarified that, subsequent  to the first  Committee                                                            
hearing on  this bill, it  was determined  that yacht owners  should                                                            
meet with  the US  Coast Guard  to address  concerns regarding  such                                                            
issues as  the requirement  for marine pilots  to be onboard  yachts                                                            
exceeding  a specified  length. He  stated that  the issue would  be                                                            
addressed  in separate legislation  provided  that yacht owners  and                                                            
the US Coast Guard effectively address the issue.                                                                               
                                                                                                                                
Senator Olson remarked that this issue must be resolved.                                                                        
                                                                                                                                
Co-chair  Wilken asserted  that melding the  Coast Guard's  concerns                                                            
with the  potential  for economic  growth resulting  from  increased                                                            
yacht traffic in the State  is a "compelling" situation. However, he                                                            
reemphasized  that  yacht owners  must address  the  issue with  the                                                            
Coast Guard.                                                                                                                    
                                                                                                                                
Co-Chair  Green  moved  to  report  the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There  being  no  objection,  CS  for  SB  20  (FIN)  REPORTED  from                                                            
Committee  with  a previous  $111,500  fiscal  note  dated  February                                                            
5,2003 from  the Department of Community  and Economic Development.                                                             
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 74(FIN)(efd add)                                                                                     
     "An Act extending the termination date of the Board of                                                                     
     Nursing; and providing for an effective date."                                                                             
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken explained  that this legislation  would extend  the                                                            
Board of Nursing for eight  years, as recommended by the Division of                                                            
Legislative Audit.                                                                                                              
                                                                                                                                
REPRESENTATIVE NANCY DALHSTROM  affirmed that this legislation would                                                            
extend the Board of Nursing  until June 30, 2011. She mentioned that                                                            
the representation  on the Board is  defined in Alaska statutes  and                                                            
that the Governor  appoints Board  members. She explained  that such                                                            
things as  conducting investigations  regarding  complaints  against                                                            
nurses  and  the  establishment   of  minimum  education   and  work                                                            
requirements  for nurses are  duties of the  Board. She stated  that                                                            
the "impeccable"  record of the Board and the cost  of conducting an                                                            
audit warrant the length of the extension recommendation.                                                                       
                                                                                                                                
KIMBERLY HANGER,  Staff to Representative Nancy Dahlstrom,  informed                                                            
the Committee  that the Division of  Legislative Audit report  dated                                                            
August 16, 2002 [copy on  file] supports the extension of the Board.                                                            
She detailed the findings of the report.                                                                                        
                                                                                                                                
Senator Olson  asked whether  the field of  nurse practitioners  has                                                            
representation on the Board.                                                                                                    
                                                                                                                                
Representative Dahlstrom responded in the negative.                                                                             
                                                                                                                                
Senator  Bunde asked  whether the  Board has  addressed the  State's                                                            
nursing shortage situation.                                                                                                     
                                                                                                                                
Representative  Dahlstrom answered  that the  Board is working  with                                                            
other pertinent  boards and organizations to address  the situation.                                                            
                                                                                                                                
Senator Hoffman  inquired as to the status of Recommendation  Number                                                            
Two as presented in the Audit Report.                                                                                           
                                                                                                                                
     Recommendation  2:  The Board  of  Nursing should  develop  and                                                            
     implement   a   self-evaluation    monitoring   checklist   for                                                            
     organizations operating  approved certified nurse aide training                                                            
     programs.                                                                                                                  
                                                                                                                                
Ms. Hanger  responded that in response  to this recommendation,  the                                                            
Board is currently  holding meetings with the various  organizations                                                            
that conduct training programs.                                                                                                 
                                                                                                                                
Co-Chair Green moved to  report HB 74 from Committee with individual                                                            
recommendations and accompanying fiscal note.                                                                                   
                                                                                                                                
There being  no objection,  CS HB  74 (FIN)(efd  add) REPORTED  from                                                            
Committee with  a previous fiscal note, dated February  28, 2003, in                                                            
the amount of  $712.7 from the Department of Community  and Economic                                                            
Development.                                                                                                                    
                                                                                                                                
AT EASE 9:13 AM / 9:15 AM                                                                                                       
                                                                                                                                
Co-Chair Green chaired the remainder of the meeting.                                                                            
                                                                                                                                
Senator B. Stevens introduced  fifteen-year-old DAVID ANTHONY MURROW                                                            
as  guest page.  He  informed  the Committee  that  Master  Murrow's                                                            
interests include  travel, drama, and backpacking,  and he continued                                                            
Master Murrow  aspires to  be involved  in international  relations,                                                            
politics  and espionage.  He additionally  noted that Master  Murrow                                                            
would be journeying  to Mexico to  participate in a yearlong  Rotary                                                            
International Student Exchange Program.                                                                                         
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 75                                                                                                         
     "An Act making supplemental and other appropriations; amending                                                             
     appropriations; and providing for an effective date."                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 76                                                                                                         
     "An Act making supplemental and other appropriations; amending                                                             
     appropriations; making appropriations to capitalize funds; and                                                             
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the fifth hearing  for these bills  in the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-chair  Green  announced  that  the  Department  of  Military  and                                                            
Veterans Affairs  would continue their  presentation begun,  but not                                                            
concluded, at the March 3, 2003 meeting.                                                                                        
                                                                                                                                
Department of Military and Veterans Affairs                                                                                   
                                                                                                                                
     SB 76                                                                                                                      
     Section 11(a) and (b)                                                                                                      
     Department of Military and Veterans Affairs                                                                                
     Commissioner's Office                                                                                                      
     Structure change to move Commissioner's Office and Unallocated                                                             
     Reduction components to National Guard BRU                                                                                 
                                                                                                                                
JOHN  CRAMER,   Director,  Division   of  Administrative   Services,                                                            
Department  of  Military  and  Veterans  Affairs  stated  that  this                                                            
request   would   restructure   the  Department   to   provide   the                                                            
Commissioner  with "the latitude  to work  within the Department  to                                                            
the extent" deemed necessary.                                                                                                   
                                                                                                                                
CRAIG CAMPBELL,  Commissioner, Department  of Military and  Veterans                                                            
Affairs  and Adjutant  General, Alaska  National  Guard stated  that                                                            
previous  to his  term as commissioner,  the  Commissioner's  Office                                                            
operated  within  the  National  Guard  Budget  Review  Unit  (BRU);                                                            
however, he continued,  the Legislature made the decision  to remove                                                            
the Office  of  the Commissioner  from  the National  Guard BRU  and                                                            
establish  a separate  "and  small"  Commissioner's  Office BRU.  He                                                            
stated that  re-establishing the Office  of the Commissioner  within                                                            
the National  Guard BRU  would provide the  Commissioner with  "more                                                            
latitude to manage  the funds being entrusted" to  him, specifically                                                            
to better coordinate  Homeland Security measures and  "better manage                                                            
the funding over the course of a year."                                                                                         
                                                                                                                                
Senator Hoffman  asked the importance  of approving this  request in                                                            
the supplemental request  process rather than through a FY 04 budget                                                            
request.                                                                                                                        
                                                                                                                                
Commissioner  Campbell  reiterated  that  approval of  this  request                                                            
would  provide the  opportunity  to  better manage  current  funding                                                            
allocations,  specifically  the funding  necessary  to sufficiently                                                             
develop and implement Homeland Security measures.                                                                               
                                                                                                                                
Senator   Hoffman  asked   whether  this   request  would   transfer                                                            
additional Department funds to Homeland Security in FY 03.                                                                      
                                                                                                                                
Commissioner Campbell  responded that approval of  the request would                                                            
allow the Commissioner  to utilize  National Guard funds  to develop                                                            
an  overall operational  plan  to coordinate  the  National  Guard's                                                            
existing Homeland Security responsibilities.                                                                                    
                                                                                                                                
Co-chair  Green asked  whether the  Department  would continue  this                                                            
restructuring alignment in FY 04.                                                                                               
                                                                                                                                
Commissioner  Campbell  concurred  that the  FY 04  budget is  being                                                            
developed in this manner.                                                                                                       
                                                                                                                                
     SB 76                                                                                                                      
     Section 11(c)                                                                                                              
     Military Youth Academy                                                                                                     
     Technical correction for Ch 130 SLA2002 (SB 345) fiscal note -                                                             
     correct fund source amounts.                                                                                               
                                                                                                                                
Co-Chair  Green stated that  this request  regards a technical  fund                                                            
source correction.                                                                                                              
                                                                                                                                
AT EASE 9:22 AM / 9:23 AM                                                                                                       
                                                                                                                                
Mr.  Campbell  noted  that  the  backup  material  provides  further                                                            
information regarding this request.                                                                                             
                                                                                                                                
Co-Chair  Green  understood  that  this  request  is to  correct  an                                                            
inaccuracy that occurred during a conference committee meeting.                                                                 
                                                                                                                                
Mr.  Campbell  concurred  and  stated that  the  request  would  not                                                            
require additional funds.                                                                                                       
                                                                                                                                
     Section 16(8)                                                                                                              
     Miscellaneous Claims and Stale-dated Warrants $580.88                                                                      
     $0.6 general funds                                                                                                         
                                                                                                                                
Mr. Cramer  stated that this request  entails two stale-dated  items                                                            
totaling $580.88.                                                                                                               
                                                                                                                                
Department of Community and Economic Development                                                                              
                                                                                                                                
     SB 76                                                                                                                      
     Section 2(a)                                                                                                               
     Admin Services                                                                                                             
     Retroactive section  to ratify the transfer of $51,000 from the                                                            
     disaster  relief fund back to the commercial  fishing revolving                                                            
     loan  fund  in  response  to  recommendation  20  in  the  FY01                                                            
     Statewide Single Audit prepared by Legislative Audit.                                                                      
                                                                                                                                
TOM  LAWSON,   Director,   Division  of   Administrative   Services,                                                            
Department  of  Community  and  Economic  Development  informed  the                                                            
Committee  that a 2001  Statewide fiscal  audit [copy not  provided]                                                            
conducted by the Division  of Legislative Audit recommended that the                                                            
Department  submit this request to  authorization the return  of the                                                            
unspent portion  of monies to the  Commercial Fish Fund from  whence                                                            
it originated.                                                                                                                  
                                                                                                                                
Co-Chair Green asked whether  this request would be more appropriate                                                            
as a ratification.                                                                                                              
                                                                                                                                
Mr.  Lawson  voiced   support  for  addressing  the   request  as  a                                                            
ratification rather than as a supplemental request.                                                                             
                                                                                                                                
Co-Chair Green announced  that this request would be reclassified as                                                            
a ratification in the upcoming committee substitute.                                                                            
                                                                                                                                
     SB 76                                                                                                                      
     Section 2(b)                                                                                                               
     Capital                                                                                                                    
     Section to change RPL 08-3-0104 for Rural Internet Access from                                                             
     operating to capital                                                                                                       
                                                                                                                                
Mr. Lawson informed  that this request would formalize  the transfer                                                            
of a $7.5 million  grant appropriation from the operating  budget to                                                            
the capital  budget to  activate a Regulatory  Commission of  Alaska                                                            
(RCA) program authorized in FY 03.                                                                                              
                                                                                                                                
Co-Chair Green clarified that this is a fund transfer.                                                                          
                                                                                                                                
Senator Taylor asked for  further information about the RCA program.                                                            
                                                                                                                                
Mr. Lawson  replied that this program  would provide for  grants and                                                            
partnerships  between  internet  carriers  and  public  entities  to                                                            
provide high speed Internet service to rural areas of the State.                                                                
                                                                                                                                
Senator Hoffman asked the projected timeframe of the program.                                                                   
                                                                                                                                
Mr. Lawson  responded  that the  program is  proceeding slower  than                                                            
anticipated;  however,  he  stated, the  federal  grant application                                                             
process would be finalized this spring.                                                                                         
                                                                                                                                
Co-Chair  Green  asked  what  occurs   once  the  federal  grant  is                                                            
finalized.                                                                                                                      
                                                                                                                                
Mr. Lawson explained  that once the State/federal  grant application                                                            
is  finalized,  the next  step  would  be to  distribute  the  grant                                                            
applications   to  eligible   entities.   He  estimated   that   the                                                            
applications  would  be  distributed  in  the  spring;  however,  he                                                            
asserted that  the program would not be completed  by June 30, 2003.                                                            
                                                                                                                                
Co-Chair  Green stated  therefore  that  the program  funding  would                                                            
continue into FY 04.                                                                                                            
                                                                                                                                
Mr. Lawson concurred.                                                                                                           
                                                                                                                                
     SB 76                                                                                                                      
     Section 2(C)                                                                                                               
     Insurance                                                                                                                  
     Authority  to receive  and expend  fees paid  by licensees  for                                                            
     background  checks. The Division  of Insurance will  then enter                                                            
     into  a contract  (RSA) with  Department of  Public Safety  who                                                            
     performs the background checks.                                                                                            
     $200.0 Receipt Supported Services                                                                                          
                                                                                                                                
Mr. Lawson  stated that this  request results  from a change  in the                                                            
methodology of  collecting fees for insurance industry  applications                                                            
and  background checks.  He  stated that  the Department  of  Public                                                            
Safety requested  this change because of the increase  in background                                                            
checks being conducted  as a result of the terrorist  attacks on the                                                            
United States on September  11, 2001. He explained that, previously,                                                            
insurance  applicants  were  required  to submit  two  payments  for                                                            
services: one to the Department  of Public Safety for the background                                                            
check  and  one  to   the  Department  of  Community   and  Economic                                                            
Development  for  the license;  this  change,  he  continued  allows                                                            
applicants  to remit  a single  payment for  the entire  fee to  the                                                            
Department  of Community  and Economic  Development.  Therefore,  he                                                            
concluded,  the Department  of  Community and  Economic Development                                                             
must receive  authorization to transfer  the $200,000 collected  for                                                            
the Department of Public Safety's background checks.                                                                            
                                                                                                                                
Co-Chair Green  announced that there  would be a "correcting  entry"                                                            
in the final committee  substitute that would reduce  the Department                                                            
of Public Safety  budget by $100,000  to reflect the portion  of the                                                            
fee the  Department  must pay  to a  third party  for administering                                                             
background checks.                                                                                                              
                                                                                                                                
Senator Olson voiced concern  that, as a result of the September 11,                                                            
2001  terrorist  attacks  and "other  obstacles"  presented  to  the                                                            
insurance  industry,  insurance  companies  might be  deterred  from                                                            
providing  insurance  coverage  in  Alaska.  He  asked  whether  the                                                            
Department has heard any such indications from the industry.                                                                    
                                                                                                                                
Mr.  Lawson clarified  that  this  request is  not generated  by  an                                                            
increase in insurance fees,  but rather reflects a change in the fee                                                            
process.                                                                                                                        
                                                                                                                                
Co-Chair  Green commented  that were  there any  opposition to  this                                                            
change, it has  not been "publicly" voiced. She informed  that State                                                            
regulations specify that  anyone seeking to sell insurance in Alaska                                                            
must submit to a background check.                                                                                              
                                                                                                                                
Senator Taylor asked for  confirmation that every insurance agent in                                                            
the State is required to undergo a background check.                                                                            
                                                                                                                                
Co-Chair  Green confirmed  and stated  that background  checks  have                                                            
been a requirement for many years.                                                                                              
                                                                                                                                
Senator Taylor  asserted that, while  he accepts that attorneys  are                                                            
required  to undergo  background checks,  he  is "incredulous"  that                                                            
this requirement applies to the insurance industry.                                                                             
                                                                                                                                
Senator Bunde  voiced that  writing one check,  rather than  two, is                                                            
"slightly more user friendly" for the industry.                                                                                 
                                                                                                                                
     SB 76                                                                                                                      
     Section 2(d)                                                                                                               
     International Trade                                                                                                        
     Authority to receive  and expend registration receipts from the                                                            
     Korea USA economic  conference. The 2002 conference was held in                                                            
     Korea;   2003  will   be   in  Anchorage.   Subsequent   years'                                                            
     conferences will be held in other western states.                                                                          
     $115.0 Statutory Designated Program Receipts                                                                               
                                                                                                                                
Mr. Lawson asked  that this request be withdrawn from  consideration                                                            
because the 2003 conference has been postponed.                                                                                 
                                                                                                                                
     SB 76                                                                                                                      
     Section 2(e) and (f)                                                                                                       
     Alaska Science and Technology Foundation                                                                                   
     Income  is insufficient  to  fund  appropriation  due to  stock                                                            
     market  declines. Fund source  switch from income to  endowment                                                            
     and  a reduction  of  $6,418.6  in the  appropriation,  leaving                                                            
     authorization of $4.1m.                                                                                                    
     ($6,418.6) Sci/Tech Endowment                                                                                              
                                                                                                                                
Mr.  Lawson informed  the  Committee  that  the Alaska  Science  and                                                            
Technology  Foundation (ASTF) endowment  revenues have declined  due                                                            
to financial  market conditions. He  stated that, as a result,  this                                                            
request seeks  to reduce the authorization funding  level and change                                                            
the funding  source. He continued  that this  is an interim  step as                                                            
the program is currently under review.                                                                                          
                                                                                                                                
Senator  Taylor  verified  that  existing  program  obligations  and                                                            
operating expenses amount to $4.1 million.                                                                                      
                                                                                                                                
Mr. Lawson concurred.                                                                                                           
                                                                                                                                
Senator Taylor  concluded that authorization  of this request  would                                                            
allow the program to operate through June 30, 2003.                                                                             
                                                                                                                                
Mr. Lawson agreed.                                                                                                              
                                                                                                                                
     SB 76                                                                                                                      
     Ratifications                                                                                                              
     Section 17(a)(1)(A)                                                                                                        
     AR 56381-02 (Delta Junction Economic Recovery)                                                                             
     $562.95 general funds                                                                                                      
                                                                                                                                
     SB 76                                                                                                                      
     Ratifications                                                                                                              
     Section 17(a)(1)(B)                                                                                                        
     AR 56385-02 (Rural Utility Mgt.)                                                                                           
     $0.83 general funds                                                                                                        
                                                                                                                                
Mr. Lawson stated  that this request involves federal  grant program                                                            
expenses originating in 1987.                                                                                                   
                                                                                                                                
Department of Education and Early Development                                                                                 
                                                                                                                                
     SB 76                                                                                                                      
     Section 5(a)                                                                                                               
     Schools for the Handicapped                                                                                                
     Out of State Placement educational cost increase due to                                                                    
     increased number of clients and increased length of stay.                                                                  
     $366.8 general funds                                                                                                       
                                                                                                                                
EDDY  JEANS,  Manager,   School  Finance  and  Facilities   Section,                                                            
Division of Education Support  Services, Department of Education and                                                            
Early  Development  informed  the  Committee  that this  request  is                                                            
generated by the additional  cost of placing handicapped children in                                                            
out-of-State educational programs.                                                                                              
                                                                                                                                
Co-Chair Green  asked whether the  program includes psychiatric  and                                                            
disability treatment.                                                                                                           
                                                                                                                                
Mr. Jeans  replied that  these two  categories are  included  in the                                                            
program.                                                                                                                        
                                                                                                                                
Mr. Jeans  stated that  the Division  of Family  and Youth  Services                                                            
(DFYS)  administers   this  program  that  provides   treatment  for                                                            
children who are  wards of the State. He explained  that because the                                                            
State does  not have the ability to  teach these students,  they are                                                            
provided  treatment in out-of-State  facilities.  He continued  that                                                            
the  increased  cost results  from  an  increase  in the  number  of                                                            
students in the program  and an increase in the total number of days                                                            
at the facility.                                                                                                                
                                                                                                                                
Co-Chair  Green asked whether  these children  qualify for  Medicaid                                                            
coverage.                                                                                                                       
                                                                                                                                
Mr. Jeans  replied that,  while Medicaid  would provide for  medical                                                            
expenses, these expenses result from educational needs.                                                                         
                                                                                                                                
Co-Chair  Green asked  whether  the  Department could  identify  the                                                            
reason for the  increase in the number of youth being  served in the                                                            
program.                                                                                                                        
                                                                                                                                
Mr. Jeans stated that the reason is unknown.                                                                                    
                                                                                                                                
Co-Chair Green  suggested that the ability of private  physicians to                                                            
enroll  youth in  the  program through  the  auspice  of the  Denali                                                            
KidCare program  might be a cause. She stated that  this issue would                                                            
be addressed.  She asked for verification  that the increase  in the                                                            
program is the  result of an increase in the number  of students and                                                            
their length of stay in the program.                                                                                            
                                                                                                                                
Mr. Jeans concurred.                                                                                                            
                                                                                                                                
     SB 76                                                                                                                      
     Section 5(b)                                                                                                               
     Foundation                                                                                                                 
     General   fund  reduction  due   to  preliminary  actuals   for                                                            
     foundation  program  that reconciles  initial  October  student                                                            
     count to the electronic data.                                                                                              
     ($6,728.8) general funds                                                                                                   
                                                                                                                                
Mr.  Jeans  stated  that  this  surplus   of  funds  in  the  School                                                            
Foundation  Formula  Fund account  is  the result  of  a lower  than                                                            
expected final count of students in the public school system.                                                                   
                                                                                                                                
Co-Chair Green  asked whether these funds would lapse  at the end of                                                            
the fiscal year if they remained in the supplemental budget.                                                                    
                                                                                                                                
Mr. Jeans stated they would.                                                                                                    
                                                                                                                                
     SB 76                                                                                                                      
     Section 15(b) and (c)                                                                                                      
     Debt                                                                                                                       
     Reduce  debt  retirement  fund appropriation  for  school  debt                                                            
     reimbursement  by amount of FY2002 cigarette  tax carry forward                                                            
     and increased tax collections.                                                                                             
     ($2,593.9) Debt RF                                                                                                         
                                                                                                                                
     Increase   School   Fund   appropriation    for   school   debt                                                            
     reimbursement  by amount of FY2002 cigarette  tax carry forward                                                            
     and increased collections.                                                                                                 
     $2,593.9 School Fund                                                                                                       
                                                                                                                                
     School construction  reimbursement estimate has  decreased from                                                            
     56,378.4  to  52,536.0,   a reduction   of  3,842.4  needed  to                                                            
     capitalize  the  debt retirement  fund.  That  amount plus  the                                                            
     2,593.9 debt retirement  fund reduction above is the amount the                                                            
     debt retirement fund is overcapitalized in FY03.                                                                           
     ($10,278.7) Total Funds                                                                                                    
          ($6,436.3) general funds                                                                                              
          ($3,842.4) Debt RF                                                                                                    
                                                                                                                                
Mr. Jeans stated that this  request reflects a reduction in the debt                                                            
retirement  fund as the result  of a funding  allocation overage  as                                                            
well  as the  receipt  of cigarette  tax  revenue allocated  to  the                                                            
Department in excess of projections.                                                                                            
                                                                                                                                
Co-Chair Green clarified that these items offset each other.                                                                    
                                                                                                                                
Mr.  Jeans clarified  that  the  first entry  reflects  the  overall                                                            
reduction in the  debt retirement program and that  the second entry                                                            
specifies the reduction  in general funds needed to support the debt                                                            
retirement  fund as the result of  the transfer of excess  cigarette                                                            
tax revenue received by the Department.                                                                                         
                                                                                                                                
AT EASE 9:45 AM / 9:46 AM                                                                                                       
                                                                                                                                
     SB 76                                                                                                                      
     Section 16(3)                                                                                                              
     Admin Services                                                                                                             
      Miscellaneous Claims and Stale-dated Warrants $5,107.28                                                                   
     $5.1 general funds                                                                                                         
                                                                                                                                
Mr. Jeans stated  that this request  is the result of a late  copier                                                            
billing.                                                                                                                        
                                                                                                                                
Senator Hoffman  asked whether  the action  specified in Section  15                                                            
(b) and (c) would increase the funding required in FY 04.                                                                       
                                                                                                                                
Mr. Jeans stated  that this request would not impact  FY 04 needs as                                                            
it  adjusts  the   FY  03  authorizations  based  on   current  year                                                            
entitlements.                                                                                                                   
                                                                                                                                
Senator Taylor  asked the  total savings  amount resulting  from the                                                            
reduction  of debt  reimbursement  expenses and  the lowered  school                                                            
student enrollment figures.                                                                                                     
                                                                                                                                
Mr.  Jeans  responded   that  the  actual  reduction   in  the  debt                                                            
reimbursement  program  is  $3.8 million,  and  that a  fund  source                                                            
change of "up  to another $5 million" further reduces  the amount of                                                            
general  funds  required  for the  debt  reimbursement  program.  He                                                            
continued  that there  is a savings  of $6.7 million  in the  school                                                            
foundation funding program allocation.                                                                                          
                                                                                                                                
Senator  Taylor specified,  therefore, that  the general fund  could                                                            
receive a credit of approximately $12 million.                                                                                  
                                                                                                                                
Mr. Jeans agreed.                                                                                                               
                                                                                                                                
Co-chair  Green  restated  that  the  FY  04  budget  for  the  debt                                                            
reimbursement program would be independent from this request.                                                                   
                                                                                                                                
Mr. Jeans verified  that the Department's  FY 04 debt reimbursement                                                             
program  budget is viewed  "as separate  transaction." He  continued                                                            
that this request applies  to the FY 03 budget appropriation and the                                                            
FY 03 Department resources.                                                                                                     
                                                                                                                                
Department of Natural Resources                                                                                               
                                                                                                                                
     SB 76                                                                                                                      
     Section 12(a)                                                                                                              
     Recorder's Office                                                                                                          
     Increased costs to process heavy volume of mortgage refinance                                                              
     activity and increased postage and supplies costs.                                                                         
     $149.1 Receipt Supported Services                                                                                          
                                                                                                                                
NICO  BUS, Administrative   Services Manager,  Division  of  Support                                                            
Services, Department  of Natural Resources stated  that this request                                                            
would  provide for  increased workload  and operating  costs in  the                                                            
Recorder's Office due to  an increase in mortgage refinancing cases.                                                            
He  stated  that, historically,  the  average  number  of  mortgages                                                            
recorded each  year is 400,000; however,  he noted, the number  this                                                            
year  has  exceeded  1,000,000.  He referred  to  a  handout  titled                                                            
"Recorder's  Office increase in Document  Size (Image Count)"  [copy                                                            
on file] that  depicts the increase.  He stated that the  Department                                                            
hired non-permanent staff to address the backlog.                                                                               
                                                                                                                                
     SB 76                                                                                                                      
     Section 12(b)                                                                                                              
     Parks Management                                                                                                           
     Increased fees for City of Kodiak park maintenance contract                                                                
     $4.0 Statutory Designated Program Receipts                                                                                 
                                                                                                                                
Mr. Bus informed that this  request would address the increased cost                                                            
of maintaining a State Park.                                                                                                    
                                                                                                                                
     SB 76                                                                                                                      
     Section 12(c)                                                                                                              
     Capital                                                                                                                    
     National Coastal Wetlands Conservation grant pass thru to                                                                  
     Juneau for purchase of wetlands near Herbert River.                                                                        
     $553.0 federal funds                                                                                                       
                                                                                                                                
Mr.  Bus  stated  that  these  funds  are  a  pass-through   federal                                                            
Department of  the Interior grant to the City and  Borough of Juneau                                                            
(CBJ) to purchase a parcel of land.                                                                                             
                                                                                                                                
                                                                                                                                
SFC 03 # 15, Side B 09:53 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Mr. Bus stated that the  Department oversees the transaction, and he                                                            
noted  that  the CBJ  Mayor  urges  the Committee  to  support  this                                                            
request.                                                                                                                        
                                                                                                                                
Co-Chair  Green asked  why the  Division of  Legislative Budget  and                                                            
Audit (LB&A) initially disapproved this request.                                                                                
                                                                                                                                
Mr. Bus noted  that the initial LB&A  response requested  the CBJ to                                                            
approve an ordinance endorsing  this land transaction. He noted that                                                            
the  ordinance  would  be finalized  at  an  upcoming  CBJ  Assembly                                                            
meeting.                                                                                                                        
                                                                                                                                
Mr.  Bus  responded  to  a  question  posed   by  Senator  Bunde  by                                                            
specifying that  this one-time pass through grant  transaction would                                                            
not result in any administration revenue to the Department.                                                                     
                                                                                                                                
     SB 76                                                                                                                      
     Ratifications                                                                                                              
     Section 17(b) and (c)                                                                                                      
     Fire Suppression                                                                                                           
     FY2002 Fire Suppression costs                                                                                              
     AR37313-02 Fire General Fund and AR37311-02 Fire Federal                                                                   
     Receipts                                                                                                                   
     $13,340,900.00 general funds                                                                                               
     $ 3,000,000.00 federal funds                                                                                               
                                                                                                                                
Mr. Bus stated  that this ratification request provides  for May and                                                            
June 2002 fire suppression expenses.                                                                                            
                                                                                                                                
Department of Environmental Conservation                                                                                      
                                                                                                                                
     SB 75                                                                                                                      
     NEW Section                                                                                                                
     Air Quality                                                                                                                
     Feb 26 Amd: Legal services for Red Dog Mines air permit                                                                    
     dispute                                                                                                                    
     $100.0 general funds                                                                                                       
                                                                                                                                
MARY  SIROKY,  Legislative  Liaison,  Department   of Environmental                                                             
Conservation  explained  that  in  1998 the  Department  issued  air                                                            
quality permits  for an existing and  a new diesel generator  at the                                                            
Red Dog  Mine. She  informed that  these permits  were subsequently                                                             
objected to and  blocked by the federal Environmental  Agency (EPA).                                                            
She  furthered that  this  request results  from  legal proceedings                                                             
whereby  the  Department  challenged  that  EPA  determination.  She                                                            
stated that a favorable ruling is expected in the near future.                                                                  
                                                                                                                                
Co-Chair Green clarified,  therefore, that this request is for legal                                                            
fees.                                                                                                                           
                                                                                                                                
Senator B.  Stevens asked whether  the Department would be  entitled                                                            
to legal fee reimbursement if the State prevailed.                                                                              
                                                                                                                                
Ms. Siroky responded  that the State would not be  entitled to legal                                                            
fees.                                                                                                                           
                                                                                                                                
Senator Bunde  asked how  much money the State  might receive  if it                                                            
wins the lawsuit.                                                                                                               
                                                                                                                                
Ms.   Siroky   responded   that   rather   than   receive   monetary                                                            
compensation, the State  would be granted the authority to issue the                                                            
permits.                                                                                                                        
                                                                                                                                
     SB 76                                                                                                                      
     Misc. claims                                                                                                               
     Section 16(4)                                                                                                              
     Admin Services                                                                                                             
     Miscellaneous Claims and Stale-dated Warrants $568.03                                                                      
     $0.6 general funds                                                                                                         
                                                                                                                                
Ms. Siroky stated that this is a miscellaneous claim request.                                                                   
                                                                                                                                
AT EASE: 10:03 AM / 10:03 AM                                                                                                    
                                                                                                                                
Co-Chair   Green  stated   that   this  concludes   the   department                                                            
presentations for the supplemental bills.                                                                                       
                                                                                                                                
Co-chair Green ordered the bills HELD in Committee.                                                                             
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 101(FIN) am                                                                                          
     "An Act  making special appropriations  to promote the  opening                                                            
     of  the  Arctic  National  Wildlife  Refuge  for  oil  and  gas                                                            
     exploration  and development;  and providing  for an  effective                                                            
     date."                                                                                                                     
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
TOM WRIGHT, Staff to Representative  John Harris, presented the bill                                                            
to  the  Committee.   He  explained  that  this  legislation   would                                                            
appropriate  funds  to Arctic  Power  to further  their educational                                                             
efforts  regarding  the  opening of  the  Arctic  National  Wildlife                                                            
Refuge (ANWR)  on the Congressional  level. He stated that  the bill                                                            
would  additionally provide  funds to  the village  of Anaktuvuk  to                                                            
continue  their efforts  in  promoting ANWR;  provide  funds to  the                                                            
Office  of  the Governor;  and  provide  funds  to Arctic  Power  to                                                            
develop monthly expenditure reports for the Legislature.                                                                        
                                                                                                                                
Senator  Hoffman  asked the  purpose  of  the appropriation  to  the                                                            
Office of the Governor.                                                                                                         
                                                                                                                                
Mr. Wright  responded  that he  was unaware  of the  reason for  the                                                            
appropriation.                                                                                                                  
                                                                                                                                
Senator Hoffman  asked whether a written request from  the Office of                                                            
the Governor is available.                                                                                                      
                                                                                                                                
Mr. Wright replied that  a letter from the Governor was not included                                                            
in the packet.                                                                                                                  
                                                                                                                                
Co-Chair Wilken  suggested that a title change be  considered by the                                                            
State  House of  Representatives  to  clarify  that the  area  being                                                            
considered  for exploration  and development  is a relatively  small                                                            
portion  of  ANWR   referred  to  as  Area  1002.  He   voiced  that                                                            
identification  of the  area in  this manner  might more  accurately                                                            
convey that a  small portion of ANWR, rather than  all of ANWR would                                                            
be opened to exploration.                                                                                                       
                                                                                                                                
Mr. Wright  voiced that the  House of Representatives  would  not be                                                            
opposed to this suggestion.                                                                                                     
                                                                                                                                
Senator  Hoffman asked  whether the  number of  supporting votes  in                                                            
Congress has changed.                                                                                                           
                                                                                                                                
Mr.  Wright  responded  that ANWR  is  addressed  in two  pieces  of                                                            
Congressional legislation:  one is the inclusion of Area 1002 in the                                                            
Budget Reconciliation  Act which is  up for a reconsideration  vote;                                                            
and the other  is ANWR's inclusion in the Energy Bill.  He specified                                                            
that a majority vote and 60 votes, respectively, are required.                                                                  
                                                                                                                                
Senator Hoffman  asked the latest tally of the support  in Congress.                                                            
                                                                                                                                
Mr. Wright responded  that the supporting vote tally  ranges from 46                                                            
to 52 votes; however, he could not verify the actual count.                                                                     
                                                                                                                                
KIM DUKE, Executive  Director, Arctic Power stated  that the private                                                            
non-profit entity has been  coordinating the effort to open ANWR for                                                            
approximately  ten years.  She stated that  the State has  allocated                                                            
funds  to help  Arctic Power  in this  endeavor,  and she  expressed                                                            
optimism  that the  circumstances  have  improved.  She stated  that                                                            
State funding  has provided for such things as Congressional  member                                                            
visitations to ANWR as  well as allowing ANWR advocates to travel to                                                            
other states  to explain  the project.  She stressed  that this  on-                                                            
going effort has  benefited the State, and she voiced  optimism that                                                            
the effort would be rewarded this year.                                                                                         
                                                                                                                                
Senator Hoffman,  noting that this  request is $2 million  less than                                                            
the original request, asked what items were omitted.                                                                            
                                                                                                                                
Ms. Duke  voiced that this  "conservative"  request would allow  for                                                            
the continuance  of a short-term aggressive  campaign; however,  she                                                            
asserted, were  the effort to be lengthy, additional  appropriations                                                            
would  be sought.  She summarized  that,  while it  is difficult  to                                                            
predict the proceedings  in Congress, the hope is  that the campaign                                                            
would be effective.                                                                                                             
                                                                                                                                
Ms. Duke  continued  that in  order to  be effective,  there are  no                                                            
plans to curtail or eliminate  any of the programs that Arctic Power                                                            
conducts.  She stated that  the campaign  would continue to  include                                                            
such things as  the North Slope tours and the outreach  program. She                                                            
stressed that  the funding would be  sufficient for a shortened  but                                                            
aggressive  campaign effort; however,  she continued that  were this                                                            
funding spread over a nine-month  or yearlong timeframe, it would be                                                            
insufficient.                                                                                                                   
                                                                                                                                
Senator  Olson  questioned  whether this  "conservative  amount"  of                                                            
funding,  as compared  to  historically  higher levels  of  funding,                                                            
might jeopardize the effectiveness of the campaign.                                                                             
                                                                                                                                
Ms. Duke responded that  Arctic Power would pursue the campaign with                                                            
the assumption  that additional  funding would  be forthcoming.  She                                                            
reiterated  that the  decision  was made  to conduct  an  aggressive                                                            
campaign.                                                                                                                       
                                                                                                                                
Senator  Bunde  asked whether  Congressional   visits to  ANWR  have                                                            
historically occurred in July.                                                                                                  
                                                                                                                                
Ms.  Duke responded  that  tours have  been  conducted  as early  as                                                            
March.  She communicated  that the  Office of  the Governor  extends                                                            
invitations  to Congressional  members, and  that Arctic Power  then                                                            
coordinates the tour.                                                                                                           
                                                                                                                                
Senator Bunde voiced support of the program.                                                                                    
                                                                                                                                
Senator Hoffman inquired  as to the type of documentation that would                                                            
be supplied to the Legislature.                                                                                                 
                                                                                                                                
Ms. Dukes explained  that Arctic Power would continue  to submit the                                                            
monthly reports  to the  Legislature, the  Governor and to  Alaska's                                                            
Congressional  delegation as  required in  the grant. She  mentioned                                                            
that, as required,  expense reports are submitted  for reimbursement                                                            
and audits  of the program are conducted.  She stated these  records                                                            
are public.                                                                                                                     
                                                                                                                                
Senator  Hoffman  voiced that  this  documentation  is important  as                                                            
there  is  a  "misconception"   that  documentation   has  not  been                                                            
provided.                                                                                                                       
                                                                                                                                
AL ADAMS, Volunteer  and Co-Chair  of Arctic Power and former  State                                                            
Senator,  testified  via  teleconference  from  an  offnet  site  in                                                            
Washington,  DC.  He stated  that the  campaign  to open  ANWR is  a                                                            
coordinated effort  in conjunction with such entities  as the Office                                                            
of the Governor, associated  industry and labor unions, and Alaska's                                                            
Congressional  delegation. He opined that while this  lower level of                                                            
funding might  hamper the process,  the Arctic Power campaign  would                                                            
aggressively  pursue  the additional  votes  required  to open  Area                                                            
1002.                                                                                                                           
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyda Green adjourned the meeting at 10:17 AM.                                                                          

Document Name Date/Time Subjects