Legislature(2011 - 2012)SENATE FINANCE 532

02/16/2012 09:00 AM FINANCE


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09:04:52 AM Start
09:06:48 AM SB161 || SB162
09:53:57 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 160 BUDGET: CAPITAL TELECONFERENCED
Scheduled But Not Heard
+= SB 161 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= SB 162 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Presentation by Karen Rehfeld, Office of TELECONFERENCED
Management and Budget: FY 13 Operating Budget
Amendments
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                     February 16, 2012                                                                                          
                         9:04 a.m.                                                                                              
                                                                                                                                
9:04:52 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Hoffman called the Senate Finance Committee                                                                            
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lesil McGuire, Vice-Chair                                                                                               
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Karen Rehfeld, Director, Office of Management and Budget,                                                                       
Office of the Governor;                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 160    BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          SB 160 was SCHEDULED and NOT HEARD.                                                                                   
                                                                                                                                
SB 161    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          SB 161 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 162    APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          SB 162 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 161                                                                                                           
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs,    capitalizing   funds,   amending                                                                    
     appropriations,   and   making  reappropriations;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
SENATE BILL NO. 162                                                                                                           
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:06:48 AM                                                                                                                    
                                                                                                                                
KAREN REHFELD,  DIRECTOR, OFFICE  OF MANAGEMENT  AND BUDGET,                                                                    
OFFICE  OF  THE  GOVERNOR, discussed  the  Operating  Budget                                                                    
amendments. She  declared that the Operating  Budget totaled                                                                    
$19,434,600; of  that, $12,542,400 was  Unrestricted General                                                                    
Funds,  $5500 in  Designated General  Fund, $1.8  million in                                                                    
other  funds,  and  $5.047 million  in  federal  funds.  She                                                                    
stated   that  some   of  the   items  would   reflect  some                                                                    
supplemental requests:  the Judicial Retirement  System past                                                                    
service costs of $3.7 million,  capitalization of the Trauma                                                                    
Care Fund  of $2 million,  reduction in debt service  due to                                                                    
refinancing of  $2.1 million, and  an operating  request for                                                                    
the  Alaska  Land  Mobile Radio  (ALMR)  Emergency  Response                                                                    
System  of $1.5  million. She  stated that  there were  some                                                                    
technical   corrections  and   transfers   related  to   the                                                                    
executive order  moving the Hearing and  Appeals Office from                                                                    
the Department of  Health and Social Services  (DHSS) to the                                                                    
Department of Administration (DOA).  She noted that ALMR was                                                                    
the  only emergency  response system,  and DOA  had recently                                                                    
made recommendations for consideration  in the Operating and                                                                    
Capital Budgets.                                                                                                                
                                                                                                                                
Ms. Rehfeld looked at the  Operating Budget spreadsheet. She                                                                    
explained  that  the  spreadsheet  was  organized  with  the                                                                    
operating  number  changes  were  on  pages  1  through  12,                                                                    
operating language changes were on  pages 12 through 14, one                                                                    
proposed  amendment to  the Mental  Health  Trust Budget  on                                                                    
page 14, and technical corrections on pages 15 and 16.                                                                          
                                                                                                                                
Ms.  Rehfeld looked  at six  items  on the  first page  that                                                                    
represented three  transactions in  the transferring  of the                                                                    
Administrative  Hearings and  Appeals  Office  from DHSS  to                                                                    
DOA.  She  furthered that  there  were  two amendments  that                                                                    
would need to be made in  order keep the full billing system                                                                    
in working  order. She explained  that the  amendments dealt                                                                    
with   transferring   general   fund   that   was   in   the                                                                    
Administrative Hearing's  budget, to the agencies  that were                                                                    
paying the bills. She stressed  that the proposed system was                                                                    
much more efficient.                                                                                                            
                                                                                                                                
Ms.  Rehfeld  looked  at  page 2  of  the  spreadsheet.  She                                                                    
pointed out the transfer of  about $1 million from DHSS into                                                                    
the Office of Administrative  Hearings in DOA. She explained                                                                    
that the  transfer was  in anticipation  of the  approval of                                                                    
Executive Order  116, which was  highlighted in lines  7 and                                                                    
8.                                                                                                                              
                                                                                                                                
Ms.  Rehfeld  looked  at  line 9.  She  explained  that  the                                                                    
appropriation was a new request  of $75,000 for the Division                                                                    
of Retirement and Benefits, which  had to do with costs that                                                                    
could not be  covered by the Retirement  System trust funds.                                                                    
She  stated  that the  request  included  management of  the                                                                    
political  subdivision  health contracts;  consultant  fees;                                                                    
legal  expenses; and  research and  analysis on  legislation                                                                    
and other activities that were  not appropriate to charge to                                                                    
the  retirement funds.  She stressed  that  the Division  of                                                                    
Retirement and Benefits did not  have general funds for this                                                                    
purpose.                                                                                                                        
                                                                                                                                
Ms.  Rehfeld  looked at  line  10,  and explained  that  the                                                                    
request was  for $1.5 million  for ALMR. She noted  that the                                                                    
Department of  Defense was transferring  sites to  the State                                                                    
of Alaska,  so the State  would be required to  maintain and                                                                    
operate 41  states beginning  July 1,  2012. She  added that                                                                    
there was  a component under  DOA in the Capital  Budget for                                                                    
their  upgrades  to the  ALMR  system,  and for  four  state                                                                    
agencies to upgrade to the new narrow band requirements.                                                                        
                                                                                                                                
9:12:39 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman wondered  how the 41 new  sites compared to                                                                    
the rest  of Alaska,  and queried the  FY 13  ALMR spending.                                                                    
Ms.  Rehfeld  replied  that  there  was  approximately  $2.6                                                                    
million in  the operating  budget for  the ALMR  system. She                                                                    
added  that   she  would  provide  information   from  DOA's                                                                    
recently completed report on ALMR.                                                                                              
                                                                                                                                
Co-Chair Hoffman  stressed that there was  concern about the                                                                    
cost of ALMR,  and how it was implemented.  He stressed that                                                                    
ALMR  did not  cover the  entire state.  He wondered  if the                                                                    
administration was more accepting of  ALMR. He felt that the                                                                    
federal  government  began  programs   and  then  turns  the                                                                    
program to  the control of  the State, with  added financial                                                                    
responsibility.  Ms. Rehfeld  responded that  there were  no                                                                    
other alternatives  for emergency  response than  the Alaska                                                                    
Land Mobile Radio (ALMR).                                                                                                       
                                                                                                                                
Co-Chair  Hoffman queried  a time  when the  committee could                                                                    
review a  cost sharing  plan. Ms.  Rehfeld replied  that the                                                                    
Department of Administration was working on the project.                                                                        
                                                                                                                                
Co-Chair Hoffman  stressed that  there was  great resistance                                                                    
to  a cost-sharing  plans,  and  wondered what  alternatives                                                                    
were   available.  Ms.   Rehfeld  agreed   that  there   was                                                                    
resistance, and explained that  there were discussions about                                                                    
developing a  sliding scale. She  felt that a  program could                                                                    
be structured without burdening the communities.                                                                                
                                                                                                                                
Senator Thomas pointed  out that his district  used the ALMR                                                                    
system  often.  He wondered  if  federal  agencies had  been                                                                    
considered for  cost-sharing. Ms.  Rehfeld replied  that all                                                                    
system users were subject to the cost-allocation plan.                                                                          
                                                                                                                                
9:17:23 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld explained  page 3, line 11. She  stated that the                                                                    
appropriation  was   $800,000  for  the  Office   of  Public                                                                    
Advocacy.   She  pointed   out   that  increased   caseloads                                                                    
resulting in  higher costs indicated  a need  for additional                                                                    
funding to  meet FY 13  obligations. Projections  were based                                                                    
upon  actual expenditure  for the  first half  of FY  12 and                                                                    
comparisons  to  prior  year expenditures.  In  FY  11,  the                                                                    
Office of  Public Advocacy (OPA) received  a supplemental in                                                                    
the amount of $900,000. A  supplemental request for FY 12 of                                                                    
$800 had  been requested.  Additional funding  was requested                                                                    
in the FY 13 amended budget to better reflect estimated.                                                                        
                                                                                                                                
Ms. Rehfeld  looked at page  3, line 13. She  explained that                                                                    
the  request was  for $62,000  for Economic  Development for                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development.  She stated  that  the  request provided  grant                                                                    
funding for  a new Alaska Regional  Development Organization                                                                    
(ARDOR) in  the Lower  Yukon, and  noted that  it was  a new                                                                    
request for FY 13.                                                                                                              
                                                                                                                                
Ms. Rehfeld pointed out page  3, line 14, and explained that                                                                    
the request  was for  $600,000 for  Community Jails  for the                                                                    
Department of  Corrections (DOC). She noted  that additional                                                                    
funding was  necessary to  cover operating  costs of  the 15                                                                    
community jails based on financial  reports provided to DOC.                                                                    
The  Department  of   Corrections  was  currently  analyzing                                                                    
financial  data from  the community  jails and  evaluating a                                                                    
methodology  to adequately  cover  their operational  costs.                                                                    
This  amendment provided  FY 13  funding  based on  a FY  12                                                                    
supplemental   request  in   the   same   amount,  and   DOC                                                                    
anticipated updating the  community jails funding allocation                                                                    
for FY 14.                                                                                                                      
                                                                                                                                
Senator Thomas looked  at the request on line  13, and hoped                                                                    
that there  was an  examination of coordination  that needed                                                                    
to  exist between  Department of  Transportation and  Public                                                                    
Facilities (DOT/PF), Department  of Natural Resources (DNR),                                                                    
and DCCED.  He felt there was  an issue of the  needs versus                                                                    
what was actually occurring.                                                                                                    
                                                                                                                                
Co-Chair Hoffman  felt that there  were some  differences in                                                                    
the  way  that  communities were  reimbursed  for  community                                                                    
jails. He wondered if any  of the major department conflicts                                                                    
had  appeared  during  contract  negotiations.  Ms.  Rehfeld                                                                    
replied  that  that  there were  some  difficulties  at  the                                                                    
community jail  in Kotzebue, which resulted  in its closing.                                                                    
She  stated   that  Kotzebue  was  poised   to  re-open  the                                                                    
community  jail,  and  had  worked  hard  to  come  to  some                                                                    
agreements with  DOC. She  explained that  the state  had 15                                                                    
community jails,  each with  their own  unique circumstances                                                                    
and  conditions.   She  stated   that  there  had   been  an                                                                    
examination of the costs that  were appropriately charged to                                                                    
the  community  jail  contracts to  ensure  that  there  was                                                                    
consistency  in how  the costs  were  covered. She  stressed                                                                    
that it  was to everyone's  benefit to have  community jails                                                                    
functioning efficiently.                                                                                                        
                                                                                                                                
9:22:28 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  alleged that the State  would probably see                                                                    
triple  the  cost  of community  jails,  if  the  particular                                                                    
community did not offer the community jail service.                                                                             
                                                                                                                                
Senator  Olson stressed  that every  year there  were issues                                                                    
regarding community  jails in  the Northwest  Arctic Region,                                                                    
and wondered why  there was no effort to  work directly with                                                                    
the communities in resolving the  cost issues that the State                                                                    
was responsible for. Ms. Rehfeld  replied that the issue was                                                                    
very  complicated,  and  it was  to  everyone's  benefit  to                                                                    
resolve the issue.                                                                                                              
                                                                                                                                
Senator Olson  stressed that the prisoner  transport between                                                                    
Kotzebue and Nome was tremendously  expensive, and wanted to                                                                    
see  more results  in resolving  the situation.  Ms. Rehfeld                                                                    
felt that there was progress, but it was slow.                                                                                  
                                                                                                                                
Senator  Olson   stated  that  the  City   of  Kotzebue  had                                                                    
presented their priorities, and the  City noted little or no                                                                    
acquisition from DOC.                                                                                                           
                                                                                                                                
Ms. Rehfeld  looked at page  4, line 15, and  explained that                                                                    
the  request was  for  a minor  technical  adjustment for  a                                                                    
decrement  of $29,900  to correct  the  amount of  estimated                                                                    
Permanent  Fund Dividend  (PFD)  felon  funds available  for                                                                    
fiscal health care under DOC.                                                                                                   
                                                                                                                                
Ms. Rehfeld  discussed page 4,  line 16, and noted  that the                                                                    
request was for  $22,500 for the Human  Rights Commission in                                                                    
the Governor's  Office. The  request would  transfer general                                                                    
fund  credit  and  bill all  hearing  services  to  existing                                                                    
reimbursable  services  agreement.  After  the  December  15                                                                    
budget  release it  was determined  that the  transfer would                                                                    
provide billing efficiencies.                                                                                                   
                                                                                                                                
Ms.  Rehfeld  looked  at  page  4,  lines  17  and  18,  and                                                                    
explained that  the requests were  for an increase  for both                                                                    
the  State  Heating  Assistance   Program  and  the  Heating                                                                    
Assistance Program that would  go directly to native tribes.                                                                    
She noted that the request  was included in the supplemental                                                                    
bill. She  stressed that the  numbers would be  refined. She                                                                    
explained that  the Heating Assistance Programs  would total                                                                    
$31.7 million for FY 13.                                                                                                        
                                                                                                                                
9:26:16 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman appreciated the  monitoring of the numbers,                                                                    
but houses that relied on  fuel had seen the highest heating                                                                    
costs ever, if the houses  depended on oil heat. He stressed                                                                    
that it  was the first  year that the State  had anticipated                                                                    
revenues from oil to exceed  over $100 per barrel, and added                                                                    
that gas  prices continued to  rise on a national  level. He                                                                    
requested further  analysis of  the two programs  on Heating                                                                    
Fuel Assistance.  In rural areas  of the state,  people were                                                                    
spending 50  percent of their  disposable income  on energy.                                                                    
He felt that the State  was benefitting, but the people were                                                                    
not.  Ms.   Rehfeld  replied  that  the   numbers  would  be                                                                    
carefully examined.                                                                                                             
                                                                                                                                
Ms. Rehfeld  discussed page 5,  line 19, and  explained that                                                                    
the request was for $350,000  for Women, Children and Family                                                                    
Health in DHSS. She noted  that due to increasing demand for                                                                    
specialty  clinic, the  Women,  Children  and Family  Health                                                                    
component   requests  a   general   fund  program   receipts                                                                    
authority  increase in  order to  utilize  collection of  an                                                                    
increasing total  of fee  receipts. This  amendment provided                                                                    
funding based  on a FY  12 supplemental request in  the same                                                                    
amount.                                                                                                                         
                                                                                                                                
Senator  Thomas wondered  if there  was  an audit  regarding                                                                    
exactly what the  need and demand was  pertaining to newborn                                                                    
screenings.  Ms.  Rehfeld  replied   that  DHSS  had  looked                                                                    
closely at public health services.                                                                                              
                                                                                                                                
Co-Chair  Hoffman  requested  more detailed  information  in                                                                    
response Senator Thomas's question.                                                                                             
                                                                                                                                
Ms. Rehfeld  looked at  page 5,  lines 20,  21, and  22. She                                                                    
explained that  the requests were  related to  the Executive                                                                    
Order 116 transfer from DHSS to DOA.                                                                                            
                                                                                                                                
Ms. Rehfeld  discussed page 6,  line 23, and  explained that                                                                    
the request  was for $168,000 for  the Workers' Compensation                                                                    
Benefits  Guaranty  Fund  in the  Department  of  Labor  and                                                                    
Workforce  Development  (DLWD).  She reported  that  due  to                                                                    
increased legal costs and  increase in Workers' Compensation                                                                    
Benefit Guaranty Fund authorization  was required to pay for                                                                    
representation provided  by DOL.  The amendment  provided FY                                                                    
13 funding  based on  an FY 12  supplemental request  of the                                                                    
same amount.                                                                                                                    
                                                                                                                                
Ms. Rehfeld looked t page 6,  line 24, and explained that it                                                                    
was for a  technical fund source adjustment  of $7.2 million                                                                    
from  the federal  American  Recovery  and Reinvestment  Act                                                                    
(ARA)  funding  to  regular  federal  receipts  in  Business                                                                    
Services in DLWD.                                                                                                               
                                                                                                                                
Ms. Rehfeld discussed page 6, lines  25 and 26 and 27, which                                                                    
were   specific   items   that  were   identified   in   the                                                                    
supplemental  bill  for  the   Department  of  Military  and                                                                    
Veterans  Affairs  (DMVA)  having   to  do  with  the  match                                                                    
requirement   change  for   Kodiak,  Ketchikan,   and  Kenai                                                                    
armories.  She added  that the  Bethel Armory  had not  been                                                                    
decommissioned, but  the new  armory was  already operating,                                                                    
so  there were  additional  costs. She  noted a  calculation                                                                    
correction on electrical usage charges  at Eielson Air Force                                                                    
Base.                                                                                                                           
                                                                                                                                
Ms. Rehfeld  looked at page  7, line 28, and  explained that                                                                    
the request would remove the  FY 13 governor's request for a                                                                    
partial  year of  the annual  estimated operating  costs for                                                                    
the   certified  veteran's   cemetery   in  Fairbanks.   The                                                                    
cemetery's  ongoing operating  and  maintenance costs  would                                                                    
instead  start in  FY  14,  allowing additional  preparatory                                                                    
arctic  construction requirements.  The  delay became  known                                                                    
after the December 15 release of the governor's budget.                                                                         
                                                                                                                                
Ms.  Rehfeld discussed  page 7,  line 29,  and noted  that a                                                                    
contribution amount  needed for the normal  cost and expense                                                                    
load  in FY  13 had  decreased  from the  FY 12  recommended                                                                    
contribution amount, and was a new request for FY 13.                                                                           
                                                                                                                                
9:32:48 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  looked at page  7, line 30, and  explained that                                                                    
the request  was for $260,000  for the North  Latitude Plant                                                                    
Material Center  for DNR. She  noted that the  project would                                                                    
address  the  needs  of the  commercial  plant  industry  in                                                                    
developing  new   crops,  determining  which   varieties  to                                                                    
produce,  and  evaluation of  the  technology  needed to  be                                                                    
competitive. This was a new request for FY 13.                                                                                  
                                                                                                                                
Co-Chair Hoffman  wondered where the Plant  Materials Center                                                                    
was  located. Ms.  Rehfeld replied  that it  was in  Palmer,                                                                    
Alaska.                                                                                                                         
                                                                                                                                
Ms. Rehfeld  discussed page 7,  line 31, and noted  that the                                                                    
request  was  for  $75,000  for  the  Alaska  State  Trooper                                                                    
Detachments in  the Department of  Public Safety  (DPS). She                                                                    
explained  that DPS  currently contracted  with the  City of                                                                    
Kotzebue to provide 24-hour dispatch  services and for local                                                                    
transport  of prisoners  to and  from  court. The  amendment                                                                    
provided  FY  13 funding  based  on  an FY  12  supplemental                                                                    
request in the same amount.                                                                                                     
                                                                                                                                
Ms. Rehfeld  discussed page 7,  line 32, and  explained that                                                                    
the  request  was  for  $1.9 million  of  the  Alaska  State                                                                    
Trooper  Detachments  in  DPS.  She noted  that  the  Alaska                                                                    
Bureau  of Highway  Patrol would  no longer  receive federal                                                                    
funds for  non-DUI related traffic enforcement.  In order to                                                                    
maintain  traffic enforcement  to  include non-DUI  specific                                                                    
activity,   such  as   impaired   driving,  youth   drivers,                                                                    
aggressive   driving   and    speeding,   and   seat   belts                                                                    
enforcement,   additional   funding   was   necessary.   The                                                                    
amendment  provided  FY  13  funding   based  on  an  FY  12                                                                    
supplemental request in the same amount.                                                                                        
                                                                                                                                
Ms. Rehfeld  looked at page  8, line 33, and  explained that                                                                    
the  request  was  for $5,000  for  the  Alcoholic  Beverage                                                                    
Control  Board in  DPS.  She noted  that  the request  would                                                                    
transfer  the  general  fund credit  and  bill  all  hearing                                                                    
services  to the  existing reimbursable  services agreement.                                                                    
After the December 15 budget  release it was determined that                                                                    
the transfer would provide billing efficiencies.                                                                                
                                                                                                                                
Ms. Rehfeld  discussed page 8,  line 34, and noted  that the                                                                    
Alaska  Records and  Identification  Bureau  had been  under                                                                    
collecting  various restricted  revenue sources  for several                                                                    
years. The  reduction in restricted revenue  authority would                                                                    
bring budgeted authority in line with actual revenue.                                                                           
                                                                                                                                
Ms. Rehfeld  looked at page 8,  line 36, and noted  that the                                                                    
request was  for $45,600  for the Tax  Division in  DOR. She                                                                    
explained  that the  request would  transfer a  general fund                                                                    
credit from  DOA Office of Administrative  Hearings and bill                                                                    
all hearing  services to the existing  reimbursable services                                                                    
agreement.                                                                                                                      
                                                                                                                                
Ms. Rehfeld  looked at page  8, line 37, and  explained that                                                                    
the  request  would  eliminate  a   request  in  the  FY  13                                                                    
governor's  budget   released  on  December  15,   2011  for                                                                    
increased contract  costs to manufacture  Alaska's cigarette                                                                    
tax  stamps.  The  manufacturer  had  agreed  to  delay  the                                                                    
increase  in  the   price  due  to  push   back  from  state                                                                    
governments. The Tax Division  anticipated that the increase                                                                    
would be implemented in 2012.                                                                                                   
                                                                                                                                
Ms. Rehfeld  discussed page 9,  line 38, and  explained that                                                                    
the request  was for  $77,000 for  the Treasury  Division in                                                                    
DOR. It  would replace  the language  section 27(d)  with an                                                                    
appropriation in Section 1.                                                                                                     
                                                                                                                                
Ms. Rehfeld looked  at page 9, line 39, and  stated that the                                                                    
request  was  for  $1.044  million  for  the  Child  Support                                                                    
Services Division  in DOR. The Outdated  language in Section                                                                    
19 (a) and  (b) would be removed so that  it allowed Federal                                                                    
incentive payments to be used as State matching funds.                                                                          
                                                                                                                                
9:37:47 AM                                                                                                                    
                                                                                                                                
Ms.  Rehfeld  discussed  page  9,   lines  40  and  41,  and                                                                    
explained that  the requests were  for the  Alaska Permanent                                                                    
Fund  for   three  positions  having   to  do   an  in-house                                                                    
investment management. She pointed  out that currently those                                                                    
positions  were held  by  outside  management services.  She                                                                    
stressed that  the Permanent Fund  believed that  they could                                                                    
provide the  positions in-house at  greatly reduced  cost to                                                                    
the State.                                                                                                                      
                                                                                                                                
Ms. Rehfeld  looked at page  9, line 42, and  explained that                                                                    
there were some adjustments in  the December 15, 2011 budget                                                                    
relating to  insurance costs for  rural airports.  She noted                                                                    
two  transactions in  the amended  budget  to correct  those                                                                    
calculations.                                                                                                                   
                                                                                                                                
Ms. Rehfeld looked at page 10,  line 43, and stated that the                                                                    
request was  for $121,100 for  the Northern  Region Highways                                                                    
and Aviation  in DOT/PF. She  explained that funding  for an                                                                    
airport  manager   position  at   the  Barrow   Airport  was                                                                    
necessary  in order  to comply  with Federal  Security (TSA)                                                                    
and   Certification   (FAA)   requirements,   mandates   and                                                                    
directives delivered  to the  department after  the December                                                                    
15 release of the FY 13 budget.                                                                                                 
                                                                                                                                
Co-Chair   Stedman   requested  information   regarding   an                                                                    
increment to  close the  gap at  the Ketchikan  airport. Ms.                                                                    
Rehfeld responded  that there was intent  to cover insurance                                                                    
costs for the ferries to  and from the airport in Ketchikan.                                                                    
She pointed out that there  was an issue because the ferries                                                                    
were not state-owned.                                                                                                           
                                                                                                                                
Co-Chair Hoffman  appreciated the effort to  make the Bethel                                                                    
airport a 24-hour facility and the improved services.                                                                           
                                                                                                                                
Senator  Olson looked  at the  Barrow airport,  and wondered                                                                    
what the plan for the  manager would be. Ms. Rehfeld replied                                                                    
that the position would be in Barrow.                                                                                           
                                                                                                                                
Senator Olson  wondered if the  manager would be  local. Ms.                                                                    
Rehfeld did not  know, and hoped it would be  a local person                                                                    
in Barrow.                                                                                                                      
                                                                                                                                
9:42:19 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld looked at page 10,  line 45 to page 12, line 54.                                                                    
She pointed out  line 57. She stated that  the requests were                                                                    
for the  University of  Alaska. She looked  at line  47, and                                                                    
stated that a federal grant  had been received for mentoring                                                                    
in urban areas. It was a $14.9 million grant over a five-                                                                       
year  period.   She  explained   that  the   University  had                                                                    
requested $2.5 million  in federal funds for  the grant. She                                                                    
furthered that line  49 was a request  for increased federal                                                                    
authorization for Pell Grants.  She furthered that the other                                                                    
University  requests were  for moving  federal authorization                                                                    
from one component to another.                                                                                                  
                                                                                                                                
Ms.  Rehfeld looked  at  the  language amendments  beginning                                                                    
with  page 12,  line 57.  She explained  that the  amendment                                                                    
would  delete language  appropriating  general  funds to  an                                                                    
unexpended  and unobligated  balance  of $5  million in  the                                                                    
state insurance catastrophe reserve account.                                                                                    
                                                                                                                                
Ms. Rehfeld explained page 12,  line 58. She stated that the                                                                    
amendment  deleted  Section  19  (a)  and  (b)  for  federal                                                                    
incentive payments to  be used as state  matching funds. The                                                                    
appropriation for state match  would be requested in Section                                                                    
1 and  increased by $265,300  for a total request  of $1.044                                                                    
million to recalculate the 34 percent match rate.                                                                               
                                                                                                                                
Ms.  Rehfeld highlighted  page 12,  line  59, and  explained                                                                    
that  the   amendment  was  for   the  sum  of   $2  million                                                                    
appropriated from the general fund to the trauma care fund.                                                                     
                                                                                                                                
Ms. Rehfeld discussed  page 12, line 60, and  stated that it                                                                    
would   delete  Section   27  (d)   and  replace   with  and                                                                    
appropriation in Section 1.                                                                                                     
                                                                                                                                
Ms.  Rehfeld highlighted  page 12,  line  61, and  explained                                                                    
that the amendment  would delete the deposit  in the defined                                                                    
benefit  plan  account  in the  Alaska  National  Guard  and                                                                    
Alaska  Naval Militia  retirement  system  for past  service                                                                    
costs. She  noted that no  direct contribution  was required                                                                    
for past service costs.                                                                                                         
                                                                                                                                
Ms. Rehfeld explained  page 13, line 62,  and explained that                                                                    
the  deposit in  the  defined benefit  plan  account in  the                                                                    
judicial retirement  system for  the purpose of  funding the                                                                    
judicial retirement  system un  AS 22.23.046 for  the fiscal                                                                    
year ending June 30, 2013.                                                                                                      
                                                                                                                                
Co-Chair Stedman queried the  position of the administration                                                                    
on  the request  on line  62. Ms.  Rehfeld replied  that the                                                                    
administration supports  funding the past service  cost. She                                                                    
explained that there was no  requirement and no cap, and the                                                                    
administration  wanted   to  be  sure  that   there  was  an                                                                    
incorporation of the courts' request.                                                                                           
                                                                                                                                
Co-Chair Hoffman pointed  out that the request  was left out                                                                    
of  the  FY  13,  and  wondered if  the  language  would  be                                                                    
included in the  original FY 14 budget.  Ms. Rehfeld replied                                                                    
that  it  was  preferred  to  include  the  request  in  the                                                                    
original budget request.                                                                                                        
                                                                                                                                
9:48:54 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld explained  page 13, line 63,  and explained that                                                                    
the  general  fund  debt service  amount  was  reduced  from                                                                    
$29,689.9  million  to  $27,578   million  as  a  result  of                                                                    
refinancing the 2003A bonds in January 2012.                                                                                    
                                                                                                                                
Ms. Rehfeld  looked at page 13,  lines 64 to 67,  and stated                                                                    
that these  amendments would address refinancing  related to                                                                    
the  refinancing of  the  General  Obligation Bonds,  Series                                                                    
2003A                                                                                                                           
                                                                                                                                
Ms. Rehfeld  explained page  14, and  noted the  request for                                                                    
the Mental Health Budget. She  stated that the amendment was                                                                    
from the Mental  Health Trust for $500,000  in Mental Health                                                                    
Trust  receipts  for  patient-centered  medical  homes.  She                                                                    
explained that  the request was for  a strategic integration                                                                    
plan development  and one-time  competitive grans for  up to                                                                    
four   pilot  programs   for  medical   home  infrastructure                                                                    
development.  She added  that  it was  a  new Mental  Health                                                                    
Trust recommendation for FY 13.                                                                                                 
                                                                                                                                
Co-Chair  Hoffman  wondered  where  the  pilot  project  was                                                                    
located.  Ms.  Rehfeld  replied that  the  request  was  for                                                                    
competitive grants,  so she  did not  know exactly  where it                                                                    
would be located.                                                                                                               
                                                                                                                                
Ms.  Rehfeld  explained that  pages  15  and 16  highlighted                                                                    
technical  corrections  having  to   do  with  language  and                                                                    
numbers sections. She  pointed out line 78,  and stated that                                                                    
there would be a deletion  of $1.5 million in federal funds.                                                                    
She  stressed  that it  was  a  carry-forward estimate,  and                                                                    
would be  included in the end  of the year. She  stated that                                                                    
those items  were identified by Legislative  Finance and the                                                                    
Office of Management and Budget.                                                                                                
                                                                                                                                
Senator  Thomas looked  at line  40, and  wondered what  the                                                                    
decrement would amount to. Ms.  Rehfeld replied that she did                                                                    
not  know,   but  noted  a  section   that  highlighted  the                                                                    
investment  management costs  for  the  Permanent Fund,  and                                                                    
agreed to provide further information.                                                                                          
                                                                                                                                
Senator Thomas  looked at line  28, and noted that  DVMA was                                                                    
being charged  30 percent overhead  by DOT. He felt  that 30                                                                    
percent  was  high,  and  hoped   that  there  would  be  an                                                                    
examination  of  that  percentage.  Ms.  Rehfeld  agreed  to                                                                    
explore that issue.                                                                                                             
                                                                                                                                
Senator  Egan pointed  out  lines 40  and  41, and  wondered                                                                    
where  those  specific  positions   would  be  located.  Ms.                                                                    
Rehfeld replied that the positions would be in Juneau.                                                                          
                                                                                                                                
SB  161  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB  162  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 160                                                                                                           
                                                                                                                                
     "An Act  making and amending  appropriations, including                                                                    
     capital   appropriations   and  other   appropriations;                                                                    
     making   appropriations   to  capitalize   funds;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
SB 160 was SCHEDULED and NOT HEARD.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
9:53:57 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:53 AM.                                                                                           

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