HOUSE FINANCE COMMITTEE MAY 5, 1993 1:00 P.M. TAPE HFC 93 - 129, Side 1, #000 - end. TAPE HFC 93 - 129, Side 2, #000 - end. TAPE HFC 93 - 130, Side 1, #000 - end. TAPE HFC 93 - 130, Side 2, #000 - #283. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:00 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT Bruce Campbell, Commissioner, Department of Transportation and Public Facilities; Annette Kreitzer, Aide, Senator Loren Leman; Representative Tom Brice; Representative Jerry Mackie; David Williams, Planner, Division of Medical Assistance, Department of Health and Social Services; Mitch Gravo, Northern Air Cargo, Anchorage, Alaska; Chris Gates, Director, Division of Economic Development, Department of Commerce and Economic Development; Senator George Jacko; Paul Fuhs, Commissioner, Department of Commerce and Economic Development. SUMMARY INFORMATION SB 91 An Act providing for coverage of midwife services under Medicaid; reordering the priority of optional services provided by the state under Medicaid; and providing for an effective date. CS SS SB 91 was reported out of Committee with a "do pass" recommendation and with three fiscal notes by the Department of Health and Social Services dated 3/22/93. SB 142 An Act relating to the Alaska regional economic assistance program; and providing for an effective date. 1 HCS CS SB 142 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Senate Finance Committee dated 4/08/93. SB 154 An Act relating to the economic development grant program; and providing for an effective date. SB 154 was held in Committee for further discussion. SB 198 An Act exempting certain activities of the Department of Transportation and Public Facilities from the regulation provisions of the Administrative Procedure Act and allowing other procedures for those activities; and providing for an effective date. SB 198 was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Health and Social Services dated 4/18/93. SENATE BILL 91 "An Act providing for coverage of midwife services under Medicaid; reordering the priority of optional services provided by the state under Medicaid; and providing for an effective date." ANNETTE KREITZER, AIDE, SENATOR LOREN LEMAN, commented the legislation would add certified direct entry midwives to the optional services covered by Medicaid. At least 42% of the pregnant women in Alaska are eligible for Medicaid. The bill allows those women to use midwifery services instead of mandating that they use clinics or hospitals for birthing services. In expanding the options for using midwifery services for births, the State will stretch its Medicaid dollars. Representative Hanley questioned the savings expected to be incurred. Representative Therriault acknowledged that the shift in midwife care would be for women who otherwise would go to the hospital which would create greater costs to the State than those opting for home delivery. DAVID WILLIAMS, PLANNER, DIVISION OF MEDICAL ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, commented that one hundred twenty-five Medicaid eligible women would be giving birth each year. Of the eligible women, sixty of those would be shifted away from hospital physician costs indicated by the fiscal note. He pointed out, the service 2 appeals to many women who reject the current system. Representative Therriault asked if there were Medicaid eligible women who do not use hospital services because they do not want the physician care. Mr. Williams said there are. Mr. Williams added, women who choose the midwife service will save costs because of the preventative and up-front prenatal care the child receives. Representative Hanley reiterated concerns with long term costs. Representative Brown asked if midwife services were considered to be optional or mandatory. Mr. Williams stated that the intent language recommends that all services be kept active with the funding available, although the service is optional with the alternatives available. Representative Parnell MOVED to report CS SS SB 91 (HES) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS SS SB 91 (HES) was reported out of Committee with a "do pass" recommendation and with three fiscal notes by the Department of Health and Social Services dated 3/22/93. SENATE BILL 198 "An Act exempting certain activities of the Department of Transportation and Public Facilities from the regulation provisions of the Administrative Procedure Act and allowing other procedures for those activities; and providing for an effective date." BRUCE CAMPBELL, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated based on the court decision in the rural airport landing fee lawsuit, Anchorage and Fairbanks (FIA) International Airports may be required to establish all fees and fee changes through the regulatory process defined in the Administrative Procedures Act. AIA and FIA establish landing fees, terminal rent, and other airline fees through uniform Airline Operating Agreement formulas negotiated with the airlines serving the two airports. Representative Hoffman asked the changes intended for rural airports. Commissioner Campbell stated that those proposed regulations have been discussed in the Administrative Procedures Act. Representative Foster provided the Committee with a letter 3 from Northern Air Cargo, Inc. (NAC). [Attachment #3]. Commissioner Campbell replied he had responded to that letter addressing the word changes. [Attachment #1 & #2]. He offered to provide a "Letter of Intent" addressing the legislative enforcement. Representative Grussendorf asked if the proposed legislation was prepared because previous DOTPF Commissioner's did not follow the Administrative Procedures Act and consequently were sued. Commissioner Campbell replied the Attorney General thought the legislation was necessary or the possibility that the State would be subject to law suits from any party who had established rates at the international airports under previous regulations. Representative Grussendorf pointed out that the international airports would be exempt from the act. Commissioner Campbell noted there would be no increased fees resulting from the implementation of the legislation. He added, the State was sued because it had not followed the Administrative Procedures Act. Currently, no one is due money from the international airport. Co-Chair MacLean asked if adequate public hearings had been scheduled for the bill. Commissioner Campbell replied there would be a new newspaper add running for three weeks prior to the public hearings. Representative MacLean asked if fees would be established for the rural carriers. Commissioner Campbell stated the legislation would only affect the international airports in Anchorage and Fairbanks. He added, the Department could establish fees under A.P.A. Representative Hoffman asked who was responsible for establishing the fees. Commissioner Campbell replied, law defines that fees be set by order of the Commissioner. (Tape Change, HFC 93-129, Side 2). MITCH GRAVO, NORTHERN AIR CARGO, INC., ANCHORAGE, ALASKA, commented on a concern in the legislation regarding litigation on the rural airports and the authority the Commissioner is given. He feared that persons not subject to litigation would have their rates and fees increased to make up for the decrease resulting from the judgement. Commissioner Campbell explained the money paid in judgments to the carriers would be subject to a legislative appropriation. Representative Brown questioned the relationship between the international and the rural airports finances. Commissioner Campbell pointed out they are separate. The international 4 airports operate from a revolving fund, with the landing fees and the charges to those airports pay for the operation. Representative Foster MOVED to report SB 198 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. SB 198 was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Transportation and Public Facilities dated 4/18/93. SENATE BILL 142 "An Act relating to the Alaska regional economic assistance program; and providing for an effective date." Representative Hanley provided the Committee with a sectional analysis of SB 142. [Attachment #4]. He suggested a "floating" match rate to be itemized within the legislation. CHRIS GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, assured Representative Hanley that there would be no string-free grants in the legislation. Match amounts will be required. Representative Hanley provided the Committee with Amendment Gates noted DCED would be comfortable with the amendment. Representative Martin noted his concern with the fiscal impact of the bill. Mr. Gates stated a new fiscal note could be established by the Committee. He added, the Department would like to fully fund each of the fifteen Regional Development Organizations (ARDOR's) at $100 thousand dollars although they are willing to negotiate. Co-Chair MacLean asked the difference between SB 154 and SB 142. Mr. Gates replied that SB 154 is a capital grant bill which allows the Legislature to establish certain money for proper economic development grant projects which must meet six criteria for job placement and economic activity. The funding would be for one person per area and would not cover any project development. Mr. Gates commented on the two fiscal notes. The original fiscal note requested by the Department was $750 thousand 5 dollars. The Senate Finance Committee reduced the note to $250 thousand dollars. There is a requirement for cash matches, although in-kind matches have been accepted. Mr. Gates advised that there is Federal Economic Development Administration money available to administrate the program. Some ARDOR's not having a functioning board of director's in the local region have been decertified. Representative Brown asked if there have been any civil lawsuits involving ARDOR's. Mr. Gates replied there has not been any lawsuits against any board members to date. Representative Brown noted her concern that the legislation does have private goals and it also works hand-in-hand with private industry. Mr. Gates reiterated, the fear of being sued has motivated many ARDOR's to make careful decision. Representative Hanley MOVED Amendment #1. (Tape Change, HFC 93-130, Side 1). Representative Brown MOVED a language change to Page 2, Line 15 and Line 20. She recommended deleting on Line 15, "for the project" and on Line 19-20, deletion of the language "to be used for the project". Mr. Gates noted the amendment was acceptable. Representative Brown MOVED to amend Amendment being NO OBJECTION to the amended Amendment #1, it was adopted. Representative Foster MOVED to report HCS CS SB 142 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. Representative Navarre MOVED to amend the fiscal note to $500 thousand dollars. SENATOR GEORGE JACKO commented that the $250 thousand dollar fiscal note would be sufficient. Representative Navarre WITHDREW THE MOTION. There being NO OBJECTION, it was so ordered. HCS CS SB 142 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Senate Finance Committee dated 4/08/93. SENATE BILL 154 "An Act relating to the economic development grant program; and providing for an effective date." Mr. Gates stated that CSSB 154 establishes the Economic 6 Development Grant Program and places directly in statute specific economic criteria that municipalities and Regional Development Organizations (ARDOR's) must meet in order to be eligible. The Office of Management and Budget will form an evaluation committee with the Department of Commerce and Economic Development (DCED) and the Department of Community and Regional Affairs (DCRA) and other agencies to prioritize the projects. The amended version of the bill replaces DCED as the administering agency with the Department of Administration (DOA). The program creates an competitive approach in which projects are prioritized. Discussion followed between Representative Navarre and Mr. Gates regarding the grant fund appropriation and the prioritized list. Representative Navarre felt the proposed program was a duplication of other legislation. Mr. Gates replied there are gaps in other proposed project legislation. Co-Chair Larson agreed with Representative Navarre. Mr. Gates stated the legislation is not a matching grant, and there should be no match required. Representative Brown did not understand the project feasibility. She recommended adding a requirement to indicate the economic feasibility of the legislation. The criteria submitted would be used to rank rather than to match. Mr. Gates disagreed with Representative Brown. SENATOR GEORGE JACKO stated that an intent letter had been exchanged between the House and Senate Finance Co-Chairs indicating criteria used for the legislation. Mr. Gates explained the fund at DCED is a matching grant fund for non- profit organizations which requires a match. The proposed legislation does not require a catch match. Economic development projects can be funded without the requirement for a match although one of the criteria is to determine how much money is being brought in from other sources. The primary difference between the two is the match requirement. Representative Parnell asked if a match requirement was imposed on the legislation, would the purpose be defeated. Senator Jacko replied, the established criteria would require that a match be provided by local participation in the project. Co-Chair MacLean pointed out that within the Senate capital budget, $15 million dollars worth of economic matching grant monies are available. Mr. Gates added each project on the list have match components. Representative Brown suggested that taxes and other costs imposed to the State should be indicated. She asked that specified criteria be required. Representative Brown 7 recommended to continue funding economic development projects already in place rather than beginning new programs. Senator Jacko said his intention was to establish a better system with the Administration's assistance. Representative Brown asked why the Department of Administration was chosen to be the lead agency for the proposed legislation. (Tape Change, HFC 93-130, Side 2). Mr. Gates replied that DOA currently administer's all the paper work and could insure a consistent process. Representative Martin noted concern with the criteria used to determine the projects and felt that the unemployment status of an area should be emphasized. Mr. Gates replied ranking the projects was not prioritized. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated there are "ready" grants and "small" grants in economic development which are used for feasibility studies. The proposed legislation is meant for the large scale projects which are not indicated in the rest of the budget. Representative Brown asked how the projects differ from the existing process complied in the Governor's capital budget for statewide economic development projects. Commissioner Fuhs stated the difference is that SB 154 establishes six criteria which are to be used by the Legislature to evaluate the projects. CS SB 154 (L&C)(efd fld) was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 3:10 P.M. HOUSE FINANCE COMMITTEE MAY 5, 1993 1:00 P.M. TAPE HFC 93 - 129, Side 1, #000 - end. TAPE HFC 93 - 129, Side 2, #000 - end. TAPE HFC 93 - 130, Side 1, #000 - end. TAPE HFC 93 - 130, Side 2, #000 - #283. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance 8 Committee to order at 1:00 P.M. PRESENT Co-Chair Larson Representative Brown Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Grussendorf Representative Hoffman Representative Martin Representative Navarre Representative Parnell Representative Therriault ALSO PRESENT Bruce Campbell, Commissioner, Department of Transportation and Public Facilities; Annette Kreitzer, Aide, Senator Loren Leman; Representative Tom Brice; Representative Jerry Mackie; David Williams, Planner, Division of Medical Assistance, Department of Health and Social Services; Mitch Gravo, Northern Air Cargo, Anchorage, Alaska; Chris Gates, Director, Division of Economic Development, Department of Commerce and Economic Development; Senator George Jacko; Paul Fuhs, Commissioner, Department of Commerce and Economic Development. SUMMARY INFORMATION SB 91 An Act providing for coverage of midwife services under Medicaid; reordering the priority of optional services provided by the state under Medicaid; and providing for an effective date. CS SS SB 91 was reported out of Committee with a "do pass" recommendation and with three fiscal notes by the Department of Health and Social Services dated 3/22/93. SB 142 An Act relating to the Alaska regional economic assistance program; and providing for an effective date. HCS CS SB 142 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Senate Finance Committee dated 4/08/93. SB 154 An Act relating to the economic development grant program; and providing for an effective date. SB 154 was held in Committee for further discussion. SB 198 An Act exempting certain activities of the Department of Transportation and Public Facilities 9 from the regulation provisions of the Administrative Procedure Act and allowing other procedures for those activities; and providing for an effective date. SB 198 was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Health and Social Services dated 4/18/93. SENATE BILL 91 "An Act providing for coverage of midwife services under Medicaid; reordering the priority of optional services provided by the state under Medicaid; and providing for an effective date." ANNETTE KREITZER, AIDE, SENATOR LOREN LEMAN, commented the legislation would add certified direct entry midwives to the optional services covered by Medicaid. At least 42% of the pregnant women in Alaska are eligible for Medicaid. The bill allows those women to use midwifery services instead of mandating that they use clinics or hospitals for birthing services. In expanding the options for using midwifery services for births, the State will stretch its Medicaid dollars. Representative Hanley questioned the savings expected to be incurred. Representative Therriault acknowledged that the shift in midwife care would be for women who otherwise would go to the hospital which would create greater costs to the State than those opting for home delivery. DAVID WILLIAMS, PLANNER, DIVISION OF MEDICAL ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, commented that one hundred twenty-five Medicaid eligible women would be giving birth each year. Of the eligible women, sixty of those would be shifted away from hospital physician costs indicated by the fiscal note. He pointed out, the service appeals to many women who reject the current system. Representative Therriault asked if there were Medicaid eligible women who do not use hospital services because they do not want the physician care. Mr. Williams said there are. Mr. Williams added, women who choose the midwife service will save costs because of the preventative and up-front prenatal care the child receives. Representative Hanley reiterated concerns with long term costs. Representative Brown asked if midwife services were considered to be optional or mandatory. Mr. Williams stated 10 that the intent language recommends that all services be kept active with the funding available, although the service is optional with the alternatives available. Representative Parnell MOVED to report CS SS SB 91 (HES) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS SS SB 91 (HES) was reported out of Committee with a "do pass" recommendation and with three fiscal notes by the Department of Health and Social Services dated 3/22/93. SENATE BILL 198 "An Act exempting certain activities of the Department of Transportation and Public Facilities from the regulation provisions of the Administrative Procedure Act and allowing other procedures for those activities; and providing for an effective date." BRUCE CAMPBELL, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated based on the court decision in the rural airport landing fee lawsuit, Anchorage and Fairbanks (FIA) International Airports may be required to establish all fees and fee changes through the regulatory process defined in the Administrative Procedures Act. AIA and FIA establish landing fees, terminal rent, and other airline fees through uniform Airline Operating Agreement formulas negotiated with the airlines serving the two airports. Representative Hoffman asked the changes intended for rural airports. Commissioner Campbell stated that those proposed regulations have been discussed in the Administrative Procedures Act. Representative Foster provided the Committee with a letter from Northern Air Cargo, Inc. (NAC). [Attachment #3]. Commissioner Campbell replied he had responded to that letter addressing the word changes. [Attachment #1 & #2]. He offered to provide a "Letter of Intent" addressing the legislative enforcement. Representative Grussendorf asked if the proposed legislation was prepared because previous DOTPF Commissioner's did not follow the Administrative Procedures Act and consequently were sued. Commissioner Campbell replied the Attorney General thought the legislation was necessary or the possibility that the State would be subject to law suits from any party who had established rates at the 11 international airports under previous regulations. Representative Grussendorf pointed out that the international airports would be exempt from the act. Commissioner Campbell noted there would be no increased fees resulting from the implementation of the legislation. He added, the State was sued because it had not followed the Administrative Procedures Act. Currently, no one is due money from the international airport. Co-Chair MacLean asked if adequate public hearings had been scheduled for the bill. Commissioner Campbell replied there would be a new newspaper add running for three weeks prior to the public hearings. Representative MacLean asked if fees would be established for the rural carriers. Commissioner Campbell stated the legislation would only affect the international airports in Anchorage and Fairbanks. He added, the Department could establish fees under A.P.A. Representative Hoffman asked who was responsible for establishing the fees. Commissioner Campbell replied, law defines that fees be set by order of the Commissioner. (Tape Change, HFC 93-129, Side 2). MITCH GRAVO, NORTHERN AIR CARGO, INC., ANCHORAGE, ALASKA, commented on a concern in the legislation regarding litigation on the rural airports and the authority the Commissioner is given. He feared that persons not subject to litigation would have their rates and fees increased to make up for the decrease resulting from the judgement. Commissioner Campbell explained the money paid in judgments to the carriers would be subject to a legislative appropriation. Representative Brown questioned the relationship between the international and the rural airports finances. Commissioner Campbell pointed out they are separate. The international airports operate from a revolving fund, with the landing fees and the charges to those airports pay for the operation. Representative Foster MOVED to report SB 198 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. SB 198 was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Transportation and Public Facilities dated 4/18/93. 12 SENATE BILL 142 "An Act relating to the Alaska regional economic assistance program; and providing for an effective date." Representative Hanley provided the Committee with a sectional analysis of SB 142. [Attachment #4]. He suggested a "floating" match rate to be itemized within the legislation. CHRIS GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, assured Representative Hanley that there would be no string-free grants in the legislation. Match amounts will be required. Representative Hanley provided the Committee with Amendment Gates noted DCED would be comfortable with the amendment. Representative Martin noted his concern with the fiscal impact of the bill. Mr. Gates stated a new fiscal note could be established by the Committee. He added, the Department would like to fully fund each of the fifteen Regional Development Organizations (ARDOR's) at $100 thousand dollars although they are willing to negotiate. Co-Chair MacLean asked the difference between SB 154 and SB 142. Mr. Gates replied that SB 154 is a capital grant bill which allows the Legislature to establish certain money for proper economic development grant projects which must meet six criteria for job placement and economic activity. The funding would be for one person per area and would not cover any project development. Mr. Gates commented on the two fiscal notes. The original fiscal note requested by the Department was $750 thousand dollars. The Senate Finance Committee reduced the note to $250 thousand dollars. There is a requirement for cash matches, although in-kind matches have been accepted. Mr. Gates advised that there is Federal Economic Development Administration money available to administrate the program. Some ARDOR's not having a functioning board of director's in the local region have been decertified. Representative Brown asked if there have been any civil lawsuits involving ARDOR's. Mr. Gates replied there has not been any lawsuits against any board members to date. Representative Brown noted her concern that the legislation does have private goals and it also works hand-in-hand with 13 private industry. Mr. Gates reiterated, the fear of being sued has motivated many ARDOR's to make careful decision. Representative Hanley MOVED Amendment #1. (Tape Change, HFC 93-130, Side 1). Representative Brown MOVED a language change to Page 2, Line 15 and Line 20. She recommended deleting on Line 15, "for the project" and on Line 19-20, deletion of the language "to be used for the project". Mr. Gates noted the amendment was acceptable. Representative Brown MOVED to amend Amendment being NO OBJECTION to the amended Amendment #1, it was adopted. Representative Foster MOVED to report HCS CS SB 142 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. Representative Navarre MOVED to amend the fiscal note to $500 thousand dollars. SENATOR GEORGE JACKO commented that the $250 thousand dollar fiscal note would be sufficient. Representative Navarre WITHDREW THE MOTION. There being NO OBJECTION, it was so ordered. HCS CS SB 142 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Senate Finance Committee dated 4/08/93. SENATE BILL 154 "An Act relating to the economic development grant program; and providing for an effective date." Mr. Gates stated that CSSB 154 establishes the Economic Development Grant Program and places directly in statute specific economic criteria that municipalities and Regional Development Organizations (ARDOR's) must meet in order to be eligible. The Office of Management and Budget will form an evaluation committee with the Department of Commerce and Economic Development (DCED) and the Department of Community and Regional Affairs (DCRA) and other agencies to prioritize the projects. The amended version of the bill replaces DCED as the administering agency with the Department of Administration (DOA). The program creates an competitive approach in which projects are prioritized. Discussion followed between 14 Representative Navarre and Mr. Gates regarding the grant fund appropriation and the prioritized list. Representative Navarre felt the proposed program was a duplication of other legislation. Mr. Gates replied there are gaps in other proposed project legislation. Co-Chair Larson agreed with Representative Navarre. Mr. Gates stated the legislation is not a matching grant, and there should be no match required. Representative Brown did not understand the project feasibility. She recommended adding a requirement to indicate the economic feasibility of the legislation. The criteria submitted would be used to rank rather than to match. Mr. Gates disagreed with Representative Brown. SENATOR GEORGE JACKO stated that an intent letter had been exchanged between the House and Senate Finance Co-Chairs indicating criteria used for the legislation. Mr. Gates explained the fund at DCED is a matching grant fund for non- profit organizations which requires a match. The proposed legislation does not require a catch match. Economic development projects can be funded without the requirement for a match although one of the criteria is to determine how much money is being brought in from other sources. The primary difference between the two is the match requirement. Representative Parnell asked if a match requirement was imposed on the legislation, would the purpose be defeated. Senator Jacko replied, the established criteria would require that a match be provided by local participation in the project. Co-Chair MacLean pointed out that within the Senate capital budget, $15 million dollars worth of economic matching grant monies are available. Mr. Gates added each project on the list have match components. Representative Brown suggested that taxes and other costs imposed to the State should be indicated. She asked that specified criteria be required. Representative Brown recommended to continue funding economic development projects already in place rather than beginning new programs. Senator Jacko said his intention was to establish a better system with the Administration's assistance. Representative Brown asked why the Department of Administration was chosen to be the lead agency for the proposed legislation. (Tape Change, HFC 93-130, Side 2). Mr. Gates replied that DOA currently administer's all the paper work and could insure a consistent process. 15 Representative Martin noted concern with the criteria used to determine the projects and felt that the unemployment status of an area should be emphasized. Mr. Gates replied ranking the projects was not prioritized. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated there are "ready" grants and "small" grants in economic development which are used for feasibility studies. The proposed legislation is meant for the large scale projects which are not indicated in the rest of the budget. Representative Brown asked how the projects differ from the existing process complied in the Governor's capital budget for statewide economic development projects. Commissioner Fuhs stated the difference is that SB 154 establishes six criteria which are to be used by the Legislature to evaluate the projects. CS SB 154 (L&C)(efd fld) was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 3:10 P.M. 16