HOUSE FINANCE COMMITTEE MARCH 11, 1993 1:30 P.M. TAPE HFC 93 - 44, Side 2, #000 - end. TAPE HFC 93 - 45, Side 1, #000 - end. TAPE HFC 93 - 45, Side 2, #000 - #241. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:30 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 Nico Bus, Chief, Financial Services, Department of Natural Resources; Glenn A. Olds, Commissioner, Department of Natural Resources; Ron Swanson, Director, Division of Land, Department of Natural Resources; Representative Carl Moses; C.E. Swackhammer, Deputy Commissioner, Department of Public Safety; Kenneth Bischoff, Director, Division of Administrative Services, Department of Public Safety; Col. John Murphey, Director, Division of Alaska State Troopers, Department of Public Safety; Jay N. Dulany, Director, Division of Motor Vehicles, Department of Public Safety; Chris Christensen, Attorney, Alaska Court System. SUMMARY INFORMATION HB 55 An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date. HB 56 An Act making appropriations for operating expenses for certain programs for which the costs are derived from mandated formulas or criteria, and for expenses for certain leases and contracts for state services and operations; and providing for an effective date. Subcommittee Closeouts: Natural Resources 1 Public Safety Incorporated Subcommittee recommendations for the Department of Natural Resources and the Department of Public Safety. HB 155 An Act relating to audits of health facilities. HB 155 was held in Committee for further discussion. While waiting for a quorum to arrive, Representative Brown discussed her concerns regarding a recent newspaper article she read addressing the possibilities of the Legislature suing the Governor over a decision to decide the fate of $1 billion dollars in oil tax settlements. DEPARTMENT OF NATURAL RESOURCES The Department of Natural Resources (DNR) Subcommittee consisted of Chair Representative Therriault with members Representative James, Representative Williams, Representative Green, Representative Toohey, Representative Davies and Representative Carney. Representative Therriault provided the Committee with handouts. [Attachments #1 - #3]. He stated the DNR Subcommittee target was $1.470 million dollars with total reductions of $1.475 million dollars. Representative Therriault explained the increment/decrement list provided by the Subcommittee, "Transaction Summary for Governor to House", Attachment #1. * Management and Administration Commissions decrement of $89 thousand dollars which would eliminate the Citizens Advisory Commission on Federal Areas. * Land Development - Resource Development Section received a total decrement of $237.2 thousand dollars. * Oil & Gas Development general fund reduction of $102 thousand dollars. This reduction reduces by half the Division's proposal for $205 thousand dollars. * The Mining Development component reduction of $45 thousand dollars would eliminate an administrative position. 2 * The Geological Development component reduces general funds for $118 thousand dollars. * The Water Development component program receipts reduction of $300 thousand dollars and the requested $175.5 thousand dollar increment has been eliminated. * The Oil and Gas Conservation Commission component reduction of $52.6 eliminates the proposed increment of a Senior Petroleum Engineering position. * The Information Resource Management component received a reduction of $110 thousand dollars to status graphics. * In the Parks and Recreation Management Division - Parks Management component received a reduction of $35 thousand dollars. A shift was made of $175 thousand dollars from general fund to program receipts. * The Agricultural Development component received a reduction of $154.3 thousand dollars. * State Fairs component received a reduction of general funds $43.3 thousand dollars. There remains $75 thousand dollars in that component. Co-Chair MacLean referenced Attachment #3 "Transaction Summary for the House" and questioned the land exchange reduction of $225.6 thousand dollars. NICO BUS, CHIEF, FINANCIAL SERVICES, DEPARTMENT OF NATURAL RESOURCES, identified projects within the Division of Land presented in the Governor's amended budget. Actual reductions to that Division have changed and he offered to provide more detail at a latter date. Co-Chair MacLean questioned the Capital project fund decrement of $335.6 thousand dollars. Mr. Bus replied that the Division of Land's budget reflects certain capital projects, based on the Governor's original request. This has been adjusted and increased in the Governor's amended request based on the total number of capital projects. Co-Chair MacLean asked for further information regarding the Challenge Alaska Grant Program. Representative Therriault said it is an agency which coordinates volunteers providing training to handicap skiers. 3 Co-Chair MacLean questioned the reduction to State Fair Grants. Representative Therriault explained that all State Fair applicants received a percentage reduction. Representative Gail Phillips requested that Legislative Finance draft intent language explaining the funding levels. Representative Hoffman stressed his concern in addressing resources and those resource developments. He drew parallels between the cuts experienced by the Department of Fish and Game budget and those to the Department of Natural Resources. Mr. Bus responded, the position count has been adjusted between FY 92 and FY 93 based on legislative intent. Representative Grussendorf referenced the State Forest Practices Act, pointing out that the Department to date has not worked out the regulations for that program. GLENN OLDS, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, responded that the Department of Fish and Game is currently discussing the regulations created for that Act. There is an appeal to the Attorney General's Office for negotiation. The Department of Natural Resources finished their responsibility of writing those regulations last year. Representative Brown noted her concern with the $247 million dollar reduction to general funds. She stated that DNR is the heart of the economic development efforts for the State. Representative Brown referenced Attachment #3, questioning the $83.3 thousand dollars reduction to the Private Mine Reclamation program receipts. The program can not be implemented without the collection of fees. Representative Therriault stated the fee regulations have not yet been approved. The switch from general funds to program receipts was made last year. Representative Brown advised that the cut will not save the State any money. Representative Brown asked if the reduction to the Public Information Center was participated in jointly with the federal government. Representative Therriault replied that the Information Center addressed in the reduction was located in Anchorage. Representative Brown questioned the effect of the $360 thousand dollar reduction to that center. Mr. Bus stated that the Public Information Center is required that to centralize all public services. The funding cut will require the operation funding originate from the public and also program receipts. Representative Brown questioned Attachment #3, a reduction to Oil and Gas Development for $102 thousand general fund dollars. This Division generates revenue from which the 4 State is based. Representative Therriault replied that anticipated additional costs can not be predicted. Representative Brown reiterated that maintaining a good lease sale schedule is difficult and felt that the increment does not include any new legislation indicated by the fiscal note. Representative Brown questioned the impact on the Water Development component with the program receipts reduction. Representative Therriault stated that the Subcommittee felt they had over estimated program receipts. Mr. Bus added last year program receipts were minimal which should increase in the future. Representative Brown referenced Attachment #3, Line 16, Oil and Gas Conservation Commission, and questioned the effect of the $52.6 thousand dollars reduction. Mr. Bus replied, the impact will be the elimination of one of the three engineer positions. He added, this will clearly impact the operation of the organization. Representative Brown questioned Line 18, Information Resource Management component reduction to Status Graphics by $110 thousand dollars. Mr. Bus stated the impact would delete two full time positions to the agency and which would delay the updating of graphic records. (Tape Change HFC 93-45, Side 1). Representative Martin questioned the increment to Fire Suppression. Co-Chair Larson explained that the fire suppression component would provide the necessary funds for the administration; the actual determination of the cost would be addressed in the supplemental. Mr. Bus stated that the Governor's request for FY 94 includes $3.7 million general fund dollars for fixed costs. He added, the average fire suppression cost is $9.5 million dollars. Representative Martin pointed out his concern over the number of surveyors employed in the Land Development component of resource development. RON SWANSON, DIRECTOR, DIVISION OF LAND, DEPARTMENT OF NATURAL RESOURCES, said there are eleven surveyors. Some of the survey work has been privatized. The applicant now is responsible for paying for the survey. He added, the Division has an oversight capability with other divisions in the Department. Representative Brown requested clarification of the fire suppression component. Mr. Bus advised the $9.117 million dollars includes $5.328 million dollars in federal funds. 5 Representative Therriault MOVED to incorporate the Subcommittee's recommendations into HB 55. There being NO OBJECTIONS, it was incorporated. DEPARTMENT OF PUBLIC SAFETY The Department of Public Safety Subcommittee consisted of Chair Representative Parnell with members Representative Moses, Representative Porter, Representative Mackie and Representative Navarre. Representative Parnell provided the Committee with handouts. [Attachments #4 - #8]. He noted that the Subcommittee has provided a two percent reduction from the Governor's proposed budget. The total reduction was $1.785 million dollars, which is an actual Public Safety budget increase of 2.4 percent for the year. Representative Parnell provided the Committee with an overview of Attachment #5, "Transaction Summary for Governor to House". * In the Fish and Wildlife Protection Division, the Enforcement/Investigative Services received a decrement of $10 thousand dollars. * From that Division in the Aircraft Section, a decrement of $10 thousand dollars was taken. * In the Division of Motor Vehicles, a decrement of $350 thousand dollars was taken from field services. The component would delete the seasonal restorational positions. The Division would also receive a $37.3 thousand dollar decrement to the Administration. * The Alaska State Troopers Division received a total decrement of $1.009 million dollars consisting of $897.9 thousand dollars to Detachments, $39.9 thousand dollars in Criminal Investigations Bureau reducing overtime increment. The Judicial Services-Anchorage component reduced the overtime increment leaving $21.6 thousand dollars. * Rural Trooper Housing component from the Alaska State Trooper Division received a reduction of $50 thousand dollars. * The Alaska Police Standards Council received an increment of $30 thousand dollars. * The Domestic Violence/Sexual Assault component 6 received a decrement of $300 thousand dollars. Representative Parnell noted that currently some money is moved from felons permanent fund dividend checks to other sources. He stated that the movement of funds will require a statutory change. He emphasized that the decrement does not represent a reduction for Domestic Violence or Sexual Assault. It would be a source change. * Commissioner's Office reduction to special services for $35 thousand dollars. Included in the component is an increment of $82.9 thousand dollars transfer to a Special Assistant II. * The Training Academy received a $33.3 thousand dollar decrement to bed replacements for the Police Academy. * Administrative Services received a reduction of $20 thousand dollars to the contractual account. * Building Security Maintenance-Session security costs decrement of $73.2 thousand dollars. And a reduction to minimum cost decrement of $20.2 thousand dollars. Representative Hoffman questioned the cuts to rural trooper housing accommodations. He suggested that the incentive for competent troopers to relocate to rural areas is not easy. KENNETH BISCHOFF, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF PUBLIC SAFETY, responded that the troopers would be responsible for finding their own housing in rural Alaska. He felt this would not affect the Department's ability to find competent troopers for the rural area. Representative Martin questioned how program receipts in the Division of Motor Vehicles were being handled. Mr. Bischoff stated that the Division of Motor Vehicles entire budget was based on program receipts. Representative Martin noted that last year, the Division requested $569 thousand dollars in RPL's. Representative Parnell replied that the cut to DMV seasonal positions caused the most controversy. Representative Martin asked how NFS checks to DMV were handled. JAY DULANY, DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, replied a hold would be placed on the vehicle at registration if a NFS check had been issued. An additional $25 dollar fee is charged to clear the check and resume the ability to register that vehicle. 7 Representative Brown questioned the service impacts of the $325 thousand dollar reduction. Mr. Dulany stated that business increases by fifty percent during the months April - July. With the additional seasonal positions, the public had a waiting time of up to two hours. Quality public service can not be provided with a minimal staff. Representative Brown referenced the claims for felons permanent fund checks and asked what would happen if the statute did not pass. Representative Parnell stated that the intent of the Subcommittee would be that the funds would come out from the felons checks only if the statute was passed. The Department of Revenue has given their support for this legislation. Co-Chair Larson noted the enclosed DPS Subcommittee House Bill provided. [Attachment #7]. Representative Brown emphasized her concern, that should the bill not pass, domestic violence not be reduced. Representative Navarre noted the money would still be available although it would need to be listed on the dividend check. Representative Therriault asked for further information on the $78 thousand dollar decrement proposed to be taken from the 470 fund. Mr. Bischoff stated the amendment would be an RSA with the Alaska State Troopers. The Department of Environmental Conservation would provide investigative assistance for hazardous substance investigation and some dispatching services. Representative Therriault suggested $20 thousand dollars be backed out of the dispatching services. Representative Martin requested further discussion regarding contact jails. C.E. SWACKHAMMER, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY, stated that contact jails provide jailing for rural Alaska. They process nearly eight thousand prisoners per year, which places heavy pressure on the Department of Corrections. He added, there has been a task force appointed to address the concern. Representative Parnell stated any closures of jails would impact the Department of Corrections and prisoner transportation costs. Representative Parnell MOVED to incorporate the Department of Public Safety Subcommittee recommendations into HB 55. Representative Navarre OBJECTED. A roll call vote was taken on the motion. 8 IN FAVOR: Hanley, Hoffman, Martin, Parnell, Therriault, Larson, MacLean. OPPOSED: Grussendorf, Navarre. Representative Brown and Representative Foster were not present for the vote. The MOTION PASSED, 7 - 2. The Department of Public Safety Subcommittee recommendations were incorporated into HB 55. Co-Chair Larson MOVED Attachment 7, work draft #8-LS0784/A dated 3/4/93 be introduced as a House Finance Committee substitute bill. There being NO OBJECTIONS, it was so ordered. (Tape Change, HFC 93-45, Side 2). HOUSE BILL 151 "An Act relating to payment by indigent persons for legal services and related costs; and providing for an effective date." Co-Chair MacLean referenced work draft #8-LS0618\E dated 3/10/93 CSHB 151 (FIN). She explained the changes the committee substitute made to HB 151. Representative Parnell asked the meaning of "cost" on Page 1, Line 9. He thought this would narrow the amount of money which the State receives. Co-Chair MacLean noted her intent was to have the costs and attorney fees incorporated. Representative Parnell recommended adding "costs and attorney's fees". CHRIS CHRISTENSEN, ATTORNEY, ALASKA COURT SYSTEM, explained that the Alaska Exemption's Act lifts items which a creditor such as the State of Alaska can not seize when it proceeds against a debtor. If the State is attempting to recover attorney's fees from someone who was indigent at one time, the first $62 thousand dollars of equity in their home can not be touched. The first $35 hundred dollars of personal property, the first $11 hundred dollars of jewelry, the first $32 hundred dollars of tools, the first $11 hundred dollars of pets, the first $35 hundred dollars of motor vehicles and the first $16 hundred dollars worth of cash can not be touched. Co-Chair MacLean asked if permanent fund dividends were allowable exemptions. Mr. Christensen stated that the PFD 9 is protected by the Alaska Exemption's Act if it is a private creditor. If the creditor is a State agency and it is a debt owed to the State, the Alaska's Exemption Act does not apply. The Supreme Court with Civil Rule 39.5 has added a "special hardship exemption" which is an exemption which is mandated by the U.S. Supreme Court decision from 1974. The Court has indicated that a "formerly indigent persons property can be taken" as long as it can be afford to be repaid without hardship. Co-Chair Larson MOVED to adopt the work draft dated 3/10/93. Representative Martin MOVED to delete on Page 1, Line 9, and use the language of the original bill. Co-Chair Larson assigned HB 151 to subcommittee Chaired by Representative Hanley and with members Representative Parnell, Representative MacLean and Representative Hoffman. HB 151 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 3:17 P.M. 10