HOUSE FINANCE COMMITTEE March 19, 1993 1:40 p.m. TAPE HFC 93-51, Side 1, #000 - end. TAPE HFC 93-51, Side 2, #000 - end. TAPE HFC 93-52, Side 1, #000 - end. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 1:40 p.m. PRESENT Co-Chair Larson Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Foster Representative Therriault Representative Grussendorf Representative Hoffman Co-Chair MacLean was absent from the meeting. ALSO PRESENT Mike Greany, Director, Legislative Finance Division; Janet Clarke, Director, Division of Administrative Services, Department of Health and Social Services; Jan Hansen, Director, Division of Public Assistance, Department of Health and Social Services; Richard Pegues, Director, Division of Administrative Services, Department of Law; Tracy McGill, Director, Division of Administrative Services, Department of Revenue; Arthur H. Snowden, II, Administrative Director, Alaska Court System; Sharon Barton, Director, Division of Administrative Services, Department of Administration; Frank Spargo, Director, Division of Pioneer Benefits, Diane Barran's,Program Coordinator, Postsecondary Education; Jeff Morrison, Director, Division of Administrative Services, Department of Military and Veterans Affairs, Nico Bus, Chief Financial Officer, Department of Natural Resources; Bill Bradley, Anchorage; Paul Woerner, Retired Officers Association; Gene Dowe, Legislative Officer, Veterans of Foreign Wars, Laura Kelly, First Vice- President, Community College Teachers Union. SUMMARY INFORMATION HB 66 "An Act relating to municipal property tax exemptions for certain residences and to property tax equivalency payments for certain residents; and providing for an effective date." 1 HB 66 was HELD in Committee. HB 135 "An Act making supplemental and special appropriations for the expenses of state government; making, amending, and repealing capital and operating appropriations; and providing for an effective date." HB 135 was HELD in Committee. HOUSE BILL NO. 66 "An Act relating to municipal property tax exemptions for certain residences and to property tax equivalency payments for certain residents; and providing for an effective date." Co-Chair Larson announced that HB 66 would be HELD in Committee following public testimony. Representative Brown presented members with Amendment 1, creating a mandatory deferral for low income persons (Attachment 1). She noted that a memorandum from Legislative Counsel is attached to Amendment 1. Legal Counsel advises that it is necessary to include language to base the optional exemption on "hardship". In response to a question by Representative Parnell, Representative Brown explained that $36,000 for individuals filling jointly has been added to subsection (b). The intent of the amendment would be to mandate that communities allow low income citizens to defer tax payments until death. BRAD BRADLEY, spoke in support of continued funding for the Senior Citizen Tax Exemption. He pointed out that many seniors could not afford to stay in the state without the aid of support programs. He urged the Committee to maintain current programs. He felt that rural seniors would be most adversely affected. He suggested that the cap be lowered or the age raised rather than to discontinue the senior citizen property tax exemption. PAUL WOERNER, RETIRED OFFICERS ASSOCIATION spoke in support of continued funding for the Disabled Veterans Property Tax Exemption. He pointed out that the Veterans Home is not being funded. He added that the veteran's burial allowance is also being discontinued. He stressed that eligible veterans are 50 percent disabled. He emphasized the difficulty that disabled veterans encounter in reaching their full earning potential. He suggested that, "surely in 2 a state that can offer upwards of a $1,000 dollars for each resident, each year for no other criteria than that person is a resident in the State for twelve months, surely we don't have to offer up our disabled American veterans to get government spending under control." Representative Grussendorf expressed his concern that disabled veterans are likely to be renters and would therefore be affected by the deletion of the Renters Rebate Program. Mr. Woerner agreed that perhaps half of the disabled veterans live in rental property. Representative Grussendorf stated that in making things easier for the State and municipalities that some times "we forget who the people were that we originally set the program up, and the service that it provides." Representative Martin asserted that the State has an influx of seniors because the State's senior programs are generous. He felt that controls must be put on the State's generosity. Co-Chair Larson clarified that the legislation passed in FY 93 to create a Veterans Home stated that the Home would be funded with private donations. Representative Therriault asked if most disabled veterans would fit under the caps provided for in Amendment 1. Mr. Woerner thought that most disabled veterans would have incomes under the cap. GENE DOWE, LEGISLATIVE OFFICE, VETERANS OF FOREIGN WARS (VFW) spoke in support of continued funding for the Disabled Veterans Property Tax Exemption. HB 66 was HELD in Committee. COMMUNITY COLLEGES LAURA KELLY, FIRST VICE-PRESIDENT, COMMUNITY COLLEGE TEACHERS UNION expressed concern that the mission, identity, and programs of community colleges are being systematically destroyed within the university system. She asserted that the University is withdrawing monetary, administrative and programmatic support from programs that have been traditionally associated with community colleges. She observed that during the 1987 merger, the University promised to protect, preserve and defend the community college mission and programs. She alleged that the community college program will not exist at the University of Alaska within two years. She emphasized the importance of two year job training programs. She urged members to remind the University of their promise to protect the 3 community college mission. Co-Chair Larson observed that Valdez is the only remaining community college. He asked if efforts are being made to encourage local support of community colleges. Ms. Kelly stated that the mission of the Community College Teachers Union is to teach the courses. She stressed that the University asked for the responsibility of teaching courses that had been provided through local communities. She asserted that the problem is not that local communities are refusing to participate but that the University has not lived up to the responsibility they took on. Representative Martin noted that Valdez has dropped their local support. He added that Bristol Bay and Ketchikan are supporting local training programs. He felt that local communities had "dropped the Ball" in helping the community colleges. He felt that the Board of Regents had not welcomed legislative participation. HOUSE BILL NO. 135 "An Act making supplemental and special appropriations for the expenses of state government; making, amending, and repealing capital and operating appropriations; and providing for an effective date." Members were presented with an analysis of HB 135, dated 3/16/93 (copy on file). * Sec. 1 Longevity Bonus - $1,980.7 million dollars This request represents the cost of increased applicants. Representative Hoffman noted that the amount had increased from the original supplemental request. SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,DEPARTMENT OF ADMINISTRATION clarified that the actual participation level is higher than Department of Labor statistics used for the original request. Representative Grussendorf asked if the Department will be requesting a supplement for FY 94. Ms. Barton stressed that the FY 94 Operating Budget is based on the best statistical information the Department has available. Representative Martin asked if a monthly growth rate can be anticipated. Ms. Barton could not answer. Representative Parnell asked how many individuals participate in the 4 program. He expressed concern that the estimated participation level was approximately 700 applicants below the actual level. FRANK SPARGO, ADMINISTRATOR, LONGEVITY BONUS PROGRAM, DEPARTMENT OF ADMINISTRATION explained that the growth of the program has been slightly lower than the annual growth of individuals over 65 years of age as compiled by the Department of Labor. The Longevity Bonus Program estimated growth was for a 5.7 percent increase based on the Department of Labor's projections. There has been a 6.3 percent growth in the program. He clarified that there has been an average of 223 new applications per month since September. The program has averaged 160 -180 new applications per month in previous years. Representative Grussendorf asked the percentage of applicants that have only been a resident for one year. Mr. Spargo stated that 13 percent of the new applicants have been in the State for less than a year and a half. Representative Martin asked the monthly participation. Mr. Spargo stated that there are approximately 2,300 monthly participants. Mr. Spargo clarified, in response to a question by Representative Parnell, that the entire request will be dedicated to grants. (Tape Change, HFC 93-52, Side 2) Co-Chair Larson noted that Longevity Bonus payments cannot be pro-rated. Co-Chair Larson MOVED to INCORPORATE Sec. 1 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 2 Public Defender - $383.0 thousand dollars This represents operating costs unfunded in the current budget. Sec. 2 has been adjusted for in the FY 94 Operating Budget. Ms. Barton noted that the Office of Public Defender was unable to meet their caseload within the appropriated amount. Co-Chair Larson noted that the FY 94 Operating Budget includes the FY 93 Authorized level plus FY 93 supplementals. Co-Chair Larson MOVED to INCORPORATE Sec. 2 into HB 135. There being NO OBJECTION it was so ordered. 5 * Sec. 3 RATNET - $200.0 thousand dollars Anticipated savings were not realized in the FY 93 Operating Budget. Competitive bids for uplink services were delayed. Savings are anticipated in FY 94. If the appropriation is not approved service could be discontinued for the final two months of fiscal year FY 93 or daily service could be drastically curtailed. Co-Chair Larson noted that RATNET is funded at $1.200 million dollars in FY 94 Operating Budget. If the supplemental appropriation is approved the FY 94 funding level will be $1,400 million dollars. Funding for FY 95 is anticipated at $1,200 million dollars. He referred to the proposed Bethel station. He noted that operations of the Bethel station would not begin until FY 95. Ms. Barton stated that the request will allow RATNET to be fully functional through the end of FY 93. Representative Martin asked if RATNET receives private funds. Ms. Barton replied that RATNET does not receive private funds. Legislation would be needed in order for RATNET to accept private donations through fund raisers or other methods. The Subcommittee discussed possible legislation. No legislation has been drafted. Ms. Barton clarified that the request would be used for maintenance and operational costs. She clarified that RATNET received $1,400 million dollars in FY 92, in response to a question by Representative Hanley. Representative Hanley expressed concern that the FY 93 level was not achieved. He suggested that continued support through supplementals defeat the appropriation process. Representative Navarre suggested that supplementals should be addressed at the beginning of the legislative year. Ms. Barton explained that the overrun by RATNET occurred because transponder maintenance bids were not accomplished in order to realized the anticipated savings. Representative Brown pointed out that the actual appropriation for FY 92 was $1,700 million dollars. Representative Brown stressed that $1.2 million dollar appropriation level assumes that no repairs are needed. She emphasized that the supplemental request will bring back the six stations that are down. Representative Hoffman added that there is a potential 6 savings in the use of compressed channels. Representative Brown agreed that compressed video channels represent potential savings. She did not think that the savings could be realized in the FY 94 Operating Budget. She added that the State could utilize eight channels where there is currently one channel. She noted that other public service such as education and the university could also benefit from compressed video channels. Representative Hanley MOVED to REDUCE section 3 to $100.0 thousand dollar. Representative Hoffman OBJECTED. He asked for a breakdown of costs according to operation and maintenance. Representative Martin felt that the stations are obligating the State. Representatives Grussendorf and Hoffman requested that Sec. 3 be HELD OPEN. Section 3 was HELD OPEN. * Sec. 4 Personnel Board - $64.0 thousand dollars Increased hearings have resulted in a shortfall. This appropriation will pay for special counsel and a hearing officer. Ms. Barton explained that the request is the result of a Executive Branch Ethics Act complaint and other hearings before the Personnel Board. Funds are also included for the Division of Personnel, EEO. Statewide and division consolidations have added to the shortfall. Co-Chair Larson MOVED to INCORPORATE Sec. 4 into HB 135. There being NO OBJECTION it was so ordered. Co-Chair Larson added that the FY 94 Operating Budget contains the FY 93 level with an additional $400.0 thousand dollars. * Sec. 5 Office of Public Advocacy - $616.4 thousand dollars The Office of Public Advocacy caseload has increased by 19 percent in FY 93. Sec. 5 has been adjusted for in the FY 94 Operating Budget. Co-Chair Larson asked the result of reducing the supplemental by $216.4 thousand dollars. Ms. Barton emphasized that the Office of Public Advocacy is caseload driven. She stated that the State of Alaska would risk contempt of court if sufficient funding is not available. 7 Representative Brown emphasized that the State has a constitutional obligation to provide access to the criminal justice system for people who are accused and cannot be represented by the Public Defender. She felt that a reduction would result in a large FY 94 supplemental. ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT SYSTEM clarified that under Administrative Rule 12, the Public Defender and the Office of Public Advocacy are mandated to return to the Court any cases where the defendant is found to not be indigent. He noted that legislation is pending in Committee to allow the court to charge for indigent coverage. Co-Chair Larson MOVED to INCORPORATE Sec. 5 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 6 Elected Officials Retirement - $30.4 thousand dollars There has been an increase in former elected officials who have elected to collect retirement. Increased health costs are also included. Co-Chair Larson MOVED to INCORPORATE Sec. 6 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 7 Leasing of State facilities - $642.9 thousand dollars Ms. Barton noted that the request will pay for the lease obligations though FY 93. Representative Martin asked why the Department cannot more accurately anticipate lease costs. Ms. Barton emphasized that "dozens" of leases are rebid every year. She noted that the component is chronically under-funded. Representative Parnell asked the affect of not funding the component. Ms. Barton stated that it would be difficult and chaotic. Spaces would have to be vacated. Co-Chair Larson MOVED to INCORPORATE Sec. 8 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 8 Prosecution - $400.0 thousand dollars Reductions resulted in the elimination of three prosecutors and three support staff positions. The Governor felt that prosection activities would be adversely affected and elected to seek supplemental funding. Sec. 8 has been adjusted for in the FY 94 Operating Budget. 8 RICHARD PEGUES, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION clarified, in response to a question by Representative Brown, that the discretionary expenditure cannot be reduced. He explained that the Office of the Governor and Attorney General identified that further cuts would cause the State to refuse criminal cases that should not be declined. Representative Brown asked if funding was removed from Prosecution to cover other shortfalls. Mr. Pegues assured her that funding was not transferred to other components. Co-Chair Larson observed that Prosecution was reduced by $47.0 thousand dollars in the FY 94 Operating Budget, from the Governor's requested amount. Representative Navarre asked if court dismissals are going up as a result of under-funding or a lack of incarceration space. Mr. Pegues could not answer the question. Co-Chair Larson MOVED to INCORPORATE Sec. 8 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 9 Oil and Gas Litigation - $6.6 million dollars Co-Chair Larson asked if the Department of Law feels that the 25/75 Permanent, Fund/General Fund split is the most appropriate separation. Mr. Pegues stated that there was an under allocation of cost to the Permanent Fund. Co-Chair Larson suggested that up to $26 million dollars could have been identified to the Fund. Only $16 million has been appropriated. Representative Navarre felt that the remaining amount should be deposited in the General Fund. Co-Chair Larson requested that Sec. 9 be HELD OPEN. Section 9 was HELD OPEN. Representative Martin suggested that the Department of Law has "milked" the State. He asked what portion of the settlements are rebated for the State's court costs. Mr. Pegues stated that money goes to the General Fund or the Budget Reserve Account. Representative Martin suggested that the Department of Law only has four cases remaining and should need less funding. Mr. Pegues emphasized that there are more pending tax cases. He emphasized that the Department must determine the disposition and value of every barrel of North Slope Oil since the beginning of the pipeline. Members discussed pending settlements. Co-Chair Larson MOVED to INCORPORATE Sec. 10 into HB 135. There being NO OBJECTION it was so ordered. 9 * Sec. 10 FCC Telephone Proceeding - $280.0 thousand dollars The request will pay legal counsel in telecommunications proceedings. Proceedings will decide how long distance rates will be apportioned between outside carriers. Mr. Pegues discussed the request. (Tape Change, HFC 93-52, Side 1) Co-Chair Larson MOVED to INCORPORATE Sec. 10 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 11 Subsistence Legislation - $35.0 thousand dollars This will pay for the enactment of subsistence legislation which was paid for during the Second Special Session of the Seventeenth Legislative Session. Regulations will be drafted and implemented to reflect the subsistence legislation. Co-Chair Larson MOVED to INCORPORATE Sec. 11 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 12 Judgement and Claims - $1,133.6 million dollars The Southeast Conference judgement award is included in this request. Six additional judgments were added to the original amount. Mr. Pegues noted that two more judgments have been awarded. He asked that Section Sec. 12 be HELD OPEN until the actual award amount is calculated. Section 12 was HELD OPEN. * Sec. 12.1 Regulations Attorney - $28.1 thousand dollar Mr. Pegues explained that the Attorney General and the Chief of Staff agreed that a regulations attorney position be hired as soon as possible. The position is included in the FY 94 Operating Budget. He stressed that delays in regulations have resulted in the usurping of state programs by the federal government. There is currently one attorney responsible for all of the State's legislation and regulations. Representative Hoffman felt that the position could wait 10 until FY 94 funding was available. Co-Chair Larson MOVED to INCORPORATE Sec. 12.1 into HB 135. There being NO OBJECTION it was so ordered. DEPARTMENT OF REVENUE * Sec. 13 Income & Excise - $325.0 thousand dollars Unallocated reductions resulted in a backlog of cases. Sec. 13 has been adjusted for in the FY 94 Operating Budget. Representative Martin expressed concern with the addition of positions. TRACY MCGILL, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES explained that $275.0 thousand dollars of the request is for contractual and travel of existing staff. There will be an additional $50.0 thousand dollars for personal services funding. No additional positions would be added. The request would allow positions that have been held open to be hired prior to FY 94. Representative Martin clarified that funding for some of the positions are not included in the FY 94 Operating Budget. Ms. McGill explained that funding of the positions in question are included in the Governor's amendments to the Department of Revenue. Other positions are included in the front section. Representative Hanley requested that Sec. 13 be HELD OPEN. Section 13 was HELD OPEN. Representative Brown stressed that the request is important to assure that potential cases are not jeopardized by the statute of limitation. Co-Chair Larson agreed that the Department of Revenue needs the resources to assure that the State receives "every cent that is coming to it in a timely manner." Members discussed the positions as included in the FY 93 Operating Budget. Representative Brown maintained that approval of section 13 would preserve the status quo. DEPARTMENT OF EDUCATION * Sec. 14 Foundation Program - $4,101.7 million dollars This represents an increase in enrollment in 11 grades K - 12. Co-Chair Larson MOVED to INCORPORATE Sec. 14 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 15 Postsecondary Commission - $98.5 thousand dollars DIANE BARRAN, PROGRAM COORDINATOR, POSTSECONDARY EDUCATION explained that the WAMI Program was short funded due to an accounting error. A FY 92 billing was paid out of FY 93 accounts. The amount was lapsed from FY 92. Co-Chair Larson MOVED to INCORPORATE Sec. 15 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 16 Ratification and amendment of prior year expenditures - $0 Errors resulting from conversions in the state accounting system in 1985 will be cleared. Co-Chair Larson MOVED to INCORPORATE Sec. 16 into HB 135. There being NO OBJECTION it was so ordered. DEPARTMENT OF HEALTH AND SOCIAL SERVICES * Sec. 17 Aid to Families with Dependent Children (AFDC) - $3,203.5 million dollars This request will cover shortfalls due to caseload increases and the Cost of Living Allowance (COLA). Legislation to suspend the COLA failed to pass the Second Session of the Seventeenth Legislature. Representative Hanley explained that sections 17 and 18 resulted when legislation to discontinue the COLA failed to pass. The FY 94 budget does not include a COLA. Legislation will be needed in order to suspend the FY 94 COLA. Co-Chair Larson MOVED to INCORPORATE Sec. 17 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 18 Adult Public Assistance (APA) - $1,671.1 million dollars This request will cover shortfalls due to caseload increases and the Cost of Living Allowance (COLA). Legislation to suspend the COLA failed to pass the Second Session of the Seventeenth Legislature. 12 Co-Chair Larson MOVED to INCORPORATE Sec. 18 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 19 Medicaid Facilities - <3,808.9 million dollars> This amount will return to the General Fund due to a caseload decrease. Representative Hanley clarified that this component has been reduced in the FY 94 Operating Budget. Co-Chair Larson MOVED to INCORPORATE Sec. 19 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 20 Public Assistance eligibility Determination- $77.9 thousand dollars There has been an increase in caseload. Representative Hanley observed that this increase has been added to the FY 94 Operating Budget. Co-Chair Larson MOVED to INCORPORATE Sec. 20 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 21 JOBS Program - $195.0 thousand dollars This request will pay for child-care costs while Public Assistance clients are engaged in education, training and employment related activities. Co-Chair Larson MOVED to INCORPORATE Sec. 21 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 22 Public Assistance Data Processing - $174.0 This is the result of increased use of the State's mainframe computer system as a result of increased caseloads. JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that the request will cover additional charge-back costs from the Department of Administration due to the an increased caseload. Co-Chair Larson MOVED to INCORPORATE Sec. 21 into HB 135. There being NO OBJECTION it was so ordered. 13 * Sec. 23 Medical Assistance Administration - $187.5 thousand dollars The State has reduced medicare dollars through increased screening. There has been an increase in administrative costs associated with the screening process. Co-Chair Larson MOVED to INCORPORATE Sec. 23 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 24 Foster Care - $1,100.0 million dollars Four hundred thousand dollars are the result of an increased number of placements. In addition, there has been a delay in the start of anticipated federal programs that will subsidize state costs. Savings will be realized in FY 94. Representative Hanley clarified that anticipated federal funds were not captured. He stressed that children will be put into residential care if funds are not appropriated. He noted that residential care is more expensive. Ms. Clarke explained that $700.0 thousand dollar of the $1.1 million request were for anticipated social security federal funds. The contract was delayed. The funds will be received in FY 94. Co-Chair Larson MOVED to INCORPORATE Sec. 24 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 25 McLaughlin Youth Center - $110.0 thousand dollars This request is the result of an increase of contractual costs due to the expansion of facilities. Co-Chair Larson MOVED to INCORPORATE Sec. 25 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 26 Post Mortem Exams - $229.6 thousand dollars This is the result of an increased number of court ordered autopsies. Co-Chair Larson MOVED to INCORPORATE Sec. 27 into HB 135. There being NO OBJECTION it was so ordered. 14 * Sec. 27 Bloodborne Pathogens - $155.9 thousand dollars This is the result of the implementation of federal requirements. Representative Hanley noted that a position included in the supplemental request was not carried forward to FY 94. Representative Hanley provided members with Amendment 1, to delete "$155.900 thousand dollars" and insert "$145,300 thousand dollars", (Attachment 2). There being NO OBJECTION, it was so ordered. Co-Chair Larson MOVED to INCORPORATE Sec. 28 as AMENDED into HB 135. There being NO OBJECTION it was so ordered. Ms. Clarke explained that the Department of Health and Social Services was cited for a situation at the Johnson Youth Center were an employee was concerned with the Department's inaction in implementing blood borne pathogens regulations. The Department the citation cost is $31.5 thousand dollar. * Sec. 26 Post Mortem Exams - $229.6 thousand dollars Ms. Clarke observed that the Department has calculated that this request could be reduced to $200.0 thousand dollars. Co-Chair Larson MOVED that Sec. 26 be reopened. There being NO OBJECTION, it was so ordered. Co-Chair Larson MOVED to AMEND and INCORPORATE Sec. 26 at the amount of $220.0 thousand dollars into HB 135. There being NO OBJECTION it was so ordered. Co-Chair Larson MOVED to INCORPORATE Sec. 27 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 27.1 Fairbanks Youth Facility - $60.0 thousand dollar This request is for increased operating costs. Co-Chair Larson MOVED to INCORPORATE Sec. 27.1 into HB 135. Representative Martin OBJECTED. Ms. Clarke explained that the need was identified last fall. She observed that two units were consolidated into a coed unit in the FY 93 Operating Budget. A court case was initiated objecting to the coed unit. Representative Martin requested that Sec. 27.1 be HELD OPEN. Section 27.1 was HELD OPEN. 15 DEPARTMENT OF EDUCATION Representative Brown referred to Sec. 16. She asked for further clarification of Sec. 16. Co-Chair Larson requested that the Committee RESCIND its action in INCORPORATING Sec. 16 into HB 135. There being NO OBJECTION, it was so ordered. Section 16 was HELD OPEN. Representative Brown provided members with Amendment 2, "making a special appropriation for additional district support for kindergarten, primary, and secondary education programs" (Attachment 3). Amendment 2 was HELD in Committee. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT * Sec. 28 ASMI - $196.3 thousand dollars This request would provide a general fund match to federal dollars for the overseas marketing program. Co-Chair Larson requested that Sec. 28 be HELD OPEN. Section 28 was HELD OPEN. * Sec. 29 ASMI - $60.0 thousand dollars FY 92 extension This request would extend the lapse date of the FY 92 balance to be used as general fund (GF) match for the federal grant contained in section 28. Co-Chair Larson MOVED to INCORPORATE Sec. 29 into HB 135. There being NO OBJECTION it was so ordered. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS * Sec. 30 Veterans Death Gratuity - $90.0 thousand dollars This request would respond to increased claims. JEFF MORRISON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS clarified, for Representative Parnell, that the request would only be used to pay the $750 dollar death gratuity. The Department will pay the gratuity until funding is exhausted. The Department expects that funds will be depleted by the end of March, 1993. Grants cannot be pro rated. Co-Chair Larson MOVED to INCORPORATE Sec. 31 into HB 135. 16 There being NO OBJECTION it was so ordered. DEPARTMENT OF NATURAL RESOURCES * Sec. 31 Fire Suppression - $6.0 million dollars Three million dollars would provide funding in the case of a fire prior to fiscal year FY 94. The Department incurs $3.6 million dollars in fixed costs. Unused funds would lapse into the General Fund. Co-Chair Larson requested that Sec. 31 be HELD OPEN. Section 31 was HELD OPEN. Representative Therriault provided members with an explanation of projected FY 93 costs (Attachment 4). He explained that the Committee has the choice of funding $2 million dollars in anticipation of a fire before the end of the fiscal year or $1 million dollars for the initial fire attack. * Sec. 32 Land Selection Program - $641.0 thousand dollars This request is the result of the expedition of land selection in order to meet federal deadlines. Co-Chair Larson MOVED to INCORPORATE Sec. 32 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 33 Challenge Alaska Grants - This request would change the scope of a 1989 capital project grant. NICO BUS, CHIEF FINANCIAL OFFICER, DEPARTMENT OF NATURAL RESOURCES explained that the request would change intent to allow a project to be built rather than remodeled. Representative Brown asked if funding for section 32 has been spent. Mr. Bus stated that the money has been spent from the Divisions of Land, Water and Information Resource Management Co-Chair Larson MOVED to INCORPORATE Sec. 33 into HB 135. There being NO OBJECTION it was so ordered. DEPARTMENT OF FISH AND GAME * Sec. 34 Division of Boards - $492.0 thousand dollars 17 This request is the result of legislation enacted during the Special Session of the Seventeenth Alaska Legislature. (The original fiscal note associated with legislation passed was for $365.0 thousand dollars. There was no vehicle for passage of fiscal notes associated with legislation.) The Division of Boards has had an increase in board meetings. Representative Hanley requested that Sec. 34 be HELD OPEN. Section 34 was HELD OPEN. * Sec. 35 Division of Subsistence - $8.0 thousand dollars This request is the result of legislation enacted during the Special Session of the Seventeenth Alaska Legislature. The original request by the Division of Subsistence was $55.0 thousand dollars. Representative Hanley requested that Sec. 35 be HELD OPEN. Section 35 was HELD OPEN. * Sec. 36 King Salmon Tags - $84.3 thousand dollars This request would make vendor payments for King Salmon tags. The request is the result of new legislation. The associated fiscal note failed to be included in the FY 93 Operating Budget. Funding will be from the General Fund. Representative Hanley explained that a portion of the sale of tags go to the vendor. This portion has been paid for out of the General Fund. The receipts from the sale of the tags go into the Fish and Game Fund. There is legislation pending to transfer the vendor costs to program receipts. Co-Chair Larson MOVED to INCORPORATE Sec. 36 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 37 Ratify and Amend Prior Year Expenditures - Old appropriations that have not been corrected in the accounting system will be cleared. Representative Brown requested that Sec. 37 be HELD OPEN. Section 37 was HELD OPEN. 18 * Sec. 38 Fund Shift - This will replace unrealized federal receipts from a 1987 CIP appropriation for Sport Fisheries, Public Access Acquisition. Unrealized federal receipts will be replaced by an appropriation from the Fish and Game Fund of $134.7 thousand dollars. The Department of Fish and Game incorrectly identified state matching contributions. Co-Chair Larson MOVED to INCORPORATE Sec. 38 into HB 135. There being NO OBJECTION it was so ordered. DEPARTMENT OF PUBLIC SAFETY * Sec. 39 Contract Jails - $690.4 thousand dollars This request would meet increased operating costs. The FY 94 Operating Budget has been adjusted to include FY 93 supplemental costs. Representative Parnell requested that Sec. 39 be HELD OPEN. Section 39 was HELD OPEN. * Sec. 40 Criminal Records and Id. - $90.6 thousand dollars This request represents an increase in system use. New legislation has been approved requiring applicants for teacher certification and other activities to supply fingerprint background checks. Representative Brown asked why this request is included in the supplemental and not addressed through the FY 94 Operating Budget. Section 40 was HELD OPEN. * Sec. 41 Bloodborne Pathogens - $126.7 thousand dollars This request would allow the Department to comply with requirements regarding bloodborne pathogens. The Department will purchase disposable gear and vaccines. Representative Parnell requested that Sec. 41 be HELD OPEN. Section 41 was HELD OPEN. * Sec. 42 Prisoner Transportation - $125.0 thousand dollars 19 This request would pay for the cost of increased prisoner transportation. Costs are primarily for air transportation. Representative Parnell requested that Sec. 42 be HELD OPEN. Section 42 was HELD OPEN. * Sec. 43 Arbitration Settlement - $101.4 thousand dollars This request would pay settlement costs for arbitration involving an employee and a controlled substance. Co-Chair Larson MOVED to INCORPORATE Sec. 43 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 44 Civil Air Patrol - $125.0 thousand dollars This request is for aircraft maintenance and operation costs. Co-Chair Larson MOVED to INCORPORATE Sec. 44 into HB 135. There being NO OBJECTION it was so ordered. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES * Sec. 45 Arbitrator's Award - $539.6 thousand dollars other funds. This request would pay for overtime of on-site construction engineers. The overtime dates back to 1991 and is the result of arbitration. Representative Navarre noted that employees must work overtime during the summer season. He emphasized that the request is the result of an arbitrator's award and must be funded. Representative Hanley asked why salaried employees must be paid overtime. He questioned the arbitrators ruling. Section 45 was HELD OPEN. * Sec. 46 Dalton Highway - $1,222.9 million dollars This request would pay for snow removal, ice control and maintenance related activities. Representative Brown requested that Sec. 46 be HELD OPEN. Section 46 was HELD OPEN. 20 * Sec. 47 Ratification of Prior Year Supply and Inventory Asset Account Expenditures Spoilage and breakage were not accounted for in assessing supply and inventory assets. Representative Navarre clarified that the request is an inventory adjustment. Co-Chair Larson MOVED to INCORPORATE Sec. 47 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 48 Extend FY 93 Operating Lapse Date - This request would extend the FY 93 Operating Budget lapse date for maintenance and operations. Co-Chair Larson MOVED to INCORPORATE Sec. 48 into HB 135. There being NO OBJECTION it was so ordered. DEPARTMENT OF ENVIRONMENTAL CONSERVATION * Sec. 49 Seafood and Sanitation Activities - $351.2 thousand dollars This request would replace unrealized program receipts. The Department did not receive approval to implement regulations assessing fees until February 19, 1993. Representative Martin questioned section 49. Representative Therriault reiterated that the request is the result of unrealized program receipts. Representative Brown noted that regulations for program receipts were difficult to adopt. She stressed that new costs resulted from paralytic shelfish poisoning. Section 49 was HELD OPEN. * Sec. 50 Paralytic Shellfish Poison Inspections - $109.9 thousand dollars This request is the result of PSP infected crabs. Co-Chair Larson MOVED to INCORPORATE Sec. 50 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 51 Water Quality Standards Advisory Group - $41.4 thousand dollars 21 This request would pay for meeting costs. Representative Therriault requested that Sec. 51 be HELD OPEN. Section 51 was HELD OPEN. DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS * Sec. 52 Organizational Grant - $300.0 thousand dollars This request would pay the first year organizational grant for the Yakutat Borough. Representative Martin questioned section 52. Co-Chair Larson MOVED to INCORPORATE Sec. 52 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 53 Revenue Sharing - $25.6 thousand dollars The Department of Community and Regional Affairs used incorrect population figures to calculate revenue sharing for the Central Mat-Su and Greater Palmer fire service areas. Co-Chair Larson MOVED to INCORPORATE Sec. 53 into HB 135. There being NO OBJECTION it was so ordered. * Sec. 53.1 Federal Grant Repayment - $48.5 thousand dollars Co-Chair Larson requested that Sec. 53.1 be HELD OPEN. Section 53.1 was HELD OPEN. DEPARTMENT OF CORRECTIONS * Sec. 54 Operations - $6,879.4 million dollars Co-Chair Larson requested that Sec. 54 be HELD OPEN. Section 54 was HELD OPEN. UNIVERSITY OF ALASKA * Sec. 55 UAF Snow Removal - $375.0 thousand dollars Co-Chair Larson MOVED to INCORPORATE Sec. 55 into HB 135. There being NO OBJECTION it was so ordered. ALASKA COURT SYSTEM 22 * Sec. 56 Mental Health Trust Case Law Clerk - $19.9 thousand dollars Mental Health Trust This request would add a law clerk to assist Judge Green with the backlog involved in the Mental Health Trust Case. Mr. Snowden pointed out that Judge Greene has been withdrawn from all other cases. Co-Chair Larson MOVED to INCORPORATE Sec. 56 into HB 135. There being NO OBJECTION it was so ordered. MULTIPLE DEPARTMENTS * Sec. 57 Miscellaneous Claims and Stale-Dated Warrants - $159.6 thousand dollars This request would settle claims and billings that are more than two years old for the Department of Administration, Department of Health and Social Services, Department of Labor, Department of Public Safety, Department of Transportation and Public Facilities, Department of Corrections and Department of Military and Veterans Affairs. Co-Chair Larson MOVED to INCORPORATE Sec. 57 into HB 135. There being NO OBJECTION it was so ordered. HB 135 was HELD in Committee. ADJOURNMENT The meeting adjourned at 4:00 p.m. 23