HOUSE FINANCE COMMITTEE February 2, 1994 1:35 p.m. TAPE HFC 94-22, Side 1, #000 - end. TAPE HFC 94-22, Side 2, #000 - end. TAPE HFC 94-23, Side 1, #000 - 287. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 1:35 p.m. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Foster Representative Therriault Representative Grussendorf ALSO PRESENT Randy Welker, Legislative Auditor; Nancy Slagle, Director, Division of Budget Review, Office of the Management and Budget, Office of the Governor; Jerry Luckhaupt, Legal Counsel, Legislative Affairs Agency; Joe Ambrose, Staff, Senator Robin Taylor. SUMMARY INFORMATION HJR 43 Proposing an amendment to the Constitution of the State of Alaska relating to penal administration. CS HJR 43 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal impact note by the Office of the Governor, dated 1/13/95; and with two zero fiscal notes by the Department of Public Safety and the Department of Corrections, dated 1/13/94. HB 372 "An Act relating to the four dam pool transfer fund." HB 372 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Community and Regional Affairs. HB 374 "An Act relating to reimbursable service agreements and other agreements between state 1 agencies for the purchase of services." CSHB 374 (FIN) was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Office of the Governor and Department of Administration. HOUSE JOINT RESOLUTION NO. 43 Proposing an amendment to the Constitution of the State of Alaska relating to penal administration. Representative Brown MOVED to RESCIND the Committee's action in passing CSHRJ 43 (FIN) out of Committee. There being NO OBJECTION, it was so ordered. Representative Brown provided members with AMENDMENT 1 (copy on file). She explained that Amendment 1 would insert, "and juvenile" after "criminal" on page 1, line 9. She emphasized that "criminal" does not apply to both the juvenile and adult systems. She recommended that the amendment be adopted to clarify that the rights discussed in CSHJR 43 (FIN) apply to both systems. Representative Brown MOVED to ADOPT AMENDMENT 1. There being NO OBJECTION, it was so ordered. Representative Brown provided members with AMENDMENT 2 (copy on file). She explained that Amendment 2 would add, "allowed to be" before "informed of and"; and add, "allowed to be" before "present" on page 1, lines 11 and 12. She expressed concern that the right to be present and informed not be interpreted as an absolute right. Representative Brown MOVED to ADOPT AMENDMENT 2. There being NO OBJECTION, it was so ordered. Representative Brown provided members with AMENDMENT 3 (copy on file). She explained that Representative Porter had drafted Amendment 3. Amendment 3 would insert, "before or after conviction" on page 1, lines 13 and 15; and "seek" after "to" on page 1, line 14. She explained that the language would address the issue of the use of the word "accused". Members discussed the use of "conviction". Representative Larson MOVED to AMEND Amendment 3 by moving "before or after conviction" on page 1, line 15 to the end of the sentence. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to ADOPT AMENDMENT 3 as AMENDED. There being NO OBJECTION, it was so ordered. 2 Representative Martin was MOVED to report CSHJR 43 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HOUSE BILL NO. 372 "An Act relating to the four dam pool transfer fund." RANDY WELKER, LEGISLATIVE AUDITOR, LEGISLATIVE AFFAIRS AGENCY observed that HB 372 was requested by the Legislative Budget and Audit Committee. He explained that the Legislature failed to make an appropriation link between the Four Dam Pool Transfer Fund and the receiving fund from which the appropriation was made. House Bill 372 would add language to clarify the intent of the Legislature that the funds be appropriated for the involved projects. House Bill 372 will remove the subject to appropriation language and insert "unless otherwise provided in an appropriation." He stressed that expenditures cannot occur absent appropriation. Representative Hanley referred to a letter from the Department of Law to Senator Taylor, dated 1/3/94, in regards to the transfer of funds to the Southeast Energy Fund (copy on file). He maintained that the Department of Law was incorrect in concluding that the funds could be transferred. He expressed support for HB 372. JOE AMBROSE, STAFF, SENATOR ROBIN TAYLOR stressed that HB 372 would create a mechanism for inner account transfers. Representative Brown provided members with AMENDMENT 1 (copy on file). Amendment 1 would delete all material after "fund", on page 1, line 6; and insert "to the general fund." She explained that the amendment would add $12 million dollars back to the General Fund. She stressed that the appropriations have not yet been made. She argued that the projects contained are not priorities of the State of Alaska. She recommended that the Committee be fiscally responsible. Representative Brown MOVED to ADOPT AMENDMENT 1. Representatives Parnell and Martin spoke in opposition to the amendment. Representative Martin OBJECTED to the amendment. A roll call vote was taken on the motion. IN FAVOR: Brown OPPOSED: Grussendorf, Hoffman, Navarre, Foster, Hanley, Martin, Parnell, Therriault, Larson 3 Co-Chair MacLean was not present for the vote. The MOTION FAILED (1-9). Representative Brown asked if the appropriation is a continuing appropriation. Mr. Welker replied that the legislation simply directs the revenue flow to a subaccount within the General Fund. Legislative appropriation is still required for the expenditure. Representative Martin MOVED to report HB 372 out of Committee with individual recommendations and with the accompanying fiscal note. Representative Brown OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Grussendorf, Hoffman, Navarre, Foster, Hanley, Martin, Parnell, Therriault, Larson OPPOSED: Brown Co-Chair MacLean was not present for the vote. The MOTION PASSED (9-1). HB 372 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Community and Regional Affairs. HOUSE BILL NO. 374 "An Act relating to reimbursable service agreements and other agreements between state agencies for the purchase of services." Mr. Welker explained that HB 374 was introduced as a result of an audit regarding fund transfers within the Commissioner's Office, Department of Health and Social Services. Reimbursable Service Agreements (RSA's) were used to transfer additional funding from agencies within the Department to the Commissioner's Office budget to increase funding to a level not approved by the Legislature or the Governor. Mr. Welker stated that an agency that provides a service will bill the agency acquiring the serve based on the actual cost of the service or by a cost allocation method that has been approved by Office of Budget and Management. Representative Grussendorf asked the penalty of violating the legislation. Mr. Welker noted that there is not penalty in law. Representative Brown MOVED to delete "with another agency". 4 There being NO OBJECTION, it was so ordered. Members were provided with AMENDMENT 2 from the Office of Budget and Management (Attachment 1). NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR explained Amendment 2. She noted that the sentence that began on page 1, line 8. She observed that the sentence is redundant. She added that "has, by law, the authority to do so", was also deleted. She emphasized that an agency may have the expertise to provide a service but have the specific authority. Mr. Welker stressed that it is not the intent of the Legislative Budget and Audit Committee that agencies ability to use legitimate RSA's be impaired. (Tape Change, HFC 94-23, Side 1) Representative Parnell MOVED to insert on page 1, line 7, "including the use of a reimbursable service agreement or other agreement", after "appropriations"; and delete: "An agency may not, through the use of a reimbursable service agreement of other agrement transfer money between appropriations." Delete after "However", and insert Amendment 2 after "However". There being NO OBJECTION, it was so ordered. Representative Parnell MOVED to delete all language starting on line 10, page 1; and insert new language, after "However,", provided by the Office of Budget and Management, in Amendment 1. There being NO OBJECTION, it was so ordered. Representative Martin MOVED to report CSHB 374 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHB 374 (FIN) was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Office of the Governor and Department of Administration. HOUSE JOINT RESOLUTION NO. 43 Proposing an amendment to the Constitution of the State of Alaska relating to penal administration. Representative Brown explained that Amendment 3, previously adopted by the Committee, neglected to assure that juvenile adjudications would be included. 5 JERRY LUCKHAUPT, LEGAL COUNSEL, LEGISLATIVE AFFAIRS AGENCY explained that the language "before or after conviction" would only cover situations involving adults or juveniles waived into and convicted in an adult court. He noted that the legislation attempts to include juvenile offenders. He suggesetd that, "juvenile adjudication", be added to lines 13 and 15, on page 1, after "conviction". Representative Brown MOVED to RESCIND the Committee's action in passing CSHRJ 43 (FIN) out of Committee, for the purpose of considering an amendment. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to RESCIND the Committee's action in adopting Amendment 3. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to insert, "before or after conviction or juvenile adjudication" on page 1, lines 13 and 15; and "seek" after "to" on page 1, line 14. There being NO OBJECTION, it was so ordered. Representative Martin MOVED to report CSHJR 43 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHJR 43 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal impact note by the Office of the Governor, dated 1/13/95; and with two zero fiscal notes by the Department of Public Safety and the Department of Corrections, dated 1/13/94. ADJOURNMENT The meeting adjourned at 2:38 p.m. 6