HOUSE FINANCE COMMITTEE April 19, 1994 3:10 P.M. TAPE HFC 94 - 133, Side 1, #000 - end. TAPE HFC 94 - 133, Side 2, #000 - #318. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 3:10 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Representative Pete Kott; Paul Fuhs, Commissioner, Department of Commerce and Economic Development; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Karson Cowart, (Testified via teleconference), Alaska Visitor Association, Anchorage; Guy Bell, Director, Division of Administrative Services, Department of Commerce and Economic Development; Elizabeth Shaw, Chief, Assistant Attorney General, Civil Division, Department of Law; Remond Henderson, Director, Division of Administrative Services, Department of Community and Regional Affairs. SUMMARY HB 342 An Act extending the termination date of the Alaska Tourism Marketing Council. CS HB 342 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Commerce and Economic Development dated 1/21/94. HB 455 An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date. HB 455 was HELD in Committee for further consideration. 1 HOUSE JOINT RESOLUTION NO. 65 Co-Chair Larson provided the Committee with a work draft of a House Finance Committee resolution #8-LS1547\A, Cook, 4/15/94, which would propose an amendment to the Constitution of the State in relationship to the Budget Reserve Fund. [Copy on file]. The resolution would delete Section (b) and (d) of Article IX of the present Constitution. Co-Chair Larson requested that the Committee members review and consider the proposed resolution for introduction. HOUSE BILL 342 "An Act extending the termination date of the Alaska Tourism Marketing Council." Co-Chair MacLean MOVED #8-LS1426\I, Lauterbach, 4/18/94, HB 342 be the version before the Committee. There being NO OBJECTIONS, it was adopted. Representative Parnell, the Subcommittee Chair, explained the differences between the previous work draft and the new one. The in-cash contribution has been changed from 15% to 20%. He added that the cash contribution had been increased and the in-kind contribution would be considered toward the full 50% required donation. Co-Chair MacLean stated that the cash contribution was too low. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, spoke to the legalities of the in-kind contributions. He disagreed that administrative time should be considered as part of those in-kind obligations and recommended that portion of the legislation be excluded from the bill. Commissioner Fuhs added that the Department would recommend the Alaska Tourism Marketing Council (ATMC) pay a 25% contribution. Representative Brown asked who would be responsible to determine which contributions qualify. Commissioner Fuhs responded that the Department would work with ATMC on a standard operating procedure in order to identify which charges would be permissible. The report would be provided each year to the Legislature. Discussion followed among Committee members regarding the administrative time as an accountable in-kind contribution. 2 KAREN COWART, (TESTIFIED VIA TELECONFERENCE), ALASKA VISITOR ASSOCIATION (AVA), ANCHORAGE, noted that currently AVA is providing a 20% match and is paying for the ATMC planners. She stressed that it would be a difficult arrangement for AVA to increase contributions to 25% and continue payment for the planners. Co-Chair MacLean provided the Committee with Amendment #1, required amount from a "20%" to "25%" match. [Copy on file]. Co-Chair MacLean MOVED to adopt Amendment #1. Representative Parnell OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Foster, Martin, Navarre, Larson, MacLean. OPPOSED: Grussendorf, Hanley, Hoffman, Parnell. Representative Therriault was not present for the vote. The MOTION PASSED (6-4). Representative Grussendorf MOVED to adopt Amendment #2 which would amend Page 2, Line 7-9, deleting all language following "less". Ms. Cowart replied AVA would not oppose Amendment #2. There being NO OBJECTION, it was adopted. Representative Brown MOVED to adopt Amendment #3 to Page 1, Line 14, inserting "cash" following the language "form of" and on Line 15, delete "and" and insert "or". There being NO OBJECTION, it was adopted. Representative Brown MOVED to adopt Amendment #4 making a change to Page 2, Line 3, inserting language "approved by the ATMC and" following "is". Co-Chair MacLean MOVED to report CS HB 342 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HB 342 (FIN) was reported out of Committee with "do pass" recommendation and with a fiscal note by the Department of Commerce and Economic Development dated 1/21/94. HOUSE BILL 455 "An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date." 3 [Workdraft copy on file]. Section #9 NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, commented that Section #9 remained open. Section #9 would address judgments and claims of the Department of Law, an increase from $325,400 dollars to $1.221 million dollars. Co-Chair Larson advised that the amount had been determined by a memorandum as provided by Attorney General Botelho, 4/06/94. [Copy on file]. Section #16 Ms. Slagle advised that Section #16 would address the increase to federal receipts and a decrease to general funds. Section #16 references the judgments and settlements concerning Medical Assistance and reflects a greater participation by the federal government in that area. Section #28 Ms. Slagle pointed out that the changes to the disproportionate share program resulted from a miscalculation of the amount the State would receive in federal reimbursement. New Sections Following Section #50 Ms. Slagle clarified that the new section for the Department of Administration's request for $35 thousand dollars would address costs for the ethics complaints grievance awards. Ms. Slagle added that the new section for the Department of Transportation and Public Facilities would reference ratification of prior year expenditures. The new section for the Department of Commerce and Economic Development would explain Alaska Seafood Marketing extending the FY93 restricted program date and the use of FY93 revenues for expenditures in FY94. Ms. Slagle commented that the following sectional change for the Department of Public Safety would permit a ratification of expenditures. The new section for the Department of Corrections would address overtime litigation settlement for the canine unit in the amount of $163.9 thousand dollars. Ms. Brown questioned the settlement amount for that component. 4 (Tape Change, HFC 94-133, Side 2). Ms. Slagle continued that the following section would extend the lapse date for the Exxon Valdez Trustee Council restoration project within the Department of Fish and Game to the Department of Natural Resources. The following section would grant ratification to prior year expenditures within the Department of Administration. Ms. Slagle added that the following new section addressed the Department of Law, Legal Services and Operations, Weiss versus the State interim trail costs and attorney fees request for $492.1 thousand dollars. Ms. Slagle advised the Committee of a memorandum provided by Attorney General Botelho, 4/06/94, regarding the concerns. [Copy on file]. ELIZABETH SHAW, CHIEF, ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, DEPARTMENT OF LAW, stated that the claims had not been placed into the supplemental last year, and that consequently the requests covered both FY94 & FY95. Discussion followed between Representative Martin and Ms. Shaw regarding the large cost requested by the law firms and amount paid. Ms. Shaw pointed out that most of the sums of billed lawyer fees have gone through the court system and that a determination had been made as to the allowable costs and fees. She added that costs will vary depending on how much per hour an attorney may charge and that the costs include computer, research, paralegal and overhead projections. Section #55 Representative Brown questioned Section #55 which would roll forward the balance in the Rural Development Grants to June 30, 1995 instead of lapsing that account. Ms. Slagle replied that historically, there has been a problem with the rural development grants and that Section #55 would provide an extension for the grants in order to continue into FY95. REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, remarked that all the money has not yet been awarded and that the funds have not yet been encumbered. HB 455 was HELD in Committee for further consideration. ADJOURNMENT 5 The meeting adjourned at 4:15 P.M. HOUSE FINANCE COMMITTEE April 19, 1994 3:10 P.M. TAPE HFC 94 - 133, Side 1, #000 - end. TAPE HFC 94 - 133, Side 2, #000 - #318. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 3:10 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Representative Pete Kott; Paul Fuhs, Commissioner, Department of Commerce and Economic Development; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Karson Cowart, (Testified via teleconference), Alaska Visitor Association, Anchorage; Guy Bell, Director, Division of Administrative Services, Department of Commerce and Economic Development; Elizabeth Shaw, Chief, Assistant Attorney General, Civil Division, Department of Law; Remond Henderson, Director, Division of Administrative Services, Department of Community and Regional Affairs. SUMMARY HB 342 An Act extending the termination date of the Alaska Tourism Marketing Council. CS HB 342 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Commerce and Economic Development dated 1/21/94. HB 455 An Act making and amending operating and capital appropriations and ratifying certain state expenditures; and providing for an effective date. 6 HB 455 was HELD in Committee for further consideration. HOUSE JOINT RESOLUTION NO. 65 Co-Chair Larson provided the Committee with a work draft of a House Finance Committee resolution #8-LS1547\A, Cook, 4/15/94, which would propose an amendment to the Constitution of the State in relationship to the Budget Reserve Fund. [Copy on file]. The resolution would delete Section (b) and (d) of Article IX of the present Constitution. Co-Chair Larson requested that the Committee members review and consider the proposed resolution for introduction. HOUSE BILL 342 "An Act extending the termination date of the Alaska Tourism Marketing Council." Co-Chair MacLean MOVED #8-LS1426\I, Lauterbach, 4/18/94, HB 342 be the version before the Committee. There being NO OBJECTIONS, it was adopted. Representative Parnell, the Subcommittee Chair, explained the differences between the previous work draft and the new one. The in-cash contribution has been changed from 15% to 20%. He added that the cash contribution had been increased and the in-kind contribution would be considered toward the full 50% required donation. Co-Chair MacLean stated that the cash contribution was too low. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, spoke to the legalities of the in-kind contributions. He disagreed that administrative time should be considered as part of those in-kind obligations and recommended that portion of the legislation be excluded from the bill. Commissioner Fuhs added that the Department would recommend the Alaska Tourism Marketing Council (ATMC) pay a 25% contribution. Representative Brown asked who would be responsible to determine which contributions qualify. Commissioner Fuhs responded that the Department would work with ATMC on a standard operating procedure in order to identify which charges would be permissible. The report would be provided each year to the Legislature. Discussion followed among Committee members regarding the 7 administrative time as an accountable in-kind contribution. KAREN COWART, (TESTIFIED VIA TELECONFERENCE), ALASKA VISITOR ASSOCIATION (AVA), ANCHORAGE, noted that currently AVA is providing a 20% match and is paying for the ATMC planners. She stressed that it would be a difficult arrangement for AVA to increase contributions to 25% and continue payment for the planners. Co-Chair MacLean provided the Committee with Amendment #1, required amount from a "20%" to "25%" match. [Copy on file]. Co-Chair MacLean MOVED to adopt Amendment #1. Representative Parnell OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Foster, Martin, Navarre, Larson, MacLean. OPPOSED: Grussendorf, Hanley, Hoffman, Parnell. Representative Therriault was not present for the vote. The MOTION PASSED (6-4). Representative Grussendorf MOVED to adopt Amendment #2 which would amend Page 2, Line 7-9, deleting all language following "less". Ms. Cowart replied AVA would not oppose Amendment #2. There being NO OBJECTION, it was adopted. Representative Brown MOVED to adopt Amendment #3 to Page 1, Line 14, inserting "cash" following the language "form of" and on Line 15, delete "and" and insert "or". There being NO OBJECTION, it was adopted. Representative Brown MOVED to adopt Amendment #4 making a change to Page 2, Line 3, inserting language "approved by the ATMC and" following "is". Co-Chair MacLean MOVED to report CS HB 342 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HB 342 (FIN) was reported out of Committee with "do pass" recommendation and with a fiscal note by the Department of Commerce and Economic Development dated 1/21/94. HOUSE BILL 455 "An Act making and amending operating and capital 8 appropriations and ratifying certain state expenditures; and providing for an effective date." [Workdraft copy on file]. Section #9 NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, commented that Section #9 remained open. Section #9 would address judgments and claims of the Department of Law, an increase from $325,400 dollars to $1.221 million dollars. Co-Chair Larson advised that the amount had been determined by a memorandum as provided by Attorney General Botelho, 4/06/94. [Copy on file]. Section #16 Ms. Slagle advised that Section #16 would address the increase to federal receipts and a decrease to general funds. Section #16 references the judgments and settlements concerning Medical Assistance and reflects a greater participation by the federal government in that area. Section #28 Ms. Slagle pointed out that the changes to the disproportionate share program resulted from a miscalculation of the amount the State would receive in federal reimbursement. New Sections Following Section #50 Ms. Slagle clarified that the new section for the Department of Administration's request for $35 thousand dollars would address costs for the ethics complaints grievance awards. Ms. Slagle added that the new section for the Department of Transportation and Public Facilities would reference ratification of prior year expenditures. The new section for the Department of Commerce and Economic Development would explain Alaska Seafood Marketing extending the FY93 restricted program date and the use of FY93 revenues for expenditures in FY94. Ms. Slagle commented that the following sectional change for the Department of Public Safety would permit a ratification of expenditures. The new section for the Department of Corrections would address overtime litigation settlement for the canine unit 9 in the amount of $163.9 thousand dollars. Ms. Brown questioned the settlement amount for that component. (Tape Change, HFC 94-133, Side 2). Ms. Slagle continued that the following section would extend the lapse date for the Exxon Valdez Trustee Council restoration project within the Department of Fish and Game to the Department of Natural Resources. The following section would grant ratification to prior year expenditures within the Department of Administration. Ms. Slagle added that the following new section addressed the Department of Law, Legal Services and Operations, Weiss versus the State interim trail costs and attorney fees request for $492.1 thousand dollars. Ms. Slagle advised the Committee of a memorandum provided by Attorney General Botelho, 4/06/94, regarding the concerns. [Copy on file]. ELIZABETH SHAW, CHIEF, ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, DEPARTMENT OF LAW, stated that the claims had not been placed into the supplemental last year, and that consequently the requests covered both FY94 & FY95. Discussion followed between Representative Martin and Ms. Shaw regarding the large cost requested by the law firms and amount paid. Ms. Shaw pointed out that most of the sums of billed lawyer fees have gone through the court system and that a determination had been made as to the allowable costs and fees. She added that costs will vary depending on how much per hour an attorney may charge and that the costs include computer, research, paralegal and overhead projections. Section #55 Representative Brown questioned Section #55 which would roll forward the balance in the Rural Development Grants to June 30, 1995 instead of lapsing that account. Ms. Slagle replied that historically, there has been a problem with the rural development grants and that Section #55 would provide an extension for the grants in order to continue into FY95. REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, remarked that all the money has not yet been awarded and that the funds have not yet been encumbered. HB 455 was HELD in Committee for further consideration. 10 ADJOURNMENT The meeting adjourned at 4:15 P.M. 11