HOUSE FINANCE COMMITTEE May 10, 1994 10:05 A.M. TAPE HFC 94 - 168, Side 1, #000 - #622. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 10:05 A.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 Jerry Burnett, Staff, Senator Randy Phillips; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Juanita Hensley, Chief, Driver Services, Department of Public Safety; M. Clyde Stolzfus, Special Assistant, Commissioner's Office, Department of Transportation and Public Facilities. SUMMARY SB 56 An Act relating to the budget reserve fund established under art. IX, sec. 17, Constitution of the State of Alaska. CS SB 56 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Senate State Affairs Committee. SB 365 An Act relating to the improvement of state finances and fiscal accountability by increasing fees, by collecting additional revenue, by reducing certain program expenditures by changing services or eligibility requirements for programs, by changing certain statutory limitation periods, by providing for use of certain electronic records, by making changes to state agency functions or procedures including certain reporting and planning procedures, and by authorizing extensions for state leases for real property if certain savings can be achieved; and 1 providing for an effective date. HCS SB 365 (FIN) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Public Safety dated 3/24/94, the Office of the Governor dated 4/21/94, the Department of Transportation and Public Facilities dated 4/21/94, the Department of Environmental Conservation dated 4/21/94, the Department of Labor dated 4/21/94, the Department of Corrections dated 4/21/94, the Department of Administration dated 4/21/94 and the Department of Law dated 4/21/94. SENATE BILL 56 "An Act relating to the budget reserve fund established under art. IX, sec. 17, Constitution of the State of Alaska." JERRY BURNETT, STAFF, SENATOR RANDY PHILLIPS, explained SB 56 which would implement repayment provisions made from appropriations within the constitutional budget reserve fund. The legislation would allow a carry forward as of June, 30, 1994, or as much as necessary to complete the repayment. The repayment would be transferred to that fund by the Department of Administration after the annual financial report was filed. Representative Brown asked what the definition of an unreserved balance, undesignated general fund balance. Mr. Burnett replied that balance would be the money which had not been restricted by law for specific use and which would accrue to the general fund under accepted accounting principles. Mr. Burnett added that the provisions provided by SB 56 were similar to those contained in HB 58, although that bill had been found unconstitutional. SB 56 was written to be consistent with the State's constitutional position. He added that when the judge ruled on HB 58, he advised that the legislation was unduly restricting funds available for repayment. The State continues to argue that case to the Supreme Court. The section in question of the constitution, specifically requires that the Legislature implement it by law and that money be taken from the general fund. Representative Hanley MOVED to report CS SB 56 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTIONS, it was so ordered. 2 CS SB 56 (FIN) was reported out of Committee with "no recommendations" and with a fiscal note by the Senate State Affairs Committee. SENATE BILL 365 "An Act relating to the improvement of state finances and fiscal accountability by increasing fees, by collecting additional revenue, by reducing certain program expenditures by changing services or eligibility requirements for programs, by changing certain statutory limitation periods, by providing for use of certain electronic records, by making changes to state agency functions or procedures including certain reporting and planning procedures, and by authorizing extensions for state leases for real property if certain savings can be achieved; and providing for an effective date." JUANITA HENSLEY, CHIEF, DRIVER SERVICES, DEPARTMENT OF PUBLIC SAFETY, explained Sections 7-22, Department of Public Safety amendments, from a handout provided by the Office of Management and Budget. NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, provided a sectional analysis of the handout "Reducing State Government Expenditures-Sectional". [Copy on file]. Representative Martin questioned the deletion to maintenance for the Department of Transportation and Public Facilities (DOTPF) in Section #1. M. CLYDE STOLZFUS, SPECIAL ASSISTANT, COMMISSIONER'S OFFICE, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, commented that Section #1 would be a deletion for a transportation plan. Representative Brown provided the Committee with Amendment [Copy on file]. She felt that to include these items would create a less comprehensive planning process and that less detail would be provided by the Department of Transportation and Public Facilities. Mr. Stolzfus agreed that the maintenance level has been less than adequate within the Department. However, a problem arises when a certain level of maintenance is promised in a plan and then the Department can not provide the service due to a lack of funds. Representative Brown asked if a prioritized maintenance program had been established. Mr. Stolzfus replied one had not been because it would result in a liability problem for 3 the Department. He continued, by stating that Section #2 had been added by the Senate Finance Committee. Section #1 addresses the six year program, Section #2 addresses the construction report of projects for the next construction season. Discussion followed between Representative Brown and Mr. Stolzfus regarding Sections #1 & #2 and the reductions to the level of detail which the legislation would provide. Representative Brown asked the difference between the six year plans proposed in Section #1 and Section #26. Mr. Stolzfus advised that Section #26 was the report which the Governor submits to the Legislature. Representative Brown understood that Section #27 would exempt DOTPF from providing the full reporting requirements due to the Legislature on the construction of projects. Mr. Stolzfus agreed. He added that Section #27 would eliminate in the six year plan, the estimated cost of that project. Representative Brown MOVED TO AMEND Amendment #1 which would now delete only Sections #1, #2, #27 & #28. There being NO OBJECTIONS, it was adopted. Representative Navarre MOVED to report HCS SB 364 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. HCS SB 365 (FIN) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Public Safety dated 3/24/94, the Office of the Governor dated 4/21/94, the Department of Transportation and Public Facilities dated 4/21/94, the Department of Environmental Conservation dated 4/21/94, the Department of Labor dated 4/21/94, the Department of Corrections dated 4/21/94, the Department of Administration dated 4/21/94 and the Department of Law dated 4/21/94. ADJOURNMENT The meeting adjourned at 10:50 A.M. HOUSE FINANCE COMMITTEE May 10, 1994 10:05 A.M. TAPE HFC 94 - 168, Side 1, #000 - #622. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting 4 to order at 10:05 A.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 Jerry Burnett, Staff, Senator Randy Phillips; Nancy Slagle, Director, Division of Budget Review, Office of Management and Budget; Juanita Hensley, Chief, Driver Services, Department of Public Safety; M. Clyde Stolzfus, Special Assistant, Commissioner's Office, Department of Transportation and Public Facilities. SUMMARY SB 56 An Act relating to the budget reserve fund established under art. IX, sec. 17, Constitution of the State of Alaska. CS SB 56 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Senate State Affairs Committee. SB 365 An Act relating to the improvement of state finances and fiscal accountability by increasing fees, by collecting additional revenue, by reducing certain program expenditures by changing services or eligibility requirements for programs, by changing certain statutory limitation periods, by providing for use of certain electronic records, by making changes to state agency functions or procedures including certain reporting and planning procedures, and by authorizing extensions for state leases for real property if certain savings can be achieved; and providing for an effective date. HCS SB 365 (FIN) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Public Safety dated 3/24/94, the Office of the Governor dated 4/21/94, the Department of Transportation and Public Facilities dated 4/21/94, the Department of Environmental Conservation dated 4/21/94, the Department of Labor dated 4/21/94, the Department of Corrections 5 dated 4/21/94, the Department of Administration dated 4/21/94 and the Department of Law dated 4/21/94. SENATE BILL 56 "An Act relating to the budget reserve fund established under art. IX, sec. 17, Constitution of the State of Alaska." JERRY BURNETT, STAFF, SENATOR RANDY PHILLIPS, explained SB 56 which would implement repayment provisions made from appropriations within the constitutional budget reserve fund. The legislation would allow a carry forward as of June, 30, 1994, or as much as necessary to complete the repayment. The repayment would be transferred to that fund by the Department of Administration after the annual financial report was filed. Representative Brown asked what the definition of an unreserved balance, undesignated general fund balance. Mr. Burnett replied that balance would be the money which had not been restricted by law for specific use and which would accrue to the general fund under accepted accounting principles. Mr. Burnett added that the provisions provided by SB 56 were similar to those contained in HB 58, although that bill had been found unconstitutional. SB 56 was written to be consistent with the State's constitutional position. He added that when the judge ruled on HB 58, he advised that the legislation was unduly restricting funds available for repayment. The State continues to argue that case to the Supreme Court. The section in question of the constitution, specifically requires that the Legislature implement it by law and that money be taken from the general fund. Representative Hanley MOVED to report CS SB 56 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTIONS, it was so ordered. CS SB 56 (FIN) was reported out of Committee with "no recommendations" and with a fiscal note by the Senate State Affairs Committee. SENATE BILL 365 "An Act relating to the improvement of state finances and fiscal accountability by increasing fees, by collecting additional revenue, by reducing certain program expenditures by changing services or 6 eligibility requirements for programs, by changing certain statutory limitation periods, by providing for use of certain electronic records, by making changes to state agency functions or procedures including certain reporting and planning procedures, and by authorizing extensions for state leases for real property if certain savings can be achieved; and providing for an effective date." JUANITA HENSLEY, CHIEF, DRIVER SERVICES, DEPARTMENT OF PUBLIC SAFETY, explained Sections 7-22, Department of Public Safety amendments, from a handout provided by the Office of Management and Budget. NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, provided a sectional analysis of the handout "Reducing State Government Expenditures-Sectional". [Copy on file]. Representative Martin questioned the deletion to maintenance for the Department of Transportation and Public Facilities (DOTPF) in Section #1. M. CLYDE STOLZFUS, SPECIAL ASSISTANT, COMMISSIONER'S OFFICE, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, commented that Section #1 would be a deletion for a transportation plan. Representative Brown provided the Committee with Amendment [Copy on file]. She felt that to include these items would create a less comprehensive planning process and that less detail would be provided by the Department of Transportation and Public Facilities. Mr. Stolzfus agreed that the maintenance level has been less than adequate within the Department. However, a problem arises when a certain level of maintenance is promised in a plan and then the Department can not provide the service due to a lack of funds. Representative Brown asked if a prioritized maintenance program had been established. Mr. Stolzfus replied one had not been because it would result in a liability problem for the Department. He continued, by stating that Section #2 had been added by the Senate Finance Committee. Section #1 addresses the six year program, Section #2 addresses the construction report of projects for the next construction season. Discussion followed between Representative Brown and Mr. Stolzfus regarding Sections #1 & #2 and the reductions to the level of detail which the legislation would provide. 7 Representative Brown asked the difference between the six year plans proposed in Section #1 and Section #26. Mr. Stolzfus advised that Section #26 was the report which the Governor submits to the Legislature. Representative Brown understood that Section #27 would exempt DOTPF from providing the full reporting requirements due to the Legislature on the construction of projects. Mr. Stolzfus agreed. He added that Section #27 would eliminate in the six year plan, the estimated cost of that project. Representative Brown MOVED TO AMEND Amendment #1 which would now delete only Sections #1, #2, #27 & #28. There being NO OBJECTIONS, it was adopted. Representative Navarre MOVED to report HCS SB 364 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTIONS, it was so ordered. HCS SB 365 (FIN) was reported out of Committee with "no recommendations" and with fiscal notes by the Department of Public Safety dated 3/24/94, the Office of the Governor dated 4/21/94, the Department of Transportation and Public Facilities dated 4/21/94, the Department of Environmental Conservation dated 4/21/94, the Department of Labor dated 4/21/94, the Department of Corrections dated 4/21/94, the Department of Administration dated 4/21/94 and the Department of Law dated 4/21/94. ADJOURNMENT The meeting adjourned at 10:50 A.M. 8