Legislature(1995 - 1996)
05/12/1995 11:10 PM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 268(FIN)
An Act making and amending appropriations; and
providing for an effective date.
Co-chairman Halford directed that CSHB 268 (Fin) be brought
on for discussion and referenced a draft SCS CSHB 268 (Fin)
which he explained includes a number of components. He
acknowledged need for technical amendments, citing a
duplicate section as an example, and referenced a list of
reappropriation sections by district.
The capital portion of the bill totals approximately $112
million in general fund dollars. In terms of categories, it
commences with the federal match for roads, airports, sewer,
and water; adds the capital matching grant program at a
total of $20 million; picks up approximately $10 million in
statewide programs and projects (primarily the executive
branch and the court system); picks up the sewer and water
municipal match; includes the largest project in each House
district; picks up "some university projects in Fairbanks,
Anchorage, and MatSu; includes a number of agency and
governor's office adjustments; picks up the short list of
AHFC projects; includes 70 sections of reappropriations;
includes supplementals; provides statewide university
maintenance at $35 million out of AHFC; includes full
funding for the education foundation formula and the full
single site school list for a total of $890 million; and
also includes a deposit to the principal of the permanent
fund.
Co-chairman Halford explained that projects associated with
federal match (roads, airports, sewer, water) are similar to
earlier versions of the bill. The other $18 million relates
to projects that have "gone back and forth." The university
and sewer and water projects represent the two major needs.
The Governor's budget contained approximately $200 million
in proposals. The proposed Senate version is shorter.
However, there are few items in the Senate version that were
not also in the Governor's budget. Projects were selected
in an attempt to maximize federal funds.
ANNALEE McCONNELL, Director, Office of Management and
Budget, and NANCY SLAGLE, Director of Budget Review, Office
of Management and Budget, came before committee.
Co-chairman Halford explained that the list of
municipalities in the front section of the bill evidences
those that have not applied for the capital matching grant
programs. Listing reflects reservations for those
communities. Other communities are listed with the specific
grant for which they have applied. There is $20 million in
the capital matching grant program. Expenditure are not
exactly the same for all because communities can maintain
moneys in the fund and build for a particular project.
Co-chairman Halford noted that he had earlier neglected to
mention that matches for the base school in Fairbanks and
the two in Anchorage are included with contingency language
that requires receipt of federal funds or the match lapses
back to the general fund. That funding was in the original
$100 million draft. Numbers for the Anchorage schools are
"a little bit less," based on recent communications with the
military.
Co-chairman Halford commenced the following sectional review
of the bill:
Sec. 1 relates to federal receipts.
Secs. 2 and 3 provide appropriations for the capital
matching grant program. Grants are contained in the long
list within the bill and in actual community allocations
shown in the back section of the bill.
Secs. 4 and 5 retain interest on grant accounts.
Sec. 6 contains base school language. Annalee McConnell
advised that there is no assurance of federal funds for
Aurora and Ursa Minor. She recommended that rather than add
them at this point and tie up general funds that may or may
not work for the match, it would make more sense to include
intent language allowing for consideration in January and
wait to "see where we end up with Congress." Ms. McConnell
acknowledged a $500.0 need relating to life and safety at
Aurora and concurred that that appropriation should be made
at this time.
For the school at Eielson, Ms. McConnell recommended that
since in-hand federal funds cover the amount needed for
repairs to bring the school up to code, funding should be at
that level. Should Fairbanks wish to have a new school
instead of upgrade of the two existing schools, the
community could bond the issue.
Senator Zharoff expressed concern and raised questions
regarding REAA schools listed on the priority list and
submitted by the Governor in his capital request. Co-
chairman Halford acknowledged that REAA schools were not
included in the proposed draft. Ms. McConnell advised that
the administration's school list totaled $13,674.0. She
noted that the school at Eielson is ranked 28th or 29th on
the Dept. of Education list and stressed need to fund
schools in the priority order listed by the department. The
administration is not recommending construction of new
schools. It is focusing on maintenance only.
Co-chairman Halford explained that base schools were
selected because of an understanding that they are federally
matched and federal moneys are available.
Further discussion ensued regarding funding for REAA schools
and bonding for construction of schools in municipalities.
Senator Zharoff stressed that opportunities for new schools
are very limited in REAAs. He urged that funding adhere to
the priority list prepared by the Dept. of Education.
Ms. McConnell said she would provide alternative, contingent
language for schools, similar to that proposed for DOTPF
federal match funding.
Sec. 7 appropriates $2 million from the Alaska marine
highway system vessel replacement fund to marine highway
system improvements/overhaul. That represents half of a $4
million appropriation. The other half is from the general
fund.
Secs. 8 and 9 contain DOTPF public facilities language
presented by the administration. Senator Rieger asked what
the amount in Sec. 8 (a) is expected to be. Nancy Slagle
responded, "approximately $1.5 million," relating to
highways. Senator Rieger asked if the amount represents
matching funds for federal projects reappropriated to "any
DOT project." Ms. Slagle said it must be used to access
federal dollars.
Sec. 10 appropriates $100,000 from the general fund to the
reforestation fund per the Governor's budget.
Sec. 11 contains a list of municipal capital grant funds for
smaller communities. Co-chairman Halford reiterated that
the list represents communities that have not yet applied.
As they apply, they are subtracted from this list and placed
on the list of actual capital matching grants within the
bill. Communities should not be listed twice.
Sec. 12 reappropriates $400,000 from the Mount Roberts
project, per the Governor's budget, but to the statewide
communications project rather than university housing. Ms.
McConnell voiced the administration's position that the
funds were appropriated for Juneau and should remain within
the community. She stressed that the use proposed by the
Governor was identified as high priority by the university.
It was part of a package of funding that covers university
projects at Anchorage, Fairbanks, and Juneau. Ms. McConnell
advised of broad support statewide, full support of the
Governor, full support of the delegation in Anchorage, and
full support by the university for use of the funding as
intended by the Governor. She stressed that Alaska has a
statewide university system. Priorities for determining
university projects should be followed. There is clearly a
need for university housing in Juneau.
Sec. 13. appropriates $1,800,000 for integration of the
state's criminal justice computer systems, per a request
from the administration. Co-chairman Halford noted a
question concerning the correct number. Annalee McConnell
explained that a multi-year project is involved. Much of
the tracking throughout the system is now done manually.
Pieces missing from the proposal consist of need for $300.0
for the public safety component for maintenance of the
fingerprinting system, $250 for the Dept. of Law, and $250
for the court system. That is considerably scaled back from
the original proposal. Nancy Slagle advised that the amount
of funding for the Dept. of Corrections at page 6, line 23,
should be $750.0 rather than $1,500,000. The remainder of
the $2.5 million in federal dollars shows up in deferred
maintenance in the back portion of the budget.
Sec. 14 contains four-dam pool language and appropriates
$4,000,000 from the Southeast energy fund to the power
development fund. Co-chairman Halford acknowledged
questions surrounding the language submitted by the Office
of Budget and Management and asked how the appropriation
would work. Nancy Slagle referenced submission of two
proposals for language. The first appropriates $4,000,000
to the power development fund, $4,000,000 to power cost
equalization, and $2,000,000 to the power project fund. The
remainder would be distributed on the 40/40/20 basis, per
statute. Following discussion with attorneys and staff in
Senate Finance co-chairs offices, it was determined it would
be simpler to leave the 40/40/20 language in the front
section of the operating bill and appropriate the $4,000,000
from the Southeast energy fund to the power development
fund.
SENATOR TAYLOR came before committee in opposition to the
appropriation, terming it "a simpler way to steal $4,000,000
out of my district and put it into a state obligation." He
remarked that the state has failed to repair power lines
that supply Tyee power to Wrangell and Petersburg. The
state is currently being sued by four-dam pool members
because of that failure. Deferred maintenance totals $35
million for the Tyee line and the Terror Lake project at
Kodiak. Senator Taylor attested to a lack of communication
with the Governor's Office on the issue and urged that the
legislature demand that "the law that was passed that
appropriated these moneys, three years ago, be enforced."
He referenced earlier comments by the administration asking
that moneys appropriated to Juneau be preserved while the
same continuity of care does not extend to the $4,000,000
appropriated for a $60 million intertie line. Ketchikan is
presently burning diesel to provide power. The city has
been doing so since September, while there is a surplus of
power at Tyee. The $4,000,000 transfer recommended by the
administration kills a $60 million intertie on which the
Senator advised he had been working for several years.
Senator Taylor said he had prepared an amendment to correct
the problem and return the moneys to the original
appropriation. Co-chairman Halford asked that amendments be
held until conclusion of overall review of the bill.
Senator Zharoff asked if a memorandum of understanding had
been reached by four-dam pool members. Nancy Slagle said
that proposed language is based on negotiations between the
administration and attorneys representing utility companies.
She acknowledged that the administration does not have a
signed agreement with all parties at this time, although a
few have signed. It will take time for city councils to
meet, vote on the issue, and sign. While that process is
underway, it is not complete at this point. In light of
needed repairs, Senator Zharoff expressed concern that an
agreement was not in place.
Sec. 15 appropriates $1,000,000 in federal receipts from the
National Marine Fisheries for the Kenai River project
Sec. 16 extends the lapse date on disaster relief funds from
June 30, 1995, to June 30, 1996. Co-chairman Halford
subsequently advised that this language is duplicated in
Sec. 94
Sec. 17 contains appropriations from unrestricted mortgage
loan interest payments to AHFC to accompany new legislation
in the executive budget act which applies to AHFC. Senator
Rieger asked if the $350,000,000 and the $50,000,000 set
forth in subsections (a) and (b) respectively, are numbers
with which AHFC is comfortable. Co-chairman Halford voiced
his understanding that the numbers were provided by AHFC.
Sec. 18 contains denial of prior authorization for runway
extension at Anchorage International Airport.
Sec. 19 appropriates the balance in the Alaska Science and
Technology Endowment earnings reserve to the Alaska Science
and Technology Foundation for grants for FY 96.
Sec. 20 contains supplemental funding for salvage timber
harvests. Co-chairman Halford advised that funding would
generate more revenue than expenditure.
Sec. 21 reappropriates the balance of funding for Petersburg
Elementary School code upgrades to Petersburg city Schools
for the middle school/high school shop addition.
Co-chairman Halford advised that reappropriations are
contained in Secs. 21 through 94. He then queried members
concerning whether they wished to proceed section by section
or merely raise questions and discuss specific items.
Members chose to discuss specific reappropriations.
Senator Rieger directed attention to Sec. 72, page 19, lines
3-5, and noted that the reappropriation is made from an
appropriation enacted during 1995. Co-chairman Halford
advised that the Lake and Peninsula Borough undertook school
projects without going through the bond, debt service
program. The reappropriation removes moneys that would have
been used for debt service for those schools from the debt
service allocation. The net effect on the general fund
should be zero. The request derived from Senator Hoffman's
office.
Senator Rieger next inquired concerning the mechanics of
Sec. 83 at pages 20 and 21. Co-chairman Halford explained
that the reappropriation was proposed by the Governor's
Office. Nancy Slagle advised that subsection (a) allows for
unexpended balances of the longevity bonus program to be
available to the office of public advocacy which is $330,000
short this year. What cannot be made up from subsection (a)
will be made up from subsection (b) funding derived from a
1994 appropriation for medical assistance, medicaid
facilities, where a lapse is expected.
Senator Donley referenced Sec. 37 and said he was
responsible for the original appropriation for Cambridge
Way/Tudor Road traffic improvements. He then voiced his
understanding that reappropriations were not to occur unless
district legislators all agreed. Co-chairman Halford
acknowledged that the criteria was for House and Senate
members to get together. If that is not the case on this
item, the "normal thing would be to delete the
reappropriation" for the Campbell Creek Trail. He suggested
that action be held in abeyance and that discussion return
to Sec. 37 at a later time.
Following discussion of questioned reappropriation items,
Co-chairman Halford continued his sectional review of the
bill.
Sec. 95 contains a $2,700,000 appropriation for the Shepard
Point road and response equipment storage facilities from
settlement fund moneys.
Sec. 96 reflects a reappropriation of $5,669,400 in
legislative carry forward moneys to DOTPF for nonroutine and
deferred maintenance.
Sec. 97 contains an Anchorage Caucus reappropriation for the
Ship Creek redevelopment project.
Sec. 98 reappropriates funding from the high speed ferry
system to the Alaska Science and Technology Foundation.
Sec. 99 contains a reappropriation within Senator Ellis'
district from the Williwaw Elementary School district to
Mountain View Elementary School.
Sec. 100 reflects a reappropriation proposed by the Governor
for the Prince William Sound Science Center. Co-chairman
Halford directed attention to page 25, line 23, and noted
need to insert "not to exceed $300,000" after the word
"appropriation."
Secs. 101 through 106 contain additional reappropriations.
The net effect is zero general funds.
Senator Zharoff inquired concerning Sec. 104. Co-chairman
Halford noted that it reappropriates moneys from the
legislative lapse to the University of Alaska, Anchorage,
for design and construction of campus parking facilities,
the second or third item on the priority list. Senator
Duncan inquired concerning the rationale behind the
appropriation. Co-chairman Halford advised that there was
no particular tie between the original appropriation and the
reappropriation project. He referenced an earlier
reappropriation from legislative funding to DOTPF
maintenance.
Sec. 105 provisions lapse a number of old appropriations.
Senator Rieger requested an explanation. Co-chairman
Halford advised that the section was included at the request
of the Legislative Budget and Audit Committee. It relates
to budgets prior to 1990. JOHN BITNEY, aide to the
Legislative Budget and Audit Committee, explained that early
in the session, the legislative auditor provided legislators
a computer listing of old capital project balances.
Language within Sec. 105 repeals unobligated and
unencumbered general fund balances in projects prior to
1989. As of January 23, 1995, the total was $8.8 million in
general funds. Following a request by Senator Donley, Co-
chairman Halford asked that Mr. Bitney make a list of repeal
items available for review.
Sec. 106 appropriates program receipts from occupational
licensing fees to the division of occupational licensing for
operating costs for FY 96. Senator Rieger subsequently
asked if the foregoing provision was standard. Nancy Slagle
explained that it ensures that program receipts received on
a biennial basis can be used for operational expenditures
over a two-year period. According to statute, program
receipts from fees are intended to cover board expenses.
Further discussion of overall division expenditures
followed. Ms. McConnell advised that OMB would review and
clarify the issue.
Sec. 107 appropriates all but $100,000,000 from the earnings
reserve balance to the principal of the permanent fund.
Annalee McConnell commented that the appropriation within
Sec. 107 represents one of the most important acts to be
taken by committee. She noted that it was transpiring in "a
little less than four seconds at five of midnight." She
stressed that the action is of enormous impact to the state
and should receive considerable attention. The
administration is opposed to the provision.
End : SFC-95, #71, Side 1
Begin: SFC-95, #72, Side 2
Ms. McConnell noted that the above appropriation would
impact whether a three-quarter vote or a simple majority is
needed to access the constitutional budget reserve when it
was "clearly the intention of the people that these are the
circumstances under which a three-quarter vote should be
required." The issue involves "making major changes in the
reserves policy of the State of Alaska just before the long-
range fiscal planning commission does its work." In her
concluding comments she termed the above appropriation
"premature and a very unwise move at this point."
Co-chairman Halford advised that the bill making the above
appropriation "passed the Senate quite some time ago," and
the House version has advanced to the Rules committee. The
approach has thus had several months of consideration,
affirmative passage in one body, and consideration through
the committee structure in the other body. It is not
intended to be hidden.
Senator Duncan inquired concerning the amount remaining and
not subject to appropriation in SB 84. Co-chairman Halford
voiced his understanding that SB 84 retained $250,000,000.
Senator Duncan voiced concern that the appropriation would
impact dividends. Co-chairman Halford explained that a
review of projections indicates no impact on the dividend,
except possibly guaranteeing that they do not decline in the
future because of legislative spending. He further noted
that the effective date in SB 84 was the last day of FY 95.
The effective date for Sec. 106 is FY 96. It would not be
available to be used in some way to "get the budget passed
with a simple majority . . . ." Senator Duncan questioned
the impact on next year's budget. Co-chairman Halford
acknowledged a constitutional question. Senator Duncan
suggested that while the arrangement would not bypass the
three-quarter vote this year, it would, in effect, do so
next year. Co-chairman Halford acknowledged that anytime a
deposit to savings is made, the appropriation for the year
is increased. It was not the intent of the constitutional
budget reserve to keep deposits to principal of the
permanent fund from being made. Senator Duncan stressed
that when the constitutional budget reserve was established,
it was not the intent that the three-quarter vote
requirement be bypassed.
Sec. 108 appropriates the sum of $711,150,130 to the Dept.
of Education for full funding, including the projected $18
million increase and single site schools, for the FY 96
education budget. Specific numbers listed on pages 27
through 29 were provided by the administration. Annalee
McConnell referenced page 27, line 29, and noted need to
delete the word "trust" from general fund/mental health
funding. Referencing page 28, line 10, public and nonpublic
pupil transportation, Ms. McConnell advised that the
administration budget showed public transportation as a
separate line item and zero funding for nonpublic pupil
transportation. The amount listed in the draft,
$32,842,200, is the public amount. The effect of Senate
funding would be to reduce the amount of money going to
public schools for transportation, in order to transport
students to private schools.
Discussion of litigation relating to school transportation
followed. Ms. McConnell advised of requests for
transportation to private schools in addition to that from
Fairbanks giving rise to the litigation. Co-chairman
Halford asked how the case was decided. Ms. McConnell
explained that Alaska statutes provide for private school
transportation, subject to appropriation. The court case
was not appealed by the state. It ordered the state to
provide transportation to students at Monroe. Ms. McConnell
urged appropriation as two separate items. In the course of
further discussion, Ms. McConnell said that the total
potential impact of transporting students to private schools
would be $3 to $6 million. Discussion of regulations setting
policy on the issue followed.
Nancy Slagle voiced need to include Sec. 108 within Sec. 113
provisions for a July 1, 1995, effective date. Co-chairman
Halford concurred that funding in Sec. 108 is intended to be
the education component of the FY 96 budget.
Sec. 109 contains a $35,000,000 appropriation from AHFC to
the general fund. Ms. McConnell said that the
administration does not support using AHFC funds for non-
housing purposes. That is the reason the administration put
together a package that included deferred maintenance at
university student housing, housing for seniors, pioneer
homes, special needs housing, etc.
Sec. 110 reflects "sweep language of the constitutional
budget reserve . . . ." It would return money to the power
cost assistant fund, the science and technology fund, the
marine highway system, and the mitigation account of the 470
fund. Mr. McConnell advised that the administration
maintains that this should be done by a three-quarters vote.
Co-chairman Halford concurred in the interpretation.
Sec. 111 relates to the three-quarter vote in the
constitutional budget reserve fund.
Remaining sections apply effective dates.
Nancy Slagle noted that a number of the supplemental items
requested by the Governor do not appear in the draft bill.
She noted specifically judgments and claims by the Dept. of
Law; settlement of claims for the Toksook Bay oil spill;
reimbursement for the Alaska Gateway School District; Dept.
of Fish and Game vendor compensation; funding for community
jails; settlement of personal lawsuits for Dept. of
Corrections; Cleary contempt court fines; University ACCFT,
and miscellaneous stale dated warrants. Co-chairman Halford
acknowledged that the foregoing were not included. He
advised of extensive discussion and a conscious decision
regarding Toksook Bay. There was no conscious decision on
the remainder of the foregoing which total approximately $3
million. While the Senate Majority would like to solve the
Toksook Bay question, it seeks a solution that includes both
state and school district liability as well as some method
of fixing the problem so this case does not become an
example of a way for communities to sue themselves for their
actions and ultimately require the state to cover the cost.
Ms. McConnell asked if public discussion of the Toksook Bay
issue had occurred. Co-chairman Halford advised that it
had. Senator Donley commented on lack of testimony by the
attorney who handled the settlement on behalf of the Dept.
of Law. He said that he subsequently met with the
appropriate attorneys and received "entirely different
responses to the questions." He advised he was satisfied
with those answers and had developed a positive feeling
toward the settlement. Ms. McConnell stressed that the
state has an opportunity to accept a settlement which would
be of extreme advantage. A jury trial could produce a
significantly higher judgment. The administration is well
aware of other claims. An interdepartmental task group is
working on the issue of bulk fuel spills, liability issues,
etc. The intent is to conduct intensive work during the
interim and make recommendations in January. She urged
support for the settlement and warned that the financial
situation would be significantly worse if the case goes to
jury trial at Bethel.
Citing the Co-chairman's indication that non-controversial
supplemental items were not consciously left out of the
draft, Ms. McConnell inquired regarding the process at this
point. Co-chairman Halford advised that supplementals would
probably be included in a technical amendment offered on the
floor. Ms. McConnell suggested that she make copies of a
spread sheet so members could review the funding. Co-
chairman Halford directed that the meeting be recessed
pending copying and distribution of the spread sheet.
RECESS - 12:20 A.M.
RECONVENE - 1:05 A.M.
Co-chairman Frank MOVED for adoption of SCS CSHB 268 (Fin)
and requested unanimous consent. No objection having been
raised, SCS CSHB 268 (Fin) was ADOPTED as a working
document.
Co-chairman Halford noted that amendment of the bill to
effect both technical and other needed corrections would
require substantial time and reprinting. He then voiced his
intent to prepare a technical amendment to "pick up all the
technical changes." He further acknowledged that there
would likely be substantive amendments as well, and
suggested that the bill be reported out of committee with
the understanding that those amendments would follow and be
offered on the floor. He referenced circulation of
information on supplemental funding by the administration
and said the committee would be taking the advice of
conference committee co-chairs on the operating budget in
including supplemental funding in amendments to be offered
on the floor.
In response to a question from Senator Randy Phillips, the
Co-chairman advised that he would do his best to combine
changes within a consent amendment and go forward from
there. He urged members to carefully examine
reappropriation items within their districts for accuracy.
Senator Rieger MOVED that SCS CSHB 268 (Fin) pass from
committee with individual recommendations. Senator Zharoff
OBJECTED, voicing exception to several sections, Sec. 107 in
particular. He further spoke to lack of opportunity to
offer amendments in committee and cited questions concerning
funding sources, the school priority list, water and sewer
projects, appropriations from AHFC receipts, and why some
projects were included while others were not.
Annalee McConnell voiced concern regarding supplemental
housing for AHFC. She said that in reducing funding from
the requested $7 million match, the state would not be able
to capture the full $60 million in federal funds. Capture
of the $60 million would require addition of $7 million at
page 32, line 22. Co-chairman Halford noted that funding
provided at page 32 is higher than "the minimum number that
was previously provided by AHFC." He further acknowledged
concern "back and forth on that question." Ms. McConnell
concurred and referenced recent receipt of correspondence
from HUD clarifying the issue.
Ms. McConnell spoke to projects which were not on the
administration's list such as the agricultural education
demonstration project. Funding for Dept. of Transportation
and Public Facilities remains $2 million short in deferred
maintenance funding. Nancy Slagle advised of need for $1.2
million for an additional Dept. of Health and Social
Services project for life, health, safety block grants.
Ms. McConnell referenced submission of information on the
school at Port Protection where the state can solve a $1.6
million problem with $100.0, the cost of moving relocatable
classrooms in an effort to avoid need for a major
construction project. She further spoke to the situation at
Kalskag where the school burned down. Although the
community is insured for replacement, it was not insured for
interim classroom space.
She next recommended funding of $300.0 for the SLED project
which makes data resources available to libraries throughout
the state. She stressed the growing popularity of the
project and the fact that it serves school children as well
as adults.
Ms. McConnell urged that no unallocated general fund
reduction of $1.5 million be made to the village safe water
program, page 55. She further noted that a number of
projects were missing from the priority list for the
municipal matching program and funding amounts for some
projects differ from those submitted by the communities and
the administration. She recommended return to funding per
the priority list.
Funding for repairs and life, safety features at community
jails is also not included. The finance committee requested
that this $155.0 item be moved from the operating budget to
the capital budget.
Ms. McConnell also stressed need for inclusion of funding
for completion of the Machatanz Building at the university,
even though it was not part of the package put together by
university regents.
Co-chairman Halford called for a show of hands on passage of
the bill. The motion CARRIED on a vote of 5 to 2, and SCS
CSHB 268 (Fin) was REPORTED OUT of committee. Co-chairmen
Halford and Frank and Senators Rieger and Sharp signed the
committee report with a "do pass" recommendation. Senators
Donley, Phillips, and Zharoff signed "no recommendation."
ADJOURNMENT
The meeting was adjourned at approximately 1:20 a.m.
| Document Name | Date/Time | Subjects |
|---|