Legislature(1997 - 1998)
04/07/1997 09:12 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 55
"An Act relating to the definition of certain state
receipts; and providing for an effective date."
Annalee McConnell, Director, Office of Management and Budget
was invited to join the committee. She said this bill was
to provide clean-up on last year's bill. She further
referred to the childrens' trust and fiscal note summary.
Senator Parnell asked about designated program receipts.
Ms. McConnell further testified regarding pioneer homes.
With proper supervision and management they have brought
down the amount of general fund. She also offered comments
on the Department of Fish and Game and the Department of
Public Safety paying for their own housing.
Senator Phillips commented on the rental receipts. He then
moved amendment #1. Senator Adams objected, asking how it
affected AHFC. Ms. McConnell responded. Co-chair Sharp
referred to page 2, line 11. Ms. McConnell said that
reference would come under rental receipts. She explained
housing and corporate receipts and noted what would
specifically be listed under corporate receipts, i.e. AHFC.
They were listed in this manner for accounting purposes.
Senator Pearce said at this time she would not support
amendment #1. She referred to the commercial fisheries test
fishing operations that had a very restrictive grants and
gifts as referred to on page 3, lines 12 and 13. With
reference to housing and rental receipts, while she was
somewhat sympathetic with the pioneer homes' situation, what
happens when program receipts are put off of the budget the
Legislature tends to not look as closely at the program
during the budget process. Then it is not noted as the
program receipts are increased. She did not want to see the
pioneer homes raise their fees even higher without the
Legislature being a part of that decision making process.
There is a large subsidy at this time and she would like to
see that brought down. She said Mr. Mike Greany, Director,
Legislative Finance and Mr. Randy Welker, Legislative
Auditor had real concerns about pushing too many program
receipts off budget. They would prefer program receipts be
brought back in as straight general fund receipts and not
try to account for them separately. Before the bill is
moved from committee and before there is further
consideration of amendment #1 she would prefer to have
further conversation with Legislative Finance and in
particular with LB&A and audit staff.
Senator Phillips said the only reason he brought the
amendment up was because he was testing water. Senator
Phillips said he did have concerns about the pioneer home
receipts and wanted the issue flushed out. He felt the
appropriate place was before this committee.
Ms. McConnell said she appreciated the comments raised by
Senator Pearce about whether this gets left to scrutiny. In
talking to AHFC staff or the board or over at occupational
licensing one would find even though those have not been in
the same GF category, the Administration very much
scrutinized those and actually turned down some of the
requests for increments in both the operating and capital
budget. It was felt even though those areas in AHFC and
some of the other corporations are not part of the GF
picture, money was money and the non-GF areas should not
have less scrutiny than others. However, unless one is
careful, they will get less scrutiny.
Senator Phillips withdrew his amendment #1.
Senator Adams asked about the total amount of program
receipts to date and what would the effect of this
particular piece of legislation be. Ms. McConnell said the
total designated program receipt amount was $53.4 million in
the budget as amended. She did not have the GF figures.
She indicated, however, she would have a tally for the next
meeting. Co-chair Sharp asked that she also include total
housing receipts. Ms. McConnell referred to amendment #1
and said according to Jim Baldwin, Assistant Attorney
General, if it were adopted the AHFC receipts would still
come under the AHFC portion because it clarified all of
them.
Co-chair Sharp further referred to the pioneer home and said
he wanted further information. Since the escalation of
rates in the pioneer homes and the estimate in the FY '97
budget, the total estimated program receipts that were
loaded into the budget for the pioneer homes did not
materialize, thereby resulting in a shortfall for the
pioneer homes. It had been running close to $700 thousand
shortfall. He did not know if this had been narrowed down.
He did not what ramifications this would now have to further
exacerbate the present problems.
Sharon Barton, Department of Administration was invited to
join the committee. She said that though it looked early on
in the fiscal year the pioneer homes' revenue would be
short, during the last half of the year revenues have been
coming in much better. It is looking much better now and
the full amount may be achieved as projected for this fiscal
year. She offered her comments on the proposal for the
pioneer homes and asked the committee to take another look
at it and said the department would be happy to provide any
background information that helped. They do work with the
residents, families of residents and staff of the homes to
achieve full cost of care. Full cost of care means that
full cost of care is charged, but full cost of care will
never be collected because many can not pay it. It is
difficult to sell the proposal because the money is just
considered as general funds. They believe they are paying
for their cost in the home and it makes the job of selling
the full cost of care a very difficult one. General fund
program receipts are now $9.9 million in the '98 budget out
of a proposed total $31 million budget. She believed that
with a remaining $20 million in straight general funds the
program would receive a very close scrutiny both from the
Administration and from the Legislature for years to come.
She felt the scrutiny issue was therefore moot.
Co-chair Sharp referred to the screening process and what
about those who cannot pay or can only partially pay. He
felt the reference to full cost of care would put extreme
pressure on those screened for admittance and screening
those out that do not have the funds to meet the increased
rates. That would force those not being able to pay
anything or in the least not the full rate to end up in
facilities that would cost twice as much as the pioneer
home. The State would not win in that situation. The
screening process has been very fair, he noted, at least
from his district. It would seem, however, the pressure
would get a little greater on the screening people as the
responsibility of the full cost of care fell on new people
coming in. Ms. McConnell said this had been a valid concern
and the department had been careful to be very clear in
their policy that full cost care was for those who could
afford it and if full cost of care could not be afforded
still no one would be denied admission or kicked out.
Senator Pearce again referred to page 3, line 13. Language
would be added that would include contracts. Gift, grants
and bequests were already included. She asked for an
example of contracts or dollars restricted by federal law.
Ms. McConnell indicated that the best example under federal
law was the WIC program. They are not actually a federal
fund but they come restricted by federal law as to how they
can be used. They must be used for the WIC nutrition
program. There are very few examples under federal law. In
the attachment to the fiscal note they are broken down by
category and one can see what is listed under each category.
She also noted contractual arrangements with local
governments. They would also be covered under that portion
of the bill. Contracts with private industry, specifically
AVTECH, and other training courses to be paid for by an
employer that has requested specifically the training be
held at AVTECH. Other contracting could be done with
departments, i.e. a local road project contracted to the
Department of Transportation who is already doing a road
project in the community. She continued on with restricted
fees which included teacher certificates, followed by state
and federal law restrictions. Most of those were in the
Department of Commerce or Department of Health and Social
Services.
Senator Donley referred to page 2, line 11 of the bill,
corporate fees, and asked if Alaska Tourism Marketing
Council was included under that. Ms. McConnell said they
were listed under contractual arrangements. It was shown as
a designated program receipt rather than a corporate
receipt. The corporate receipts would cover AHFC, permanent
fund corporation and AIDEA.
Senator Adams referred to the last page of the bill and
asked what would happen if the Alaska Railroad Corporation
were to be deleted so that the program receipts would come
to the Legislature and then they could be reappropriated.
Jim Baldwin, Assistant Attorney General, Department of Law
was invited to join the committee. He said that just to
take the Alaska Railroad out would not change the section.
Senator Adams asked what would happen then if a new section
were added. Mr. Baldwin continued saying that under the
present section it only defines program receipts. Using
Senator Adams suggestion, the Railroad's income would be
considered unrestricted general funds. He said that was
similar to another bill moving through the Legislature in
both the House and the Senate, which would accomplish that
purpose. The Legislature has the power of appropriation
over all funds in the state treasury. There had never been
a definition of what the term "state treasury" included.
Nor a court case defining it. It would be legally possible
to do that, but he was not sure the title in this bill was
broad enough.
Senator Torgerson also referred to page 3, line 13. Ms.
McConnell said funds were restricted by federal law. WIC
was not federal funds but its' use was federally restricted.
Senator Adams referred to legislative oversight. Ms.
McConnell concurred and said there would still be
legislative oversight.
In response to a previous question by Senator Parnell, Ms.
McConnell said the police standards academy was added back
in when it was reevaluated this year.
Co-chair Sharp asked committee members and the
administration to be ready with additional information and
amendments. He held the bill in committee. There was no
one available in the audience, either from agencies or the
public that wished to offer any testimony. He reviewed the
schedule for tomorrow, including tomorrow morning at 9:00
a.m. full closeouts for the University and the Department of
Natural Resources. He further reminded committee members
the 6:00 p.m. meeting tonight was cancelled. Senator Pearce
indicated that if the closeouts moved quickly tomorrow
morning the evening ones would be moved up accordingly.
ADJOURNMENT
Co-chair Sharp adjourned the meeting at 10:22 a.m. until
tomorrow morning at 9:00 a.m.
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