Legislature(1993 - 1994)
03/29/1994 01:40 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 370 "An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date." HB 370 was HELD in Committee for further discussion. HOUSE BILL NO. 370 "An Act making appropriations for the operating and 1 loan program expenses of state government and to capitalize funds; and providing for an effective date." LEGISLATURE PAM STOOPS, DIRECTOR, LEGISLATIVE AFFAIRS AGENCY discussed the miscellaneous increases in the Legislature's operating budget. She noted that FY 94 unallocated reductions were zeroed out. She observed that the unallocated reductions would result in a decrease of 19 positions. The positions were funded by the roll forward. She estimated the FY 94 total Legislative operating budget at approximately $5.0 million dollars. In response to a question by Representative Brown, she noted that office space rental was spread among the corresponding components. She noted that $500.0 thousand dollars budgeted for office space rental was not sufficient. She observed that excess office space rental had been taken from the Legislative Affairs Agency's budget. She emphasized the need to continue the carry forward. Representative Martin referred to increased health costs. Ms. Stoops noted that increased health costs would be absorbed. Ms. Stoops acknowledged that the proposed budget contains the increased per diem funding for all members. Representative Martin expressed his opposition to increased per diem expenses. Representative Martin MOVED to delete the per diem increase of $405.6 thousand dollars. Representative Hoffman OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Martin, Parnell, Therriault, Brown, Grussendorf OPPOSED: Foster, Hoffman, MacLean, Larson Representatives Navarre and Hanley were not present for the vote. The MOTION PASSED (5-4). OFFICE OF THE GOVERNOR Representative Brown MOVED to ADOPT AMENDMENT 1 (copy on file). She explained that the amendment would add an increment of $272.0 thousand dollars for Maternal, Child, and Family Health, Department of Health & Social Services. An equal decrement would be taken from the Media Center, Office of the Governor. She spoke in support of amendment 2 1. Representative Brown provided members with AMENDMENT 2 (copy on file). She explained that amendment 2 would provide intent language for the operation of the program, funded by amendment 1. Representative Martin questioned the practice of establishing a new program through legislative intent. Representative Brown noted that the concept was discussed by the Children's Caucus. She pointed out that the Social Services Block Grant program was begun through a budget appropriation. Co-Chair Larson noted that funding for the Media Center contains $121.0 thousand dollars in interagency receipts. He MOVED to AMEND Amendment 1 to take a decrement of $247.7 thousand dollars from the Media Center. There being NO OBJECTION, it was so ordered. A roll call vote was taken on the main MOTION IN FAVOR: Brown, Grussendorf, Hoffman, Navarre OPPOSED: Foster, Martin, Parnell, Therriault, MacLean, Larson Representative Hanley was not present for the vote. The MOTION FAILED (4-6). Representative Brown WITHDREW AMENDMENT 2. ALASKA COURT SYSTEM Representative Parnell MOVED to ADOPT AMENDMENT 1 (copy on file). He explained that amendment 1 would increase funding for trial courts by $700.0 thousand dollars and take an unallocated reduction of $700.0 thousand dollars from the Legislature's budget. ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT SYSTEM explained that the amendment would not appropriate funding for travel. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION explained that the $700.0 thousand dollars unallocated reduction in the Legislature's budget could be adjusted for in the reappropriation legislation. Discussion pursued regarding the carry forward funding available to the Legislature through reappropriation. Representative Brown MOVED to DIVIDE the Question, to 3 separate the increment from the decrement. She spoke against a further, unrestored, reduction to the Legislature's budget. She WITHDREW the motion to divide the question. Co-Chair Larson noted that the decrement will be reflected in HB 370 as a reduction. He expressed his intention to restore the reduction through the reappropriation budget. A roll call vote was taken on the MOTION to adopt AMENDMENT 1. IN FAVOR: Hanley, Parnell, Therriault, Foster, MacLean, Larson OPPOSED: Brown, Hoffman, Martin The MOTION PASSED (8-3). DEPARTMENT OF HEALTH AND SOCIAL SERVICES Co-Chair MacLean MOVED to ADOPT AMENDMENT 1 (copy on file). She explained that amendment 1 would add $6,175.0 million dollars for Alcohol and Drug Abuse grants. She emphasized that programs will be closed without the restoration. Representative Navarre spoke in support of increased alcohol and tobacco taxes. Discussion pursued regarding the cost of alcohol and tobacco on society versus revenues which could be raised by excise taxes. Representative Grussendorf spoke in support of amendment 1. Co-Chair MacLean noted that the state has lost $1.0 million federal dollars as a result of actions taken in FY 94. She noted that grants have been reduced by 5 percent. Representative Martin spoke in support of local solutions to drug and alcohol problems. Co-Chair Larson expressed concern that funding not be used to cover administrative costs. Representative Hanley suggested that recipients provide a match for state grants to alcohol and drug abuse programs. A roll call vote was taken on the MOTION to adopt AMENDMENT 1. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Foster, Hanley, Parnell, MacLean, Larson OPPOSED: Therriault, Martin The MOTION PASSED (8-2). 4 Representative Hanley MOVED to ADOPT AMENDMENT 2 (copy on file). Amendment 2 would increase the Medicaid Non-Facility component by $550.0 thousand dollars and reduce the Medicaid Facility component by $550.0 thousand dollars. He observed that the amendment is a net zero and properly reflects the intent to implement a co-payment plan. JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES spoke in support of amendment 2. She stressed that the amendment would help the Department to contain costs. Representative Hanley MOVED to ADOPT AMENDMENT 2 (copy on file). There being NO OBJECTION, AMENDMENT 2 was adopted. Representative Hanley MOVED to ADOPT AMENDMENT 3 (copy on file). He explained that amendment reduces travel by 2.5 percent below the FY 94 level. MARGARET LOWE, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES noted that administrative travel would be reduced. She observed that a large share of the department's travel funding is through federal dollars. Ms. Clarke pointed out that travel is required in the Public Health Nursing and Family and Youth Services components. She added that travel allows direct services to the public. A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Grussendorf, Hoffman The MOTION PASSED (8-3). Representative Hanley MOVED to ADOPT AMENDMENT 4 (copy on file). Amendment 4 would delete an increment of $100.0 thousand mental health trust account dollars which would be transferred as a RSA to the Department of Administration. DEBORAH SMITH, EXECUTIVE DIRECTOR, MENTAL HEALTH TRUST BOARD observed that the increment was recommended by the Board to serve the Alzheimer's beneficiary group. A roll call vote was taken on the MOTION to adopt AMENDMENT 4. IN FAVOR: Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Foster, Grussendorf, Hoffman, Navarre 5 The MOTION PASSED (6-5). Representative Hanley MOVED to ADOPT AMENDMENT 5 (copy on file). He explained that amendment 5 would reduce $50.0 thousand dollars for medicaid audits. JAY LIVEY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES spoke in opposition to amendment 5. He observed that federal law limits the department's control of expenditures to hospitals and nursing homes. He emphasized that audits are a beneficial tool to determine how medicaid funding is spent. He estimated that each audit position can identify $1.3 million dollars in excess cost to the state. Ms. Clarke added that a $50.0 thousand dollars reduction was taken by the Subcommittee. A roll call vote was taken on the MOTION to adopt amendment 5. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, MacLean OPPOSED: Brown, Grussendorf, Hoffman, Navarre, Larson The MOTION FAILED (5-6). Representative Hoffman MOVED to ADOPT AMENDMENT 6 on behalf of Representative Brice (copy on file). REPRESENTATIVE TOM BRICE observed that the amendment would duplicate previous reductions. He recommended that the amendment be amended to leave an increment of $400.0 thousand dollars for the Designated Evaluation and Treatment component. There being NO OBJECTION, AMENDMENT 6 was amended to reflect a $400.0 thousand dollars increment to the Designated Evaluation and Treatment component. Commissioner Lowe noted that the department lacks funds to reimburse hospitals willing to provide designated treatment beds for the mentally ill at a level required by the hospitals. Hospitals in Anchorage and Juneau have withdrawn from the program. Representative Hanley reviewed the Subcommittee's treatment of the increment. A roll call vote was taken on the MOTION to adopt AMENDMENT 6. IN FAVOR: Brown, Grussendorf, Hoffman OPPOSED: Navarre, Foster, Hanley, Martin, Parnell, 6 Therriault, MacLean, Larson The MOTION FAILED (3-8). Representative Navarre MOVED to ADOPT AMENDMENT 7 (copy on file). Amendment 7 would reduce interagency receipts by $200.0 thousand dollars and add $200.0 general fund dollars for the Infant Learning Program; and reduce the Legislative Operating Budget by $200.0 thousand general fund dollars. Representative Hanley spoke against amendment 7. (Tape Change, HFC 94-99, Side 2) Commissioner Lowe noted that the department has begun to implement co-payment or partial payment for infant learning programs. Ms. Clarke recommended that interagency receipts not be reduced. Representative Navarre MOVED to AMEND Amendment 7 to delete the decrement, allow the interagency receipts and reduce the general fund dollar increment to $100.0 thousand dollars. The amendment as amended would add $100.0 thousand dollars to the Infant Learning Program. There being NO OBJECTION, it was so ordered. A roll call vote was taken on the MOTION to adopt AMENDMENT 7 as amended. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (4-7). Representative Hoffman WITHDREW AMENDMENT 8. Representative Brown MOVED to AMEND Amendment 9, reduce the increment to $1,700.7 million dollars for Human Services Community Match Grant. She explained that the amendment would increase the grant by $51.6 thousand dollars. She reviewed the history of the grant. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to ADOPT AMENDMENT 9 as amended. She stressed that the program serves the poor and needy. She noted that 11 percent of those served are from areas outside of Anchorage. A roll call vote was taken on the MOTION to adopt AMENDMENT 7 9. IN FAVOR: Therriault, Brown, Grussendorf, Hoffman, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, MacLean, Larson The MOTION FAILED (5-6). Representative Hanley MOVED to ADOPT AMENDMENT 10 (copy on file). He explained that the amendment would add intent language to the Department of Health & Social Services. The intent language states that it is the "intent of the Legislature that the Department of Health & Social Services begin to implement a drug formulary for the Medicaid program. The Department will investigate further savings to be achieved from full implementation of a formulary." There being NO OBJECTION, it was so ordered. Representative Hanley MOVED to ADOPT AMENDMENT 11 (copy on file). He explained that the amendment would add intent language to the Department of Health & Social Services, Medicaid Non-Facility. The intent language states that it is the "intent of the Legislature that the Department of Health & Social Services begin to implement, when financially sound, recipient deductibles, co-insurance and co-payments for medical services to the fullest extent practicable under federal law and regulation." There being NO OBJECTION, it was so ordered. Representative Hanley MOVED to ADOPT AMENDMENT 12 (copy on file). He explained that the amendment would add intent language to the Department of Health & Social Services, Medicaid Non-Facility. The intent language states that it is the "intent of the Legislature that the Department of Health & Social Services begin to implement, when financially sound, recipient deductibles, co-insurance and co-payments for medical services to the fullest extent practicable under federal law and regulation." There being NO OBJECTION, it was so ordered. Representative Hanley MOVED to ADOPT AMENDMENT 13 (copy on file). He explained that the amendment would add intent language to the Department of Health & Social Services, Residential Child Care. The intent language states that it is the "intent of the Legislature that the reduction in this component is intended to reduce the number of beds purchased from Alaska Children's Services and will not result in the reduction of purchased beds in other facilities." Ms. Clarke explained that there is excess capacity in Alaska Children's Services, Family and Youth Services. There being NO OBJECTION, AMENDMENT 13 was adopted. 8 Representative Martin MOVED to ADOPT AMENDMENT 14 (copy on file). He explained that amendment 14 would reduce the General Relief Medical program in order to cease state funding of abortions. He spoke in support of amendment 14. Representative Brown OBJECTED. She spoke in opposition to amendment 14. A roll call vote was taken on the MOTION. IN FAVOR: Hanley, Martin, Parnell, Therriault OPPOSED: Foster, Brown, Grussendorf, Navarre, MacLean, Larson Representative Hoffman was not present for the vote. The MOTION FAILED (4-6). Representative Martin MOVED to ADOPT AMENDMENT 15 (copy on file). He explained that amendment 15 would add legislative intent to deny state funding of abortions unless the procedure is necessary to save a life. Representative Brown OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Hanley, Martin, Parnell, Therriault OPPOSED: Foster, Brown, Grussendorf, Navarre, MacLean, Larson Representative Hoffman was not present for the vote. The MOTION FAILED (4-6). FRONT SECTION Co-Chair Larson reviewed the front section of HB 370 by section in order to entertain amendments. There being NO OBJECTION, sections 1 and 2 were adopted. Co-Chair Larson questioned if "may" should be deleted and "shall" inserted in section 3, line 13. He noted that section 3 states that an excess in federal funds "may" result in a reduction of state funds. Representative Martin MOVED to delete "may" and insert "shall" on page 1, line 13. Representative Grussendorf queried the effect on Medicaid funds. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION pointed 9 out that if a federal maintenance of effort level is required the "shall" could cause problems. He added that the change could constitute a delegation of legislative appropriation authority to the administration. Representative Therriault reiterated concerns that the change could interfere with state/federal match levels. Discussion pursued regarding the proposed change from "may" to "shall". JAY HOGAN, CONTRACT STAFF, HOUSE FINANCE COMMITTEE noted that the agency which receives an excess of federal funds would be responsible for making the reduction of state funds under the instruction of the Office of Budget and Management. He observed that "may" has been used by previous legislatures. Representative Martin WITHDREW his Motion to amend section 3. There being NO OBJECTION, section 3 was adopted. There being NO OBJECTION, section 4 was adopted. Representative Martin MOVED to delete section 5. Section 5 would allow state funds to replace federal funds in the case of a shortfall of federal receipts. Ms. Clarke pointed out that the Title 20, Social Services Block Grant offset is a component in the Department of Health & Social Services. She spoke in support of retaining the component in the front section of HB 370. Representative Hanley noted that the department's estimates have been on track. He acknowledged that the department will not have the exact amount until the end of the fiscal year. Representative Brown OBJECTED to the motion to delete section 5. A roll call vote was taken on the MOTION. IN FAVOR: Martin, Therriault OPPOSED: Brown, Grussendorf, Hanley, Hoffman, MacLean, Foster, Larson Representatives Parnell and Navarre were not present for the vote. The MOTION FAILED (2-7). Representative Brown MOVED to HOLD section 6. There being NO OBJECTION, it was so ordered. There being NO OBJECTION, sections 7 and 8 were adopted. 10 Representative Martin asked if debt service for international airport bonds could be renegotiated. NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR explained that the Department of Revenue has reviewed debt service payments and found that there were some errors in their original calculations. She noted that refinancing occurred on the international airport revenue bonds. (Tape Change, HFC 94-100, Side 1) Co-Chair Larson MOVED to AMEND section 9 to $5,779.34 million dollars. There being NO OBJECTION, it was so ordered. There being NO OBJECTION, section 9 was adopted as amended. Ms. Slagle explained that an error was made in calculations of the amount needed in section 10. She added that the amount did not include the Anchorage court house building. Co-Chair Larson MOVED to delete "$9,029,663.0" and insert "$11,243,993.0" million dollars and add "Alaska Court System". There being NO OBJECTION, it was so ordered. Discussion pursued regarding the annual lease cost of the Anchorage court building. Ms. Slagle clarified that the purchase of the Anchorage building would help defray some additional rental that will occur if they do not vacate their current location. Representative Martin suggested that the Alaska Court System lease costs be reevaluated. There being NO OBJECTION, section 10 was adopted as amended. There being NO OBJECTION, section 11 was adopted. Representative Martin recommended that a letter of intent be adopted to request the Department of Revenue to renegotiate debt service financing contained in sections 9, 10 and 11. Co-Chair Larson noted that the sections in question were adopted. Representative Martin suggested a cap be placed on permanent fund dividend payments, to limit payments to $1,000 thousand dollars. Representative Navarre noted that statutory authority is needed. He encouraged debate regarding capping of permanent fund divided payments. Co-Chair Larson announced that section 12 would be HELD open. Co-Chair MacLean MOVED to delete section 13. 11 JIM KELLY, LIAISON OFFICER, ALASKA PERMANENT FUND CORPORATION noted that the deletion of section 13 would diminish the value of the fund principle by $372 million dollars. Representative Martin spoke in support of inflation proofing the fund. Mr. Kelly pointed out that inflation proofing has added approximately $3.5 billion dollars to the principle of the fund or $300 million dollars a year in income. He noted that the earnings reserve is not calculated for inflation proofing. Section 13 was HELD. There being NO OBJECTION, sections 14 and 15 were adopted. Co-Chair Larson noted that section 16 was added back into the main body of HB 370. He MOVED to delete section 16. There being NO OBJECTION, it was so ordered. There being NO OBJECTION, section 17 was adopted. In response to a question by Representative Navarre, Mr. Greany explained that section 17 lapses unexpended funds for the STEP program to the Employment Assistance and Training Program from which it was appropriated. He noted that section 17 was contained in the FY 94 appropriation legislation. Section 18 was HELD open. HB 370 was HELD in Committee for further discussion.
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