Legislature(2013 - 2014)HOUSE FINANCE 519
01/31/2013 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB30 | |
| HB65 || HB66 | |
| Department Overview: Department of Labor and Workforce Development | |
| Department Overview: Department of Law | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 65 | TELECONFERENCED | |
| += | HB 66 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HB 30 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 65
"An Act making appropriations for the operating and loan
program expenses of state government and for certain
programs, capitalizing funds, amending appropriations, and
making reappropriations; and providing for an effective
date."
HOUSE BILL NO. 66
"An Act making appropriations for the operating and capital
expenses of the state's integrated comprehensive mental
health program; and providing for an effective date."
2:09:57 PM
^DEPARTMENT OVERVIEW: DEPARTMENT OF LABOR and WORKFORCE
DEVELOPMENT
2:10:31 PM
DIANE BLUMER, COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, introduced herself.
Commissioner Blumer discussed the PowerPoint presentation,
"Alaska Department of Labor and Workforce Development;
House Finance; Department Overview; Commissioner Dianne
Blumer; January 31, 2013" (copy on file).
Commissioner Blumer looked at slide 2, "Department of Labor
and Workforce Development."
Mission: Provide safe and legal working conditions and
advance opportunities for employment.
Core Services:
-Protect Alaska's workers through statutory and
regulatory assistance and enforcement.
-Income replacement for injured, unemployed, and
permanently disabled workers.
-Workforce development to support Alaska hire and
economic development.
Commissioner Blumer discussed slide 3, "Department of Labor
and Workforce Development, Organization Chart." She stated
that the commissioner oversaw the deputy commissioner and
the assistant commissioner. The deputy commissioner oversaw
the Administrative Services Division; the Alaska Vocational
Technical Center; the Business Partnerships Division; the
Employment and Training Services; Unemployment Insurance;
Adult Basic Education; and the Workers' Compensation
Division. She explained that the assistant commissioner
oversaw the Alaska Workforce Investment Board; the Labor
Standards and Safety Division; the Vocational
Rehabilitation Division; the Alaska Labor Relations Agency;
and the Disability Determination, which was also known as
the Vocational Rehabilitation Division.
2:15:46 PM
Commissioner Blumer looked at slide 4, "Services by
Location." She stated that there were Job Centers in
Barrow, Kotzebue, Nome, Bethel, Dillingham, Kodiak, Homer,
Kenai, Anchorage, Wasilla, Eagle River, Seward, Valdez,
Glennallen, Tok, Fairbanks, Juneau, Sitka, and Ketchikan.
She stated that Vocational Rehabilitation Centers were
located in Fairbanks, Wasilla, Eagle River, Anchorage,
Kenai, Kodiak, Juneau, Sitka, and Ketchikan. She shared
that the Alaska Vocational and Technical Education Center
(AVTEC) was located in Seward.
Commissioner Blumer discussed slide 5, "State and Private
Partnerships."
State Partners
Veteran Services
-Department of Military and Veterans Affairs
Economic and Demographic Data Production
-Department of Health and Social Services
-Department of Commerce, Community and Economic
Development
-Department of Education and Early Development
Prisoner Reentry
-Department of Corrections
Training and Education Program Outcomes
-Department of Education and Early Development
-University of Alaska
-Commission on Postsecondary Education
2:19:43 PM
Commissioner Blumer highlighted slide 6, "State and Private
Partnerships."
Private Partners:
Training and Education
-Construction Education Foundation
-Alaska Works Partnership
-School Districts
-Association of General Contractors
-Home Building Associations
-Regional Training Centers
-Employers
Private Sector Membership on Boards and
Commissions
-Alaska Labor Relations Agency Board
-Alaska Safety Advisory Council
-Alaska Workers' Compensation Board
-Alaska Workforce Investment Board
-Fishermen's Fund Advisory and Appeals Council
-Occupational Safety and Health Review Board
-State Vocational Rehabilitation Committee
-Statewide Independent Living Council
-Workers' Compensation Appeals Commission
-Workers' Compensation Medical Services Review
Committee
Commissioner Blumer looked at slide 7, "Department of Labor
and Workforce Development Challenges." She stated that
maintaining services to Alaskans while managing flat or
declining federal revenue and increasing operating expenses
were challenges for DLWFD because of flat or declining
federal revenue; and increasing operating expenses.
PALOMA HARBOUR, ACTING DIVISION DIRECTOR, DIVISION OF
ADMINISTRATIVE SERVICES, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT, discussed slide 8, "Protect Workers." She
stated that the Labor and Standards Safety Vision (Grey
Mitchel, Director) oversaw wage and hour administration;
mechanical inspection; and occupational safety and health.
She also stated that the department had the Alaska Labor
Relations Agency, with Mark Torgerson serving as the
administrator.
Ms. Harbour looked at slide 9, "Protect Workers."
Performance:
The five-year moving average rate of workplace
fatalities per 100,000 employees declined from
1.61 (FY 07-FY 11) to 1.48 (FY 08-FY 12).
Ms. Harbour discussed slide 10, "Income Replacement."
Workers' Compensation Division; Michael Monagle,
Director
Workers' Compensation
Workers' Compensation Appeals Commission
Workers' Compensation Benefits Guaranty Fund
Second Injury Fund
Fishermen's Fund
Employment Security Division; Paul Dick, Director
Unemployment Insurance
Vocational Rehabilitation Division; Cheryl Walsh,
Director
Disability Determination
2:24:35 PM
Ms. Harbour highlighted slide 11, "Income Replacement."
Performance:
-In FY2012, the number of employers brought into
compliance with the Workers' Compensation Act was 387.
This was an increase from the prior year total of 319.
-In calendar year 2011, Alaska processed 92.5 percent
of initial unemployment insurance payments within 21
days.
Ms. Harbour highlighted slide 12, "Workforce Development."
Vocational Rehabilitation Division; Cheryl Walsh,
Director
-Client Services
-Independent Living
-Special Projects
Employment Security Division; Paul Dick, Director
-Employment and Training Services
-Adult Basic Education
Business Partnerships Division; Corine Geldhof,
Director
Alaska Workforce Investment Board; Jeff Selvey,
Executive Director
Alaska Vocational Technical Center; Fred Esposito,
Director
Ms. Harbour looked at slide 13, "Workforce Development."
Performance
-In FY 12, 637 of the individuals exiting the
vocational rehabilitation program were employed upon
exit. This represents a record level and exceeds the
prior year performance of 569 individuals by 12
percent.
-In FY 12, 85 percent of Alaska Vocational Technical
Center (AVTEC) long-term (longer than six weeks)
program students graduated. This exceeded the target
graduation rate of 80 percent and the accrediting
benchmark of 60 percent.
Ms. Harbour highlighted slide 14, "Total Funding Comparison
by Fund Group."
Between FY 05 and FY 14:
-UGF increased by $21.6 million (156.5 percent)
-DGF increased by $11.8 million (54.2 percent)
-Other funds increased by $4.3 million (19 percent)
-Federal Funds remained relatively flat, increasing by
$0.1 million (0.1 percent)
Ms. Harbour highlighted slide 15, "Share of Total Agency
Operations."
-The department's general fund budget grew by $33.4
million between FY05 and the FY14 Governor's Request -
an average annual growth rate of 7.6 percent.
-Growth since FY09 has been $5.5 million (1.7 percent
growth rate).
-The department continues to represent a small portion
of the overall statewide budget.
Ms. Harbour looked at slide 16, "Line Item Distribution."
The majority of funding in FY 14 is in the following
line items:
-Personal Services: 46 percent
-Grants: 31 percent
About 55 percent ($34 million) of the grants funding
is in the Business Partnerships appropriation (with
the majority housed in two allocations):
-$25.6 million in Business Services
-$3.2 million in the Construction Academy
2:29:22 PM
Ms. Harbour spoke to slide 17, "Budgeted Positions."
-Between FY 05 and FY 14 the total number of budgeted
positions decreased by 32.
-Reduction in permanent full-time and part-time
positions since FY 05 is due to flat or declining base
operating federal funds and the expiration of one-time
federal grant funds.
Ms. Harbour highlighted slide 18, "FY 2014 Budget Request:
194,404.9; ($35,363.0 UGF; $33,696.4 DGF; $26,566.7 Other;
$98,778.8 Federal)." She stated that the pie chart
displayed the budget by priority program: Income
Replacement, 27 percent at $53,248.1 million; the Protect
Workers, 7 percent at $13,681.3 million; and Workforce
Development, 66 percent at $127,475.5 million. She stated
that there were 869 full-time positions, 77 part-time
positions, and 14 temporary positions.
Ms. Harbour discussed slide 19, "Governor's Budget
Overview."
FY2013 Operating Supplemental:
Department-wide lease cost increases
-$942.9 UGF for increasing ongoing lease expenses
with a department-wide impact
FY2014 Operating Budget
Department-wide lease cost increases
-$984.5 UGF for increasing ongoing lease expenses
with a department-wide impact
Department-wide core service cost increases
-$65.0 UGF for increasing ongoing core services
provided by the Department of Administration with
a department-wide impact
Division of Vocational Rehabilitation
-$100.0 UGF to strengthen the Independent Living
network in Alaska
Alaska Vocational Technical Center (AVTEC)
-$200.0 UGF continuation of one-time FY2013
appropriation for increasing operating expenses
at AVTEC
Ms. Harbour looked at slide 20, "Governor's Budget
Overview."
FY2014 Capital Budget
Heavy Equipment/Diesel/Pipe Welding Relocation
Phase 1 of 3
-$6,000.0 this phase, $15,000.0 all three phases,
replaces a training facility with safety issues
Deferred Maintenance
-$968.4 UGF for reducing the backlog of
maintenance needs on the Alaska Vocational
Technical Center's (AVTEC) aging infrastructure
Mobile Mine Machine Simulator
-$1,800.0 UGF grant to the University of Alaska's
Mining and Petroleum Training Services program to
train across Alaska
Maritime Simulator Ice Navigation Upgrade Phase 1
of 3
-$375.0 UGF this phase, $1,050.0 all three
phases, hardware upgrades are required to support
this software
Ms. Harbour discussed slide 21, "Ten Year Plan."
The department's general fund budget grew by $33.4
million between FY05 and the FY14 Governor's Request -
an average annual growth rate of 7.6 percent.
Growth since FY09 has been $5.5 million (1.7 percent
growth rate).
The department's ten year plan equates to an average
annual growth rate of 0.6 percent.
2:34:56 PM
Ms. Harbour spoke to slide 22, "Ten Year Plan." She stated
that the graph displayed a representation of all funds,
instead of only GF.
Co-Chair Austerman looked at slide 11, and noted that there
were approximately 300 employers who were not in
compliance. He wondered if the state was required to annual
fund the employer compliance cases. Ms. Harbour replied
that there was a fraud division that investigated
complaints related to policy cancellations or workers that
stated that they are not covered. She stated that there was
approximately 400 per year, and announced that the year
prior had a slightly lower number of cases. She stressed
the importance of funding continual fraud investigation.
Vice-Chair Neuman looked at the Legislative Analysis book
related to federal withholdings and vocational education,
and wondered why those not included in the legislative
review book. He asked whether all 10 programs in statute
were receiving equal funding.
GREG CASHEN, ASSISTANT COMMISSIONER, DEPARTMENT OF LABOR
AND WORKFORCE DEVELOPMENT, answered the programs had
varying percentages, and agreed to provide more detailed
information.
Vice-Chair Neuman would appreciate it. He pointed to AVTEC
and the cost of delivery thought the program had increased
from $2.50 million to $3.00 million. Ms. Harbour stated
that she would follow up on the question.
2:39:19 PM
Vice-Chair Neuman referred to discussions about the UA
provided funding; he surmised that some of the costs were
averaging $30,000 to $35,000. He requested information
regarding the possibility of UA providing that funding. Ms.
Harbour would follow up with the detail.
Representative Costello asked about opportunities to reduce
duplicated efforts. She hoped the department's auditor
could look at DEED. She discussed vocational education and
wanted the departments to work more closely together on
some issues. She believed the departments were both
expending efforts in similar areas related to benefits for
young Alaskans. Commissioner Blumer answered that there was
a technical education plan that she would provide to the
committee. The internal auditor had been hired primarily to
look at three divisions within the department to identify
any overlaps internally.
Representative Kawasaki agreed that there seemed to be a
lot of duplication in services. He asked about the
department's budget that was relying heavily on federal
funds. He pointed to sequestration and wondered whether it
was part of the department's plan. Commissioner Blumer
replied that sequestration was not included in the graph.
Representative Gara looked at slide 19. He wondered if the
increase in lease expenses referred to new space or
existing space. Commissioner Blumer replied that the
increase was for existing leases.
Representative Gara surmised that DEED did not own any of
the buildings, because the buildings were all privately
owned. Commissioner Blumer agreed.
Representative Gara remarked that there were discussions
about the possibility of departments partnering together to
occupy state-owned building. He wondered if there could be
further discussion between the departments, to determine
the possibility of long-term cost savings that may be
achieved by owning a building, rather than leasing a
building. Commissioner Blumer agreed to have discussions
with other departments, specifically with Commissioner
Hultberg of DOA.
2:46:36 PM
AT EASE
2:48:34 PM
RECONVENED
^DEPARTMENT OVERVIEW: DEPARTMENT OF LAW
2:49:55 PM
MICHAEL GERAGHTY, ATTORNEY GENERAL, DEPARTMENT OF LAW,
presented the PowerPoint, "Department of Law; FY 14 Budget
Overview." He began with slide 2, "Core Services."
Protecting the Safety and Financial Well Being of
Alaskans
Fostering Conditions for Responsible Development of
Our Natural Resources
Protecting the Fiscal Integrity of the State
Promoting Good Governance
Attorney General Geraghty highlighted slide 3, "Core
Services." He stated that the core services for the
Department of Law (DOL) were separated into four budget
sections: 61 percent toward protecting Alaskans; 21 percent
toward state and fiscal protection; 9 percent toward
governance; and 9 percent toward economic opportunity and
resource development.
Attorney General Geraghty shared that the United Cook Inlet
Drifters Association and Fisherman's Fund sued the North
Pacific Council, because the North Pacific Council had
approved an amendment that seeded control of federal waters
to the state for exclusive state-management of the salmon
fisheries. He remarked that those locations were federal
waters, but the amendment would allow for the state to
continue exclusive regulation of salmon fishing in that
area. He stated that the State of Alaska were going to join
in the effort to defend the State of Alaska's regulatory
rights.
2:59:11 PM
Attorney General Geraghty discussed slide 4, "Department of
Law organizational Chart." The divisions included the
Criminal Division these thirteen offices in the state; the
Administrative Services Division: Management and Financial
Forecast; and the Civil Division.
Attorney General Geraghty looked at slide 5, "Key
Statistics."
Civil Division: 167 attorneys, 141 support staff, 38
total.
Criminal Division: 131 attorneys, 118 support staff,
249 total.
Administrative Services Division: 1 attorney, 21
support staff, 22 total.
Total: 299 attorneys, 280 support staff, 579 complete
DOL staff.
Attorney General Geraghty displayed slide 6, "Prosecutors
in Statewide Offices." He stated that there were 2
prosecutors in Barrow; 2 in Kotzebue; 2 in Nome; 14 in
Fairbanks; 11 in Palmer; 7 in Bethel; 35 in Anchorage; 9 in
Kenai; 2 in Dillingham; 2 in Kodiak; 4 in Juneau; 1 in
Sitka; and 3 in Ketchikan.
Attorney General Geraghty looked at slide 7, "Assistant
AG's Statewide Offices." He explained that there were
assistant attorney general (AG) offices in Nome, Fairbanks,
Palmer, Bethel, Anchorage, Kenai, and Juneau.
Attorney General Geraghty highlighted slide 8, "Department
of Law's Share of Total Agency Operations." He stated that
Department of Law's general fund budget grew by $32.9
million between FY 05 and the FY 14 governor's request,
which was an average annual growth rate of 8 percent. He
furthered that Department of Law's total FY 14 general fund
request equaled $200 per resident worker.
3:03:07 PM
Attorney General Geraghty displayed slide 8, "Department of
Law, Percent of the Total Department's Budget Fund Group."
He stated that the graph displayed DOL's fund sources. He
remarked that DOL received federal grants. There were some
communities in the state that elected to fund prosecutor
positions.
Attorney General Geraghty spoke to slide 9, "Department of
Law, Continued Budget Growth Compared to 10-year Plan." He
stated that the graph showed DOL's plan, but he could not
speak to the details of the graph, because it was prepared
by LFD.
Attorney General Geraghty discussed slide 13, "Return on
Budget, FY 12." He reiterated that one of the core missions
of DOL was to protect the fiscal integrity of the state. He
shared that companies or individuals owed the state money,
DOL would pursue those claims. He stressed that on many
occasions, the return to the state was based on that equal
recovery of money. He stated that the graph displayed the
financial return, broken down by the divisions within the
department. He remarked that the State of Alaska won a case
against the Supreme Court in FY 12, and as a consequence
the Court release funds that had been deposited into an
account to fight the case. He stated that DOL had convinced
the judges that their calculation of pre-judgment interest
was incorrect. He remarked that the graph displayed the
total and cost of returns from the last two years. He
stressed that the money was not wasted, and was often used
toward recovering funds that were owed to the state. He
added that in FY 13, DOL had already recovered $255 million
from the British Petroleum (BP) case.
Attorney General Geraghty looked at slide 14, "FY 14
Operating Budget Request (millions)." He shared that there
was a difference between the way the LFD and DOL analyzed
the budget requests. He concluded his presentation.
3:08:43 PM
Co-Chair Austerman referred to slide 8, and he remarked
that the graph was really about comparing DOL's GF spending
in 2005 versus GF spending in 2014. He observed that it had
almost doubled. He pointed out that the legislature was
currently focused on that trend of almost doubling spending
within ten years. He wondered what DOL's budget projections
would be for the next ten years. Attorney General Geraghty
stated that barring something unforeseen circumstance, he
did not see growth in terms of people, because the
population was currently fairly stable. He felt that DOL
was well-staffed, and DOL only projected a modest ten-year
growth plan. He pointed out that most crimes were committed
by individuals between the ages of 18 to 35. He remarked
that there was not an anticipation of population growth for
individuals between the ages of 18 to 35, so the crime rate
was not growing. He felt that DOL's budget projection was
accurate; and possibly even more accurate that the
projection provided by LFD for DOL.
Co-Chair Austerman wondered if there were additional growth
projections, outside of federalism, that would impact DOL's
budget. Attorney General Geraghty replied that it was
difficult to predict litigation, but furthered that most
federalism cases were less than 10 percent of DOL's budget.
He stressed that almost all of the federalism cases were
conducted within DOL, except that an outside law firm was
assisted to handle the Endangered Species Act case.
3:13:16 PM
Representative Munoz queried the status of RS 2477 claims,
and the state's involvement in defending the historic
right-of-ways. Attorney General Geraghty replied that DOL
was currently preparing to file a series of claims under RS
2477 to perfect a quiet title related to the state's right-
of-ways, focusing primarily on Chicken, Alaska. He stated
that there had been long-term activities in Chicken, and
the trails were well-used and well-marked. He explained
that DOL was planning to file on the RS 2477 claims to
quiet-title against the federal government. He stated that
there were some private landowners that may be involved,
but may file a disclaimer of interest. He stated that there
were approximately 700 RS 2477 trails in the state. The
case was difficult to prove, because there was a
requirement to prove historic proof with testimony
leverage. He shared that DNR had a section working to
collect old pioneers and miners that could testify to the
trails' historic uses. He relayed that DOL defended claims
for people with existing well-known trails who claimed to
have superior interest. He explained that RS 2477 was
created under the mining law in 1864, but was abolished by
the United States Congress in 1974. He shared that if state
government could prove that there was an existing trail or
road that were developed by pioneers, the state could
perfect a right-of-way against the federal government and
others who may claim against the right-of-way. He announced
that Utah had asserted approximately 10,000 RS 2477 claims.
Vice-Chair Neuman wondered if there was a way for the state
to recoup the costs when the state was sued on a
development project. Attorney General Geraghty responded
that DOL would recoup attorney fees, but the costs related
to the postponing of projects could not be recovered.
3:17:48 PM
Vice-Chair Neuman requested a list of lawsuits pertaining
to protecting state's rights, specifically related to gun
and ammunition rights. Attorney General Geraghty agreed to
provide that information. He was not aware of any current
firearms cases, but there were some natural resource cases.
He furthered that Alaska was one of the states that
challenged the Affordable Care Act, and one of the key
features was the penalty that was imposed on individuals
who refused to buy insurance. He stated that the federal
government's defense was based on the use of the Commerce
Clause, because medical care was an intrastate effort. The
US Supreme Court rejected that argument.
Vice-Chair Neuman stated that the authority of navigable
waters was also a current issue. Attorney General Geraghty
stated that that issue would be included in the list that
he had previously agreed to provide.
Representative Wilson wondered if there was a deadline for
when the navigability in Chicken would be restored for the
miners. Attorney General Geraghty shared that there was a
lawsuit regarding the 30-mile stretch in the Mosquito Fork
that DOL contended was navigable. He stated that the
federal government argued that the area was not navigable,
so that issue was still open. He agreed to provide further
information regarding the specifics of the case.
HB 65 was HEARD and HELD in committee for further
consideration.
HB 66 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| LAW HFIN OVERVIEW(013113).pdf |
HFIN 1/31/2013 1:30:00 PM |
LAW Overview |
| DOLWD HFIN Overview 1-31-13 (2).pdf |
HFIN 1/31/2013 1:30:00 PM |
DOLWD Overview 1/31 |