Legislature(2001 - 2002)
02/20/2001 07:01 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 73
"An Act making supplemental appropriations and making and
amending other appropriations; and providing for an effective
date."
Department of Corrections
Section 3
Department of Corrections
Correctional Industries Production Cost BRU
Increase for materials used in the Correctional Industries
programs
$650,000 Correctional Industries fund
DWAYNE PEEPLES, Director, Division of Administrative Services,
Department of Corrections noted that this item is also included as
an increment the governor's proposed FY 02 operating budget. Mr.
Peeples detailed the funds would be used for selling meat products
in the Mt. McKinley Meat Plant, flat goods production in the Hiland
Mountain Woman's Facility, and for increased furniture production
at the Wildwood and Spring Creek Correctional Centers.
Alaska Court System
Section 4
Alaska Court System
Judicial Conduct BRU
Legal fees for formal disciplinary hearing
$41,900
CHRIS CHRISTENSEN, Staff Counsel, Office of the Administrative
Director, Alaska Court System, stated that he did not represent the
Judicial Conduct Commission.
ANNALEE MCCONNELL, Director, Office of Management and Budget,
Office of the Governor, explained that the Commission held a
disciplinary hearing for a judge and that this supplemental request
is to pay the Commission's legal expenses associated with the
hearing.
Department of Administration
Section 1(a)
Department of Administration
Leasing BRU
Shortfall in amount funded for leases with the private sector
$1,678,700 general funds
DAN SPENCER, Director, Division of Administrative Services,
Department of Administration, stressed this request would be
approximately $2 million less than any year since FY 88. He
reminded how the legislature has consistently appropriated less
than the projected costs for leasing expenses with the
understanding that savings would be sought.
[Note: teleconference connection extremely poor. Mmost of the
testimony is inaudible.]
Section 1(b)
Department of Administration
Office of Public Advocacy BRU
Shortfall in current year funding exacerbated by increased
costs, especially for Child in Need of Aid and guardian ad
litem cases
$1,791,000 general funds
BRANT MCGEE, Public Advocate, Office of Public Advocacy, Department
of Administration, testified via teleconference from Anchorage that
for the 16 of the past 17 years, a supplemental appropriation has
been necessary due to the inability to precisely predict the number
of cases the Office would receive each year. He stated that this
request would fund operations for the remainder of the fiscal year.
MR. McGee explained that the caseload increased 28.8 percent from
FY 00. He remarked that this increase is primarily a result of the
balloon project to move children through the state custody system
and into permanent placement. The OPA's statutory obligation in
this process, he continued, is to provide a guardian ad litem to
the children involved and council to many of the parent's involved,
particularly when the custody rights of one parent are challenged,
but that the other parent's are not necessarily in question. He
elaborated that this occurs with some cases of abuse inflicted by
one parent, because the other parent is entitled to OPA assistance.
Mr. McGee noted that these cases are primarily civil matters as
well as are Child in Need of Aid cases. He detailed the subsidy
costs as well as the percentage of full attorney fees paid by the
OPA. He noted that the OPA contracts pay between $65 and $80 per
hour. He stressed that the sole advantage of the OPA in the
marketplace is its practice of paying in a timely manner on a 30-
day cycle.
Section 1 (c)
Department of Administration
Office of Public Advocacy BRU
Replenish current year funding used to pay remaining FY 00
costs
$77,400 general funds
Mr. McGee testified that this request is to cover payment of
services provided in FY 00, but not invoiced until FY 01.
Senator Green relayed discussions in a recent meeting with the
Department of Health and Social Services regarding the balloon
project and asked if the OPA has received funding from the
Department of Health and Social Services to cover costs related to
the project.
Mr. McGee affirmed.
Senator Green asked if this supplemental request is for expenses in
addition to those the Department of Health and Social Services
funds cover.
Mr. McGee 's referred to cost overruns.
Senator Green asked if the balloon project payments to the OPA
appear in the regular budget.
Mr. McGee affirmed.
Co-Chair Donley inquired about the 28 percent increase in caseload.
Mr. McGee clarified that in addition to an increased caseload, some
cases were lasting longer than anticipated.
Co-Chair Donley asked why the cases were taking longer to resolve.
Mr. McGee replied there is no proof, but anecdotal evidence
indicates that Child in Need of Aid cases are more vigorously
litigated, and therefore require more guardian ad litem time. He
explained that the Balloon project cases involve the termination of
custody and because of this are seriously litigated.
Mr. McGee expounded on the reason for the lengthier cases due to
provisions contained in HB 375, passed by the previous legislature
that impose strict time limits for obtaining permanent placement
for the children in question. He stated that the OPA had predicted
that the caseloads could be handled within the shorter timeframes
because the amount of work would not increase significantly.
However, he said the shorter timeframes increased the likelihood of
litigation. He opined that the parents were more likely to
challenge the termination of custody, when actually faced with
loosing their children.
Senator Green commented that the intent of the Balloon project was
to eliminate the back log of cases, process the cases more quickly
and eventually reduce the number of cases; knowing that there would
always be some incoming cases. She wanted to know if a decrease in
the number of cases could be expected.
Mr. McGee agreed it could and noted that the Balloon project has
been successful and the backlog has been significantly decreased.
He detailed the office is on the third set of cases, but that these
would have a higher cost to resolve. He added that this program
includes the Department of Law, Department of Health and Social
Services, the OPA, the Public Defender Agency and the Alaska Court
System.
Senator Green wanted to know if, because the backlog is now
eliminated and the OPA is only handling the new cases, would there
be an advantage to reconsidering the provisions of HB 375.
Mr. McGee clarified that the backlog has been reduced but not
eliminated and that he thought the timeline should actually be
shorter. He qualified that no one has agreed with him on that
point. He predicted that if the adjudication time were closer to 30
days, there might a decrease in litigation over time. He also noted
that with the Balloon project as well as in other cases, the OPA
not only provides a guardian ad litem, but also is responsible for
paying contractors to represent one or both parents in those cases.
He stated that it is more common that the OPA provides council for
one parent, but that it does occasionally provide for two.
Co-Chair Donley asked the percentage of the attorneys in these
cases are not paid by the state.
Mr. McGee replied that there are not very many cases. He spoke of a
recent case that involved a private attorney representing the
adoptive family.
Co-Chair Donley wanted to know the "standard" and asked if there is
an economic standard that determines with the OPA does not get
involved.
Mr. McGee replied that the court makes such a determination subject
to the same indingency standards that apply to qualification for a
public defender in criminal cases. He noted that the Child in Need
of Aid cases involve an "overwhelming majority" of poor people.
Co-Chair Donley asked the success ratio of cases with the state's
involvement.
Mr. McGee answered, "It depends on how you measure success." He
elaborated that in some instances, the parents involved are able to
correct the behavior that precipitated the custodial challenge.
Co-Chair Donley asked if the OPA was pursuing more of these cases
then necessary. He again asked the witness what he considered an
appropriate success ratio.
Mr. McGee phrased, "how many of these cases does the court find
that the same justice to be to take custody of the child, is
unjustified." He answered there are very few such cases. Typically,
he added that those cases are resolved at the probable cause phase
where the judge determines the family was improperly interfered
with.
Section 1 (d)
Department of Administration
Public Defender BRU
Provide remaining funds needed for basic operations in current
year
$380,300 general funds
BARBARA BRINK, Director, Public Defender Agency (PDA), Department
of Administration, testified via teleconference from Anchorage
explaining the reason for the request is due to an increased
caseload and an increased workload. She stated that in the previous
year, the agency handled over 19,200 new cases in addition to
approximately 6,000 pending cases. She cautioned that half-year
projections indicate a continued caseload growth.
Ms. Brink stressed that the types of cases that are increasing are
the most time consuming and resource intensive cases usually
requiring extensive litigation and forensic work. These, she noted,
include Child in Need of Aid cases. She informed the Committee that
the PDA represents parents in situations where the Division of
Family and Youth Services removes a child from the home. She cited
the Alaska Court System 2000 Annual Report as showing a six percent
increase of these cases in Anchorage, 17 percent increase in Bethel
and 47 percent increase in Ketchikan. She stated that serious
consequences, such as the loss of a child, and shorter time frames
due to new legislation, appear to have increased litigation in
these cases.
Ms. Brink continued that serious felony cases have increased as
well. She again cited data from the Alaska Court System report:
cases in Anchorage have increased nine percent, Palmer has
increased 12 percent and Bethel has increased 36 percent. She
pointed out that because of the serious consequences in these
cases, such as mandatory imprisonment, these cases are less likely
to settle without litigation.
Ms. Brink emphasized that the PDA cannot control caseload increases
or workload increases. She explained the process where the Alaska
Court System makes an indigency determination, stressing that the
PDA cannot decline a case. Rather, she said, the US and Alaska
Constitutions, statutes and Rules of Professional Responsibility
require work be done to satisfy providing the effective assistance
of counsel.
Ms. Brink detailed the increasing contractual costs as follows.
· Discovery: the costs of police reports and other evidence
from the Department of Law
· Travel: 13 offices cover 45 additional remote courts
sites for regular court sessions with few competitive
travel providers
· Interpreters/Forensic Experts
· Telecommunications:
Many clients are incarcerated hundreds of miles
from their lawyer (e.g. Anchorage-Palmer, Kenai,
Seward; Barrow-Fairbanks)
The Department of Corrections Evercom entails
expensive long-distance charges for basic attorney
client consultation
Ms. Brink pointed out that none of the funds in the supplemental
request address the serious deficiencies noted in the Division of
Legislative Budget and Audit report issued the previous year
identifying inadequate staffing, uncompensated overtime, support
staff ratio and lack of technology. She spoke of the maintained
vacancies in Anchorage, Palmer, Barrow, Kotzebue and Ketchikan. She
cautioned that the PDA could not continue this practice for much
longer. She noted that each lawyer is currently responsible for 80-
150 clients at any given time, many with immediate court hearings
and other pressing needs.
Section 1 (e)
Department of Administration
Longevity Bonus BRU
Current estimate of amount needed to fully fund Longevity
Bonus formula program
$1,100,000 general funds
Mr. Spencer noted that the language detailing this item is
different than previous longevity bonus related language. He stated
that this request appropriates from the general fund, the amount
necessary to fund the Longevity Bonus Grants program, however much
that may be. He reminded that in the previous year, a projected
amount was calculated, but was then amended several times. He
explained that the legislature, over the past several years, has
under-funded the grants appropriation for this item in the initial
budget. As grant payments are made, he said, the department then
revises the forecast based on the last check run to calculate the
amount needed through the end of the fiscal year. He gave examples
of how the estimated need of $1.1 million made in December 2000 has
changed after the last check run and is currently $1.3 million.
Mr. Spencer stated that the department could not anticipate how
many checks would be written in any given month. He stressed the
inability to predict what participants would travel out of the
state and for how long. He assured that the department would
continue to provide monthly forecasts to the legislature. He warned
that if this item were not appropriated, the department would not
be able to provide the last payment to the program's participants.
Senator Green asked about "pro-ration" language and asked what
would be necessary to implement such a system.
Co-Chair Donley explained that statutory changes that provided a
pro-ration formula for the Longevity Bonus Program would be
required.
Section 1 (f) and (g)
Department of Administration
Pioneer Homes BRU
Complete the Anchorage Pioneer Home emergency heating and
ventilation system repairs, including replacing the unrealized
program receipts previously appropriated.
$1,000,000 general funds
($595,000) Receipt Support Services
Mr. Spencer reminded the Committee of the previous legislature's
appropriation of $250,000 Alaska Housing Finance Corporation (AHFC)
receipts, and up to $880,000 pioneer home receipts, to upgrade the
ventilation and humidification systems at the Anchorage Pioneers
Home. He stressed that the existing system is in poor condition
with temperatures reaching 100-degrees in the bathing areas that
serve a clientele with an average age of 87 years old. He noted
that the original request was for $1.4 million, and that the
$880,000 appropriation was based on a projection of the collected
pioneer home receipts without spending authority, made at the time
the budget was passed. This projection, he elaborated, was made in
April 2000 and calculated an over-collection in FY 00 of $440,000.
In fact, he shared, $285,000 was over-collected. He continued that
the appropriation was for two years and used the $440,000
assumption for the second year as well.
Mr. Spencer summarized that the (f) supplemental budget request
would fully fund the first phase using the existing $250,000 AHFC
receipts plus the $285,000 pioneers home receipts and an additional
$1 million general fund. He stated that completion of phase one of
the project would alleviate the more urgent problems.
Mr. Spencer then addressed the companion supplemental request, (g),
explaining this item adjusts fund receipts in another portion of
the operating budget. He said that in addition to allowing the
project to proceed, this item would reduce the amount of program
receipt authority in the case of excess program receipts, those
funds would lapse to the general fund to offset the $1 million
general fund contribution to this project. He stated that the
intent is that to the maximum extent possible ensure that pioneer
home receipts pay for this project.
Section 1 (h)
Department of Administration
Retirement and Benefits BRU
Trial preparation for retired employees' lawsuit concerning
changes in group health benefits.
$87,000 Benefit Systems Receipts
ALISON ELGEE, Deputy Commissioner, Department of Administration,
testified that these funds would come from the Teachers' Retirement
System (TRS) and the Public Employees' Retirement System (PERS) to
assist the department in preparations for a trial set for September
2001. She reminded the Committee of a decision made two years prior
by the Retirement Board following a review of the health benefits
in an attempt to update medical coverage for retirees. She shared
that the board compiled a benefit plan that was "cost neutral" and
would not increase costs. She stated that three groups representing
the covered retirees filed suit against the state contending that
the change is a diminishment of benefits. She noted that the funds
would be used to cover actuarial costs, and other expenses
necessary for trial preparation.
Section (i)
Department of Administration
Senior Services BRU
Fully fund current projections for the senior General Relief
Grants
$150,000 general funds
Ms. Elgee explained that this request funds the costs of protective
services for vulnerable adults and represents payments to assisted
living facilities. She noted that the payments cover the costs of
participants of the adult protection system administered by the
Division of Senior Services. She referred to the fiscal note for SB
73 from the Twenty-first Legislature that increased funding for
assisted living homes. However, she said the program's growth was
underestimated by approximately 20 participants.
[Note: Section 1 (j) contains two items listed separately in the
explanatory spreadsheet provided by the Office of Management and
Budget. Copy of spreadsheet on file.]
Section 1 (j)
Department of Administration
Senior Services BRU
Additional federal funds to expand Family Caregivers Grants.
$564,000 federal funds
Ms. Elgee explained this request reflects the federal government's
reauthorization of the Older Americans Act, which includes funding
for a new program called the Family Caregivers Act. She noted that
the funds in this item are in addition to on-going federal funding
for this program and are directed specifically for services to
support family caregivers, such as respite care.
Ms. Elgee qualified that because the program is in its early
stages, the federal government has not completed regulations and
guidelines. However, she stressed, the funds have been appropriated
effective October 1, 2000, and the department hoped to issue grants
in 2001. She noted there would be a corresponding budget amendment
to the governor's proposed FY 02 operating budget to reflect this
on-going program funded by the federal government.
Section 1 (j)
Department of Administration
Senior Services BRU
Robert Wood Johnson Foundation grant to work with community
partners in rural Alaska to develop affordable assisted living
for seniors.
$50,000 Statutory Designated Program Receipts
Ms. Elgee shared that this item reflects the recent award
notification of a Robert Wood Johnson Foundation grant. She stated
this would fund a three-year program to allow the department to
expand efforts to develop assisted living and other long-term care
services throughout rural Alaska.
Co-Chair Donley asked how the $50,000 would be used.
Ms. Elgee replied that a second long-term, non-permanent position
would be added to the Rural Long Term Care Project, which is
currently funded by the Mental Health Trust Authority (MHTA). She
spoke to the tremendous amount of travel and community contact
required by the existing staff to determine an appropriate program
for the particular communities involved. She continued that the
staff provides assistance to communities by helping them obtain
financing from AHFC. She stated that the goal is to "bring services
closer to the people where it is both cheaper to provide them and
much more satisfactory to the participants."
Co-Chair Donley asked if the funds would be used to develop another
program.
Ms. Elgee explained that the total grant award is $350,000 and
$50,000 would be used this year. She assured that the program would
cease after three years and the efforts would supplement existing
efforts. She elaborated that the department applied for this grant
to expand on-going efforts currently funded by the MHTA to bring
rural long-term care delivery to rural communities.
Ms. Elgee noted the various grant programs operated by the AHFC,
assisted living facilities being one of them. The grants provide
low-income loans in the form of mortgages, or refinancing to
private individuals to operate assisted living homes. She stated
that this program is to work with communities to assess what is
most appropriate and to help interested individuals in those
communities obtain funding for the services best suited for them.
She stressed that the financing packages already exist and that
this program assists individuals to obtain that funding. She talked
of a new assisted living facility in Dillingham that operates using
no state funding except for possible participation in the state's
waiver program. She remarked, "To the degree that we can provide
this opportunity in rural Alaska, it prevents those people, when
they need long-term care services, from having to relocate into one
of our urban centers and end up in a nursing home bed, which is way
more expensive and much less desirable on their part."
Senator Hoffman told of residents in his district and their desire
to remain in their community and out of nursing homes.
Senator Green knew of two or three senior-service oriented groups,
one being the Older Persons Action Group, that visit pioneers homes
and wondered if there was an overlap between this function and
those groups. She said these organizations visit senior groups to
learn what services are available in the community.
Ms. Elgee explained the federal charge of the Alaska Commission on
Aging to serve as the advisory board and to make grants for
nutrition, transportation and support services, to make requests to
the MHTA for funds for the development of long-term care services
and to represent people with Alzheimer and dementia. She noted that
this board is a part of the Division of Senior Services and
therefore has oversight for this project among other programs.
Senator Green asked if the project could result in expanded
Medicaid waiver costs to the state.
Ms. Elgee responded that the Medicaid waiver program has expanded
and would continue to expand as community resources become more
available. However, she stressed that this is a "cost avoidance
situation" because no one is admitted to the waiver program unless
also eligible for nursing home services by meeting financial
eligibility and medical need criteria. Therefore, she stated that
to the degree that the state is providing service in a waiver
environment, this program provides the care at a significantly
lower cost.
Section 1 (k)
Department of Administration
Motor Vehicles BRU
Replace boating registration receipts shortfall during startup
of program and renew Polaroid contract for drivers license
photos due to lack of response to digital photo Request For
Proposals.
$287,200 general funds
Mr. Spencer explained the two elements of the request. He stated
that $68,000 of the funds would be used to offset the increased
costs of the Polaroid contract for driver's license photos. He
noted the extended contract is necessary to continue operations
until the Division of Motor Vehicles can install a digital driver's
licensing system. He spoke of the unsuccessful efforts of obtaining
a contract for a digital system.
SFC-01 # 20, Side A
Mr. Spencer then detailed the other portion of the request for the
boating registration program. He reminded the Committee of HB 108,
passed the previous session that established the boating safety
program and instituted a registration requirement for all unpowered
vessels over ten feet in length.
Mr. Spencer stated that the fund source of the attached $411,000
fiscal note was changed from general fund program receipts to boat
registration receipts, a non-general fund source. While over the
long-term, he said, this change is beneficial, the program was
short-funded in the first year due to start-up costs and the
inability to utilize other general fund program receipts. He
explained that the projections for the fiscal note were based on
the US Coast Guard (USCG) database of powered boats and estimates
of the number of unpowered boats. He qualified that the number of
canoes and kayaks, etc. that would be registered in the remainder
of the fiscal year is unknown. However, he stated that all would
not be registered. Therefore, he said, this request is based on
estimated receipts of $192,000 and the additional $219,000
necessary to run the program in the first fiscal year.
Mr. Spencer shared that the program has already incurred over
$180,000 in start-up costs, which includes upgrading the USCG
database and hiring of additional staff to cover registration
activities.
Co-Chair Donley wanted to know what would happen the next year.
Mr. Spencer predicted it would be a self-supported program, but
reiterated there is no figure for the number of unpowered vessels
and related registration revenue. He noted that calculating revenue
for most powered vessel registration would be easy since these boat
owners are used to registering these vessels. He added that powered
vessels operating on non-navigable waters were not required to be
registered under USCG regulations, but are required under the state
program.
Senator Wilken commented that HB 108 was a difficult bill and that
some legislators voted for it only because of the assurance there
would be no general fund requirement. He hoped the department could
find another way to fund the start-up costs due to the promises
made. He suggested not funding this request and shutting down the
program.
Senator Hoffman pointed out that the last minute fund source
changes were made not at the fault of the department.
Co-Chair Donley surmised that the department had wanted to use
motor vehicle receipts for this boating program. He remarked, "once
again, people who are paying the motor vehicle receipts are
subsidizing other people around the state."
Mr. Spencer clarified that the last minute changes were not
challenged but that the department was unable to explain the
implications. He affirmed that the original intent was to utilize
motor vehicle and other division receipts to fund the start-up
costs of the program. He stated that the program is "melded" into
the division's operations and it is difficult to separate all
operating costs. As an example, he pointed out that the same staff
processes all mailed in registrations, whether for automobiles or
boats.
Co-Chair Donley rebutted that while the same staff may be
processing the registrations, the boating program serves different
people. He noted that some areas of the state are exempt from
paying motor vehicle registrations.
Section 9 (a) and (b)
Various Agencies
Increased Fuel Costs BRU
Increased fuel costs in various agencies for heating,
vehicles, aircraft, ferries, etc. due to higher oil and gas
prices.
$2,123,000 general funds
457,600 International Airport Revenue Fund
Mr. Spencer stated that this item pertains to the Department of
Administration with regard to the increased fuel costs to operate
the Pioneers Homes. He admitted the winter weather has been mild,
but emphasized fuel prices have been higher.
Section 18
Various Agencies
Miscellaneous Claims and Stale-dated Warrants BRU
Stale-dated warrants and miscellaneous claims.
$85,500 general funds
141,100 federal funds
Mr. Spencer noted the stale-dated warrants item appears every year
in the supplemental budget to cover lost or stashed checks that are
over two years old. He reminded that by statute, the department
could not pay these warrants without separate appropriation. He
explained the miscellaneous claims represents invoices received
after a fiscal year is over and, for various reasons, could not be
paid from the current year's appropriation. As an example, he gave
programs that have no lapsed funds.
Senator Hoffman asked if other states refuse to pay warrants older
than two years.
Mr. Spencer answered that he would check.
Senator Green asked how many departments had these claims.
Mr. Spencer responded that all departments have miscellaneous
claims, but that only the Department of Administration has stale-
dated warrants.
Section 19 (a)(1)
Department of Administration
Older Alaskans Commission BRU
AR3530-90 Older Alaskan Commission
$683.00 general funds
Mr. Spencer explained this ratification item as a "clean up of the
accounting system." He detailed that a reimbursable services
agreement (RSA) was established in FY90 and the funds were expended
for personal services. He continued saying that "there are
frequently timing issues between when revenues comes in and when
the costs have been expended." He stated that this is a case where
the RSA was set up on the expectation of federal receipts, which
never materialized.
Department of Community and Economic Development
Section 2 (a)
Department of Community and Economic Development
International Trade and Marketing BRU
International Trade seed potato storage facility feasibility
study.
$16,000 federal funds
TOM LAWSON, Director, Division of Administrative Services,
Department of Community and Economic Development testified to this
US Department of Agriculture (USDA) grant for an Alaska Seed Potato
Storage Facility Feasibility Study. He stated the intent is to
conduct the study in the upcoming spring with completion early in
the summer. He explained the purpose is to review the market demand
in Taiwan and China for these items, to research Alaska's
production capability and the interest in growing this type of
crop, and to assess the storage facility needs.
Co-Chair Donley wanted to know the amount of general funds that
were included in the FY 01 capital budget for the seed potato
project. He commented that inclusion of this item was the reason he
voted against the House of Representative's version of the FY 01
capital budget.
Mr. Lawson replied $120,000 was appropriated in the form of a
grant.
Senator Green remarked, "Too much."
GREG WOLF, Director, Division of International Trade and Marketing
Development, Department of Community and Economic Development,
testified via teleconference from Anchorage to the three components
of the study. He stressed that Alaska has the ability to produce
virus-free, pest-free seed potatoes, and is the only state allowed
to ship seed potatoes to Taiwan. He added that representatives from
the Peoples Republic of China have traveled to Alaska and that
Alaska may become the first state permitted to ship seed potatoes
to China.
Mr. Wolf then addressed the second component of the study: to
assess Alaska's capability to meet that demand. This, he said,
entails reviewing current and potential acreage available for
production.
Mr. Wolf spoke of a task force formed in November 1998 to address
the storage issue of these seed potatoes. He stated that the task
force reviewed progress for seed potato exports, noting the
successful efforts to date. He noted another charge of the task
force is to identify obstacles to this program. Among the four or
five obstacles identified, he shared; one was the lack of storage.
He summarized that this study would determine what type of storage,
and location of such storage, would be necessary.
Co-Chair Donley wanted to know if the study could be completed with
$16,000.
Senator Green asked if the division would perform the study or
contract out.
Mr. Wolf replied that the division is preparing a request for
proposal (RFP). He stated the intention to match this appropriation
with $15,000 of existing division funds, $5000 of which would
actually be in-kind staff support services. He calculated the total
cost of the study to cost $30,000 to $35,000.
Senator Green wanted to know the number of interested bidders.
Mr. Wolf anticipated there would be some interest once the RFP is
issued. He presumed that there would be sufficient interest
considering the amount of the contract.
Senator Green suggested that instead of conducting this study, the
division contact the USDA and the Plant Materials Center, which
already has much of this information.
Mr. Wolf responded that while some of the information may be
readily available, other data needed in the study, such as the
demand-side aspects, are not known.
Senator Green agreed that the witness could be correct regarding
the lack of information regarding adequate storage facilities.
However, she again stressed that most of the information could be
obtained from the USDA.
Senator Wilken asked who would build and operate the seed storage
facility, if the need for one were identified.
Mr. Wolf hoped the study would identify this.
Senator Wilken asked if the witness envisioned that the state would
own and operate the facility.
Mr. Wolf responded that he was not specifically proposing a state
operated facility and did not know whether it would be appropriate.
Senator Wilken next referred to the FY01 funding request for the
seed data project. He stated that he had asked for an income
statement showing where the previously appropriated money had gone
and where the requested funds would be spent in the current year.
He assumed the FY 02 budget contains a request for this project as
well and he asserted that before he would vote for the funding, he
wanted that information. He also wanted to know the state's return
on investment.
Mr. Wolf replied he would request that information, and noted the
University of Alaska is the main recipient of the grant.
Senator Leman noted that funding for virus free seed potatoes has
been provided for at least ten years and asked that the information
Senator Wilken requested reflect this time period. He then asked if
the division would have the consultant assess the commitment of
Taiwan and China to honor their financial obligations. He
referenced the new Taiwanese government that chose to not honor its
commitment to the seafood processing facility in Anchorage.
Mr. Wolf did not know that ascertaining the credit worthiness of
countries was appropriate. He stated that the division always
advises companies to exercise good judgment when entering into
contracts.
Senator Leman agreed, but stressed that the seafood facility
involves the government of Taiwan and not a private business.
Mr. Wolf assured that the buyers of seed potatoes would be private
businesses rather than the government.
Senator Green advised that this item has been considered
agriculture revolving loan funds rather than general funds, a
practice she has disagreed with.
Section 2 (b)
Department of Community and Economic Development
Regulatory Commission of Alaska BRU
Unanticipated increases in costs for personnel, office move
and management information system.
$144,800 Regulatory Commission Receipts
Mr. Lawson explained this authorization request to cover relocation
of the office, increased lease costs, increased pipeline-related
workloads, unexpected management information system costs, and
costs for hiring new staff.
Co-Chair Donley wanted to know if there would be an increase in the
existing fee structure.
NAN THOMPSON, Commissioner and Chair, Regulatory Commission of
Alaska, Department of Community and Economic Development, testified
via teleconference from Anchorage that the funds would be recovered
through regulatory commission receipts, not through general funds.
She assured that even with the increase, the division would still
meet the statutory cap.
Co-Chair Donley asked the amount of the increase in the fee
structure.
Ms. Thompson replied that it would be nominal and that the ordinary
consumer wouldn't notice.
Section 12 (a)
Department of Community and Economic Development
Community and Business Development BRU
Lapse extension to June 30, 2004 of National Petroleum
Reserve-Alaska grant appropriation in sec. 63, ch. 2, FSSLA
1999.
No dollar amount
Section 12 (b)
Department of Community and Economic Development
Capital BRU
Appropriate grants from National Petroleum Reserve-Alaska
receipts.
$1,728,000 federal funds
Mr. Lawson reminded the Committee that in 1999 the legislature
appropriated National Petroleum Reserve-Alaska (NPRA) funds,
through the NPRA Impact Grant Fund program to address the impacts
of oil and gas exploration and development in communities near the
reserve. He stated that the funds were providing in the operating
budget and the supplemental request converts the funds to capital
funds and inserts a lapse date of June 30, 2004. He explained that
the grants offered, are mostly construction-type grants.
Co-Chair Donley asked if the amount reflected in the request is the
amount that would lapse.
Mr. Lawson answered the amount reflects the NPRA funds the state
would receive in the current year and in FY 01.
Co-Chair Donley asked who decides what projects the grants fund
would and which communities receive them. He asserted that the
funds were to help cover the $8 million shortfall in the power cost
equalization (PCE) program.
Mr. Lawson agreed that "a fairly large amount of money" was
appropriated to PCE. However, he noted that federal and state laws
dictated that funds must first be spent for impact grants.
Senator Wilken, referring to grant applications, asked for an
explanation of what a wooden deck ball court has to do with oil
exploration. He remembered, during his first year as a member of
the Committee, a promise that this fund source would be used to
help PCE. He stated that the promise had been forgotten and
recommended returning to the intent of that promise. He stressed
that he would support these projects if he felt they were actually
linked to NPRA. He gave as an example, the City of Nuiqsut, which
is hundreds of miles from NPRA.
Senator Leman commented that Mr. Lawson was right, but that Senator
Wilken and Co-Chair Donley were also correct. He recalled Senator
Adams' promise on behalf of the communities he represented, that
they would make a good faith effort not to consume all of the funds
on grant projects so funds would be available for PCE.
Unfortunately, Senator Leman opined, not all communities were
following through.
Senator Hoffman had the same recollection. He expanded that these
communities all had "first call" on the funds and any unutilized
funds could be used for other purposes. He addressed Senator
Wilken's comment regarding the location of Nuiqsut, pointing out
that the eligible communities are listed in federal law. Senator
Hoffman did not know the authority of "what those dollars could be
spent on."
Senator Green asked if the 1999 projects were authorized prior to
the conversations about using these funds to assist PCE.
Ms. McConnell responded that the original list of grant requests
far exceeded what was available under the NPRA grant. She affirmed
that Senator Adams worked with communities to reduce their requests
to make funds available for PCE, which occurred.
Ms. McConnell pointed out that statutes governing the approval of
projects provide for not only the environmental impacts, but also
social, economic and cultural impacts of oil exploration and
development. This is the reason for such projects as Senator Wilken
mentioned, she stated. She stressed that all the projects met the
statutory requirements.
Ms. McConnell spoke to the conversion from operating funds to
capital grant funds, as an oversight, emphasizing that the projects
are "clearly capital projects."
Senator Wilken asked if the statutes the witness referred to were
state or federal.
Ms. McConnell answered these are state statutes, and was unsure if
the federal guidelines are statutory or regulatory.
Senator Wilken remembered that the issue was addressed two years
prior, when the funds first became available, rather than one year
ago. He suggested reviewing and possibly amending the state
statute.
Ms. McConnell stressed that there were funds that were appropriated
to PCE in cooperation with the communities. Therefore, she surmised
that the commitment was kept.
Co-Chair Donley countered that the PCE program still has an $8
million shortage in the current year.
Ms. McConnell clarified that the shortage is not in the current
fiscal year. She explained that the full effects of the endowment
would not have begun by FY 02, when it was estimated that the state
would need to provide $1.8 million annually. As a result, she
continued, the state would have to provide greater support before
the effects of the endowment would be realized. She noted that this
information was provided to the Committee in the previous session,
and that she would redistribute those spreadsheets.
Senator Wilken wanted a list of those communities that received
grants and the projects the grants funded. He noted that in the
previous year, a certain amount of funds were available but that
there were five times as many requests as available funds. He was
interested in knowing which communities forewent their requested
projects.
Senator Hoffman relayed discussions held during US Senator Ted
Stevens' last visit. Senator Hoffman recalled there was House of
Representatives' legislation to use substantially more NPRA grant
funds for PCE. Senator Stevens had argued that such use of the
funds went against the original intent of the grants, according to
Senator Hoffman.
Ms. McConnell understood the same.
Senator Austerman requested that the PCE information be supplied to
all Committee members.
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