Legislature(2001 - 2002)

04/16/2002 04:28 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     CS FOR  HOUSE BILL NO. 403(FIN)  am (brf sup maj fld)(efd  fld)                                                            
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize funds."                                                                                                  
     SENATE BILL NO. 289                                                                                                        
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize  funds; making appropriations  under art. IX,                                                            
     sec.  17(c), Constitution  of  the State  of  Alaska, from  the                                                            
     constitutional   budget reserve  fund;  and  providing  for  an                                                            
     effective date."                                                                                                           
     CS FOR HOUSE BILL NO. 404(FIN)                                                                                             
     "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."                                                                             
     SENATE BILL NO. 288                                                                                                        
     "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."                                                                             
Department of Labor and Workforce Development                                                                                 
Senator Austerman, Chair                                                                                                        
Senator Torgerson                                                                                                               
Senator Elton                                                                                                                   
Cliff Stone, Staff to Senator Austerman, presented the subcommittee                                                             
report as follows.                                                                                                              
     Gov Amended          $12,146,900                                                                                           
     FY 02 Mgt Plan       $12,228,100                                                                                           
     SB 289 Intro         $12,233,000                                                                                           
     HB 403  House Final  $10,775,300                                                                                           
     Senate  Allocation   $11,494,400                                                                                           
     Senate  Subcommittee $11,494,400                                                                                           
     Since  our  allocation  was  $719,100  above  the  final  House                                                            
     numbers  we did not  accept their decrement  of $503,400  GF to                                                            
     the Job Training Programs  component under Employment Security,                                                            
     and we did  not accept their decrement of $3,700  general funds                                                            
     to the Alaska Labor Relations Agency.                                                                                      
     As in  the House budget,  we fully funded  the increased  labor                                                            
     costs.  We  also  fully  funded  the  department's  request  of                                                            
     $102,000  for a  wage and hour  technician  and $92,000  for an                                                            
     additional  electrical inspector. An extra $9,100  was directed                                                            
     towards the Mechanical Inspection component.                                                                               
     In addition,  we allowed the third and final  year for the fund                                                            
     source changes to  the Occupational Safety and Health component                                                            
     ($343,500) and the  Workers' Compensation component ($625,400).                                                            
     This action completes  the conversion of federal grant matching                                                            
     funds from general funds to fee based funding.                                                                             
     The subcommittee also  reiterated that the Senate structure has                                                            
     eight  separate  budget  appropriations  vs. the  three  budget                                                            
     appropriations in the FY 03 House structure.                                                                               
     Finally, the subcommittee  expressed support for the passage of                                                            
     HB 262 that  in part establishes a building safety  account and                                                            
     supports  the positions  that  would be  authorized for  boiler                                                            
     inspections and elevator inspections.                                                                                      
Senator Austerman  stated that he  had initially proposed  utilizing                                                            
$212,000 of the  amount allocated to the Department's  budget by the                                                            
Senate  Majority  to  increase  the  budget  of  the  Department  of                                                            
Military and  Veterans Affairs. However,  he informed the  Committee                                                            
that Co-Chair Donley rejected the recommendation.                                                                               
Department of Military and Veterans Affairs                                                                                   
Senator Austerman, Chair                                                                                                        
Senator Davis                                                                                                                   
Senator Phillips                                                                                                                
Senator Therriault                                                                                                              
Senator Wilken                                                                                                                  
Mr. Stone presented the subcommittee report as follows.                                                                         
     Gov Amended          $9,896,200                                                                                            
     FY 02 Mgt Plan       $8,517,500                                                                                            
     SB 289 Intro         $8,517,500                                                                                            
     HB 403  House Final  $8,924,400                                                                                            
     Senate  Allocation   $8,517,400                                                                                            
     Senate Subcommittee $8,517,400                                                                                             
     As  you can  see  from  the numbers  above,  this department's                                                             
     allocation  is  funded  at the  FY 02  management  plan  level.                                                            
     Regardless  of this fact,  the subcommittee  was able  to fully                                                            
     fund  the increased  labor  costs  of $110,000,  the  increased                                                            
     grant  for Veterans'  Services  of  $200,000,  the Air  Guard's                                                            
     Anchorage  Airport Joint User Fees of $41,000,  the Air Guard's                                                            
     New  Facilities  operational  costs in  the amount  of  $52,700                                                            
     (which  is  $4,200  under  the  House  authorization)  and  the                                                            
     increase   in  actuarial  costs   to  retirement  benefits   of                                                            
     In  addition, we  accepted the  House GF  decrements  (Governor                                                            
     amended)  to  the  Air  Force Association  Air  Show  Grant  of                                                            
     $12,000 and  a small technical adjustment of  $700 to the State                                                            
     Active Duty component  of the Guard. The subcommittee allowed a                                                            
     small  technical addition of  the words "Naval Militia"  to the                                                            
     Educational  Benefits  component of the  Alaska National  Guard                                                            
     Benefits  BRU.  This was  an oversight  by the  department  and                                                            
     should  have been included in  the Governor's request,  as well                                                            
     as the House version.                                                                                                      
     After  funding  the  core  services   of  the  department,  the                                                            
     allocation  still left the subcommittee  the decision  of where                                                            
     to  take  an   additional  cut  of  $654,700.  The   department                                                            
     recommended and we  approved to take a decrement of $654,700 GF                                                            
     and  replace it with  interagency receipts  of $654,700  in the                                                            
     Alaska Military Youth Academy.                                                                                             
     The  subcommittee also  commented that  if HB 312 (Relating  to                                                            
     funding  the Alaska  Challenge Youth  Academy program)  becomes                                                            
     law  as written,  then the fiscal  note will  reduce the  GF to                                                            
     zero for  the entire component and be funded  with I/A receipts                                                            
     from  the Department  of Education and  Early Development.  The                                                            
     Senate Finance  Committee may also want to consider  creating a                                                            
     new  BRU/Component  for  the  Academy within  the  DMVA  budget                                                            
     structure if HB 312 passes.                                                                                                
Senator Leman asked the reason for the reduction in funding for the                                                             
air show.                                                                                                                       
Mr. Stone responded this was the recommendation of General Phil                                                                 
Oates, Commissioner of the Department of Military and Veterans                                                                  
Senator Leman expressed he disagreed with this recommendation.                                                                  
Senator  Austerman commented  the  air show,  as well  as the  youth                                                            
academy  program, are  not part  of the  original  "design" of  this                                                            
Department.  Because of this, he stated,  the subcommittee  chose to                                                            
recommend reductions to  these services rather than across-the-board                                                            
reductions to  the remaining programs. He noted that  if HB 312 does                                                            
not pass, all funding for the youth academy would be eliminated.                                                                
Senator Olson asked the definition of "Naval Militia".                                                                          
Senator Wilken  shared the question  was raised in the subcommittee                                                             
hearing and the  Department provided a written description  [copy on                                                            
University of Alaska                                                                                                          
Committee of the Whole                                                                                                          
Co-Chair  Donley proposed  adopting  an allocation  of $197,815,000                                                             
general  funds,  which  is the  amount  established  by  the  Senate                                                            
Majority,  and is $2.315  million higher than  the FY 02  Management                                                            
Co-Chair  Donley also  suggested  replacing science  and  technology                                                            
foundation  funds in the  FY 02 budget with  funds from the  science                                                            
and technology  endowment.   He stated this  would increase  funding                                                            
for the  University of Alaska  to the FY 02  level and equal  to the                                                            
general   fund    appropriation    approved   by   the    House   of                                                            
Co-Chair  Donley then  recommended  that the  Committee approve  the                                                            
following transactions  contained in the budget adopted by the House                                                            
of Representatives.                                                                                                             
     ·    general fund increment to replace the $2 million one-time                                                             
          Alaska Commission on Postsecondary Education (ACPE)                                                                   
          Dividend funds                                                                                                        
     ·    increment of $36,800 Mental Health Trust Authority                                                                    
          Authorized Receipts (MHTAAR) to expand statewide delivery                                                             
          of the Bachelor of Social Work degree                                                                                 
     ·    accept all non-general fund increments and changes,                                                                   
          totaling  approximately $14,836,000 in new federal receipt                                                            
          authority  and  $35,727,700  in  new authority  for  other                                                            
          funds:  inter-agency (I/A)  receipts, University  receipts                                                            
          and Capital Improvement Project (CIP) receipts                                                                        
Co-Chair  Donley  next suggested  an  additional transaction  of  an                                                            
estimated $13,200  statutory designated  program receipts  (SDPR) to                                                            
be included  in the language section  of the budget legislation  for                                                            
net receipts  from  the sale  of the  University  of Alaska  license                                                            
plates. He  explained this would allow  the proceeds of the  license                                                            
plate sales to go directly to the University.                                                                                   
Co-Chair  Donley  noted  recommendation  of  a  net  zero  technical                                                            
funding source  change between University receipts  and I/A receipts                                                            
for internal reporting purposes.                                                                                                
Co-Chair Donley  summarized these changes would be  identical to the                                                            
House of Representatives'  budget with the exception that the Senate                                                            
Finance  Committee  version  would  utilize  science  and  technical                                                            
foundation  endowment funds  rather than general  funds. He  pointed                                                            
out  the appropriation  is  the same  as approved  by  the House  of                                                            
Senator  Wilken respectfully  suggested,  "This is  a good place  to                                                            
start". He spoke  of the "struggles" of funding all  state agencies,                                                            
stressing  the  University   is different   from  the  agencies.  He                                                            
reminded that  President Hamilton promised the Committee  four years                                                            
ago, "If  you give  me some  of your  money, I'll  make it into  new                                                            
money," which  Senator Wilken attested has occurred.  He pointed out                                                            
that  the Legislature  has appropriated  approximately  $35  million                                                            
additional  funds to  the  University, which  has  resulted in  $110                                                            
million  increase  to  the  University   budget.  He  asserted  that                                                            
investing in  the University of Alaska  is investing in the  State's                                                            
economy. He spoke  of fixed costs and additional programs  that must                                                            
be funded to continue to  educate Alaskans. He hoped the Legislature                                                            
would "continue the momentum."                                                                                                  
Senator Hoffman  asked for clarification of the discrepancy  between                                                            
the amount of I/A receipts  approved by the House of Representatives                                                            
and that proposed for the Senate Finance Committee.                                                                             
AT EASE 4:45 PM / 4:46 PM                                                                                                       
DAVID TEAL,  Director, Division  of Legislative  Finance,  explained                                                            
the University  considers  funds transferred  within the  university                                                            
system to  be interagency  receipts and funds  that are transferred                                                             
from other  state agencies  to be university  receipts. However,  he                                                            
stated, it is often assumed  that university receipts are new funds,                                                            
rather than "duplicated  out of the budget". He stated  the Division                                                            
of Legislative Finance,  the Office of Management and Budget and the                                                            
University  of  Alaska reclassified  those  funds  transferred  from                                                            
other state  agencies as  I/A receipts and  those funds transferred                                                             
within the  University as Intra-University  Transfers. He  explained                                                            
this has no impact  on the budget except to add a  new fund code and                                                            
clarify funding sources.                                                                                                        
Co-Chair  Kelly suggested  that  rather than  the  Committee of  the                                                            
Whole debate each component,  the proposed report should be adopted.                                                            
He informed, however, that  "the University is very near and dear to                                                            
me" and  that he  intended to  identify additional  funding  sources                                                            
that could be  appropriated. He advised he would prepare  amendments                                                            
for consideration by the full Committee.                                                                                        
Co-Chair  Donley commented  that Co-Chair  Kelly and Senator  Wilken                                                            
have been  "great  champions of  the University"  and successful  in                                                            
securing increased funds.                                                                                                       
Senator  Austerman  shared  he  would not  oppose  adoption  of  the                                                            
recommendations  at the  subcommittee  level. He  did have  concerns                                                            
about the science and technology  endowment and stressed that if the                                                            
intent were  to use the  corpus of the endowment  to fund  operating                                                            
expenses, the matter would  merit "solid concrete" discussion before                                                            
the full Committee  as to the intended  future of the endowment.  He                                                            
qualified  that  he  would  not  oppose  utilizing  the endowment's                                                             
interest earnings.                                                                                                              
Co-Chair  Kelly moved for  adoption of the  recommendations  for the                                                            
University of Alaska budget.                                                                                                    
Without   objection  the   Committee  of   the  Whole  ADOPTED   the                                                            
Co-Chair  Donley noted a  committee substitute  would be drafted  to                                                            
incorporate the recommendations in the subcommittee reports.                                                                    

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