Legislature(1997 - 1998)
04/14/1997 01:50 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 14, 1997
1:50 P.M.
TAPE HFC 97-94, Side 1, #000 - end.
TAPE HFC 97-94, Side 2, #000 - end.
CALL TO ORDER
Co-Chair Hanley called the House Finance Committee meeting to order
at 1:50 p.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
ALSO PRESENT
Annalee McConnell, Director, Office of Management and Budget,
Office of the Governor; Dan Spenser, Senior Analyst, Office of
Management and Budget, Office of the Governor; Guy Bell, Director,
Division of Administrative Services, Department of Commerce and
Economic Development; Pat Ladner, Alaska Science and Technology
Foundation; Janet Clark, Director, Division of Administrative
Services, Department of Health and Social Services; Royce Weller,
Analyst, Office of Management and Budget, Office of the Governor;
SUMMARY
SB 83 "An Act making an appropriation for management fees for
the constitutional budget reserve fund (art. IX, sec. 17,
Constitution of the State of Alaska); and providing for
an effective date."
HCS CSSB 83 (FIN) was reported out of Committee with a
"do pass" recommendation.
SENATE BILL NO. 83
"An Act making an appropriation for management fees for the
constitutional budget reserve fund (art. IX, sec. 17,
Constitution of the State of Alaska); and providing for an
effective date."
Members were provided with amendments 1 - 12 (copies on file).
Co-Chair Hanley explained that Amendment 1 would appropriate a
total of $300 thousand dollars to the Department of Natural
Resources for the veterans' land discount program. He noted that
$20 thousand dollars of this sum is earmarked for administrative
costs. The Senate reduced this appropriation by $30 thousand
dollars. This restores the appropriation to the Governor's
requested level.
Co-Chair Hanley MOVED to adopt Amendment 1. There being NO
OBJECTION, it was so ordered.
Co-Chair Hanley explained that Amendment 2 restores funding for
fire suppression to the Governor's requested amount of $3,788,300
million dollars. The Senate reduced the appropriation by $120
thousand dollars.
Co-Chair Hanley MOVED to adopt Amendment 2. There being NO
OBJECTION, it was so ordered.
Co-Chair Hanley explained that Amendment 3 would restore $100
thousand dollars for the Old Eagle School site. The Senate deleted
this appropriation. Co-Chair Hanley summarized that failure to
appropriate this amount could result in greater expense to the
state.
Co-Chair Hanley MOVED to adopt Amendment 3. There being NO
OBJECTION, it was so ordered.
Co-Chair Hanley explained that Amendment 4 would appropriate $115
thousand dollars for on going litigation costs of the Department of
Fish and Game. The Department of Fish and Game will have to absorb
this cost in their budget if it is not appropriated.
Co-Chair Hanley MOVED to adopt Amendment 4. There being NO
OBJECTION, it was so ordered.
Co-Chair Hanley explained that Amendment 5 would split the
difference between the House and Senate for the Public Defender
Agency. The House version reflected the Governor's request. The
Senate cut the request substantially. He acknowledged that the
Senate would prefer that this funding not be restored. He observed
that $85 thousand dollars would be added.
Co-Chair Hanley MOVED to adopt Amendment 5. Representative Kohring
noted that this item was reduced in the FY 97 budget to reflect the
fact that Kotzebue voted to prohibit the sale and exportation of
alcohol. There being NO OBJECTION, Amendment 5 was adopted.
Co-Chair Hanley discussed Amendment 6. He explained that the House
version of the supplemental, CSHB 113 (FIN), did not include the
Governor's full leasing request of $993.7 thousand dollars. The
Senate version, CSSB 83 (FIN)am, includes this amount. He observed
that there is a $1.6 million dollar surplus from the longevity
bonus grant appropriation available. The amendment would fully
fund the leasing component using $1.3 million dollars of the
surplus longevity bonus funds. In addition, $243.3 thousand
dollars would be used for the settlement of ABBA, Inc v. State and
$104 thousand dollars would be used for costs associated with
adjudicatory claims relating to the Department of Environmental
Conservation laboratory.
Co-Chair Therriault summarized that the amendment is a
reappropriation. Co-Chair Hanley noted that all three items would
be fully funded using surplus longevity bonus funds.
Co-Chair Therriault asked if FY 97 actual leasing costs have been
determined. Co-Chair Hanley noted that the Committee has not
received a leasing amendment. He explained that the supplemental
contained the FY 98 lease funding level. He observed that the
Administration has suggested that the FY 98 level is $1 million
dollars short of the anticipated need.
Co-Chair Hanley explained that the appropriation for longevity
bonus payments is $1.6 million dollars more than is needed.
Co-Chair Hanley MOVED to adopt Amendment 6. There being NO
OBJECTION, it was so ordered.
Co-Chair Hanley explained that Amendment 7 would appropriate $200
thousand dollars for emergency communications equipment to the
Department of Health & Social Services. He observed that this item
was included in the Governor's original request.
Co-Chair Hanley MOVED to adopt Amendment 7. There being NO
OBJECTION, it was so ordered.
Representative Martin explained that Amendment 8 would grant $50
thousand dollars to the Department of Military and Veterans Affairs
to work with the Air Force Association on a statewide celebration
of the 50th university of the United States Air Force in Alaska.
He observed that the total cost is $250 thousand dollars. Private
enterprise, the federal government and state and local governments
are participating.
Representative Martin MOVED to adopt Amendment 8. There being NO
OBJECTION, it was so ordered.
Representative Foster MOVED to adopt Amendment 9. He explained
that Amendment 9 would increase the appropriation for an
aeromagnetic study to identify natural gas deposits in the Holitna
Basin from $650 thousand dollars to $800 thousand dollars.
Co-Chair Hanley observed that this project was added in the Senate.
He noted that the project was included in the proposed FY 98
capital budget. Inclusion in the supplemental budget would allow
the project to start earlier. Co-Chair Therriault noted that the
amendment augments existing projects. Co-Chair Hanley noted that
there have been previous appropriations for similar projects in the
capital budget.
There being NO OBJECTION, Amendment 9 was adopted.
Co-Chair Hanley discussed Amendment 10. He noted that the Mental
Health Trust Authority has been working with the Department of
Health & Social Services on the relocation of a mental health
center in Aniak. The amendment would appropriate $43.5 thousand
dollars in mental health trust authority receipts.
Co-Chair Hanley MOVED to adopt Amendment 10. There being NO
OBJECTION, it was so ordered.
Co-Chair Hanley discussed Amendment 11. He noted that the
amendment would appropriate $550 thousand dollars to the Department
of Community and Regional Affairs for payment as a grant to Arctic
Power for education efforts to open the Costal Plain of the Arctic
National Wildlife Refuge for oil and gas exploration and
production. The amendment also appropriates $100 thousand dollars
to the Office of the Governor to promote development on the North
Slope. This would continue the efforts of Arctic Power as a
capital project. In FY 97, some of this money was used for oil and
gas development. The Administration's request appropriated $50
thousand dollars less to Arctic Power and $50 thousand dollars more
to the Office of the Governor.
Co-Chair Hanley MOVED to adopt Amendment 11. There being NO
OBJECTION, it was so ordered.
Amendment 12 by Representative Kelly was withdrawn. The amendment
would have included funding for the Fairbanks Youth Facility. Co-
Chair Hanley observed that the amendment would appropriate funding
for security measures. He noted that the Senate included funding
for security measures at the McLaughlin Youth Center. He stressed
that additional information is needed. He stated that he would
consider both proposals during the capital process.
Co-Chair Hanley MOVED to delete Section (k) on page 5, line 22.
This deletes the sum of $838.8 thousand dollars to the Department
of Health & Social Services for improved security at the McLaughlin
Youth Center. He stressed that the number of juvenile beds needs
to be considered. He reiterated that security and additional bed
needs will be considered during the capital process. There being
NO OBJECTION, it was so ordered.
Representative Martin referred to Section 2, page 2. He observed
that Section 2 dedicates $5 million dollars from the Alaska Science
and Technology Foundation and $5 million dollars in corporate
receipts to the Aerospace Development Corporation. Co-Chair Hanley
stressed that the Alaska Science and Technology Foundation funding
is contingent on receipt of $18 million dollars from the federal
government.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR explained that the appropriation would still
be contingent on receipt of $18 million dollars in federal
proceeds.
ROYCE WELLER, ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF
THE GOVERNOR observed that the corporate receipts could be Air
Force receipts or earnings from the endowment. He clarified that
$5 million dollars in Air Force receipts were already approved by
the Legislative Budget and Audit Committee. The appropriation
contains an additional $5 million dollars in corporate receipt
authorization to allow the Aerospace Development Corporation to
secure additional funds.
Co-Chair Therriault understood that corporate receipts from the Air
Force could only be used for specific construction of the launch
complex. He added that the total project cost is $28 million
dollars.
Co-Chair Therriault clarified that the Alaska Industrial
Development and Export Authority (AIDEA) has withdrawn from the
project due to expected financing from the federal government.
Alaska Science and Technology Foundation funding will not be
released until receipt of federal funding.
Ms. McConnell provided members with additional amendments by the
Administration as contained in a memorandum to the House Finance
Committee (copy on file). She noted that a number of the
Administration's concerns were addressed by the adoption of
previous amendments. She noted that funds were partially restored
to the Public Defender Agency. She emphasized that this component
is still under-funded.
Ms. McConnell observed that the House Finance Committee utilized
surplus funding from the longevity bonus grants program. She
stated that the Administration proposed to use this funding to
offset the needed supplemental increase for the Public Defender
Agency and to fund the power cost equalization appropriation.
Ms. McConnell discussed the Administration's amendment for Public
Assistance:
* Delete sections 10(f) and 10(g), DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, reduction of $300,000 to Public Assistance
Admin/Eligibility determination.
* Add to sec. 10, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, a
new subsection as follows:
The unexpended and unobligated balance of the appropriation made
in sec. 30, ch. 117 SLA 1996, page 31, line 18 (Public
Assistance Administration, $39,769,900) lapses into the general
fund on June 30, 1998.
Ms. McConnell observed that the Senate deleted $300 thousand
dollars from the Division of Public Assistance. She noted that 19
field staff positions would be eliminated in FY 98. She asked that
the lapse date be extended to allow this funding to be used in FY
98.
Representative Martin noted that the federal government is
anticipating a 20 to 40 percent reduction in welfare programs.
JANET CLARK, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES acknowledged that many
states have had decreases in cash payments for public assistance.
She emphasized that many of these states have experienced large
increases in child care and work programs. She stressed that there
has been a reduction in the cash benefit side of the state's
welfare reform budget. The state's welfare reform program begins
July 1, 1997.
Co-Chair Hanley stated that he preferred to wait until the
Conference Committee on the Operating Budget meets to decided if
funding should be extended.
Ms. McConnell noted that the Administration requests that sections
11 and 13 be amendment to reflect additional judgments and claims:
* Amend sec. 11(b), DEPARTMENT OF LAW, judgments and claims, at
page 6 line 10 as follows:
General fund [$1,347,589] $
1,532,3
14
This reflects two additional claims relating to McCabe v. State.
* Amend sec. 13, MISCELLANEOUS CLAIMS, at page 7 line 11 as
follows:
Transportation and Public Facilities [903] 928
This reflects an additional miscellaneous claim submitted by the
Department of Transportation and Public Facilities.
Ms. McConnell discussed conditional language adopted by the Senate
regarding transfer of the Perseverance Trail to the City and
Borough of Juneau. The Administration would delete this language
and add a new section as follows:
* Delete sec. 14(b), Perseverance Trail with conditional
language.
* Add new sec. 15(m), DEPARTMENT OF NATURAL RESOURCES, as
follows:
(m) The sum of $120,000 is appropriated from the general
fund to the Department of Natural Resources for emergency
repairs to the Perseverance Trail.
Ms. McConnell observed that this is identical to the language in HB
113 as passed by the House. This removes the conditional language
added by the Senate requiring the City and Borough of Juneau to
take over the trail. She maintained that, "as with our roads, it's
not appropriate to insist that a local government take over a trail
when we know there are major repairs still needed." She stressed
that it is unfair to ask communities to take over maintenance if
conditions are unsafe.
Representative Grussendorf spoke in support of the Administration's
request. He observed that there is a several hundred foot drop on
Perseverance Trail. He MOVED to delete the conditional language on
page 7, lines 17 -23. He emphasized that the city of Juneau would
also be required to take over maintenance of several other trails.
Ms. McConnell expressed support for intent language directing the
Administration to talk to communities about local control of trails
and roads.
(Tape Change, HFC 97-94, Side 2)
Representative Mulder spoke against the deletion. He stressed that
there are very few state operated trails within cities. He
maintained that the conditional language is needed as a "hammer".
Ms. McConnell emphasized that the trail is a state liability. She
observed that someone has died on the trail. If the City does not
take over the trail the liability will rest with the state.
Representative Martin spoke in support of a letter of intent. He
emphasized that legislation cannot be written through an
appropriation bill.
A roll call vote was taken on the MOTION to delete the conditional
language on lines 17 - 23, page 7.
IN FAVOR: Grussendorf
OPPOSED: Moses,
Davis, Foster, Kelly, Kohring, Martin, Mulder,
Hanley
Co-Chair Therriault and Representative Davies were absent from the
vote.
The MOTION FAILED (1-8).
Co-Chair Hanley MOVED to adopt the amendment to Section 11(b):
* Amend sec. 11(b), DEPARTMENT OF LAW, judgments and claims, at
page 6 line 10 as follows:
General fund [$1,347,589] $
1,532,3
14
There being NO OBJECTION, it was so ordered.
Co-Chair Hanley MOVED to adopt the amendment to Section 13:
* Amend sec. 13, MISCELLANEOUS CLAIMS, at page 7 line 11 as
follows:
Transportation and Public Facilities [903] 928
There being NO OBJECTION, it was so ordered.
PAT LADNER, ALASKA SCIENCE AND TECHNOLOGY FOUNDATION testified via
the teleconference network in regards to section 2. He agreed that
the $5 million dollar appropriation from the Foundation to the
Alaska Aerospace Development Corporation Revolving Loan Fund would
be contingent on the federal appropriation.
Mr. Ladner explained that the additional authorization for $5
million dollars in corporate receipts would cover the interest
earned on the federal appropriation and other funding, and any
additional grants or contracts that may be received. He clarified
that a $4.9 million dollar grant was received from NASA. This
amount has already been approved through the Legislative Budget and
Audit Committee. He noted that the Kodiak Launch project's total
cost is estimated at $28 million dollars. Additional authorization
of $5 million corporate receipt dollars was added.
Co-Chair Hanley expressed concern with the addition authorization
of $5 million corporate receipt dollars. Mr. Ladner stressed that
the Kodiak Launch project does not require the additional $5
million dollars in corporate receipts.
Co-Chair Hanley MOVED to delete $5 million dollars in corporate
receipt authorization on page 2, line 23 and reflect the deletion
in line 17 by reducing "$28" million dollars and inserting "23"
million dollars. He observed that the Foundation can go to the
Legislative Budget and Audit Committee for additional
authorization.
Ms. McConnell noted that the Senate has developed language for the
operating budget that would restrict authorization by the
Legislative Budget and Audit Committee. Co-Chair Hanley
acknowledged that this issue needs to be addressed.
There being NO OBJECTION, $5 million dollars in corporate receipt
authorization was deleted on page 2, line 23 and reflected in line
17.
Co-Chair Hanley provided members with a letter from the Department
of Commerce and Economic Development, dated 4/8/97 (copy on file).
The letter requests that an additional section be adopted to add
$300 thousand dollars in federal receipts from the United States
Department of Commerce to the State Department of Commerce and
Economic Development to capitalize the Small Business Economic
Development Revolving Loan Fund.
Ms. McConnell spoke in support of the amendment. She observed that
the money is available. No additional match is needed.
Co-Chair Hanley MOVED to adopt an amendment of an additional
section to add $300 thousand dollars in federal receipts from the
United States Department of Commerce to the State Department of
Commerce and Economic Development to capitalize the Small Business
Economic Development Revolving Loan Fund. There being NO
OBJECTION, it was so ordered.
Ms. McConnell clarified that the Administration's request for
Arctic Power was $495 thousand dollars.
Ms. McConnell expressed concern that the appropriation in to
Section 5, page 3 would be for FY 97.. She observed that Section
5 appropriates $1 million dollars in federal receipts for contract
beds in community residential centers and out-of-state contract
beds. The Administration requested that this appropriation be
spent in FY 98. She observed that this amount will have to be
spent in two months.
Representative Mulder explained that the intent is to make a
stronger case that the federal funds would not be used to supplant
general funds. The federal funds can be used for the purchase of
new beds. Ms. McConnell stressed that the Administration's
preference is to extend the appropriation through FY 98.
Representative Mulder noted that federal funds were used in the FY
98 budget for the purchase of new beds. The appropriation will be
used to purchase new beds in FY 97 that will be continued with
federal funding in FY 98.
Representative Martin MOVED to report HCS CSSB 83 (FIN) out of
Committee with individual recommendations. There being NO
OBJECTION, it was so ordered.
HCS CSSB 83 (FIN) was reported out of Committee with a "do pass"
recommendation.
ADJOURNMENT
The meeting adjourned at 3:20 p.m.
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