Legislature(2001 - 2002)
01/10/2001 01:39 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
January 10, 2001
1:39 PM
TAPE HFC 01 - 1, Side A
TAPE HFC 01 - 1, Side B
TAPE HFC 01 - 2, Side A
TAPE HFC 01 - 2, Side B
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 1:39 PM.
MEMBERS PRESENT
Representative Eldon Mulder, Co-Chair
Representative Bill Williams, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Carl Moses
Representative Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
Representative Jim Whitaker
MEMBERS ABSENT
None
ALSO PRESENT
Representative Gretchen Guess; Ed Flanagan, Commissioner,
Department of Labor & Workforce Development; Remond
Henderson, Director, Division of Administrative Services,
Department of Labor & Workforce Development; Duane French,
Director, Division of Vocational Rehabilitation, Department
of Labor & Workforce Development; Jim Duncan, Commissioner,
Department of Administration; Allison Elgee, Deputy
Commissioner, Department of Administration; Robert Poe,
Executive Director, Alaska Industrial Development and Export
Authority (AIDEA), Department of Community & Economic
Development.
PRESENT VIA TELECONFERENCE
None
GENERAL SUBJECT(S):
REVIEW OF DEPARTMENTS ACCOMPLISHMENTS:
Department of Labor & Workforce Development
Department of Administration
Alaska Industrial Development & Export Authority
(AIDEA)
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 22nd Legislative Session, contact 465-
2156. After the 22nd Legislative Session they will be
available through the Legislative Library at 465-3808.
LOG SPEAKER DISCUSSION
TAPE HFC 00 - 1
SIDE A
000 Co-Chair Mulder Introduced members and staff.
132 Co-Chair Williams Voiced appreciation for the expertise of
the staff and members. He introduced his
staff.
226 Co-Chair Mulder Commented that he believed that the
minority and majority could work well
together.
264 Co-Chair Mulder Noted that he had passed out the rules of
how the Finance Committee works in a
handout. [attachment] The handout
explains the number of votes that are
required to make a majority and quorum
for passing a bill and for amendments.
He also pointed out the scheduling of the
bills and the requirements associated
with that. The notice requirement of the
uniform rules will be the same as
previous years. Included in the handout
is a letter from Tamara Cook, Director of
Legal Services.
482 There was no objection to using the
proposed rules.
518 Co-Chair Mulder Spoke to missions and measures and the
history associated with that formula. He
did not know if this year, the Committee
would be able to fully implement those
guidelines. He stated that these are a
"living document". Some of the past
measures have been refined and will
continue to be refined.
635 Co-Chair Mulder Noted that there would be a brief
overview made by each department in the
next couple of weeks. He asked that each
Department reference how last year's
money was spent.
Department of Labor & Workforce
Development
736 ED FLANAGAN, Spoke to the mission of the Department.
COMMISSIONER, He itemized the seven points that the
DEPARTMENT OF LABOR Department is most proud of. The
AND WORKFORCE Department's mission is to provide for a
DEVELOPMENT safe working environment. Enforcement
and regulatory status is of prime
concern.
826 Commissioner He noted that the Department's customers
Flanagan are all Alaskans. Last year, the
Department did very well in attaining
their goals. He listed the significant
accomplishments, stressing that the
Occupational Safety & Health
Administration(OSHA) and Workers' Comp
program had been saved. The Workers'
Comp program is now on a sound fiscal
basis. Last year was a win-win for both
the State and employers.
935 Commissioner Commented that the Department is still in
Flanagan
the process of implementing HB 240. He
reiterated that it had been a long
process. Specific to the rural employment
issues, the task was to deal with the
terrible impact of the fishing disaster
in Western Alaska. The Department
developed a youth employment program and
that it is up and running in those areas.
That program has been extremely
effective. He noted that had been a
significant impact with federal funding.
1055 Commissioner The Department has increased their
Flanagan partnership with local communities who
are depending on grants from local
agencies and in the process of working
with the Dillingham services. The
vocational education plan was lead by the
Lt. Governor; there was a lot of State
involvement.
1177 Commissioner He added that there has been some
Flanagan dislocation of employees. The rapid
response team has been very effective in
dealing with those concerns.
1169 Commissioner Acknowledged that next year that there
Flanagan would be continued challenges for sound
fiscal footing in the OSHA program.
1210 Commissioner There exists programs that recognize the
Flanagan employers and reach to meet established
standards that exceed those implemented
by the law. The Department hopes to
pursue federal funding to help with
independent living for the handicapped
and seniors, particularly living in rural
Alaska.
1275 Commissioner Spoke about doing a rolling RFP program
Flanagan which the Department experimented with in
the Denali Program.
1319 Commissioner Addressed the possibilities of a gas
Flanagan line. He noted that there is cooperation
from labor to do this correctly.
1367 Representative Questioned the role of the Department.
Davies
1384 Commissioner Explained that they would be funded
Flanagan through the grant process. He listed the
independant agencies.
1417 Representative Asked if the measures had been
Davies calculated.
1426 Commissioner Replied that he would address that later
Flanagan in his presentation.
1450 Representative Asked if there was shortage of qualified
Lancaster labor.
1455 Commissioner Stated that there is a shortage in the
Flanagan construction and the seafood trades. It
is tight. He added that this is not all
bad as there is a tight labor market at
this time. He noted that progress is
being attempted in that area, however,
there is a pressing need for skilled
workers. This has created a demographic
bulge throughout the nation.
1550 Representative Noted that he would be chairing the
Hudson Department's subcommittee. He asked for
the breakdown of the 200 youth who were
put to work in the Bristol Bay area.
Additionally, information on the
coalition with the Bristol Bay Natives.
He asked what was happening in SE Alaska
with timber, etc.
1610 Vice-Chair Bunde Questioned if there had been feedback
from employers of how well workers were
qualified and literate. Also, he
commented on the income tax for the non-
resident workers.
1644 Commissioner Stated that there is feedback from
Flanagan employers that want employees to have the
basic "soft skills" such as basic problem
solving. They would be willing to train
workers. The average wage of the non-
resident workers are generally lower
because they are residing in State for
shorter periods of time.
1702 Commissioner Employment Security Division mission - to
Flanagan ease the effects of unemployment,
through Adult Basic Ed; Job Training;
Employment Services; Unemployment
Compensation.
1765 Commissioner He spoke to the Unemployment (UI)
Flanagan Services and how they have been
streamlined making it more efficient
through direct deposits and increased
phone services.
1850 Commissioner Performance for the UI is to maintain the
Flanagan benchmark of 95% timeliness. Last year,
the Department hit 97%. The Employment
Service has been tweaked to make it more
available for self-referral services,
allowing people to undertake their own
job search. There are ample services
available. Services are still located in
same locations.
1935 Commissioner He spoke to tracking employers with a tax
Flanagan account, which has not yet been done.
The Department is pondering whether to
propose a measure to increase that
service.
1975 Commissioner Job Training - More services available.
Flanagan The Department is attempting to increase
job training to 65%, while keeping 80%
working. He admitted the time lag. He
indicated that earnings before and after
would be investigated.
2027 Commissioner Adult Basic Education - attempting to
Flanagan increase the education goal maintaining
a 25% positive outcome.
2055 Co-Chair Mulder Requested that he highlight the remaining
divisions.
2066 Representative Croft Asked what Commissioner Flanagan had been
referring to.
2081 Commissioner Replied that there is not yet a document.
Flanagan
2091 Representative Pointed out that in some agencies, there
Davies only exists a program level and that this
Department was one of them.
2106 Commissioner Acknowledged the measures in SB 281.
Flanagan
2123 Representative Thought it would be helpful to list the
Davies measures and the numbers for members to
follow.
2160 Representative Croft Asked the timeliness of initial payments.
2172 Commissioner Replied that it was at 97%.
Flanagan
2185 Representative Stated that he was having a difficult
Hudson time following the previous input,
knowing that it was valuable. He
requested written documentation for
Subcommittee work.
2207 Commissioner Stated that he would provide that info to
Flanagan the subcommittee.
2217 Commissioner Division of Worker's Compensation -
Flanagan guarantee fair benefits. Performance
measures need hearing requests. The
status of that is not good. The Division
is having a problem with the scheduled
hearing time which is lagging. It was up
to 135 days sometimes in FY00. There has
been radical employment turnover.
2261 Co-Chair Mulder Stated that if there is a problem, the
Department needs to find a solution.
2272 Commissioner Medical Insurance Program for Fisherman.
Flanagan He commented that the tag lag appears to
have been reduced. There are fewer
complaints at present time.
2296 Commissioner Work Place Injuries. That could be the
Flanagan number of uninsured work place injuries
and would be an OSHA concern. The
Department is trying to reduce it by 35%.
2350 Representative Croft Asked the percentage.
2357 PAUL GROSSI, 29 less hurt with no recourse.
2374 Commissioner Noted that the petition for second injury
Flanagan and recovery has been reduced to 38 days.
TAPE HFC 01 - 1, Department of Labor & Workforce
Side B Development (continued)
000 Commissioner Continued listing services. He noted
Flanagan that no one applied for those services
after 12 months. 31 persons were given
post services.
105 DUANE FRENCH, The Division of Vocational Services
DIRECTOR, STATEWIDE currently has a mechanism in place, which
PROGRAMS, DIVISION will help the Division to reach those
OF VOCATIONAL people.
REHABILITATION,
DEPARTMENT OF LABOR
AND WORKFORCE
DEVELOPMENT
178 Co-Chair Mulder Suggested that they continue to work with
the subcommittee chair to further clarify
that program.
206 Commissioner Listed the percentage of eligible
Flanagan Alaskans that received services and noted
that all had been served. He suggested
that measure be eliminated.
352 Commissioner Monitoring safe and legal. It helps to
Flanagan level the playing field and helps to
provide workers safety. The measures
previously listed were the numbers of
work related industry. The number by
industry is not listed. He clarified
that there is a different way of doing
business with OSHA.
511 Commissioner He spoke to the decrease in the number of
Flanagan logging jobs. Construction 5.7% in '97;
4.9% in '99. Employers and insurers are
involved in these numbers.
580 Commissioner Discussed the third mission. Concluded
Flanagan that the department is on track.
669 Commissioner Discussed the fourth measure. He noted
Flanagan that there have been difficulties in
accomplishing the 4th mission.
790 Commissioner He noted that elevators are inspected
Flanagan every two years at no additional fee for
the employer.
828 Representative Pointed out that 7 schools have burnt
Foster down in Northern Alaska. He stressed the
importance of boiler inspectors.
878 Commissioner Discussed the mission for the Division of
Flanagan Administrative Services. He noted that
the general mission is unwieldy. He
offered to work with the subcommittee.
936 Commissioner Discussed the second mission under the
Flanagan Division of Administrative Services.
991 Commissioner Noted that there is a mission to assure
Flanagan data adequacy. He concluded that the
department's estimate was close to number
by the census.
1079 Commissioner Discussed missions of the Commissioner's
Flanagan office. He noted that the Alaska Resource
Council is under the Commissioner's
Office.
1169 Commissioner Noted that audit exceptions were solved.
Flanagan
1200 Co-Chair Mulder Discussed subcommittee assignments
Department of Administration
1260 JIM DUNCAN, Discussed highlights of the department.
COMMISSIONER, He referred to the mission statement,
DEPARTMENT OF customers served by the department and
ADMINISTRATION issues before the department.
1399 Commissioner Duncan Discussed the first mission of the
department to provide centralized
management and technology services to
state government. He reviewed the mission
of the department's individual divisions.
1469 Commissioner Duncan Stated that responses to each measure
would be provided in written form.
1537 Commissioner Duncan Noted that the department serves a wide
variety of individuals, businesses and
state agencies.
1562 Commissioner Duncan Reviewed accomplishments of the
department.
1603 Commissioner Duncan The department has assumed responsibility
for maintenance and oversight of public
buildings in Juneau.
1629 Commissioner Duncan Noted Y2K success and other information
technology advances.
1673 Commissioner Duncan Discussed performance measures for the
Division of General Services. He noted
the successful use of master contracts.
1724 Commissioner Duncan Performance measure of the Division of
Personnel was the number of successful
grievance contracts. He observed that
during the first half of the year the
State won 6 of 9 cases, lost 2 and split
1. Early intervention has been
successful.
1790 Co-Chair Mulder Questioned how the Department's
arbitration history compares to previous
years.
1834 Commissioner Duncan Did not know.
1841 Commissioner Duncan In response to a question by
Representative Lancaster, Commissioner
Duncan discussed arbitrators.
1880 Co-Chair Mulder Noted that many of the arbitrators do not
reside in Alaska. He questioned why state
arbitrators are not used and emphasized
the uniqueness of Alaskan issues.
1911 Commissioner Duncan Noted that arbitrators are selected from
a list provided by the national board.
1925 Representative Noted that the majority of arbitrators
Hudson come from the Pacific Northwest.
1947 Commissioner Duncan Discussed the performance measures for
the Division of Finance. He concluded
that they were successful in reducing
penalties paid by the State.
1991 ALISON ELGEE, DEPUTY Discussed the Public Building Fund. She
COMMISSIONER, noted that the goal was to leverage funds
DEPARTMENT OF for use to address deferred maintenance.
ADMINISTRATION
2037 Co-Chair Mulder Noted that without the Public Building
Fund. the State could not charge rent in
some cases. He added that the goal was to
highlight maintenance needs.
2063 Representative Questioned how many of the funds have
Davies holes in them.
2079 Commissioner Duncan Acknowledged that some funds were
appropriated from.
2091 Ms. Elgee Reviewed the use of the fund.
2141 Representative Concluded that the State would need to
Davies add money back into that fund.
2152 Ms. Elgee Observed that the Governor's budget
proposes additional funds.
2168 Representative Asked if the fund would be made whole
Davies
2185 Commissioner Duncan Clarified that funding removed from the
previous year had not been replaced.
2216 Commissioner Duncan RFP bids were due in December.
Currently, in the process of evaluating
the bids for telecommunication services.
Also on that fund, the Department has
assumed management of that budget. Will
shift those positions for Department of
Transportation & Public Facilities to
Department of Administration.
2275 Commissioner Duncan Spoke to workforce planning which needs
to be addressed in the future. There is
an agency wide committee who is looking
at those issues which is a major
priority.
2312 Vice-Chair Bunde Asked if was a statutory requirement for
the emergency networks within the State.
2332 Commissioner Duncan Did not know and he offered to check that
concern out.
TAPE HFC 01 - 2, Department of Administration (continued)
Side A
000 Commissioner Duncan Continued testimony regarding services
for indigent Alaskans, etc. Customers
served by the Divisions were addressed.
He addressed accomplishments achieved by
the Department.
100 Commissioner Duncan Spoke to the performance measures for
each of the Divisions for the Office of
Public Advocacy (OPA) and the Public
Defender.
172 Co-Chair Mulder Stated that Representative Lancaster
should note that information. The
Department needs to provide a better
outcome in these two areas.
224 Representative Suggested focusing on national
Davies benchmarks.
243 Commissioner Duncan Spoke to the federal guidelines for the
Children in Need of Aid cases.
284 Co-Chair Mulder Expected that the Committee would hear
from Department of Health and Social
Services and Department of Law regarding
these concerns.
312 Commissioner Duncan Programs for Alaska Seniors. Senior
Services, which provides oversight for
Senior Grant programs. The Alaskan
Longevity Programs which administers that
program. The Division has been expanding
that program for long term care programs.
Today, 1400 Alaskans receive care from
Medicaid waivers. Waiver services can be
used for 1/4 of the costs.
470 Commissioner Duncan Two quality performance measures for the
Pioneer Homes. Medication and Health
Care Finance division. The State is
Care Finance division. The State is
under the 5% goal set nationally.
523 Representative Croft Referenced the benchmark 1 & 2, and asked
if that was the intention noting that the
vacancy could be filled with higher
interest rates. He asked if there
currently were vacancies.
582 Commissioner Duncan There are 100 vacant beds and the beds
are vacant because there is not adequate
staffing to fill them.
628 Representative Asked if the vacancy referred to beds or
Davies staff.
642 Commissioner Duncan Replied beds.
654 Vice-Chair Bunde Asked how big is the waiting list.
666 Commissioner Duncan Replied that the waiting list far exceeds
the number of beds. He believed that
there were 800 on the wait list.
695 Vice-Chair Bunde Spoke to the recommendations of the task
force. He asked if there would be an
initiative to cover costs.
734 Ms. Elgee Stated that the option to expand to
active employees is being considered for
long term care. There is an option to
expand that to long-term employees. The
Department has done some educational work
to explain long term care.
811 Vice-Chair Bunde Recommended that the State needs to
strongly encourage the younger employees
to buy into that options.
836 Representative Asked if it had been adequately funded to
Hudson cover the vacant beds. He noted that the
Governor had introduced legislation.
908 Commissioner Duncan Acknowledged that the Governor had
introduced legislation that would change
the name of the division and give
adequate funding for the beds. He spoke
about the women veterans in the State.
965 Co-Chair Mulder Asked how the number applied from the
past.
980 Ms. Elgee Replied that it has been increasing.
Last year, in Anchorage, there were 20
beds vacant. Now there are 36.
1011 Co-Chair Mulder Questioned the breakdown of funding.
1025 Ms. Elgee Replied that 40% is collected from the
actual residents.
1042 Ms. Elgee In response to Co-Chair Mulder, Ms. Elgee
advised that the Department had maximized
the revenue available from the residents.
Each year the incremental amount gets
smaller and smaller.
1133 Representative Acknowledged that employees to administer
Lancaster these services are difficult to come by.
1155 Representative Expanded, noting that there is a serious
Hudson shortage of nurses in the State of
Alaska, noting that this is a critical
area.
1184 Representative Croft Noted that there is concern that the
rates are increasing. Not much more
money can come out from the fee raising,
which is an area of concern.
1232 Co-Chair Mulder Mentioned the barrier to the veteran's
angle.
1267 Commissioner Duncan The # of incidents in Pioneer Homes
resulting in injuries is lower than the
national percentage. He noted that the
State's rate is only 1.8%.
1311 Commissioner Duncan Division of Motor Vehicles has
accomplished a new voter registration
program this past year. Improved
customer service.
1380 Commissioner Duncan Mentioned that the average waiting time
for a customer to receive service has
been reduced to less than 15 minutes;
only sometimes up to 45 minutes. 60% of
the customers waited less than 15
minutes. Last year, there were only 2
written complaints.
1455 Commissioner Duncan Mentioned that the Department is
considering a review of communities
exempt from vehicle insurance and
mandatory insurance. Those are basically
rural locations.
ALASKA INDUSTRIAL DEVELOPMENT & EXPORT
AUTHORITY (AIDEA)
1524 ROBERT POE, Spoke to the measures for AIDEA. He
EXECUTIVE DIRECTOR, spoke to the earnings of the authority
ALASKA INDUSTRIAL available to the State as a dividend.
DEVELOPMENT & EXPORT AIDEA pays for all its activities. He
AUTHORITY (AIDEA), emphasized that it is a very real return.
DEPARTMENT OF
COMMERCE AND
ECONOMIC DEVELOPMENT
1611 Co-Chair Mulder Asked the total amount that the State has
invested in AIDEA.
1622 Mr. Poe Believed that it was approximately $102
billion dollars.
1649 Mr. Poe Continues to aggressively pursue all
possible deals. He spoke to the Seafood
Center and the target associated with
that program.
1675 Mr. Poe The second measure is the loan
delinquency rate. He added that number
of permanent jobs created by that
measure.
1713 Representative Noted that he would be the subcommittee
Lancaster chair. He asked the number of people
employed by AIDEA.
1733 Mr. Poe Replied including the number of Alaska
Energy employees there are now 60 total
employees.
1756 Representative Asked if AIDEA does there own investing.
Hudson
1765 Mr. Poe Stated some is done by AIDEA and some by
cash managers. He pointed out that
Schudder is one of the investors. AIDEA
is on par with their targets. There is
no common stock and the returns are
relatively low.
1800 Representative Asked if the money needed to be
Davies available.
1826 Mr. Poe The money is there to make investments
happen.
1840 Mr. Poe The Alaska Energy Authority mission is to
tap Alaska's natural resources and new
technology to achieve the lowest
reasonable consumer power costs.
Observed that there was $64 million more
in expenses than revenues for the AEA
last year.
1957 Mr. Poe Reviewed repairs and upgrades. He
discussed some of the repairs to the Four
Dam Pool project.
2056 Mr. Poe Reviewed projects for the next year. The
largest is to complete the sale of the
Four Dam Pool. Land transfer and
ownership is the largest remaining issue
before the sale.
2130 Co-Chair Williams Questioned when the sale would be
completed. Mr. Poe responded that their
intent is to complete the sale in the
current year.
2147 Representative Noted that the Power Cost Equalization
Hudson (PCE) endowment created in the past year
is dependent on the sale.
2176 Mr. Poe Assured Representative Hudson that the
schedule will accommodate the plan.
2202 Representative Questioned if AIDEA would work with the
Hudson Denali Commission. Mr. Poe assured him
that they work with the Commission every
day.
2227 Mr. Poe Stressed the importance of reducing the
cost of power in rural Alaska. He noted
that diesel is more cost effective than
gas. He stressed the opportunities in
increasing diesel efficiency. He observed
that wind power is an alternative power
source.
TAPE HFC 01 - 2,
Side B
20 Representative Referred to the land issue.
Harris
085 Representative Healy Clean Coal Project
Whitaker
123 Mr. Poe Noted that AIDEA reached an agreement for
a full or partial retrofit. He noted that
resolving the Healy Clean Coal Project
issue is a priority.
318 Co-Chair Mulder Noted that measurements are directed
toward hydropower and emphasized that
there is more.
365 Mr. Poe Discussed rural measurements. There are
20 projects on their slate for next year.
He emphasized the need to keep control of
project accounting.
480 Mr. Poe Completed 6 utility upgrades and 5 line
extensions.
486 Mr. Poe Discussed Circuit Rider.
532 Representative Clarified that most of the rural
Hudson communities are not able to utilize the
internet.
560 Mr. Poe Observed that a good internet connection
can be like a good transportation system.
594 Mr. Poe Discussed the Alaska Seafood Institute.
AIDEA owns the plant located in
Anchorage. Debt was converted to equity
and that a fourth investor had been
sought.
888 Mr. Poe AIDEA has $55 million dollars in the ASI
deal. He stressed that AIDEA is in the
best investor position. He reviewed the
other investments. He stressed that the
plant will add value to Alaska. The
facility can accommodate five fisheries
around the State.
1062 Co-Chair Mulder Questioned if ASI would open without the
fourth investor.
1079 Mr. Poe Noted that there would be a new board.
They could open without a 4th investor.
1125 Co-Chair Mulder Questioned if products are being
marketed.
1135 Mr. Poe Responded that marketing is occurring.
1154 Representative Noted the significance of ASI to the
Hudson seafood industry. He stressed the need
for the Legislature to be informed
regarding the project's needs. Marketing
and management should be strong in order
to build confidence.
1241 Mr. Poe Observed that the State spent $50 million
to build the facility.
1272 Co-Chair Mulder Asked if Cominco and Red Dog were still
good projects.
1289 Mr. Poe Yes. He noted that AIDEA was looking at
different scenarios.
1322 The meeting was adjourned at 4:35 p.m.
ADJOUNMENT
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