Legislature(2003 - 2004)
01/27/2003 01:28 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 27, 2003
1:28 P.M.
TAPE HFC 03 - 1, Side A
TAPE HFC 03 - 1, Side B
CALL TO ORDER
Co-Chair Harris called the House Finance Committee meeting
to order at 1:28 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Gary Stevens
Representative Bill Stoltze
MEMBERS ABSENT
Representative Jim Whitaker
ALSO PRESENT
Senator Ralph Seekins; Representative Ralph Samuels;
Representative David Guttenberg; Cheryl Frasca, Director,
Division of Management & Budget, Office of the Governor;
Greg O'Claray, Commissioner, Department of Labor; Edward
Fisher, Deputy Commissioner, Department of Labor; Jo Ellen
Hanrahan, Acting Director, Division of Administrative
Services, Department of Labor; Gregg Renkes, Attorney
General, Department of Law; Kathryn Daughhetee, Director,
Administrative Services Division, Department of Law; Barbara
Ritchie, Deputy Attorney General, Department of Law; Louanne
Christian, House Finance Committee Staff.
PRESENT VIA TELECONFERENCE
none
GENERAL SUBJECT(S):
Agency Overviews:
Office of Management & Budget
Department of Law
Department of Labor
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 23rd Legislative Session, contact 465-
2156. After the 23rd Legislative Session they will be
available through the Legislative Library at 465-3808.
LOG SPEAKER DISCUSSION
TAPE HFC 03 - 1, SIDE A
000 Co-Chair Williams Convened the House Finance Committee
meeting at 1:40 p.m.
041 Co-Chair Williams Introduced the members of the Committee.
157 Co-Chair Williams Introduced his legislative staff: Pete
Ecklund, who will be handling the Capital
budget and Randy Ruaro who will be doing
all the work with the Finance Committee
legislation.
306 LOUANNE CHRISTIAN, Explained how the Committee runs most
HOUSE FINANCE efficiently with regard to the bills,
COMMITTEE STAFF scheduling and office procedures.
560 Co-Chair Williams Encouraged that the Minority and Majority
members of the Committee work as a team.
649 Co-Chair Williams Distributed a handout regarding the
Finance Committee intent with the manner
in which the Committee would run during
the legislative session.
715 Co-Chair Harris Explained that this meeting would begin a
series of department overviews. He noted
that it was the Majority's intent to put
a budget together for each department.
He reiterated that today's meeting would
be the first step in that process, taking
testimony from three agencies, Office or
Management and Budget, Department of Law,
and the Department of Labor.
820 Co-Chair Harris Introduced his staff, Matt Gill and Tom
Wright. Co-Chair Harris then introduced
David Teal, Director, Legislative Finance
Division and his staff.
OFFICE OF MANAGEMENT & BUDGET
950 CHERYL FRASCA, Spoke to the FY04 proposed process of
DIRECTOR, DIVISION Governor Murkowski. She noted that the
OF MANAGEMENT & Administration is looking at spending
BUDGET, OFFICE OF limits and how to be able to continue
THE GOVERNOR services at less costs. That is taking
time as is the fact that some departments
do not yet have their new commissioners.
She stated that the Administration is
working diligently.
1041 Ms. Frasca Noted that the Administration does
appreciate the difficult choices that the
Committee must make. She listed some of
those approaches. Ms. Frasca noted that
the Office had requested that the
Departments determine if they could live
with a budget that was 90% - 95% of their
current budget. There continues to be
discussions regarding that possibility
with each of the departments.
1152 Ms. Frasca Spoke to the Administrative Order 202,
which was delivered by Governor Murkowski
when he took office. That order
prescribed a review of all of the
departments. Each department has been
requested to prepare, in summary format,
what is their mission, how do they
deliver service and what is their
performance.
She added that some of the departments
have good measures. The Governor is
currently committed to working with the
Committee so that information and process
can be communicated to the constituents.
The managers want to improve performance.
The Administration is attempting to come
up with measures that:
· insure what the Department does
contributes to achieving its
mission; and
· communicates the value for the
dollar being spent.
1325 Ms. Frasca Explained that the second part of that
Administrative order also asks that the
Departments identify changes in delivery
processes. That information is due by
the end of January, 2003. Additionally,
there have been a number of reworks
issued through the Executive order
process.
1356 Ms. Frasca Continued, there are a few financial
audits, which need to be completed.
Those are with the Department of
Correction and Department of Labor &
Workforce Development.
1424 Ms. Frasca Advised that the goal for the Governor's
budget to be distributed is middle
February.
1510 Ms. Frasca Spoke to the Supplemental Budget requests
and the Fast Track requests. That
th
deadline is the 30 day of the
legislative session. Those will be
provided by that time.
1535 Ms. Frasca Capital budget - She noted that the
Administration had requested that the
departments 'revisit' the list of the
last Administration. The new
commissioners should determine if there
should be new priorities.
1555 Ms. Frasca Addressed the Labor contracts - all 12
are up for renegotiation this year.
March 21, 2003 is the deadline and it is
a tight time frame.
1627 Ms. Frasca Concluded that the Administration is
looking forward to working with the House
Finance Committee.
1646 Co-Chair Harris Asked that the Legislature be provided
with some projection of what 90% funding
would look like. He asked when that
could be expected.
1712 Ms. Frasca Replied that information would be the
contained in the Administration's budget
proposal. She was not aware of any
additional material.
1736 Co-Chair Williams Asked how the departments would be
addressing concerns for those departments
that do not have a commissioner.
1800 Ms. Frasca Stated that the administration is working
with the acting commissioners.
1810 Representative Croft Asked about the 90%-95% possible scenario
and their impacts.
1891 Ms. Frasca Explained that this was a place in which
discussion would begin. She noted that
some programs would be funded at 110%.
With the projected reduction in place,
then discussion would begin.
1914 Representative Croft Acknowledged the difficulties associated
with the transition for the new
Administration. He asked if the '1/2
back' 10% would be returned to.
1950 Vice-Chair Meyer Inquired what the total supplemental
requests amounted to.
2011 Ms. Frasca Explained that they are still being
reviewed. The projected number is
approximately $100 million dollars.
2035 Ms. Frasca In response to Vice Chair Meyer, Ms.
Frasca spoke to "flat spending" and how
that related to the formula driven
programs and the labor contracts.
2102 Representative Questioned if the Administration was
Stevens comfortable with addressing and
incorporating the missions & measures
that the House Finance Committee had
previously worked out.
2138 Ms. Frasca Replied that they were and that they
wanted to address it cooperatively. It
was not always that way. There needs to
be agreement regarding what the mission
is.
2145 REPRESENTATIVE RALPH Asked about the timeline for the articles
SAMUELS in the "hopper".
2203 Ms. Frasca Replied they would be addressed the end
of January, 2003.
DEPARTMENT OF LAW
2339 GREGG RENKES, Noted that most of his time getting
ATTORNEY GENERAL, oriented had been spent consulting and
DEPARTMENT OF LAW advising with the Governor. Mr. Renkes
introduced his staff, Barbara Ritchie,
Deputy Attorney General, Civil Division,
Kathryn Daughhetee, Director,
Administrative Services Division, Pat
Gullufsen, Deputy Attorney General,
Criminal Division.
2509 Attorney General Provided an overview of the work
Renkes performed by the Department. He noted
that there are cases currently pending
within the Department that need
attention. He reported that the
Department is zealously representing the
State of Alaska.
2627 Attorney General Addressed the audits. Attorney General
Renkes Renkes referenced the Conference of
Western Attorney Generals, which provided
an audit for the State. He noted that he
had reviewed those reports to better
understand the challenges of the
Department. That has been a useful
process. Attorney General Renkes stated
that they are looking for ways to make
the Department more accountable. On
March 7th, a management review team will
be in Alaska to help make that
determination. Those reports will be
made available to the Legislature.
2814 Attorney General The Governor is looking for ways to make
Renkes improvements. Information will be
submitted to Office of Management &
Budget with a list of the anticipated
changes.
2904 Attorney General Department of Law is challenged in
Renkes supporting each agency within the
Executive Branch, Legislative Branch and
the Judicial Branch. Responsibilities of
the Attorney General and the Department
of Law are prosecution & protection for
the State of Alaska. Because of the
broad base responsibilities involved, any
change within any department will be
dramatic. The Department must review all
legislation. In times of change, the
Department of Law is the engine. The
Department wants to work closely with the
Legislature and Legislative Counsel.
Attorney General Renkes emphasized that
the Department will defend the State's
rights.
3222 Attorney General Priorities for the Department of Law:
Renkes
· Move resource funds around within
the Department of Public Safety -
the prosecution effort needs better
support & funding;
· Receive the most from the oil and
gas resources;
· Defend and establish the State's
sovereignty. He spoke to all the
navigable waters within the State;
· Improve the State's tribal
relations, which will affect the
entire State.
3746 Attorney General Referenced the handout. [Copy on File].
Renkes He outlined the organizational chart
contained within the handout.
· Criminal Division's mission is to
assure safe and healthy communities
by prosecuting and convicting
criminal offenders in urban and
rural Alaska. 2/3 of the current
travel budget is being used to bring
victims to court.
· Provide legal services for
Department of Public Safety and
Department of Corrections.
· Retention of prosecutors is a major
concern for the Department. In
Anchorage, sexual assault and abuse
issues have doubled in the last
year. The resources are not being
given to deal with those concerns.
Attorney General Renkes emphasized
that is important, and should be
taken into account. The Department
has not had the resources to be able
to address these concerns
adequately.
4101 Attorney General Addressed the Civil Division's mission,
Renkes which is to protect the human, financial
and natural resources of the State of
Alaska. There are four locations:
Anchorage, Fairbanks, Juneau & Bethel
that have civil lawyers. Currently,
there are 130 lawyers within the Civil
Division. Attorney General Renkes
reiterated that the Department of Law
represents the Governor, the Judicial &
the Legislative branch of the government.
4245 Attorney General Pointed out that the oil and gas and
Renkes Statehood defense were separate BRU's.
He noted that they would be discussed
later in the report. He admitted that
there are limitations when taking lawyers
and directing them to where the need
exists. Attorney General Renkes appealed
for more flexibility within the
Department of Law. There are currently
six BRU's with that Department. He
recommended that there be three BRU's:
The civil, criminal & administrative. He
claimed that it was difficult to address
the current situation, which is
compounded by the Reimbursable Service
Agreements (RSA) process. Current
lawyers are paid through a reimbursement
process. As a result of the current
process, the Department of Law needs to
come back to the Legislature for
supplemental funding. He indicated that
is not always appropriate but the
Department is "handicapped by the RSA
process".
4539 Co-Chair Harris Commented that the Committee would
appreciate information on how the
Department will restructure in order to
do things more efficiently and yet keep
the costs down. Requests for expansion
should be first addressed within the
Department before coming to the
Legislature.
TAPE HFC 03 - 1, Side B
4647 Attorney General Offered to look at ways to generate
Renkes revenues through the oil and gas
settlements. He anticipated that the
Department would be able to generate
better revenues for the State. Attorney
General Renkes stated that those revenues
could be generated through consumer
protection, collections, the criminal
areas, and oil and gas settlements.
4531 Attorney General Requested that his colleagues answer
Renkes current questions of the Committee.
4500 Representative Mentioned the State sovereignty issues.
Foster He asked how Attorney General Renkes
envisioned the role of minorities in that
land.
4444 Attorney General Replied that the role of Native Alaskans
Renkes is very important in the State of Alaska.
It is important that the Department
protect the rights of all Alaskan
citizens. That does not mean that the
State should be combative with the tribal
organizations and rural Alaskans. These
people need to be empowered. The State
has drifted toward the search of federal
authority from a result of frustration.
4326 Attorney General He noted that he wants to include Native
Renkes Americans in the State's decisions. The
State has a cooperative vision, but must
work to protect sovereignty.
4217 Representative Croft Asked for examples of cases that the
State would pursue regarding statehood
defense.
4158 Attorney General Observed that he would be in Washington
Renkes D.C. to argue the Glacier Bay submerged
lands case. Additionally, it is also
important to pursue the navigable rivers
case. The Roadless Rule, a pending case,
is another one of interest. Reserve water
right precedent needs more fact-findings
before the State can pursue it.
3923 Attorney General In response to a question by
Renkes Representative Stoltze, Attorney General
Renke's spoke to victims' rights, noting
that he needed more information regarding
that concern. He stated that he wanted to
learn more about what that office does.
3739 PATRICK GULLUFSEN, Added that there are 21 paralegals that
DEPUTY ATTORNEY do nothing but assist victims. Mr.
GENERAL, CRIMINAL Gullufsen stressed the importance of the
DIVISION, DEPARTMENT issue.
OF LAW
3627 Co-Chair Williams Questioned if the Administration had
conceded to granting tribal sovereignty.
3515 Attorney General Noted that some tribal entities have held
Renkes the position that they can engage in
gaming activities that are in opposition
to management practices. The government
is forced to prosecute. The
Administration's job is to bring clarity
to the law.
3321 Co-Chair Williams Stressed that tribal entities would like
to be "talked to" not "talked at".
3251 Attorney General In response to a question by
Renkes Representative Stevens, Attorney General
Renkes talked about parental consent
cases. He noted that there would be an
appeal to that case. He believed that
one lawyer would be able to represent the
State on that appeal.
DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT
3048 GREG O'CLARAY, Introduced his staff, Ed Fisher, Deputy
COMMISSIONER, Commissioner, and Jo Ellen Hanrahan,
DEPARTMENT OF LABOR Acting Director, Division of
AND WORKFORCE Administrative Services.
DEVELOPMENT
2842 Commissioner Observed that the Department is tasked to
O'Claray set up a monitoring system by the federal
government. Department of Labor &
Workforce Development is responsible to
foster and promote the welfare of the
wage earners of the State, improve their
working conditions and advance their
opportunities for profitable employment.
2728 Representative Noted the difficulty of finding good
Foster paying jobs in rural areas. He noted
that it has improved under the
Department's supervision and through the
Denali Commission.
2546 Commissioner Spoke regarding the Denali Commission and
O'Claray the Department of Labor & Workforce
Development joint program. He noted that
training programs had been restructured
to improve working conditions and provide
better opportunities. He mentioned HB 40,
previous legislation and the Workforce
Investment Act of 1998 consolidated
several functions from one department to
another. Now the Department has the
responsibility of improving the working
conditions and the opportunities.
2308 Vice-Chair Meyer Asked about the creation of a new
Division called the Division of Business
Partnership.
2251 Commissioner Observed that the Department is
O'Claray attempting to be more efficient and
friendly. The Division of Business
Partnership was created with the purpose
to bring all the workforce initiative
programs and training under one umbrella
with three relative boards considered for
consolidation of greater efficiency.
2000 Vice-Chair Meyer Questioned how the new Division would be
funded. He asked if the Department would
assist in several statewide situations
including closing of the K-Mart stores
and the downsizing of Burger King. He
voiced his concern with the service
industry has applied for exemption to the
minimum wage and the Department took too
long to get them that exemption.
1919 Commissioner Advised that the Division would not be
O'Claray looking at the service industry jobs. It
would be working with the producers for
the higher tech jobs and the construction
trades. Those grant funds would be used
to train people for good jobs and good
pay. The new Division is not "new"
money. It will be funded out of existing
funds.
1848 Commissioner Spoke to the new minimum wage statutes.
O'Claray He observed that the Department would be
responsive to requests.
1745 Representative Croft Observed that the Department's general
fund appropriation is approximately $10
million dollars. He questioned the
impact of a million dollar reduction to
that Department in light of Ms. Frasca's
previous comments.
1636 Commissioner Stated that he was unable to identify any
O'Claray areas of potential reduction but noted
that they had been looking at the
worker's rehabilitation line item. He
stressed that the core functions would be
preserved and that the Department would
attempt to look for efficiencies.
1501 Representative Questioned how Department of Labor and
Foster Workforce Development would work with
other departments such as Department of
Natural Resources to encourage
development.
1417 Commissioner Stated that he would not be creating an
O'Claray additional liaison position. The
Department should be used as an "engine"
to drive the economy forward.
Co-Chair Harris Questioned asked if Commissioner O'Claray
had a position on the increased
unemployment benefits.
1357 Commissioner Observed that there would be legislation
O'Claray to deal with that concern as Alaska is
#50 out of 50 states in the amount of
their weekly benefit. He pointed out
that the increase to benefits legislation
had not been adopted in the past couple
years. He added that every dollar spent
in the Alaskan economy, reflects further
increases for the economy. Alaska is
loosing skilled trades-people because of
the cost of living. That must be
addressed.
1204 Co-Chair Harris Reviewed Committee procedures. [See
attached handout].
The meeting was adjourned at 2:56 P.M.
ADJOURNMENT
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