Legislature(2003 - 2004)

02/25/2003 01:47 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 25, 2003                                                                                          
                         1:47 P.M.                                                                                              
TAPE HFC 03 - 25, Side A                                                                                                        
TAPE HFC 03 - 25, Side B                                                                                                        
TAPE HFC 03 - 26, Side A                                                                                                        
CALL TO ORDER                                                                                                                 
Co-Chair Harris  called the  House Finance Committee  meeting                                                                   
to order at 1:47 P.M.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
Representative Jim Whitaker                                                                                                     
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
David  Teal,  Director, Legislative  Finance  Division;  Eddy                                                                   
Jeans,  Manger,   School  Finance  and  Facilities   Section,                                                                   
Department of Education and Early  Development; Janet Clarke,                                                                   
Director, Division of Administrative  Services, Department of                                                                   
Health and  Social Services;  Patty Ware, Director,  Division                                                                   
of  Juvenile   Justice,  Department  of  Health   and  Social                                                                   
Services; Kevin Brooks, Director,  Division of Administrative                                                                   
Services, Department  of Fish  and Game; Kathryn  Daughhetee,                                                                   
Director,  Administrative  Services Division,  Department  of                                                                   
Law;  Patrick Gullufsen,  Deputy  Attorney General,  Criminal                                                                   
Division,  Department   of  Law;  Scott   Nordstrand,  Deputy                                                                   
Attorney General,  Civil Division,  Department of  Law; David                                                                   
Marquez,  Legislative  Liaison, Assistant  Attorney  General,                                                                   
Civil Division,  Oil, Gas &  Mining, Department of  Law; John                                                                   
Cramer,  Director,  Administrative  Services,  Department  of                                                                   
Military  and Veterans  Affairs; Nico  Bus, Acting  Director,                                                                   
Division of  Administrative Services,  Department of  Natural                                                                   
PRESENT VIA TELECONFERENCE                                                                                                    
Jeff   Jahnke,   State  Forester,   Department   of   Natural                                                                   
Resources,   Anchorage;   Sharon   Young,   State   Recorder,                                                                   
Department of  Natural Resources, Anchorage;  Peter Panarese,                                                                   
Acting  Director, Division  of Parks,  Department of  Natural                                                                   
Resources,  Anchorage;  Captain  Howard  Starbard,  Director,                                                                   
Division  of  Fish and  Wildlife  Protection,  Department  of                                                                   
Public  Safety,   Anchorage;  Roberta  Carney,   Division  of                                                                   
Emergency  Services,   Department  of  Military   &  Veterans                                                                   
Affairs, Anchorage.                                                                                                             
HB 100    An    Act    making    supplemental    and    other                                                                   
          appropriations;   amending    appropriations;   and                                                                   
          providing for an effective date.                                                                                      
          HB 100 was HEARD and HELD in Committee for further                                                                    
HB 110    An    Act    making    supplemental    and    other                                                                   
          appropriations; amending appropriations; making                                                                       
          appropriations to capitalize funds; and providing                                                                     
          for an effective date.                                                                                                
          HB 110 was HEARD and HELD in Committee for further                                                                    
HOUSE BILL NO. 100                                                                                                            
     An Act making supplemental and other appropriations;                                                                       
     amending appropriations; and providing for an effective                                                                    
HOUSE BILL NO. 110                                                                                                            
     An Act making supplemental and other appropriations;                                                                       
     amending appropriations; making appropriations to                                                                          
     capitalize funds; and providing for an effective date.                                                                     
DEPARTMENT OF EDUCATION & EARLY DEVELOPMENT                                                                                   
Section 5(a)                                                                                                                    
     Out of State Placement educational cost increase due to                                                                    
    increased number of clients and increased length of                                                                         
    stay.                                         $366.8                                                                        
EDDY JEANS,  MANGER, SCHOOL  FINANCE AND FACILITIES  SECTION,                                                                   
DEPARTMENT  OF  EDUCATION AND  EARLY  DEVELOPMENT,  clarified                                                                   
that  Department   of  Education  &  Early   Development  had                                                                   
requested the  funding for  increased costs for  out-of-State                                                                   
placement for  educational costs  of children that  are wards                                                                   
of the State.  The increase is  due to the number of students                                                                   
Section 5(b)                                                                                                                    
     General  fund reduction  due to  preliminary actual  for                                                                   
     foundation  program  that   reconciles  initial  October                                                                   
     student count to the electronic data.         ($6,728.8)                                                                   
Mr.  Jeans  explained  that  there   are  supplemental  funds                                                                   
available  in the  foundation  program.   The  student-counts                                                                   
this  past October  came  in lower  than  anticipated by  the                                                                   
Department, which leaves $6.7 million dollars available.                                                                        
Representative  Croft asked  if  that $6.7  million was  left                                                                   
from  anticipated  need  for  the  operation  of  the  normal                                                                   
foundation,   which  would   not  be   needed.    Mr.   Jeans                                                                   
acknowledged that was correct  and that fewer children showed                                                                   
up this  year than  anticipated.   Additionally, there  was a                                                                   
slight increase  in impact aid,  which does reduce  the State                                                                   
Representative  Croft  questioned  if  that  amount  was  not                                                                   
appropriated through supplemental  funding, what will happen.                                                                   
Mr. Jeans understood that it would  lapse to the general fund                                                                   
at the  end of the  fiscal year.   He added  that he  did not                                                                   
know where the money would be going.                                                                                            
Representative Croft  thought that the action  "artificially"                                                                   
made the  supplemental look $6  million dollars less  than it                                                                   
really  is   and  that   it  would   be  going  for   "other"                                                                   
supplemental purposes.                                                                                                          
Co-Chair Harris informed  members that it could  be taken off                                                                   
the books for Legislative  use.  If nothing is  done with it,                                                                   
it could then be available for Legislative use.                                                                                 
Co-Chair Harris referenced line  item 5(a) and questioned its                                                                   
relationship to the Denali Kid Care program.                                                                                    
JANET CLARKE, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT  OF HEALTH  AND  SOCIAL SERVICES,  responded  that                                                                   
there is  a relationship with Denali  Kid Care.  For  many of                                                                   
the  children  in the  out-of-State  residential  psychiatric                                                                   
treatment centers, they do qualify  for Medicaid and Medicaid                                                                   
does   pay  the   treatment  costs;   however,  Medicaid   is                                                                   
prohibited from paying their educational  costs.  Those costs                                                                   
are a responsibility of the State.                                                                                              
Ms. Clarke  responded to a  query by Co-Chair  Harris, noting                                                                   
that at present  time, there are 84 kids in  State custody in                                                                   
the  out-of-State  placement.    Those  children  are  in  22                                                                   
different  treatment  facilities  throughout  many  different                                                                   
states.    Most  of the  facilities  are  locked  facilities.                                                                   
There is  limited capacity in  Alaska for locked  facilities.                                                                   
She  noted  that  the children  that  are  out-of-State,  are                                                                   
actually staying longer  on the average from last  year.  The                                                                   
length of  stay in  those facilities is  at least  10-12 days                                                                   
longer than last year, which is adding to those costs.                                                                          
Section 15(b) & ©                                                                                                               
     (b) Increase School Fund appropriation for school debt                                                                     
     reimbursement by amount of FY2002 cigarette tax carry                                                                      
     forward and increased collections.                                                                                         
     ©   School  construction   reimbursement  estimate   has                                                                   
     decreased  from $56,378.4 to  $52,536.0, a reduction  of                                                                   
     $3,842.4 needed to capitalize  the debt retirement fund.                                                                   
     That  amount  plus  the $2,593.9  debt  retirement  fund                                                                   
     reduction above  is the amount the debt  retirement fund                                                                   
     is overcapitalized in FY03.                                                                                                
Mr.  Jeans   noted  that  this   year,  the  Department   has                                                                   
determined  that they  will not  need  a sum  of $28  million                                                                   
dollars to  fully fund the  debt reimbursement program.   The                                                                   
second piece of the request is  that a determination has been                                                                   
made  that there  is $2.5  million dollars  available in  the                                                                   
Tobacco Tax Fund that the Department  could use to offset the                                                                   
general fund requirement for the debt reimbursement.                                                                            
Co-Chair Harris  questioned why  they would want  to consider                                                                   
that.   Mr.  Jeans  responded  that  tobacco tax  revenue  is                                                                   
dedicated to that reimbursement and it is available.                                                                            
Representative  Croft pointed  out that  the concern  is that                                                                   
the Department would be using  $6 million dollars in each pot                                                                   
of non-general  fund money  to make  the supplemental  appear                                                                   
less.   He claimed  that action  could cut the  Legislature's                                                                   
options later  on.  Next year,  much more will be  needed for                                                                   
the debt  retirement and that  'setting aside  the individual                                                                   
items' will be problematic.                                                                                                     
Representative  Whitaker  questioned  how  it could  that  be                                                                   
Representative  Croft  explained that  there  is $75  million                                                                   
dollars of general  fund spending proposed, and  taking money                                                                   
out of the foundation  formula left over funds  and taking $6                                                                   
million  out of  debt retirement,  more will  be needed  next                                                                   
Representative  Whitaker interjected that  since this  is the                                                                   
same year, the Administration  recognizes that this would not                                                                   
be a  carry forward.   He did not  see this as  an accounting                                                                   
concern or a political problem.                                                                                                 
Section 16(9)                                                                                                                   
     Miscellaneous Claims and Stale-dated Warrants  $47.50                                                                      
Mr. Jeans noted that the request  was for a late billing on a                                                                   
copier charge.                                                                                                                  
DEPARTMENT OF FISH AND GAME                                                                                                   
Section 16(5)                                                                                                                   
     Miscellaneous Claims and Stale-dated Warrants                                                                              
KEVIN BROOKS, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT  OF   FISH  AND  GAME,   noted  that   these  were                                                                   
miscellaneous  claims and the  Department has identified  one                                                                   
additional item  for that section  for another  $250 dollars.                                                                   
Most of  the claims are  for bills that  were over  two years                                                                   
old when  submitted.  The Department  of Law cannot  pay them                                                                   
paid out of the current year appropriations.                                                                                    
Section 17(a)(4)(B)                                                                                                             
     Ratifications:  AR42100-02  (Administrative Services)                                                                      
Mr. Brooks stated  that the amount requested  is $8.05, which                                                                   
would  be used  for an  accounting issue.   The  supplemental                                                                   
would clean up that adjustment.                                                                                                 
Section 17(a)(5)                                                                                                                
     Ratifications:  AR 47829-03  (RS DOT/AST DET .08)                                                                          
Mr.  Brooks noted  that the  amount  of the  request was  for                                                                   
$16,047 dollars.   The request  was submitted after  the cut-                                                                   
off date.                                                                                                                       
DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                                                      
Section 3(1) - Fast Track Supplemental                                                                                          
     Caseload growth.  Current funds projected to be fully                                                                      
    spent by mid-April.                           $271.0                                                                        
JANET CLARKE, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT  OF  HEALTH  AND SOCIAL  SERVICES,  explained  the                                                                   
request was for $271 thousand  dollars for the General Relief                                                                   
Assistance  (GRA) program,  which dates  back to  territorial                                                                   
days.  The State has paid the  costs for indigent burials and                                                                   
emergency  assistance for  the  very poor  individuals.   The                                                                   
burial  part of  the  program has  grown  by 10  or more  per                                                                   
Vice-Chair Meyer asked the total  monthly number.  Ms. Clarke                                                                   
responded that  there are nearly  42 per month.   She pointed                                                                   
out the General  Relief Assistance chart included  in members                                                                   
packets.  (Copy on File).                                                                                                       
Co-Chair Harris  asked if the program had  been intentionally                                                                   
under-funded.   Ms. Clarke replied  that it had had  not been                                                                   
under funded; the Department had  not projected it correctly.                                                                   
She  explained   that  there   is  a  growing   elderly  poor                                                                   
population.  The  Department plans to look at  the program to                                                                   
determine if there are existing demographics associated.                                                                        
Representative Hawker  commented that expenditures  from FY00                                                                   
- FY01  were same number  and then all  of a sudden  in FY02,                                                                   
there  was  a  40%  increase.     He  pointed  out  that  the                                                                   
projection  for this year  was consistent  with that  number.                                                                   
He asked what  had happened between FY01 and  FY02 that would                                                                   
such a significant increase.                                                                                                    
Ms. Clarke  responded that the  Department had not  looked at                                                                   
that to  determine  if there had  been a  change during  that                                                                   
time frame.                                                                                                                     
Section 3(2)                                                                                                                    
     Formula program short funding in the amount of $445.3                                                                      
     and caseload growth of $170.0.  Current funds projected                                                                    
    to be fully expended in May.                  $615.3                                                                        
Ms.  Clarke  noted  that  the request  was  for  foster  care                                                                   
special  needs  in  the  amount of  $615,300  dollars.    The                                                                   
program pays for  one-time items in the foster  care program.                                                                   
She pointed out  that the program had been  'under-funded' by                                                                   
the  Legislature last  year.   The bulk  of the  supplemental                                                                   
funding resulted from under funding in the FY03 budget.                                                                         
Representative Hawker  referenced the first  six-month detail                                                                   
versus those projections.   He advised that  travel costs for                                                                   
that section  typically had run  small numbers.   However, in                                                                   
September and October, those numbers  increased dramatically.                                                                   
He  asked  if  any  of  those   costs  had  been  subject  to                                                                   
Ms. Clarke  responded that  all of  the travel expenses  were                                                                   
client related.   The  Department pays  for parents  to visit                                                                   
children for  reunification purposes, etc.   She acknowledged                                                                   
that  the  Department  could  always do  a  better  job  when                                                                   
looking at  the travel costs to  make sure that they  are the                                                                   
most cost  effective possible.   She  stressed that  for this                                                                   
program,   every  payment   is  scrutinized   before  it   is                                                                   
Representative  Hawker  commended  the  Department  on  their                                                                   
preparation  for   the  Supplemental  Budget  request.     He                                                                   
reiterated  that   most  of  the   requests  had   been  well                                                                   
documented,  however,   this  section  needs  to   have  more                                                                   
information provided.                                                                                                           
Co-Chair Harris inquired if there  were ever times when there                                                                   
were more  than one-time special  needs.  Ms.  Clarke advised                                                                   
that foster care has several different components.                                                                              
   ·    There is the base rate component which pays the                                                                         
        monthly foster care payment to the foster parents;                                                                      
        and the                                                                                                                 
   ·    Augmented component for the very difficult special                                                                      
        needs child.  The foster parent is then paid an                                                                         
        additional rate every month.                                                                                            
Foster  care special  needs are  for one-time  purposes.   It                                                                   
could be  that a child  has a  one-time purchase  for special                                                                   
equipment  and/or clothing.   The program  is about  one-time                                                                   
purchases of specific  needs and is not a  reoccurring event.                                                                   
She  stressed  that  these are  not  a  re-occurring  monthly                                                                   
Section 3(3)                                                                                                                    
    Formula program short funding $2,000.0 and caseload                                                                         
     growth in the amount of $833.3.  Current funds                                                                             
     projected to be fully expended in April.    $2,833.3                                                                       
Ms. Clarke commented that the  request was for the subsidized                                                                   
adoption  and  guardianship program  in  the  amount of  $2.8                                                                   
million dollars.   She explained that the program  provides a                                                                   
subsidy  for the  special needs  children  that are  adopted.                                                                   
The subsidy  covers the  needs of  those children until  they                                                                   
reach 18  years old.  This  is federal reimbursement  through                                                                   
the  Title 40  program.   Last  year  the request  was  under                                                                   
funded by  $2 million dollars.   She stated that  the program                                                                   
is a success  as the program  pays less than foster  care and                                                                   
the  children  are getting  a  permanent  home.   Ms.  Clarke                                                                   
pointed out this year's program growth of 9%.                                                                                   
Co-Chair  Harris asked  if this  program was  related to  the                                                                   
'balloon project'.   Ms. Clarke  responded that none  of this                                                                   
program was funded through that  project.  She added that the                                                                   
balloon  project  has  helped  get  children  permanent  home                                                                   
Vice-Chair Meyer  assumed that the foster parents  that adopt                                                                   
these children do  it out of love.  He asked  if the children                                                                   
would still get adopted without  these subsidies.  Ms. Clarke                                                                   
responded that it  would be more difficult for  some families                                                                   
to take on the  extra financial burden because  many of these                                                                   
kids have a lot of problems.   The federal government as well                                                                   
as  the  State   government  has  adopted  this   program  to                                                                   
guarantee that  the families are  not disadvantaged  by these                                                                   
Representative  Hawker  advised  that the  program  has  been                                                                   
short  funded 5  out  of the  past  6 years.    He noted  the                                                                   
indirect  cost  savings,  as Division  of  Family  and  Youth                                                                   
Services (DFYS)  no longer carry  the children.  He  asked if                                                                   
there was an off set cost savings in the base rate.                                                                             
Ms. Clarke  acknowledged  that the Department  has looked  at                                                                   
that for savings.   She noted that the Legislature  cut those                                                                   
projected savings out of the budget  already.  It was reduced                                                                   
in  the Governor's  request from  $11.3 million  down to  $10                                                                   
million dollars.                                                                                                                
Representative  Hawker  voiced  concern  with  the  projected                                                                   
increase of  children in the program.   He noted that  it had                                                                   
been running approximately  9-10 children per  month and then                                                                   
commencing January; the projection  was raised to 18 children                                                                   
each  month, for  the  remainder  of the  year.   Ms.  Clarke                                                                   
pointed out that in January and  February, the Department has                                                                   
already had 18 new enrollees.   She added that the Department                                                                   
would look  at the increased numbers  to determine if  in the                                                                   
last six months, there was an increase in participation.                                                                        
Representative Hawker  stated that the  line item had  been a                                                                   
substantial request  in the amount  of $2.8 million  dollars.                                                                   
He asked if there was any room  to compromise on that number.                                                                   
Ms. Clarke responded that the  Department attempts to provide                                                                   
an update  on the formula programs  in March to  determine if                                                                   
the projections are in line.                                                                                                    
Representative  Whitaker commented on  the method  of payment                                                                   
for  the  program.    Ms. Clarke  advised  that  there  is  a                                                                   
contract with  the parents  and that  they receive  a monthly                                                                   
Representative   Croft  noticed   that  the  Department   had                                                                   
attempted  to  indicate  the  amount  saved  from  subsidized                                                                   
adoption as opposed to foster  care.  He projected that daily                                                                   
number was  around 20.  Ms.  Clarke stated that  the children                                                                   
in the  subsidized program  are all  special needs  children.                                                                   
The foster  care program  costs run about  $41 dollars  a day                                                                   
and the  subsidized adoption  program costs  run about  $23 a                                                                   
Representative  Croft estimated  that would  be about  $7,000                                                                   
per child, with a total savings  of approximately $13 million                                                                   
dollars.   He asked  what would  be the  effect be  of under-                                                                   
funding  and then  attempting  to make  a  contract with  the                                                                   
parent  for the  special needs  child.   Ms. Clarke  stressed                                                                   
that  the  Legislature  has  always  come  through  for  this                                                                   
program.  The  Legislature shares the goals  for all children                                                                   
to be placed in permanent homes.   She added that it would be                                                                   
a breech of contract.                                                                                                           
Section 3(4)                                                                                                                    
     Caseload growth.  Current funds projected to be fully                                                                      
     spent by the end of May.                       $110.0                                                                      
Ms.  Clarke stated  that the  request was  for $110  thousand                                                                   
general  fund  dollars  for old  age  assistance  for  Alaska                                                                   
Longevity  hold harmless.   This  is the  program that  holds                                                                   
people harmless  from receiving a longevity bonus,  a benefit                                                                   
drop  from   the  Adult  Public   Assistance  (APA)   or  the                                                                   
Supplemental Security  Income (SSI) components.   The reality                                                                   
of  the  request  is  that  last  year;  the  Department  had                                                                   
suggested  a  decrement  of  $232   thousand  dollars.    The                                                                   
Legislature   adopted  that  decrement.     The   program  is                                                                   
declining, but not  as quickly as thought.   She acknowledged                                                                   
that this mistake was that of the Department.                                                                                   
Co-Chair Harris inquired about  the trend the Legislature had                                                                   
taken  to make  that decision.    Ms. Clarke  stated that  in                                                                   
FY01, the Department decreased  the program by almost 11%; in                                                                   
FY02, the  program was decreased  by 10%, and  the Department                                                                   
anticipated that  they could decrease  it in FY03 with  a 11%                                                                   
reduction, however, in reality,  that amount turn out to be a                                                                   
7% reduction.                                                                                                                   
Co-Chair  Harris  asked  how many  people  qualify  for  that                                                                   
program.  Ms. Clarke responded  that there are 1,137 Alaskans                                                                   
that qualify.                                                                                                                   
Section 3(5)                                                                                                                    
     Funds to hire superintendent and unit leader and                                                                           
     provide other operating funds needed to open the                                                                           
     facility that will be completed April 15, 2003.                                                                            
Ms. Clarke  remarked that the  request was for  $155 thousand                                                                   
dollars  to  allow  the  Department to  open  the  new  Kenai                                                                   
Peninsula Youth facility.  The  construction will be complete                                                                   
in mid  April.  The  request would allow  the facility  to be                                                                   
staffed so  that there can  be kids in  the facility  by July                                                                   
Co-Chair Harris  asked if  the request  were not received  at                                                                   
this  time,  would the  Department  then  enter it  into  the                                                                   
normal  budgeting  process.   Ms.  Clarke  acknowledged  that                                                                   
would be difficult  given that the utility costs.   She added                                                                   
that it  is important that there  is enough security  to make                                                                   
sure that the facility does not get vandalized.                                                                                 
Vice-Chair Meyer inquired how  much money would be needed for                                                                   
the superintendent  position.   Ms. Clarke  pointed  out that                                                                   
the  backup failed  to  indicate  that the  requested  amount                                                                   
includes  two and half  months for  superintendent costs  and                                                                   
unit  leader for  one full  month.   She  indicated that  the                                                                   
supplemental   could   be  decreased,   while   keeping   the                                                                   
superintendent and unit leader on while hiring the staff.                                                                       
Representative   Hawker   advised   that  the   request   was                                                                   
predicated  upon  opening  the  facility  by  the  mid  April                                                                   
completion date.                                                                                                                
In  response to  Representative  Hawker,  Ms. Clarke  advised                                                                   
that  the  Department  had  received  appropriation  for  the                                                                   
construction  of the project  two years ago.   They  also had                                                                   
received  the   design  and   planning  money  before   that.                                                                   
Construction began this past year.                                                                                              
Representative  Hawker asked  if  the anticipated  completion                                                                   
date for  the project would be  early.  Ms.  Clarke indicated                                                                   
that had  been the  scheduled date  for completion  for quite                                                                   
some  time.   Funds  had not  previously  been requested  for                                                                   
opening the facility.                                                                                                           
Representative Hawker found it  troubling that the Department                                                                   
was  requesting funds  to fully  staff the  facility at  this                                                                   
time.  He  noted that the size  of the request.  He  asked if                                                                   
there was  funding available  from other  facilities  to help                                                                   
cover these  costs or if  employees running other  facilities                                                                   
could  be brought  in  to manage  this  one  for the  initial                                                                   
PATTY   WARE,  DIRECTOR,   DIVISION   OF  JUVENILE   JUSTICE,                                                                   
DEPARTMENT OF  HEALTH AND SOCIAL SERVICES, responded  that it                                                                   
was possible  that staff  from other  facilities might  apply                                                                   
for the positions of superintendent  or unit leader; however,                                                                   
in  terms of  transfer  opportunities,  the  reality is  that                                                                   
someone would  choose to  apply for a  promotion.   There are                                                                   
potential savings in other facilities.                                                                                          
Representative Stoltze  commented that recruitment  would not                                                                   
be a  problem in the  Kenai area.  He  added that he  did not                                                                   
think  that there  was a  sense  of urgency  for funding  the                                                                   
Representative Chenault commented  that bringing the facility                                                                   
on line  earlier would  keep the  Department from needing  to                                                                   
transfer juveniles to Anchorage.                                                                                                
TAPE HFC 03 - 25, Side B                                                                                                      
Representative   Chenault   continued,  that   action   would                                                                   
encourage the Department to address  the concern on the local                                                                   
level.  He  admitted that he had  not kept track of  the work                                                                   
being done on that facility and  acknowledged that there will                                                                   
be costs  associated whether  the project  is funded  or not.                                                                   
Those costs will be related to the utilities.                                                                                   
Ms. Ware added that it takes a  significant amount of time to                                                                   
provide the appropriate  staff training.  She  noted that the                                                                   
some   staff   might  transfer,   however,   the   Department                                                                   
anticipates a number of new hires  from the Kenai.  That will                                                                   
require the  Division to do  a significant amount  of on-site                                                                   
training.   Part of the request  allows the Division  to gear                                                                   
up and have a trained staff by July 1.                                                                                          
Co-Chair  Williams  advised that  the  funding  had not  been                                                                   
added  last year  as the  Legislature  proposed that  funding                                                                   
could be  addressed through  this supplemental.   He  did not                                                                   
foresee any problems with that.                                                                                                 
Section 8(a)(1)                                                                                                                 
     The Division of Finance is incurring substantially more                                                                    
     costs for accounting and payroll data processing                                                                           
     charges, due to both increased usage and rate                                                                              
     increases, and unanticipated  increased costs due to                                                                       
     conversion from ADABAS to  DB2.  (Savings in general                                                                       
     relief program offsets $300.0.)               $400.0                                                                       
Ms.  Clarke  spoke  to  the  Adult  Public  Assistance  (APA)                                                                   
program  request in  the amount  of  $2.368 million  dollars,                                                                   
including the  combined federal  assistance funds  that would                                                                   
meet the need of  that program.  The program  provides a cash                                                                   
supplement for  those that receive  SSI.  The  State provides                                                                   
about  $362   dollars  per  month,   and  the   feds  provide                                                                   
approximately $500  dollars per month  up to a total  of $890                                                                   
dollars per  month.  The individuals  on the program  have to                                                                   
be low-income  elderly or permanently  disabled person.   The                                                                   
FY03 appropriation  was reduced by $1.8 million  dollars last                                                                   
year and part  of the supplemental is due to  that shortfall.                                                                   
There has  been consistent growth  in the program and  it has                                                                   
averaged 5%  the last ten  years.  She  pointed out  that the                                                                   
disabled  population seems  to be  growing at  a faster  rate                                                                   
than the elderly population.                                                                                                    
Representative Hawker  commented that the program  has become                                                                   
a two  to one ratio  of disabled to  elderly.  He  questioned                                                                   
the reasons for  the exponential growth in the  program.  Ms.                                                                   
Clarke pointed  out that previously, the  disabled population                                                                   
would have  been treated  in institutions.  The State  is now                                                                   
able  to  serve the  disabled  person  in  their home.    The                                                                   
supplemental  would provide  cash  assistance  so that  these                                                                   
individuals can remain in their  own homes or assisted living                                                                   
homes.   As people  are living  longer, some  of the  elderly                                                                   
become  disabled  and  then reclassified.    She  added  that                                                                   
disabled children are being identified  at an earlier age and                                                                   
are tending to live longer.                                                                                                     
Representative Hawker observed  that the formula is a 'matter                                                                   
of statute'  and added that it  is the highest  supplement in                                                                   
the United  States.  He questioned  if there are  other areas                                                                   
with lapsing funds.                                                                                                             
Ms.  Clarke responded  that other  programs  such as  General                                                                   
Relief  assistance,  old  age  assistance  and  the  welfare,                                                                   
located  in   the  same  BRU,  have  requested   supplemental                                                                   
assistance.    She  did  not  anticipate  additional  lapsing                                                                   
funds.  The  program has a maintenance of  effort requirement                                                                   
in  order to  receive  the  federal Temporary  Assistance  to                                                                   
Needy Families (TANF) block grant.                                                                                              
Section 8(a)(2)                                                                                                                 
     Unanticipated federal grant award to fund Child Abuse                                                                      
     Treatment Plans for Alaska Native Children and Parents                                                                     
    project.                                      $450.0                                                                        
Ms. Clarke  observed that the  request in the amount  of $450                                                                   
thousand federal  fund dollars would  be used for  the Indian                                                                   
Child Welfare Act to allow the  Department to increase Native                                                                   
foster home participation and  to work with the Native Health                                                                   
Board.    The program is  100% federally funded and  no State                                                                   
matching funds required.                                                                                                        
Sections 8(a)(3) - 8(a)(8)                                                                                                      
     8(a)(3) Population increase of 18.9% has resulted in                                                                       
     increased overtime of $16.7 and laundry, food, and                                                                         
     clothing costs of $9.1.  FY2002 average population was                                                                     
     179.6, while FY03 has averaged 198.3.            $25.8                                                                     
     8(a)(4) Extraordinary medical  costs including MRI,                                                                        
     extensive brain testing,  weekly allergy shots, and                                                                        
     surgery.                                      $20.0                                                                        
     8(a)(5) Staff for population increase.  Average daily                                                                      
     population has increased 36% over FY02.  Facility                                                                          
    capacity is 6.  Average population in FY02 was 6.9,                                                                         
     while in FY03 the average population has been 9.3.                                                                         
     8(a)(6) Medical costs for physical therapy for 1 youth.                                                                    
     8(a)(7) Population increased 34.7% over FY02 and                                                                           
    extraordinary medical costs.                  $35.0.                                                                        
     8(a)(8) Operating costs driven by increased number of                                                                      
     licenses and certificates, including non-permanent                                                                         
     positions to deal with backlogs.  Also covers rent for                                                                     
     a move into a new facility earlier than anticipated.                                                                       
Ms. Ware discussed  the difficulties with the  current budget                                                                   
dealing  with the  pressures and  population  problems.   She                                                                   
pointed  out the  pressure  this fiscal  year  in the  Bethel                                                                   
Youth Facility  and the  Nome Youth  Facility.  She  observed                                                                   
that the Bethel Youth Facility  is over capacity and children                                                                   
from there  have been  sent to Fairbanks.   She compared  the                                                                   
average monthly bed  days and observed that there  has been a                                                                   
46% increase.   Bethel consistently has been  overcrowded and                                                                   
it is continuing  to grow.   She stressed that the  number of                                                                   
increases in the Class A felonies.   None of the youth in the                                                                   
detention  unit  are there  for  anything  less than  a  very                                                                   
serious offense.                                                                                                                
Ms. Ware discussed increases in  the Nome Youth Facility.  It                                                                   
is a six-bed facility  and has operated with as  many as 9 to                                                                   
12.  She acknowledged  that many of the youth  are from other                                                                   
areas.    Staff  has  had to  be  increased  to  address  the                                                                   
Ms. Ware  remarked  that the Division  has  not been able  to                                                                   
absorb the increased costs.  There  was a $70 thousand dollar                                                                   
cost    for    the    American    Correctional    Association                                                                   
Accreditation,  which insures  that  outside reviewers  check                                                                   
the  detention   and  treatment  facilities.     Due  to  the                                                                   
increased detention  counts, the Division has had  to pay for                                                                   
escorts and travel costs related  to transferring children to                                                                   
other facilities.                                                                                                               
Ms.  Clarke  pointed   out  that  the  other   costs  include                                                                   
extraordinary medical  costs.  The  State does attempt  to go                                                                   
after their insurance if they  have it, however, most are not                                                                   
Co-Chair Harris asked about the McLaughlin Youth Facility.                                                                      
Ms. Ware  explained that  youth picked up  in Kenai  area are                                                                   
then brought  to the  McLaughlin Youth  Facility.   The Kenai                                                                   
Facility  will  be  used  for   short  periods  of  time  for                                                                   
detention time.  These are not treatment beds.                                                                                  
Co-Chair  Harris  commented that  the  opening  of the  Kenai                                                                   
Facility  would  not  necessarily  bring  down  the  cost  of                                                                   
McLaughlin.  Ms. Ware understood  that it would in the longer                                                                   
Ms.  Clarke  noted   that  the  Department  shows   that  the                                                                   
McLaughlin  Facility  averaged  daily a  population  of  just                                                                   
fewer than  180 in FY02; currently,  it is running  just over                                                                   
198 daily.   If  those were  detention kids,  there would  be                                                                   
some relief.                                                                                                                    
Representative  Stoltze   asked  if  there  were   any  court                                                                   
directives regarding the capacity  concerns.  Ms. Ware stated                                                                   
there are  not.  The Division  uses the tools of  making sure                                                                   
that they have  the accreditation guaranteeing  that they are                                                                   
in compliance.                                                                                                                  
Vice-Chair  Meyer questioned  if  other correctional  centers                                                                   
required a  local contribution.   Ms. Clarke noted  that many                                                                   
of the  local communities  have donated  land.  Anchorage  is                                                                   
the  only municipality  that  participates  in the  operating                                                                   
Representative  Hawker observed  that Nome  request was  over                                                                   
$224  thousand dollars.   He  pointed out  that the  Juvenile                                                                   
Justice budget  for FY03  had been $35  million dollars.   He                                                                   
pointed out  that this  request was for  .6% of their  annual                                                                   
budget.  That  'troubled' him that the Division  did not have                                                                   
enough  managerial   control  to  deal  with   such  a  small                                                                   
Ms. Ware emphasized that the Division's  budget has been very                                                                   
tight.    She explained  that  the  Division  has  maintained                                                                   
vacant positions  and undertaken a  number of things  to keep                                                                   
the  budget  under  control.     She  offered  to  meet  with                                                                   
Representative Hawker to discuss these concerns.                                                                                
Representative  Foster  interjected  that the  Nome  facility                                                                   
houses  kids  from  all  over  Arctic  Alaska  and  that  the                                                                   
overcrowding has not resulted from only Nome kids.                                                                              
Section 8(a)(b)                                                                                                                 
     8(a) Operating costs driven by increased number of                                                                         
     licenses and certificates, including non-permanent                                                                         
     positions to deal with backlogs.  Also covers rent to                                                                      
     move into new facility earlier than anticipated.                                                                           
     8(b) Claims growth and match rate adjustment.$10,991.3                                                                     
Ms. Clarke noted that these were  supplemental requests for a                                                                   
total of $195 thousand dollars  in receipt-supported services                                                                   
for  Vital Statistics.   A  few years  ago, Vital  Statistics                                                                   
increased their fees  for certificates by $5  dollars to help                                                                   
pay for  their activities.   She noted that the  supplemental                                                                   
request had two components addressing:                                                                                          
   ·    A considerable backlog. The Division hired temporary                                                                    
        staff to reduce that backlog.                                                                                           
   ·    Moving costs and a small amount for an additional                                                                       
        lease cost.  The Juneau office moved to a new                                                                           
        facility in the Lemon Creek area.  The Legislature                                                                      
        authorized funds for seven months.                                                                                      
Vice-Chair   Meyer  commented   that   he   had  received   a                                                                   
certificate for  his adoptive child  and that it was  a small                                                                   
charge.  Ms.  Clarke responded that the charge  for that type                                                                   
certificate is $15 dollars.                                                                                                     
Vice-Chair  Meyer recommended  that fee  costs be  increased.                                                                   
Ms.  Clarke  responded  that  would  be  good  especially  if                                                                   
service levels could be increased.                                                                                              
Co-Chair Harris noted that the  Division earns more than they                                                                   
spend.   Ms.  Clarke discussed  that the  amount earned  over                                                                   
budget for FY02 was $132 thousand  dollars.  She advised that                                                                   
the Department was  requesting $195 thousand dollars.   It is                                                                   
anticipated  that  the  Division   will  earn  $215  thousand                                                                   
dollars this year.                                                                                                              
Representative   Croft  clarified   that   the  Division   is                                                                   
requesting to be able to keep  the fees that they are already                                                                   
Representative Joule asked when  the fees previously had been                                                                   
raised.  Ms. Clarke did not know  when the increase occurred.                                                                   
Section 8(b)                                                                                                                    
     8(B) Claims growth and match rate adjustment.$10,991.3                                                                     
Ms. Clarke  indicated that the  request was for  the Medicaid                                                                   
services.   It is  a request for  $28.1 million general  fund                                                                   
dollars.   The request resulted  from changes in  the federal                                                                   
Medicaid  authorized  percentage   rate,  which  impacts  the                                                                   
program dramatically.  Prior to  1998, Alaska was a 50% match                                                                   
State.   Then Senator Frank Murkowski  was able to  bring the                                                                   
rate up  to 59.8%  percent.  In  FY00, Alaska's rate  changed                                                                   
and then  Senator Murkowski  increased Alaska's overall  rate                                                                   
by 5% because  the cost of living  was so much higher.   That                                                                   
was  good for  the  State; however,  the  Bureau of  Economic                                                                   
Analysis changed the way the national  formula calculates per                                                                   
capita income,  and that went  into the national  formula for                                                                   
the  rate.   Due  to the  way  that they  recalculated  that,                                                                   
Alaska  took  a  3%  hit  in   the  rate.    Last  year,  the                                                                   
Legislature  did provide funds  to address  that rate  and at                                                                   
the time,  legislators anticipated  that there would  be some                                                                   
way that  Congress would  be able to  fix it.  However,  that                                                                   
did not happen.                                                                                                                 
The  other  change in  the  rate  is  that the  Division  had                                                                   
budgeted  a larger  amount that  they thought  would be  100%                                                                   
claimable from  the Indian Health  Service facilities.   That                                                                   
money has not been seen.  The  other request is for growth in                                                                   
the program.                                                                                                                    
Co-Chair Harris  asked how the Administration  was attempting                                                                   
to do to curb the growth of Medicaid expenses.                                                                                  
Ms. Clarke  advised that  in the  past week, regulations  had                                                                   
been  adopted   which  allow   the  Department  to   do  more                                                                   
administrative  cost containment in  the program,  which will                                                                   
impact the  long run.   At present time,  there is  a billing                                                                   
lag within  the Medicaid  program.   Ms. Clarke advised  that                                                                   
the Administration is also considering other options.                                                                           
Co-Chair  Harris inquired  if  the poverty  level  percentage                                                                   
would be analyzed.                                                                                                              
Ms.  Clarke asked  if Co-Chair  Harris was  referring to  the                                                                   
Denali  Kid  Care  program.   There  are  varying  percentage                                                                   
levels  of poverty  that the  Medicaid program  covers.   The                                                                   
Commissioner is  looking at all  those rates with  everything                                                                   
being on the table.                                                                                                             
Ms.  Clarke distributed  the Option  List.   (Copy on  File).                                                                   
She explained that  the way that list works,  it is important                                                                   
to cut the  #1 service first;  however, the items at  the top                                                                   
of the list are the ones that  are most cost effective.  That                                                                   
would not  be a good  tool.   She emphasized how  complicated                                                                   
this matter  is and that the option  list is not a  good cost                                                                   
cutting tool.                                                                                                                   
Co-Chair Harris asked  if the option list statute  were to be                                                                   
changed or eliminated,  would that help the  Department.  Ms.                                                                   
Clarke responded  that it could  provide more  flexibility in                                                                   
managing and that is what other states are doing.                                                                               
Sections 8© & (d)                                                                                                               
     8( c)&(d) Suicide Follow-back Study; extend lapse date                                                                     
     to June 30, 2004.                                                                                                          
Ms. Clarke  commented that the  request was for a  lapse date                                                                   
extension for the Suicide Follow-back study.                                                                                    
Section 16(6)                                                                                                                   
     Miscellaneous Claims and Stale-dated Warrants                                                                              
Ms.  Clarke noted  that the  request  was for  ratifications.                                                                   
One for approximately  $2.7 million dollars for  the Medicaid                                                                   
Program in response to a budget  shortfall.  The federal fund                                                                   
claims had been disallowed in that amount.                                                                                      
The  second  ratification  request  was  for  $54.9  thousand                                                                   
dollars from the  federal Title 4-E Program.   The Department                                                                   
claimed the  funds at the federal  rate; upon review,  it was                                                                   
determined that they should not  have been claimed as federal                                                                   
Ms. Clarke pointed out the third  section was a whole number,                                                                   
(30+), claims resulting from old invoices and late bills.                                                                       
DEPARTMENT OF LAW                                                                                                             
Section 4(a)                                                                                                                    
     Criminal  Justice  Litigation   -  Outside  counsel  and                                                                   
     experts for the parental  consent lawsuit $432.6 and the                                                                   
     sex offender registration  lawsuit                $150.0                                                                   
KATHRYN   DAUGHHETEE,   DIRECTOR,   ADMINISTRATIVE   SERVICES                                                                   
DIVISION,  DEPARTMENT OF  LAW, explained  that $582  thousand                                                                   
dollars  for the  Criminal  Division for  two  cases used  in                                                                   
defending Alaska  Statutes and that the one  for sex offender                                                                   
registration,  funds  of  $150   thousand  dollars  had  been                                                                   
expended.  The  balance of that request is  for $482 thousand                                                                   
dollars and would  be used for the Planned  Parenthood cases.                                                                   
The  trial  phase   of  that  has  just  been   completed  in                                                                   
Anchorage.    The  requested   funds  are  for  the  expenses                                                                   
incurred  for  2  attorneys  and  the  anticipated  costs  in                                                                   
preparing the post trial brief and appeal costs.                                                                                
Co-Chair  Harris asked  why outside counsel  had been  hired.                                                                   
Ms.  Daughhetee   stated  that  a  Supreme   Court  brief  is                                                                   
complicated  language  and  that  the  State  needed  someone                                                                   
experienced in drafting that type language.                                                                                     
PATRICK   GULLUFSEN,   DEPUTY  ATTORNEY   GENERAL,   CRIMINAL                                                                   
DIVISION, DEPARTMENT  OF LAW, added that these  two cases are                                                                   
within  the Criminal  Division's  management  responsibility.                                                                   
They are  connected with  criminal activity and  legislation.                                                                   
With respect  to the Alaska's  Sex Offender Registration  Act                                                                   
and the  hiring of outside  counsel, the Department  used in-                                                                   
house  counsel up  through the  9  Circuit.   They ruled  the                                                                   
statute  unconstitutional.    In  1994,  the  'toughest'  sex                                                                   
offender laws were  passed by the Legislature.   The case was                                                                   
the first before  the Supreme Court.  The Department  of Law,                                                                   
at  that  point,  thought  it   was  appropriate,  given  the                                                                   
significance of  the case nationwide,  to hire the  best that                                                                   
could be found in outside counsel to represent the case.                                                                        
Section 4(b)                                                                                                                    
     Oil and gas caseload shortfall.  $500.0 is needed for                                                                      
     the reopener-specific casework and $100.0 for ongoing                                                                      
     D.C. casework primarily regarding Federal Energy                                                                           
     Reserve (FERC) and TAPS (utility) reopener.                                                                                
    Extended lapse date thru June 30, 2004        $600.0                                                                        
Ms.  Daughhetee  explained  that   within  the  Oil  and  Gas                                                                   
Division,  the Civil Division  needs $6  thousand dollars  to                                                                   
deal with reopening cases on the  horizon.  The Department of                                                                   
Law   anticipates  that   the   oil  companies   will   marsh                                                                   
significant  resources and  the State  needs to  be on  equal                                                                   
footing to protect the interest's in these royalty items.                                                                       
TAPE HFC 03 - 26, Side A                                                                                                      
DAVID  MARQUEZ,   LEGISLATIVE  LIAISON,  ASSISTANT   ATTORNEY                                                                   
GENERAL,  CIVIL DIVISION,  OIL, GAS &  MINING, DEPARTMENT  OF                                                                   
LAW, explained  that if the  Department does not  receive the                                                                   
money,  they would  have to  do it  'in-house'.   He did  not                                                                   
believe that they had the expertise.                                                                                            
Co-Chair  Harris  asked  what   would  happen  if  the  State                                                                   
prevails.  Mr.  Markus responded that if the  State prevails,                                                                   
Alaska  could get  up  to $60  million  dollars in  royalties                                                                   
through to June 2003, and could  then expect some $10 million                                                                   
per year in royalties from then on.                                                                                             
Representative  Joule asked what  would happen if  Alaska did                                                                   
not do this  and if it would  it be a technical  violation of                                                                   
the Constitution.   Mr. Markus did not believe  that it could                                                                   
rise to a constitutional issue;  however, the State should do                                                                   
all that it can to make the argument,  so that the State will                                                                   
Section 9                                                                                                                       
     Judgments and Claims                                                                                                       
     $1,064,246.51 GF, $72,053.97 PERS             $1,136.4                                                                     
Ms. Daughhetee  pointed out the Judgment and  Claims request.                                                                   
She added that component would  total $4 - $5 million dollars                                                                   
when the Catastrophic Reserve Fund was added in.                                                                                
Section 10                                                                                                                      
     Fairbanks DA office had unexpected move and lease costs                                                                    
     due to the Department of Transportation and Public                                                                         
     Facility's closure of Fairbanks court building. $95.0                                                                      
Ms.   Daughhetee    observed    that   the   Department    of                                                                   
Transportation  and Public  Facilities decided  to close  the                                                                   
State owned facility in which  the District Attorney's office                                                                   
was housed.   The office was  moved to a non-State  facility,                                                                   
which required lease costs.                                                                                                     
Co-Chair Harris questioned  if there would be a  RSA from the                                                                   
Department of Transportation and  Public Facilities, reducing                                                                   
the  supplemental  request.  Ms.  Daughhetee  explained  that                                                                   
issue was yet to  be determined.  There could  be a shortfall                                                                   
in  the  prosecutorial  effort  of vacant  positions  if  the                                                                   
funding is not realized.                                                                                                        
Section 16                                                                                                                      
     MISCELLANEOUS CLAIMS AND STALE-DATED WARRANTS                                                                              
Ms.  Daughhetee  noted that  there  were set  of  stale-dated                                                                   
warrants that  the Department  has accumulated in  the amount                                                                   
of $17 thousand dollars and that they need to be paid.                                                                          
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                                                                                   
Section (4)                                                                                                                     
     Criminal Justice Litigation - Outside counsel and                                                                          
     experts for the parental consent lawsuit $432.6 and the                                                                    
    sex offender registration lawsuit $150.0      $582.6                                                                        
JOHN CRAMER,  DIRECTOR,  ADMINISTRATIVE SERVICES,  DEPARTMENT                                                                   
OF MILITARY AND VETERANS AFFAIRS,  noted that the request was                                                                   
in  the amount  of $42.7  million dollars  to capitalize  the                                                                   
fund  for  declared   disasters  during  the   FY03  and  for                                                                   
emergency preparedness  and operation  costs.  He  added that                                                                   
$680 thousand  dollars has been the appropriation  seed money                                                                   
for the  period of time  until the fiscal  year starts.   The                                                                   
additional  $150 thousand  dollars  is for  items  associated                                                                   
with running  the State Emergency Coordination  Center around                                                                   
the clock.  The additional $30  thousand dollars will be used                                                                   
for the Alaska State Defense Course for protecting assets.                                                                      
Section 11 (a)&(b)                                                                                                              
     11(a) and (b) Structure change to move Commissioner's                                                                      
     Office and Unallocated Reduction components to National                                                                    
     Guard BRU                                                                                                                  
Co-Chair Harris  pointed out  that the Commissioner's  Office                                                                   
was  requesting a  structure change.   Mr.  Cramer could  not                                                                   
provide information on the reason for that request.                                                                             
DEPARTMENT OF NATURAL RESOURCES                                                                                               
NICO  BUS,   ACTING  DIRECTOR,  DIVISION   OF  ADMINISTRATIVE                                                                   
SERVICES, DEPARTMENT OF NATURAL RESOURCES,                                                                                      
Section 7                                                                                                                       
     Fixed costs and fire suppression costs incurred to                                                                         
     date.                                    $19,033.8                                                                         
Mr.  Bus  observed  that  the request  was  for  $19  million                                                                   
dollars  for   fire  suppression.    Co-Chair   Harris  asked                                                                   
historical  information regarding  the costs associated  with                                                                   
fire suppression.                                                                                                               
Mr. Bus replied that the average  fire suppression expense is                                                                   
about $14 million dollars.                                                                                                      
Co-Chair  Harris asked  if the  Legislature  put $14  million                                                                   
dollars into the budget this year,  would the Department then                                                                   
not need to request a supplemental.   Mr. Nico responded that                                                                   
he would  hope so as  that would mean  that there  would have                                                                   
been fewer fires than this past  year, which was a high year.                                                                   
Co-Chair  Harris questioned  if  'hot shot  fire crews'  were                                                                   
used  to  fight  outside  of their  local  areas.    Mr.  Bus                                                                   
explained that  the 'hot shot'  crews are an elite  group and                                                                   
are  not always  called as  they cost  more.   There are  70+                                                                   
village crews  that are  made up of  16-20 member  teams that                                                                   
are  trained by  the Division  of Forestry.   They  are on  a                                                                   
rotation schedule  and those are  the crews that  are usually                                                                   
called in.                                                                                                                      
Co-Chair Harris asked about the  practice the Department uses                                                                   
in hiring crews.                                                                                                                
JEFF JAHNKE, (TESTIFIED VIA TELECONFERENCE),  STATE FORESTER,                                                                   
DEPARTMENT  OF NATURAL RESOURCES,  ANCHORAGE, explained  that                                                                   
there are four  hot shot crews in the State of  Alaska.  They                                                                   
are  sponsored by  the federal  government.   The  Department                                                                   
brings those crews  on early to do work around  Anchorage and                                                                   
Kenai to reduce  the damage of the bark beetle.   They are on                                                                   
all summer and spend much of their  time on demand.  They are                                                                   
also used  in the fall  to do field  reduction work  and then                                                                   
they are laid off  and brought back the next year.   They are                                                                   
a very good crew.                                                                                                               
Section 12(a)                                                                                                                   
    Increased costs to process heavy volume of mortgage                                                                         
     refinance activity and increased postage and supplies                                                                      
    costs.                                        $149.1                                                                        
Mr.  Bus noted  the $149.1  thousand dollar  request for  the                                                                   
Recorder's Office  as a result of the low interest  rates and                                                                   
refinancing of loans, program receipts have increased.                                                                          
Section 12(b)                                                                                                                   
     Increased fees for City of Kodiak park maintenance                                                                         
     contract.                                     $4.0                                                                         
Mr.  Bus explained  that  the  request in  the  amount of  $4                                                                   
thousand dollars  would allow  for the  management of  a city                                                                   
park in Kodiak.                                                                                                                 
Co-Chair  Harris observed  that  last summer  many parks  had                                                                   
been closed due to budget restraints.   He questioned how the                                                                   
parks could be opened without a supplemental request.                                                                           
Mr. Bus  clarified that  last year's  appropriation  had been                                                                   
short-funded.  Some parks  were  opened as  a  result of  the                                                                   
Capital  appropriation.   The  Department  is evaluating  the                                                                   
situation and currently is in  discussion with the Governor's                                                                   
Office with the anticipation that all parks will open.                                                                          
Co-Chair Harris questioned what  would happen if a local non-                                                                   
profit group volunteered to keep  them open at their expense.                                                                   
Mr.  Bus  responded  that the  Department  would  attempt  to                                                                   
support that effort.                                                                                                            
Section 12©                                                                                                                     
     National Coastal Wetlands Conservation grant pass thru                                                                     
     to Juneau for purchase of wetlands near Herbert River.                                                                     
Mr.  Bus observed  that  the request  was  for $553  thousand                                                                   
dollars for  a federal  grant for  the Department of  Natural                                                                   
Resources to distribute to the City of Juneau.                                                                                  
Co-Chair  Harris noted  that  property has  been  deforested.                                                                   
Mr. Bus  observed  that the owner  had begun  cutting on  the                                                                   
property to  the dismay of many  local residents.   The owner                                                                   
has agreed to sell  the land to the City &  Borough of Juneau                                                                   
and  this appropriation  would  allow  the purchase  of  that                                                                   
land.   The City  7 Borough  of Juneau  has taken action  and                                                                   
will own the property.                                                                                                          
Representative Hawker understood  that there were a number of                                                                   
complications  and protests  within  the community  regarding                                                                   
the sale of  the land.  Mr.  Bus advised that the  issues had                                                                   
been resolved through the Planning Commission.                                                                                  
Section (17)(b)                                                                                                                 
    FY02 Fire Suppression costs AR37313-02 Fire General                                                                         
     Fund and AR37311-02 Fire Federal Receipts                                                                                  
Mr.   Bus  discussed   the  fire   suppression  request   for                                                                   
$13,340,900 dollars.  He explained  that the funds were spent                                                                   
after the  last legislative  session  adjourned.  He  pointed                                                                   
out that this had been the fifth largest fire year on record                                                                    
for the State of Alaska.                                                                                                        
Co-Chair Harris stated that HB 100 & HB 110 would be HELD in                                                                    
Committee for further consideration.                                                                                            
The meeting was adjourned at 3:51 P.M.                                                                                          

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