Legislature(1997 - 1998)
03/24/1997 01:44 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 24, 1997
1:44 P.M.
TAPE HFC 97-73, Side 1, #000 - end.
TAPE HFC 97-73, Side 2, #000 - end.
TAPE HFC 97-74, Side 1, #000 - #301.
CALL TO ORDER
Co-Chair Hanley called the House Finance Committee meeting to order
at 1:44 p.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Foster
Representative Grussendorf
Representative Mulder was absent from the meeting.
ALSO PRESENT
Wilson Condon, Commissioner, Department of Revenue; Arbe Williams,
Director, Division of Administrative Services, Department of Labor;
Larry La Bolle, Staff, Representative Foster; Carol Caroll, Special
Assistant, Department of Military and Veterans Affairs.
SUMMARY
HB 75 "An Act making appropriations for the operating and loan
program expenses of state government, for certain
programs, and to capitalize funds; and providing for an
effective date."
HB 75 was HELD in Committee for further consideration.
HB 76 "An Act making appropriations for the operating expenses
of the state's integrated comprehensive mental health
program; and providing for an effective date."
HB 76 was HELD in Committee for further consideration.
HOUSE BILL NO. 75
"An Act making appropriations for the operating and loan
program expenses of state government, for certain programs,
and to capitalize funds; and providing for an effective date."
AMENDMENTS
DEPARTMENT OF LABOR
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
ALASKA COURT SYSTEM
DEPARTMENT OF REVENUE
DEPARTMENT OF LABOR
Representative Grussendorf MOVED to adopt Amendment Labor-1 (copy
on file). Therriault OBJECTED.
Representative Grussendorf explained that Amendment Labor-1 would
add $47.8 thousand dollars to the Department of Labor, Workers'
Compensation. He emphasized that reductions in this component
would result in delays. He stressed that the state could be liable
for delays.
Co-Chair Therriault questioned if the request would add money to
the grants line.
Representative Grussendorf clarified that the amendment would
transfer from the grant line approximately $27.0 to personal
services and $20 thousand dollars to contractual.
Co-Chair Therriault summarized that the requested increment for FY
98 was denied. The subcommittee reduced the grant line. The
Department recommended that the grant line be reduced and the
funding shifted to allow the increment.
Representative Davies expressed concern with the ability of the
Department to respond to workers' needs in a timely manner. He
noted that there has been an increase in demand over time.
Representative Grussendorf clarified that the intent of the
amendment is to address a backlog in cases.
ARBE WILLIAMS, DIRECTOR, DIVISION OF ADMINISTRATION, DEPARTMENT OF
LABOR noted that the grants line was established in 1988 to
grandfather in certain persons for workers' compensation benefits.
Grant funding becomes available for use in the Workers'
Compensation component as these recipients die. She emphasized
that grant funding has been transferred to personal services in
order to maintain operations. She observed that two full-time
clerical positions or one professional position would return to
part-time if the funding is not approved. She stated that the
Department had intended to use some of the money to investigate
workers' compensation fraud.
Co-Chair Hanley summarized that the grant money was transferred in
FY 97. Ms. Williams explained that the funding is needed to
support the current staffing level.
Representative Davies noted that the state has lost lawsuits
because it did not meet its statutory requirement for processing
orders.
A roll call vote was taken on the MOTION to adopt Labor-1.
IN FAVOR: Davies Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder,
Therriault, Hanley
The MOTION FAILED (3-7).
Representative Grussendorf MOVED to adopt Amendment Labor-2 (copy
on file). Co-Chair Therriault OBJECTED. Representative
Grussendorf noted that Amendment Labor-2 would add $75 thousand
dollars for Occupational Safety and Health. He maintained that the
reduction would result in 100 less enforcement inspections. He
emphasized that a half-million dollars in fines has been collected
in the last 10 years.
Co-Chair Therriault acknowledged that there would be a $75 thousand
dollar overall general fund reduction. He emphasized that the
Subcommittee tried not to jeopardize federal funds. He stressed
that a portion of the leasing cost can be used to match federal
funds.
Representative Grussendorf maintained that programs should be
considered based on their impact on Alaskans.
Representative Davis noted that an inspector position would be
lost. He stressed that there has been an increase in activity.
A roll call vote was taken on the MOTION to adopt Labor-2.
IN FAVOR: Davies Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder,
Therriault, Hanley
The MOTION FAILED (3-7).
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
Representative Foster MOVED to adopt Amendment MVA-1 (copy on
file). Amendment MVA-1 would add $191 thousand dollars to the
Alaska National Guard and delete the same amount from National
Guard retirement benefits.
LARRY LA BOLLE, STAFF, REPRESENTATIVE FOSTER explained that the
amendment represents the additional actuarial amount that should
have been placed into the Veterans' Retirement Program to hold it
harmless and to keep from depleting the corpus of the fund.
Co-Chair Hanley recalled that funding was added to the retirement
fund in the previous year to capitalize the Fund.
CAROL CAROLL, SPECIAL ASSISTANT, DEPARTMENT OF NATURAL RESOURCES
stated that the Department is working with the Office of the
Governor on legislation to resolve the problem. The Department of
Military and Veterans Affairs supports Amendment MVA-1.
Representative Foster noted that facility closures have been
discussed for Fairbanks, Wasillia and Juneau. Ms. Caroll stated
that when the Department first saw the $341 thousand dollar
reduction, it was to the National Guard BRU. The Department
determined that if $341 thousand dollars were reduced from the
National Guard BRU, that facilities would be impacted. The
Department did not reduce the Air National Guard because it is so
highly leveraged with federal funds that one of the bases would
become shaky. The Army National Guard support was the primary area
to take the reduction. Facilities have a higher fixed cost for
operation than the discretionary amount available for maintenance.
The Department provided a schedule demonstrating fixed costs versus
maintenance costs. At the proposed level of reduction the
Department anticipates that one of the closures will have to take
place. She emphasized that the amendment would benefit active
guard members that have jobs. She maintained that there will be no
short term impact on retirees.
Representative Foster stated that he supports the amendment. He
clarified that the amendment was at the request of the Department
of Military and Veterans Affairs.
Representative Davies questioned if the amendment would reduce the
unallocated reduction. Mr. LaBolle stated that the unallocated
reduction would be reduced to $150 thousand dollars in the National
Guard Armory component. He stressed that this is the only area
that is not tightly leveraged.
Representative Davies expressed concern that National Guard
retirement benefits are being shortfunded. Co-Chair Hanley stated
that legislation would solve approximately $200 thousand dollars of
the problem. He added that the Governor's budget is $200 thousand
dollars underfunded in this item. He noted that if the unallocated
reduction is applied that there will still be a $150 thousand
dollar shortfall. He observed that a $1 million dollar endowment
would generate approximately $120 thousand dollars a year. He
spoke in support of fully endowing the fund.
Mr. LaBolle noted that $191 thousand dollars was transferred into
the retirement system. He clarified that Amendment MVA-1 would
restore the Alaska National Guard Fund to the level of the
Governor's budget. He observed that there would still be a $150
thousand dollar reduction.
There being NO OBJECTION, Amendment MVA-1 was so ordered.
ALASKA COURT SYSTEM
Representative Grussendorf MOVED to adopt Amendment Court-1 (copy
on file). Co-Chair Therriault OBJECTED. Representative
Grussendorf observed that the Chief Justice of the Alaska Supreme
Court asked that the legislative body consider the Court as a third
branch of government in regards to security problems in court
buildings throughout the state. Amendment Court-1 would add
$1,431,8 million dollars to the Alaska Court System.
Representative Grussendorf spoke in support of the amendment. He
maintained that security officers should be available to respond to
problems. He emphasized that the safety of jurors and witnesses
should be considered.
Co-Chair Therriault noted that the Alaska Court System's request
was reduced by the Subcommittee. He emphasized that the additional
funding approved by the Subcommittee was granted in a lump sum. He
stated that the Court System has the flexibility to fund this
request. He observed that the Court System could look at
contractual possibilities.
Representative Grussendorf stressed that caseloads have increased.
He maintained that the Court System has to use additional money to
handle increased caseload. He cautioned that litigation could
occur from the under-funding of security needs.
A roll call vote was taken on the MOTION to adopt Amendment Court-
1.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Foster, Kelly, Martin, Therriault, Hanley
Representatives Davis, Mulder and Kohring were absent from the
vote.
The MOTION FAILED (3-5).
DEPARTMENT OF REVENUE
Co-Chair Hanley MOVED to adopt Amendment Rev-1 (copy on file). He
explained that the amendment would expand asset allocation to allow
the Constitutional Budget Reserve Fund (CBR) portfolio to include
equities. He stated that the additional $100 thousand dollars
could be funded through general funds or the Constitutional Budget
Reserve Fund. He noted that the additional appropriation would fit
within the Department of Revenue's target.
Representative Martin suggested that the appropriation be dedicated
from the CBR account. He MOVED to AMEND Amendment Rev-1 to reflect
a CBR funding source. There being NO OBJECTION, it was so ordered.
There being NO OBJECTION, Amendment Rev-1 was adopted.
Co-Chair Hanley MOVED to adopt Amendment Rev-2 (copy on file). He
explained that the original reduction to Gaming of $198.2 thousand
dollars was dependent upon the passage of legislation. He stated
that the restoration of $198.2 thousand dollars into Gaming and $36
thousand dollars into Income and Excise Audit would allow
management regardless of the passage of legislation. He observed
that there would still be a $300 thousand dollar reduction in
Gaming.
There being NO OBJECTION, Amendment Rev-2 was adopted.
Representative Martin MOVED to adopt Amendment Rev-3 on behalf of
Representative Williams (copy on file).
(Tape Change, HFC 97-73, Side 2)
Representative Williams explained that the amendment would add
$143,822 thousand dollars to the Department of Fish and Game,
ComFish Management and Development. He noted that the amendment
would fund the management of the sea urchin fisheries. Without the
amendment, this fishery would not be managed. He observed that
legislation has been introduced to support the fisheries in the
next year. He added that the amendment will also add $50 thousand
dollars to the Department of Natural Resources, Forest Management
and Development. He stressed that this addition would assist the
forest industry. The amendment would delete $100 thousand dollars
from the Department of Law, Civil Division and $93,822 thousand
dollars from the Department of Revenue, Income Excise and Audit.
Representative Grussendorf spoke in support of the amendment. He
expressed concern with the reductions.
WILSON CONDON, COMMISSIONER, DEPARTMENT OF REVENUE stressed that
the decision to reduce the Income Excise and Audit Division would
have ramifications in years to come. He pointed out that this
division generates revenue.
Representative William noted that 500 hundred jobs in Southeast
Alaska will be protected through the amendment.
Co-Chair Hanley clarified that there is no funding for the sea
urchin fishery in the Department of Fish and Game's budget.
Representative Davies MOVED to Divide Amendment Rev-3.
Representative Moses suggested that the deletion be taken from the
Legislative Operating Budget. Representative Davies WITHDREW his
motion.
Representative Moses MOVED to AMEND Amendment Rev-3 by doubling the
additions and changing the funding source to the Legislative
Operating Budget. Co-Chair Therriault spoke against the amendment
to the amendment.
A roll call vote was taken on the MOTION to adopt Amendment Rev-3
as amended.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault, Hanley
Representative Mulder was absent from the vote.
The MOTION FAILED (3-7).
Representative Davies MOVED to Divide Amendment Rev-3. The motion
to divide would separate the vote on the additions and deletions.
A roll call vote was taken on the MOTION to divide Amendment Rev-3.
IN FAVOR: Davies, Grussendorf, Kelly, Martin, Moses
OPPOSED: Davis, Foster, Kohring, Therriault, Hanley
Representative Mulder was absent from the vote.
The MOTION FAILED (3-7).
Representative Davis MOVED to AMEND Amendment Rev-3, by deleting
the reduction to the Department of Revenue and the addition to the
Department of Natural Resources and reduce the amount added to the
Department of Fish and Game to $100 thousand dollars.
Representative Martin objected. Representative Grussendorf
expressed concern with the funding source. Representative Davis
WITHDREW the amendment to Amendment Rev-3.
A roll call vote was taken on the MOTION to adopt Amendment Rev-3.
IN FAVOR: Davies, Grussendorf, Foster, Moses
OPPOSED: Davis, Kelly, Kohring, Martin, Therriault, Hanley
Representative Mulder was absent from the vote.
The MOTION FAILED (4-6).
Representative Grussendorf MOVED to adopt Amendment Rev-4.
Representative Martin OBJECTED. Representative Grussendorf noted
that the amendment would capture $476 thousand dollars in federal
funds to the Child Support Enforcement Division. The general fund
addition would be $145.4 million dollars. He spoke in support of
the amendment. He noted that 9 positions were reduced due to
vacancies. He pointed out that 5 of these positions were vacant
for only 45 days. Two positions were vacant for less than 6
months.
Representative Martin maintained that the Child Support Enforcement
Division has been treated well by the Legislature. He spoke in
support of maintaining the present level of funding.
Representative Davies spoke in support of the amendment. He
observed that welfare reform legislation has increased the task of
the Child Support Enforcement Division.
Representative Grussendorf stressed that the amendment would aid
children of the state of Alaska. He observed that collections have
increased. He asserted that greater collections will help reduce
the welfare rolls.
Representative Martin stated that collections have increased
because all cases go through the Department of Revenue.
Co-Chair Hanley summarized that the Department of Revenue's budget
has been reduced $45.4 thousand dollars beyond the cap set by the
leadership.
Representative Martin acknowledged that the caseload has increased,
but added that staff has increased by 200 percent. He stated that
financial support from the state and federal governments have
increased by 400 percent.
Representative Grussendorf MOVED to AMEND Amendment Rev-4 by
reducing the general fund match from $145.4 to $45.4 thousand
dollars. He noted that the federal match would be $278.7 thousand
dollars. There being NO OBJECTION, it was so ordered.
A roll call vote was taken on the MOTION to Adopt Amendment Rev-4
as amended.
IN FAVOR: Davies, Grussendorf, Moses, Therriault, Hanley
OPPOSED: Davis, Foster, Kohring, Martin, Mulder
Representative Kelly abstained from the vote.
Representative Mulder was not present for the vote.
The MOTION PASSED (5-4).
Representative Grussendorf MOVED to adopt Amendment Rev-5 (copy on
file). He clarified that the amendment would add $1.4 thousand
dollars in corporate receipts. He explained that the amendment
would upgrade a secretary I position to an executive secretary II
position. He observed that the position would accept greater
responsibilities due to the elimination of the executive director's
position.
Representative Martin express support for the amendment.
There being NO OBJECTION, Amendment Rev-5 was adopted as amended.
Representative Grussendorf MOVED to adopt Amendment Rev-6 (copy on
file). He explained that Amendment Rev-6 would provide
administrative support to the Permanent Fund Corporation investment
officer. He stressed that the investment officer should be able to
concentrate on investment and assets of the Permanent Fund. He
stated that the position should not be tied up with administrative
aspects of the Department. Amendment Rev-6 would add $109.6
thousand dollars in permanent fund corporate receipts.
Representative Martin spoke against the amendment.
(Tape Change, HFC 97-74, Side 1)
A roll call vote was taken on the MOTION to adopt Amendment Rev-6.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault,
Hanley
Representative Mulder was absent from the vote.
Representative Grussendorf MOVED to adopt Amendment Rev-7 (copy on
file). Amendment Rev-7 would add $198.2 thousand general fund
dollars to the Department of Revenue, Oil and Gas Audit. The
amendment would restore 5 positions that are schedule to take early
retirement.
Representative Martin noted that an early retirement program is
being instituted in the same year that there is an increase in
benefits. He stated that the reduction will encourage early
retirement.
Representative Davies summarized that the Department announced a
retirement incentive program (RIP) and set some guidelines for the
program. Employees volunteered to RIP. He maintained that the
Subcommittee changed the terms of the program. He asserted that
some of the employees may not decide to RIP.
A roll call vote was taken on the MOTION to adopt Amendment Rev-7.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault,
Hanley
Representative Mulder was absent from the vote.
The MOTION FAILED (3-7).
Representative Grussendorf WITHDREW Amendment Rev-8 (copy on file).
Representative Grussendorf MOVED to adopt Amendment Rev-9 (copy on
file). Amendment Rev-9 would delete $100 thousand dollars in
interagency receipts and add $100 thousand dollars in general fund
dollars, Department of Revenue, Administrative Support. He
observed that the appropriation would fund a study of cost
allocation of interagency receipts.
Representative Martin noted that all agencies would benefit from
the study. He observed that the study was recommended by the
Legislative Budget and Audit Committee.
Representative Davies spoke in support of the amendment. He
suggested that the allocation of interagency receipts is too high.
A roll call vote was taken on the MOTION to adopt Amendment Rev-9.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Therriault,
Hanley
Representative Mulder was absent from the vote.
The MOTION FAILED (3-7).
Representative Grussendorf MOVED to adopt Amendment Rev-10 (copy on
file). Representative Martin OBJECTED. Amendment Rev-10 would add
$93 thousand dollars from the Permanent Fund to restore two
permanent fund dividend specialist I positions.
Representative Martin spoke against the amendment. He maintained
that appeals have been reduced.
Representative Grussendorf observed that there is still a backlog
in appeals.
Representative Martin explained that the amendment was introduced
in subcommittee.
Representative Davis noted that the Department of Revenue supports
the amendment.
A roll call vote was taken on the MOTION to adopt Amendment Rev-10.
IN FAVOR: Davies, Davis, Grussendorf, Moses
OPPOSED: Foster, Kelly, Kohring, Martin, Therriault, Hanley
Representative Mulder was absent from the vote.
The MOTION FAILED ( 4-6).
Representative Grussendorf MOVED to adopt Amendment Rev-11 (copy on
file). Amendment Rev-11 would add $51 thousand dollars in mental
health trust program receipts to the Mental Health Trust Authority
for an administrative position. Representative Martin expressed
support for the amendment. There being NO OBJECTION, it was so
ordered.
HB 75 and HB 76 were as HELD in Committee for further
consideration.
ADJOURNMENT
The meeting adjourned at 4:02 p.m.
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