Legislature(1997 - 1998)
03/09/1998 04:45 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
9 March, 1998
4:45 p.m.
TAPES
SFC 98 # 71, Side A (000-558)
CALL TO ORDER
Senator Drue Pearce, Co-Chair, reconvened the meeting at
approximately 4:45 p.m.
PRESENT
In addition to Co-Chair Pearce, Senators Sharp, Donley,
Torgerson, Adams, Parnell and Phillips were present when the
meeting was convened.
Also Attending: Senator GARY WILKEN; DAN SPENCER, Office of
Management and Budget, Office of the Governor; KEVIN BROOKS,
Director, Division of Administrative Services, Department of
Fish and Game; MARY PETE, Director, Division of Subsistence,
DF&G; WAYNE REGELIN, Director, Division of Wildlife
Conservation, DF&G; DWIGHT PERKINS, Special Assistant,
Office of the Commissioner, Department of Labor; DAN
KANOUSE, Budget Analyst, Division of Employment Security,
DOL; JAMES COATE, Program Coordinator, DES, DOL; NICO BUS,
Administrative Services Manager, Division of Support
Services, Department of Natural Resources and Department of
Military and Veterans Affairs; Colonel GARY PETERSON,
Director, Alaska National Guard Youth Corps, DM&VA; SHARON
BURTON, Director, Division of Administrative Services,
Department of Administration; KEITH GERKEN, Architect,
Facilities Section, Division of General Services, DOA; MIKE
GREANY, Director, Division of Legislative Finance; DAVE
TONKOVICH and SUSAN TAYLOR, Fiscal Analysts, DLF; and aides
to committee members and other members of the Legislature.
via Teleconference: from Anchorage: BARBARA MIKLOS,
Director, Division of Child Support Enforcement, Department
of Revenue.
SUMMARY INFORMATION
SENATE BILL NO. 292
"An Act making supplemental appropriations; making,
amending, and repealing capital or other
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
(Companion Legislation:)
CS FOR HOUSE BILL NO. 461(FIN)
"An Act making supplemental and special appropriations
and amending appropriations; and providing for an
effective date."
The committee continued hearing department presentations
from the morning meeting, with the intention of completing
the items in Section One of SB 292 and Section J of HB 461.
KEVIN BROOKS was invited to the table to speak to the
SUBSISTENCE SPECIAL PROJECTS request (Section 1-G.) He told
the committee the department was requesting $120.6 in
federal receipts that was originally listed as a Legislative
Budget and Audit Committee request. That was consistent with
Legislative intent that the department work with the
subcommittee chair last session to bring those types of
requests before the LB&A committee. He said that because
LB&A was not meeting during the session, the request was
included in the supplemental bill.
This request was comprised of five small projects, according
to Mr. Brooks. The anticipated completion dates of the
projects ranged from as early as this April to June, with
all needing to be completed by September. He said three
projects would cross the fiscal year cutoff. The department
included in this year's budget request, receipts needed to
accommodate the portions that would occur in FY99. Because
of this, he stressed there was a time-sensitivity for these
projects.
Co-Chair Sharp said it was his understanding that the money
would come, not from federal fish and game funds, but from
the National Park Service to do studies for that agency on
the traditional use of game in some of the Game Management
Units. Mr. Brooks responded that there were a couple
sources of funding coming from the NPS, US Forest Service
and the US Fish and Wildlife Service, but none of these were
the federal aid dollars typically talked about with regard
to the Sport Fish and Wildlife Conservation divisions.
This concluded discussion on the subsistence projects. At
the request of DAN SPENCER, the committee jumped ahead to
address SITKA HERRING ROE KELP FISHERY. This item was
listed in Section 1-M in the house bill and Section 8-B in
the Governor's original bill.
Mr. Brooks said the project in question here was $463,800
Test Fish Receipts for a herring fishery in Sitka. The
department brought that item before LB&A committee where
there was general agreement that the project should go
forward. However, the committee decided that they did not
have the authority to act on test fish receipts given the
limitations in the front section of the Operating Bill for
FY98. It was therefore agreed, he said, to bring this item
forth in the supplemental bill.
Mr. Brooks stated that this project had a time-sensitivity,
as well as the other ADF&G request. The department had told
the LB&A committee they had test fish receipts on the books
for other projects that could be used to get started on this
project. However, doing so would jeopardize the other
projects since all the money has been allocated. With that
knowledge, the department went ahead and started the bidding
process since this fishery would occur in April. That was
the reason they were asking for consideration of this
funding in the fast-track bill.
There were no questions and the ADF&G requests were
completed. The committee moved ahead to Department of
Military and Veterans Affairs request for funding of the
ALASKA NATIONAL GUARD YOUTH CORPS CHALLENGE PROGRAM.
NICO BUS introduced himself and Colonel GARY PETERSON who
were both before the committee to speak to this request.
Mr. Bus explained the $608,000 request for the Youth Corps
was to basically finish operations for federal FY98. He
said the FY98 Governor's budget included $3 million federal
funds. For federal fiscal year 1998, the youth corps
funding was $2.1 million. To continue the program and start
the next class of 80 students would require $608,000 General
Funds to carry through June 30, according to Mr. Bus. For
operations after that date, the department and Legislature
would have to address funding for the remainder of that
class. The classes run from March through September and
another class starts in September and ends in February.
Mr. Bus reminded the committee that the youth corps program
had been a pilot program for three years and was then
converted into a regular program.
Senator Adams requested the "cost per student" - how much
this was costing per student for the at-risk youths. Mr.
Bus replied the cost per graduate amount, which he
emphasized was calculated in that manner rather than
figuring the cost for each enrolled participant, was about
$21,750.
Senator Phillips wanted a breakdown of that figure including
the $2000 stipend. Mr. Bus responded that the basic cost of
the program was for the 24-hour residential facility,
including salaries of the instructors and staff, the lodging
and meals for all the students and at the time of
graduation, the award to students of a $2000 stipend. This
stipend was paid out over a yearlong period with the student
required to prove they still met set criteria on a quarterly
basis.
Co-Chair Pearce asked when the next class was scheduled to
begin. Mr. Bus replied they hoped to start the next class
March 18, which was next week. How many students, Co-Chair
Pearce also wanted to know. Mr. Bus said that would be
contingent upon funding, but they were shooting for 80
graduates. That would mean enrolling more than 80 students,
with the hope of having 80 making it to graduation.
No other questions were asked on the subject of the youth
corps. The committee moved to the next item in the
supplemental request, DEPARTMENT OF ADMINISTRATION - LEASES,
listed under Section 1-K in the Governor's bill, Section 1-I
in the House Bill.
SHARON BARTON spoke to this request. She said when the FY98
budget was passed, the department projected the leasing
budget would be short approximately $1.7 million. The net
effect of activities since that time resulted in a total
request somewhat less, of $1.413 million, she explained.
This bill included $1.29 million in this section, and
$383,600, which was in Section Two. Because there would be
a cash flow problem with the normal schedule for the
supplemental bill, the department asked that the $1.29
million be included with any fast-track efforts, she
summarized.
Senator Phillips relayed a question he earlier asked of
Dugan Petty, Director of the General Services division. Mr.
Petty was unable to attend the meeting but Ms. Burton
assured that KEITH GERKEN was present to answer any
questions. The senator said he had wanted information
regarding air conditioning and heating within the recently
purchased Bank of America building in Anchorage. He had
concerns that the system would not be adequate to
accommodate planned future growth for use of the building.
Mr. Gerken responded that he didn't have any information
from Mr. Petty on that matter, but he would follow up and
get back to the senator. Senator Phillips asked if this
issue was part of the request listed in this section of the
supplemental. Mr. Gerken told him it was not.
Senator Adams wanted to know the reason for the split
request for this funding. Ms. Burton told him it was the
department's proposal to fund as much of the supplemental
needs from the surplus in the Longevity Bonus Grant Program.
They projected they had a million dollars surplus in that
program. So after they funded the OPA and proposed fund
from that $1 million, there was $383,600 left that could go
to the leasing supplemental, she explained. When the
department requested the fast track, OMB asked if the
$383,600 could be left in the regular supplemental. The
department decided that would be adequate and not disrupt
cash flow. If the $1.3 million could be fast-tracked, the
cash-flow problem would be alleviated.
Senator Donley said he was still not satisfied that this
agency had done all it could to reduce costs. Therefore, he
would not support additional money for them at this point.
He stressed that he thought the Legislature had sent a very
clear message to them last year on this subject. He felt
this was making an already badly skewed system even worse.
This concluded discussion on the lease payment topic. Mr.
Gerken requested the committee take up the supplemental
request in Section 1-H. Co-Chair Pearce told him her intent
was to first hear from the Department of Revenue on CSED -
grants for child support enforcement purposes in Section 12-
C-7. However, the teleconference hook-up was lost and the
committee was unable to hear testimony from Anchorage on
this topic. Co-Chair Pearce decided to then proceed with
the Department of Labor, Section 1-H in the Governor's bill
that did not appear in the House Bill version. This request
was for ALASKA DISASTER ASSISTANCE PROGRAM - BRISTOL BAY
ECONOMIC DISASTER.
DWIGHT PERKINS introduced himself, DAN KANOUSE and JAMES
COATE, who were available to answer any questions. Mr.
Perkins spoke to the request for $3 million appropriated
from the General Fund for programs to mitigate the impact of
the Bristol Bay Economic Disaster for the fiscal year ending
June 30, 1998. He informed the committee of enabling
legislation in SB 333 to implement these programs.
Currently, the department did not have statutory authority
to disperse this money to the recipients, he explained.
Senator Phillips relayed questions he had received from
constituents. During 1986, 1988 and 1989, there was an
economic disaster in the Anchorage area, where his
constituents did not receive any relief. Why is this
current request so special versus the crash in oil prices,
which resulted in the decrease in home valuations, loss of
jobs and tens of thousands of people leaving Anchorage, he
asked? He wanted to know how this was different from that
economic disaster.
Mr. Perkins responded saying he did not have a good answer
for what he was asking. He conceded that things were
certainly tough during the times the senator was referring.
This current request would have an impact on people who are
in serious financial woes. This money would not give large
sums to individuals, but would help those in need. He could
not tell the committee why there was no relief in 1985 for
the Anchorage constituents.
Senator Phillips clarified his question, asking why there
was a departure from previous Administration's policies to
not grant the relief. He spoke of the deep economic
recession during the late 1980's and wondered how this
situation was different from then. Mr. Perkins said he
appreciated that observation, but countered that Governor
Knowles was currently in office and he felt there was a need
and wanted to try to help those individuals. With the
Legislature's help it could be done, Mr. Perkins stressed.
Senator Donley shared Senator Phillips concerns and felt
that was an important question the Governor should address.
He compared this proposal to others the Governor offered and
stated that usually the Governor dropped those proposals on
the table and failed to do any of the necessary follow-up
work needed to garner support. He wanted to hear an answer
to that question. He went on, referring to the morning's
meeting where, in his opinion, some of this relief was miss-
characterized as unemployment insurance. As someone who had
worked with the DOL, Mr. Perkins should recognize that these
programs were not unemployment insurance payments, but
disaster relief payments. The senator felt it was doing a
disservice to the Unemployment Insurance Program. He asked
how the department was characterizing the relief payments
that were to be made to individuals.
Mr. Perkins responded, pointing out that SB 333 talked about
the Alaska Disaster Assistance Program. The legislation
would provide a cash benefit to individuals who had suffered
a loss to primary income due to the economic disaster in the
fishing industry.
Senator Donley wanted to know which organization would
decide who got how much money and why. Mr. Perkins said it
was all spelled out in SB 333 and that Mr. Coat could give
more detail, if the committee wanted.
Senator Donley observed that the money was clearly linked to
that program and that he would have to know a lot more about
that program before he could support handing out the cash.
He stressed that he would need to know what safeguards were
in place and how it would be administered and protected from
abuses. Mr. Perkins replied that he would be happy to make
an appointment with him to go into the details of SB 333.
Senator Torgerson surmised that this supplemental request
was not properly before the committee if there was no
authorization to spend the money to begin with. Therefore,
there was no need to discuss the issue.
Senator Adams stated that the Legislature has the power to
appropriate and that was what they were doing with this
piece of legislation. He added that he thought this program
was a worthy cause. He suggested that if current committee
members were in the Legislature in 1985, they could have
offered similar assistance during the oil prices crisis.
Also, if the current Governor had been in office, he could
have done the same. Senator Adams counseled against
bringing the issue up now just because the lawmakers at that
time didn't take action. He assigned part of the blame to
the Legislators for not putting the funds into the
supplemental.
This concluded discussion on the disaster relief matter.
Co-Chair Pearce directed the committee's attention to
Section 1-J, which was Section 12-C-7 in the Governor's
bill, GRANTS FOR CHILD SUPPORT ENFORCEMENT PURPOSES.
BARBARA MIKLOS was linked to the meeting via teleconference
from Anchorage. She explained the reason this request was
added to the supplemental because there were three federal
grants the division was awarded last October. One of those
grants was 100% federally funded. The division sent the
request to the Legislative Budget and Audit Committee where
it was approved. However, the other two grants required
five-percent state match and were added to the fast-track
supplemental because of the federal requirement to begin
implementing the programs, she said.
Ms. Miklos told the committee how one of those grants was to
fund childcare agencies and Headstart programs to work with
non-custodial parents and coordinate activities. The intent
was to work with the parents as much as possible to enable
them to make the child support payments as opposed to
maintaining an adversarial relationship.
The larger of the two grants would enable the division to
modify more quickly the child support orders, according to
Ms. Miklos. One of the major concerns she heard when she
talked to people, whether Legislators or the public, was the
length of time it took the agency to modify child support
orders when income had changed. This often meant that the
income of the obligor had gone down, sometimes it meant that
the income had gone up, she explained. This federal grant
would enable the division to be more efficient and try
innovative ways to make that process faster.
She summarized what the CSCD was asking for was the
authority to receive the federal money for these two grants
and provide the five-percent state-funded match. Mr.
Spencer joined the discussion telling the committee of two
changes to the language in the original bill to how it
appeared in HB 461. He explained the first change was to
correct a drafting error. The original bill stated the
appropriation was for a grant, when in fact the grants had
been received, so the request was for regular program
purposes as Ms. Miklos just explained. The second reflected
a change to the original language that showed a lapse date
of June 30, 1998, instead of the correct four-year state
fiscal years the grants cover. The lapse date was then
extended in the house bill version to June 30, 2001, he
said.
Senator Torgerson referred to the Review and Adjustment
System Demonstration Project and said he had been trying for
years to get the CSCD to automatically modify support
orders. The problem he always ran into the situation where
it was required to go back before the judge who issued the
original order. How is this going to affect court orders
that the division was under and allow them to be changed, he
asked. Ms. Miklos responded that they were under two kinds
of orders, one being administrative orders which didn't
require them to go back before the judge and could be done
automatically. This is what the system was designed to do,
she said. In the case of court orders, the CSCD still
determined the amount, gathering income information and they
make the adjustments. The faster the division could get
that information and submit it to the courts, the quicker
the court order could be modified, Ms. Miklos explained.
She said they still play a part in the court orders and this
program would help expedite that piece.
Senator Torgerson didn't see how that would help. He wanted
to know if the division was hiring new people, buying a new
computer or what they were doing to help the situation. Ms.
Miklos replied that the grant included additional staff and
also some resources to help them program the computer and to
change the way they operated through the computer system.
They would be able to match with data from various agencies
so it could be done automatically, she added.
Senator Torgerson asked if Ms. Miklos anticipated this being
an on-going appropriation after the grant ran out. She said
no, unless the department received another federal grant.
By the time the current grant ended, she expected the system
would be implemented.
Senator Torgerson requested a copy of the actual grant. Ms.
Miklos said she had a copy of the award pages. Senator
Torgerson also had that, but said it didn't tell him
anything. She agreed. He found some words in the award
pages pretty scary because it said. "...by spending any
money under this grant constitutes the acceptance of
following the contents of this grant." He didn't know what
that was. He felt this might be well and good, but didn't
see how it would operate and save any time or make things
faster.
Ms. Miklos responded, surmising that the language said two
things. One, if the state started spending under the grant,
it meant that they accepted it, which they hadn't begun yet
since they were still waiting for approval from the
Legislature. Secondly, the whole purpose of the grant was
to make things faster so they would be more automated
allowing the division to match the data with the data that
comes in.
Co-Chair Pearce recalled a federal requirement that said the
division had to have a system. Was this part of that
system, she wondered. No, replied Ms. Miklos, the federal
law included some options in terms of how they modified.
This would help CSCD explore the best option for Alaska, but
was not part of the computer requirements.
Co-Chair Pearce requested further information about the
actual grant. Ms. Miklos said she could provide the grant
application from which the award was made. Co-Chair Pearce
asked Senator Torgerson if that would be sufficient to
answer his questions. He said he hoped so. His point was
that the Legislature had been constantly asking for
automatic or modified orders and hadn't got there. Now they
were being told that if they appropriate $1.3 million all
the problems would be fixed. He didn't see that, there was
nothing there to substantiate that, he felt. He realized it
was mostly federal money, but said he wouldn't be in favor
of approving the request until he knew what they were doing.
Ms. Miklos said she would be glad to get the committee the
materials she had and if there were any additional things
they needed, she would get them also. Co-Chair Pearce said
she would like that as soon as possible. It was her
understanding that the house bill would be on the floor of
the House of Representatives soon and when it came to the
Senate Finance Committee; they would be taking action very
quickly.
Senator Donley wanted to know if this proposed computer
equipment might help deal with a problem he had identified
in some of his legislation. This concerned fixing the court
system to help parents who were not receiving their due
child support by helping them with their income tax
deductions that were being used to support themselves or the
children. Ms. Miklos responded that these grants didn't
speak to that issue so she didn't know if it would be able
to help with that need. She thought there were other ways
they could help.
Senator Donley requested information showing the perimeters
which this money would be used. Ms. Miklos said she would
be glad to get that to him.
This concluded discussion on the grants for CSCD.
Co-Chair Pearce requested additional information from Mr.
Spencer on a different item, Section 1-D of the Governor's
bill. This was Section 1-C of the house bill, MATERNAL
CHILD AND FAMILY HEALTH CARE SPECIALTY CLINICS that
requested $100,000. She voiced confusion as to why it was
included in the supplemental request and particularly in the
fast-track supplemental request, because she understood the
Legislature had funded a set number of clinics and this
request added additional clinics. The budget request for
FY99 went back to the original 50 clinics. She said she
wanted to know why and also how many children would benefit
from the additional $100,000.
The committee took up an item in Section 8-C of SB 292 at
the request of Senator Sharp. This was a request for a
change of funding source from federal fish and game funds,
to state fish and game funds.
Senator Sharp thought the department was close to going to
bid on this project and that was why it was included in the
supplemental.
WAYNE REGELIN was invited to come to the committee to speak
to this item. He explained that when this projects was
originally funded for $2 million the department set up the
funding to be split 50/50 between ADF&G funds and federal
aid receipts. Since doing that, he had learned of
restrictions in the federal aid account on how much money
could be spend on hunter education activities.
Mr. Regelin said there were plenty of funds in the federal
aid account, but only a small amount of those could be used
for hunter education like building rifle ranges. ADF&G had
adequate state fish and game funds to make this switch, so
they asked the Legislature to change the match from 50/50 to
75% ADF&G funds and 25% federal aid dollars. Then they
could move forward with the project, which was ready to go
to bid now.
Co-Chair Pearce asked for clarification that the fish and
game account had sufficient funds for this project. Mr.
Regelin assured her that they had adequate reserves in that
fund.
Senator Sharp said he had no questions or comments, but
wanted to make sure to get the department's testimony on the
record so the committee could try to accommodate the request
later.
In deciding which item to next address, Co-Chair Pearce
noted Senator Adams' interest in the TCA funds. She pointed
out that was surrounded by some even larger policy issues
since the fund was going to be depleted soon. There was a
hazardous waste cleanup included in Section 4, but the area
of particular interest to Senator Adams was the KASILOF
HATCHERY included in Section 8-A in the Governor's
supplemental funding bill.
Co-Chair Pearce said the committee was quite aware of the
TCA problem. Senator Adams explained this request. He told
the committee how ADF&G leased a portion of Native allotment
land from a resident called Theodore Booth. For the last
two years the Legislature had not funded the hatchery so the
hatchery portion was disposed from the request. All that
was left in the request was for the hazardous waste clean up
of $56,800.
Mr. Spencer added that to his understanding, the state would
continue to lease the land until it was finished cleaning it
up. Senator Adams pointed out that the cleanup was done.
Co-Chair Pearce asked for clarification that this request
was to cover the cost of the lease payments even though the
funds had already been allocated for the cleanup. This
request was to recover the lease payments for the owner.
Senator Adams said he had the funding listed as waste
cleanup. Mr. Spencer said that while the state was working
on the cleanup, the landowner was losing lease income. This
was to make up for the landowner's loss.
Co-Chair Pearce asked if there was any sort of legal opinion
saying if the state was liable for these costs. Both Mr.
Spencer and Senator Adams said they did not know it there
were any. Co-Chair Pearce directed Mr. Spencer to look into
that.
Co-Chair Pearce asked committee members if they had any
other areas they would like to address at this meeting.
There were none and the co-chair ORDERED SB 292 HELD until
HB 461 was received in committee. The house bill would be
the vehicle for the Governor's budget supplemental. She
anticipated this would happen soon.
Mr. Spencer added a preview of what was to come. He told
the committee the supplemental would be updated to reflect
judgements and any miscellaneous claims that may come in
after today. He noted that OMB had already received three
or four RPL-type items, which would also be submitted to the
committee. He expected his office would have an amendment
would be out this week.
The committee took a five-minute at ease at 5:30pm and came
back to address SB36.
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