HOUSE BILL 76 "An Act making appropriations for the operating expenses of the state's integrated comprehensive mental health program; and providing for an effective date." DEPARTMENT OF ENVIRONMENTAL CONSERVATION Co-Chair Therriault MOVED to adopt DEC-#5. [Copy on file]. He explained that the amendment would increase the State Emergency Response Commission/LEPC grants to the second refined requested level by SERC. Preliminary request to Department of Environmental Conservation (DEC) was $576 thousand dollars, refined request to DEC was $422 thousand dollars, second refined request was $351 thousand dollars. The amount allocated in the Governor's budget was $311 thousand dollars. The Administration has offered no explanation as to why the requested amount was not considered. Co-Chair Therriault pointed out that the amendment would add an increase of $39.7 thousand dollars in Response Fund expenditures which would not affect the general fund line while at the same time would bring the LEPC's funding to the second refined requested amount. There being NO OBJECTION, DEC-#5 was adopted. Representative Kohring WITHDREW DEC-#6. [Copy on file]. There being NO OBJECTION, it was withdrawn. Representative J. Davies MOVED to adopt DEC-#7. Representative Kohring OBJECTED for the purpose of discussion. Representative J. Davies explained that the amendment would provide the necessary funding to allow the unit to continue investigation and prosecution of individuals who willingly and willfully disregard laws that protect public health. Representative Kohring spoke of the Subcommittee's intent in addressing the Department of Environmental's budget actions. He noted that the Criminal Investigation Unit is an aggressive entity and with an unreasonable approach. He suggested that the Department should "shift" money from within other BRU's. Representative J. Davies noted that he was not aware of specific instances in which the Unit had been overly aggressive. The Subcommittee's proposed reduction would prelude DEC from investigating and prosecuting individuals whose activities endanger public health, as reflected in the following actual cases: *Intentional discharge of sewage into the Kenai River; *Intentional discharge of sewage into residential areas where children become exposed to fecal water; *Misrepresentation of real estate as it relates to on- site septic systems; *Dumping hazardous materials along a riverbank; *Failure to perform required tests on seafood to ensure safe consumption for people. Representative Kohring MOVED to amend DEC-#7, deleting $148.0 GF and inserting $98.0 GF. There being NO OBJECTION to the change, it was incorporated. There being NO OBJECTION to the amended DEC- Representative J. Davies MOVED to adopt DEC-#8. [Copy on file]. Representative Kohring OBJECTED. Representative J. Davies explained that the amendment would restore funding for the Kodiak Inspector's position and would allow Kodiak seafood processors and the Kodiak Livestock Company to continue to sell their products in national and foreign markets. Representative Kohring agreed the importance of the position. He emphasized that it should not be threatened as a result of cutting the budget. The Subcommittee's intent was to cut communications, rentals and leases. Representative J. Davies commented that the Legislature has established positions of "charge-backs" to the Department of Administration (DOA) to address these concerns. Consumers are being asked to pay for the things that they are consuming. The intent is that agencies will become more careful in the way they spend their budget. DOA must be given the opportunity to make adjustments and that the amount charged in the prior fiscal year was too low. Representative Kohring responded that system wide, the Department is charging exorbitant numbers. He suggested that since DEC is being cut and they disagree with the cuts, they are attempting to obtain additional revenue reflected in the inflated charged rates. Representative Grussendorf reminded members that the entire fishing and meat industry will be held responsible for any problems. Inspection is essential and the Department must make the cuts at some level. He encouraged members to support DEC-#8. Representative Kohring pointed out that there are 32 inspector positions statewide and he felt that one should be moved to Kodiak. REPRESENTATIVE ALAN AUSTERMAN noted that the position would directly affect his district. If it was the intent of the Administration to place in jeopardy the commercial industry, he recommended that the Legislature should "call their bluff". The seafood industry can work without an inspector on site. He pointed out that Kodiak has the biggest processing responsibility outside of Unalaska. If something happens, that responsibility will fall back onto the Administration. A roll call vote was taken on the MOTION. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: Kelly, Kohring, Martin, Mulder, G. Davis, Foster, Hanley, Therriault. The MOTION FAILED (3-8). Representative J. Davies WITHDREW DEC-#9. [Copy on file]. There being NO OBJECTION, it was withdrawn. Representative J. Davies MOVED to adopt DEC-#10. [Copy on file]. Representative Kohring OBJECTED. Representative J. Davies explained that the amendment would restore the amount necessary to fund travel for the Joint Pipeline Office liaison at the request of and funded by receipts from industry and for travel costs associated with DEC's participation on the Kenai River Advisory Board monthly meetings in Soldotna. Without the travel funding, DEC will not be represented for Lease Sales 85A, as well as water quality protection for the Kenai River. Representative Kohring disagreed that travel money should be added back into the budget. A roll call vote was taken on the MOTION. IN FAVOR: Moses, Mulder, J. Davies, Grussendorf, Kelly OPPOSED: Kohring, Martin, G. Davis, Foster, Therriault, Hanley The MOTION FAILED (5-6). Representative J. Davies MOVED to adopt DEC-#11. [Copy on file]. Representative Kohring OBJECTED. Representative J. Davies explained that the amendment would restore the funding necessary to maintain and repair laboratory equipment which is used to analyze raw fish, finished and value added seafood, dairy, red meat and other food products to ensure safety for the consuming public. In addition, the equipment would be used to test water and soil samples for contaminants that may impact human health. Denial of funding would result in maintenance and repairs being deferred, delays in completing required tests and possible endangerment of public health. A roll call vote was taken on the MOTION. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: Martin, Mulder, G. Davis, Foster, Kelly, Kohring, Hanley, Therriault The MOTION FAILED (3-8). DEPARTMENT OF NATURAL RESOURCES Representative Kelly revised DNR-#1 changing the BRU component to Parks and Rec Management, Historical Preservation Office for $50 thousand dollars and the component of Parks Management for $50 thousand dollars. An additional BRU for Resource Development, component Water Development add an additional $50 thousand dollars. Representative Kelly MOVED the amended DNR-#1. [Copy on file]. Representative J. Davies asked to change the Parks Management unit to $52.5 thousand dollars. Representative Kelly stated that would be a "friendly" change. There being NO OBJECTION to the amended DNR-#1, it was adopted. Representative Kelly MOVED to adopt DNR-#2. [Copy on file]. There being NO OBJECTION, the amendment was adopted. Representative J. Davies revised DNR-#3 deleting $189.3 thousand dollars and inserting $131.4 thousand dollars. Representative J. Davies MOVED to adopt DNR-#3. [Copy on file]. Co-Chair Hanley OBJECTED. Representative J. Davies explained that DNR-#3 would restore full funding for the component which would ensure that the current level of service could be maintained and that parks could accommodate the increasing number of visitors who annually spend many dollars in the State. Representative Kelly countered, the subcommittee realized that there would be impacts and decided to cut this area rather than water development. A roll call vote was taken on the MOTION. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: Mulder, G. Davis, Foster, Kelly, Kohring, Martin, Therriault, Hanley The MOTION FAILED (3-8). Representative J. Davies MOVED to adopt DNR-#4. [Copy on file]. Representative Kelly requested to AMEND DNR-#4 by deleting $75 thousand dollars from the component of Geological Development and in the BRU Admin, $40 thousand dollars from the Recorders Office. Representative Grussendorf questioned the effect of the deduction to the recorder's office. Representative Kelly stated that it would not have a negative effect as it had been added to and then was removed from the Governor's requested amount. There being NO OBJECTION, DNR-#4 was adopted. Representative J. Davies MOVED to adopt DNR-#5. [Copy on file]. Representative Kelly OBJECTED. Representative J. Davies explained that DNR-#5 would restore funding for the assistant to the Commissioner, two development specialists and a Natural Resource's officer. He stressed that agriculture was underfunded in the State and that removal of the positions would provide for the demise of the program. Representative Kelly clarified that the program had been funded under the Agriculture Revolving Loan Fund (ARLF). Representative Davies pointed out that he was advocating for a funding switch from ARLF to general funds. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, Grussendorf, Moses OPPOSED: Mulder, G. Davis, Foster, Kelly, Kohring, Hanley, Therriault Representative Martin was not present for the vote. The MOTION FAILED (3-7). Representative J. Davies MOVED to adopt DNR-#6. [Copy on file]. Co-Chair Hanley OBJECTED. (Tape Change HFC 97-81, Side 2). Representative J. Davies explained that DNR-#6 would provide additional funding, reducing permitting and lease time. He pointed out that would be an addition to the Governor's request. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, Grussendorf, Moses OPPOSED: G. Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). Representative J. Davies MOVED to adopt DNR-#7. [Copy on file]. He pointed out the funds used would be from the ARLF funds. Representative Kelly stated that he did not object to the recommendation. There being NO OBJECTION, DNR-#7 was adopted. Representative J. Davies MOVED to adopt DNR-#8. [Copy on file]. Co-Chair Therriault OBJECTED. Representative J. Davies commented that the amendment would restore the funding level to State Fairs. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Moses, J. Davies OPPOSED: G. Davis, Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (3-8). Representative J. Davies MOVED to adopt DNR-#9. [Copy on file]. Co-Chair Hanley OBJECTED. Representative J. Davies explained that the amendment would allow the state parks to be supported by "user" fees. He pointed out that eighty percent of the visitation to the parks is from Alaska residents. He proposed that the $2.2 million dollar program receipts in the Department's budget be split in half. Co-Chair Hanley stated that the amendment would have little impact and that he would prefer to keep it the way in which the Department had structured the use. Representative J. Davies explained that the Department did not object to the amendment and that the amendment would not impact the bottom line. A roll call vote was taken on the MOTION. IN FAVOR: Grussendorf, Kelly, J. Davies OPPOSED: Foster, Kohring, Martin, Mulder, G. Davis, Therriault, Hanley Representative Moses was not present for the vote. The MOTION FAILED (3-7). OFFICE OF THE GOVERNOR Representative Foster MOVED to adopt the revised GOV-#1. [Copy on file]. KYLE JOHANSEN, STAFF, REPRESENTATIVE BILL WILLIAMS, noted that the special project funding in the amount of $75 thousand dollars was intended for the Southeast sea urchin fishery. To date, the amount previously funded in combination with GOV-#1 would provide $171 thousand dollars. There being NO OBJECTION, GOV-#1 was adopted. DEPARTMENT OF CORRECTIONS Representative J. Davies MOVED to adopt COR-#1. [Copy on file]. Representative Mulder OBJECTED. REPRESENTATIVE GENE KUBINA explained that the amendment would restore $1.5 million dollars to the entire BRU. He stated that the proposed cuts would force a 92 position vacancy within the institution for the next fiscal year. That reduction would fall mostly upon the Division of Institutions. The unallocated amount coupled with premium pay reductions, would add 29 more forced vacancy throughout the twelve institutions. Representative Mulder spoke against COR-#1 noting that the Department of Corrections budget over the past three years has been increased over $13 million dollars. The level of reduction in the referenced BRU is 2.577 below the FY97 authorized level with authorization to carry forward spending. He added, the subcommittee's intent was to bring down the average cost per day per inmate. He noted that the current cost is $105 dollars per day. ROBERT COLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF CORRECTIONS, commented that in FY95, the Department inherited a $13.5 million dollar supplemental. That fiscal year, the supplemental was reduced to $7 million dollars. Of the $14 million difference between the FY96 and FY98 request, about $5 million was for the out-of-state contract and the additional $4.8 million dollars was for the community jails. Consequently, of the $14 million dollars, $9 million was "eaten" up on contracts which the Department had no choice but to implement. In the last two years, the Department has not had a supplemental budget request. The Governor submitted a conservative budget, the difference in the request from FY97 was $1.7 million dollars which was for negotiated contracts. The proposed budget presumes that the Department could cut at least $4 million dollars out of basic operations. He emphasized that would be a serious challenge for the Department. The correctional population is rising. The proposal for the budget recommends eliminating the special assistant to the Governor, reducing the travel and contractual budget and eliminating funding for data processing. There are thirteen pages of proposed cuts. Representative Moses asked if services to municipalities had been collected. Mr. Cole stated that the Department tries, although, there is not exist a formula for charge-backs. The State has responsibility for misdemeanors. In order to solve the issue, there needs to be an equitable formula which can be used for all municipalities. In response to Representative Martin question, Mr. Cole advised that the jail population is increasing. Since the 1980's, there has been a 300% increase in the number of persons incarcerated due to changes in the criminal code on the federal and state level. Representative J. Davies questioned the premium pay issue. Mr. Cole explained that the Department is required to carry a certain percentage of vacancy. The premium pay pays for a shift differentials and also for the over-time costs. A roll call vote was taken on the MOTION to adopt DOC-#1. IN FAVOR: Grussendorf, Moses, J. Davies OPPOSED: Kelly, Kohring, Martin, Mulder, G. Davis, Foster, Therriault Co-Chair Hanley was not present for the vote. The MOTION FAILED (3-7). Representative J. Davies MOVED to adopt DOC-#2. [Copy on file]. Representative Mulder OBJECTED. Representative Kubina explained that the proposed replacement of $1.1 million general fund dollars with federal funds would be a disallowed transaction under federal grant rules. He stressed that the states' eligibility for the actual receipt of the federal Crime bill grant funds would be in jeopardy. Representative Mulder countered that the question would be the use of the federal funds and what they would be appropriated for. He stated that it was clear in the federal statutes that the money must be used for new beds. It is not the intent of the Subcommittee to remove any beds or to use any State general funds. The reduction of general funds is a separate issue. (Tape Change HFC 97-82, Side 1). A roll call vote was taken on the MOTION. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: Kohring, Martin, Mulder, G. Davis, Foster, Therriault Representatives Kelly and Hanley were not present for the vote. The MOTION FAILED (3-6). Representative J. Davies MOVED to adopt DOC-#3. Copy on file. Representative Mulder OBJECTED. Mr. Cole explained that Amendment #3 would address the proposed replacement of $1 thousand general fund dollars with the federal crime bill funds and would be a disallowed transaction under federal grant rules and the states' eligibility for actual receipt of the federal crime bill grant funds would be in jeopardy. Representative Mulder stated that the federal funds were to be used for purchasing more soft beds. The position made to the Department of Justice is that the purchase of additional soft beds would eliminate some of the overcrowding in the existing facilities, which is the intention for the funds. Representative J. Davies requested further clarification of the issue. Mr. Cole noted that the problems with DOC-#2 and DOC-#3 is the math used to address what the cost for existing beds will be. New beds are a more complicated issue. He questioned if supplanting meant the replacement of funding that would have otherwise been appropriated had the federal money not been available or would it be restricted to funds appropriated, cut and replacement with other federal funds. Mr. Cole stressed that all three of these items are at issue. Representative J. Davies suggested that the funds would be better used as capital funds to actually expand the physical facilities. Representative Mulder reiterated that purchasing new soft beds would make better sense by encouraging the Department to use more soft beds which would expand the capacity. A roll call vote was taken on the MOTION. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: Kohring, Martin, Mulder, G. Davis, Foster, Kelly, Therriault Representative Hanley was not present for the vote. The MOTION FAILED (3-7). Representative J. Davies MOVED to adopt DOC-#4. [Copy on file]. Representative Mulder OBJECTED. Representative Kubina explained that the funds would reinstate the out-of-state contracts within the Administration and Operations BRU. That section would provide classification support, responsibility of prisoners assigned to out-of-state facilities, and general oversight of all out-of-state operations. If this program is within its own BRU, institutions would not be able to provide direct financial support for enhancement to the program. A roll call vote was taken on the MOTION. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: Martin, Mulder, G. Davis, Foster, Kelly, Kohring, Therriault Representative Hanley was not present for the vote. The MOTION FAILED (3-7). Representative J. Davies WITHDREW DOC-#5. [Copy on file]. There being NO OBJECTION, it was withdrawn. Representative J. Davies MOVED to adopt DOC-#6. [Copy on file]. Representative Mulder OBJECTED. Representative J. Davies stated that the amendment would delete one of the intent provisions which would transfer a pre-trial misdemeanor from jails to CRC's. He stated that was not practical. The pre-trail issue is problematic. Mr. Cole emphasized that there exists a "business obligation" to the private sector to place as many misdemeanant pretrial persons in CRC within 12 hours of booking unless a determination has been made that the prisoner is a threat to public safety. This is a public safety concern. Representative Mulder recommended a change to DOC-#6. He pointed out that currently there is no definition of nonviolent misdemeanor. The Legislature is trying to encourage the Department to put as many people as possible into half way house beds. He agreed that he was sensitive to domestic violence situations and would be amenable to adding language to the end of the first section: "The Department should be sensitive to the safety of victims, before placing misdemeanant convicted of crimes involving domestic violence." Representative Mulder MOVED that language following removal of "delete" and changing it to "amend". Discussion followed regarding striking the language "nonviolence" in part (b) of the amendment and adding the same sentence following portion (b). There being NO OBJECTION, the above language was changed. FRONT SECTION Co-Chair Hanley MOVED to adopt the Division of Insurance section to the Front #1-Governor's recommended amendment. [Copy on file]. There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to adopt the Alaska Science and Technology Foundation section to the Front #1. There being NO OBJECTION, it was adopted. Co-Chair Hanley noted that the Department of Natural Resources section would not be moved. The $150 thousand dollars will be added in the supplemental budget. Co-Chair Hanley MOVED to amend the Alaska Public Utilities Commission section changing it to designated program receipts. There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to adopt the amended Section 12(c) which will return it to standard language. There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to adopt the amended Section 13(a) which will allow the utilization of the Department of Fish and Game funds. There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to adopt the amended Section 19 which would correct the funding source for occupational licensing. There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to adopt Section 26(c), State Debt and other Obligations. There being NO OBJECTION, it was adopted. (Tape Change HFC 97-82, Side 2). Co-Chair Hanley noted that the amended Section #31 and Section #4 would be HELD. Co-Chair Hanley MOVED to adopt Section 11, which would provide the deletion of the Exxon Valdez Oil Spill Trustee Council. There being NO OBJECTION, it was adopted. Co-Chair Hanley noted that Sections 16(b), 16(c) and 16(d) would not be deleted. Co-Chair Hanley spoke to adoption of Front-#2 and it's components. [Copy on file]. He stated that he would amend the amendment to add a deletion to Page 7, Line 12 (c): "Except as provided in (d)," and to Page 7, Lines 15-17, delete (d). Co-Chair Hanley noted that Section 1 is the intent language already outlined in the Executive Budget Act. The second part of the amendment would increase AHFC dividend to general fund account for the recently released Insurance Fund. The final part of the amendment would be the Governor's intent when addressing fiscal notes. The Legislature can fund fiscal notes at Conference Committee. Representative J. Davies MOVED to divide the question of Front-#2 into Section A, change to Page 1, and Section B, addressing the remaining portion of the amendment. There being NO OBJECTION, it was divided. Co-Chair Hanley MOVED to adopt Front-#2(B). There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to adopt Front-#2(A). Representative J. Davies OBJECTED. Representative Grussendorf questioned how such a change would affect the long range fiscal plan. A roll call vote was taken on the MOTION. IN FAVOR: Moses, Mulder, G. Davis, Foster, Kelly, Kohring, Martin, Therriault, Hanley OPPOSED: J. Davies, Grussendorf The MOTION PASSED (9-2). Co-Chair Hanley MOVED to adopt Front-#3. [Copy on file]. He explained that the possibility of federal match rate change for the State's payment of Medicaid funds. The change could result in a reduced State payment from 50% to 38% rate. The amendment assumes this will pass this fiscal year, with a net zero intent. Representative J. Davies noted concern with the contingency decision associated with the proposed change. Co-Chair Hanley stated that the Legislative Budget and Audit Committee (LBA) could authorize the increased federal funds. There being NO OBJECTION, the amendment was adopted. Representative Grussendorf MOVED to adopt the new Front-#4. [Copy on file]. Representative Martin pointed out that the $9 million dollars from Wishbone Hill was separate funding and was not included in the Railroad. Co-Chair Hanley noted that the appropriation had been to the Alaska Railroad and that it could not be spent without a contract dealing with the Wishbone Mine. Representative Martin commented that he would accept the changed Representative G. Davis OBJECTED to Front-#4. He stated that he was opposed because it would put more constraints on the Railroad and would not provide a true assessment of the true value. Co- Chair Hanley pointed out that the amendment would not have any effect on the legislation currently in the Legislative Body. A roll call vote was taken on the MOTION. IN FAVOR: Foster, Kelly, Kohring, Martin, Hanley OPPOSED: Mulder, J. Davies, G. Davis, Grussendorf, Moses Representative Therriault was not present for the vote. The MOTION PASSED (5-5). Representative Grussendorf MOVED to adopt Front-#5. [Copy on file]. He stated that the amendment would add $125 thousand dollars to the Alaska Marine Highway System fund to restore funding for the operation of the bars on the ferries. VIRGINIA STONKUS, FISCAL ANALYST, LEGISLATIVE FINANCE DIVISION, corrected that the new number for the Marine Highway stabilization fund is $28.383 million dollars. Co-Chair Hanley OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: J. Davies, G. Davis, Grussendorf, Moses OPPOSED: Foster, Kelly, Kohring, Martin, Mulder, Therriault, Hanley The MOTION FAILED (4-7). (Tape Change HFC 97-83, Side 1). STATEWIDE Co-Chair Hanley MOVED to adopt State-#1. [Copy on file]. He explained that items in the proposed amendment were capital budget projects which were not included in the Mental Health Trust Authority indicating a true capital budget request. There being NO OBJECTION, it was adopted. As a technical amendment, Co-Chair Hanley MOVED that the capital projects be added as part of the title for the capital bill. There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to adopt State-#4. [Copy on file]. Co- Chair Hanley explained that this amendment was needed to complete transfers associated with the Executive Order '98 which transfers Weights and Measures from Commerce and Commercial Vehicles Inspections from Public Safety to the Department of Transportation and Public Facilities. There being NO OBJECTION, it was adopted. HB 75 and HB 76 were HELD in Committee for further consideration.