Amendments for the following budgets were considered: Department of Labor Department of Law Department of Natural Resources Department of Environmental Conservation Department of Community and Regional Affairs Department of Health and Social Services Alaska State Legislature Office of the Governor Front Section HB 50 was REPORTED out of Committee with a "do pass" recommendation. HB 51 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." HB 51 was REPORTED out of Committee with a "do pass" recommendation. DEPARTMENT OF LABOR Representative Austerman MOVED to ADOPT Amendment LAB-A: Delete: Department of Education Alaska Vocational Technical Center Alaska Vocational Technical Center Operations 770.5 GF/PR Delete: Department of Education Alaska Vocational Technical Center Alaska Vocational Technical Center Operations 29.5 GF Add: Department of Education Alaska Vocational Technical Center Alaska Vocational Technical Center Operations 800.0 SDPR Add: Department of Labor Labor Standards and Safety Occupational Safety and Health 800.0 GF 1,000.0 Federal Funds Representative Austerman explained that the amendment would protect the private sector and allow time for the transition to federal takeover of the Occupational Safety and Health Inspection Program (OSHA). Representative Grussendorf questioned how much of the funding would be available for the private sector. Co-Chair Mulder explained that the intention is to allow for the inspection of public facilities during the transition period. Representative Austerman clarified that Amendment LAB-A is the total amount needed to make the transition. Representative Grussendorf question who should be responsible for OSHA functions. He observed that under federal supervision, problems would be addressed through federal administrative judges. He spoke in support of an Alaskan program. Co-Chair Mulder acknowledged concerns and indicated that the transition to federal oversight would not have been taken if it were not for the current financial situation. The intent is to make adjustments and allow for spill oversight within OSHA. Oversight would be through the federal government. Representative G. Davis asked for clarification of statutory designated program receipts for the Alaska Vocational Technical Center (AVTEC). Co-Chair Mulder stated that the intent is that tuition from the University of Alaska would go straight to the university. The AVTEC receipts would be handled in the same manner. ED FLANAGAN, COMMISSIONER, DEPARTMENT OF LABOR provided information about the OSHA transition to federal oversight. He noted that the amendment is an improvement on the subcommittee's recommendation. The amendment would allow for an orderly transition from the existing program at the end of the federal fiscal year to a system of federal enforcement. The private sector consultation was reinstated. This would allow the establishment of a public sector consultation and enforcement program. He anticipated that federal fines would be higher than state fines. In response to a question by Representative Grussendorf, Mr. Flanagan noted that a panel in Washington D.C would handle reviews. There being NO OBJECTION, Amendment LAB-A was adopted. Representative Austerman Withdrew Amendment LAB-1 (copy on file). Representative J. Davies Withdrew Amendment LAB-2 (copy on file.) Representative Grussendorf Withdrew Amendment LAB -3 (copy on file.) Representative J. Davies MOVED to ADOPT Amendment LAB- 4 as amended by the sponsor: Department of Labor Labor Standards and Safety BRU Occupational Safety & Health Component 1,309.2 Federal 284.9 GFM 23.1 I/A Analysis: The proposed addition to the Alaska Occupational Safety and Health Program (AKOSH) restores the State Plan program (23(g) Grant) for ensuring protection of Alaska workers and also restores the federal grant monies from EP A to provide oversight on asbestos work sites. If the federal and general fund match for the (23(g)Grant) program are not restored it will mean that Alaska will no longer enforce occupational and health standards in the work place, private or public. Without enforcement, situations may exist that put workers at risk of injury, such as the recent incident at the Alaska Office Building where employees were transported to the hospital due to air quality. The OSH staff performed analysis sampling to determine the cause, risk and plan for remediation before employees could return to the building. Although the federal government would take over private sector enforcement, public employers and employees (municipal and state) would not be covered unless the State was to continue to provide general funds. Failure to continue to provide a state funded public sector consultation and enforcement program would result in 56,000 state and local government workers and their employers having no protection or assistance. Additionally, if this funding is not restored, safety standards that are unique to Alaska will not be operative under federal enforcement, e.g. helicopter logging, petroleum processing, night blasting and confined spaces. Finally, enforcement of state asbestos worker certification will be lost. The elimination of all funding does not allow sufficient resources for transitioning of an orderly federal takeover by July 1, 1999, thus causing confusion for employees and employers throughout the private sector. The only other case of a state returning a program to OSHA was the State of California in 1987, and lack of a coherent transition was largely responsible for a voter's initiative that restored the state program one year later. The appeal process for employers would change drastically since the federal process differs from Alaska. Currently, initial appeals are heard by our Review Board comprised of a representative from industry, labor and the public. Federal OSHA uses an administrative Law Judge for the initial appeal process, and if it is denied at that level, it is then forwarded to a Federal OSHA Review Board. There is a potential impact to employers and employees due to out- of-state hearings such as out-of state- travel, long distance phone, fax costs and other related costs. Receipts from citation fines of approximately $280.0 per year are currently deposited into the general fund, but would no longer be available due to the loss of public sector enforcement and the return of private sector enforcement to Federal OSHA. There are 31 positions associated with the 23(g) program funding. Program staff includes enforcement officers, consultation and training staff, review and non-discrimination, administrative, clerical, and information system support positions. Positions are located in Anchorage, Fairbanks, Juneau, Kenai, and Ketchikan. Four of the 31 positions are Director's Office staff. Of the four Director's Office staff, the primary management position affected by this reduction is the Division Director. The AKOSH program currently funds salary costs of $62.0 plus associated costs. These costs will be borne by the other programs in the Division since the position is an integral part of on- going operations. Loss of funding will also impact the other three Director's Office positions (Administrative Manager, Administrative Assistant, and Secretary. These positions assist the Director in the on- going operations of the division by providing oversight and support in matters pertaining to budget, financial management, legislation, personnel, purchasing, regulations, public inquiries, etc. Interagency Receipts for this component, which were also eliminated, are for administrative oversight by the Administrative Manager of Wage and Hour, and Mechanical Inspection; administrative oversight by AKOSH staff to the Alaska Safety Advisory Council; program work on asbestos; and participation in the State Emergency Response Commission (SERC). In response to a question by Representative Grussendorf, Mr. Flanagan discussed the federal grant from the Environmental Protection Agency for asbestos removal. He noted that the state would not be eligible for the grant with the adoption of Amendment LAB-A. Without the grant there would be no private sector program. The grant is $50 thousand dollars a year and can be used on public buildings. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder The MOTION FAILED (3-7). Representative Grussendorf MOVED to ADOPT Amendment LAB-5: Department of Labor Labor Standards and Safety BRU Mechanical Inspection Component 79.3 general funds Analysis: This amendment responds to a portion of the Subcommittee's reduction of 124.1 that was originally part of the FY 99 one-time belt tightening reduction. The Subcommittee extended this reduction into FY 00 by reducing the Commissioner's Office 124.1. The department proposed the elimination of a Fairbanks Wage & Hour Technician to address part of the 124.1 reduction (44:8) and the elimination of a Kenai Electrical Inspector for the remaining portion of the reduction (79.3). This amendment restores the Kenai Electrical Inspector. Loss of this position will require the two remaining inspectors to cover the inspection areas currently assigned to the Kenai inspector. This position performed 410 inspections in FY 98 on the Kenai Peninsula, in Western Alaska and the chain. The Wasilla inspector is extremely busy with the valley, performing 670 inspections in FY 98 while the Juneau inspector performed 352 in all of Southeast Alaska. It is expected that the Juneau position would have to absorb the lion' s share of the Kenai inspections, traveling to the Peninsula, the chain and some of the West Coast. It would be physically impossible for two inspectors to be able to produce the same amount of inspections now performed by three. The annual goal for each inspector is 400. This goal has been met, or nearly so by the Kenai and Juneau inspectors and far exceeded by the Wasilla inspector. In all likelihood, the Wasilla inspector will continue to cover the valley and will travel to some other areas, while the other inspector performs most of the inspections in outlying areas. The overall inspection output will be reduced by an estimated 350 inspections or approximately 25% of the FY 98 production level. The impact to the public will be a greater number of electrical installations in new construction and repairs across Alaska that are not code-compliant resulting in hazardous and unsafe conditions. Mr. Flanagan observed that the position in question is an electrical inspector. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder The MOTION FAILED (3-8). Representative Grussendorf MOVED to ADOPT Amendment LAB-6. Representative Austerman OBJECTED. Labor Standards and Safety BRU Wage and Hour component 44.8 general funds Analysis: This amendment responds to a portion of the Subcommittee's reduction of 124.1 that was originally part of the FY 99 one-time belt tightening reduction. The Subcommittee extended this reduction into FY 00 by reducing the Commissioner's Office 124.1. The department proposed the elimination of a Fairbanks Wage & Hour Technician to address part of the 124.1 reduction (44.8) and the elimination of a Kenai Electrical Inspector for the remaining portion of the reduction (79.3). This amendment restores the Fairbanks Wage & Hour Technician position. The loss of this position will require the agency to abandon timely auditing of all certified payrolls. Currently, the technician routinely audits certified payrolls as the information is received. With reduced staffing, payrolls will be filed immediately (with no auditing) and the filing will have to be performed by the remaining staff (investigators and one clerk). Only in cases where complaints are received, or where investigations have been opened, will audits of certified payrolls be performed. These audits will now have to be performed by the investigator for the Title 36 program. The investigator responsible for the Title 36 program is already backlogged with his investigations. Having to perform the audits of certified payrolls will increase his case backlog by 50% to 75%. Presently he can turn his audits over to a technician while he performs his various investigative functions, both routine and specific. Having to perform his own audits will extend the time required to complete investigations and reduce the time available for on- site inspections. If this position is not restored, the overall impact will result in reduced effectiveness of the enforcement program by fewer investigations being conducted and increased time for each investigation to be concluded. This in turn can result in a delayed collection process for overdue wages owed employees. Co-Chair Mulder noted that the reduction was offered by the Administration as a part of the "belt tightening" effort. He observed that any general fund reduction in the Department of Labor is painful. Mr. Flanagan clarified that there was a one-time reduction in FY99 due to vacancy and a hiring freeze. He noted that there were 10 wage and hour inspector positions in the Fairbanks office ten years ago. With this reduction there would be four positions left. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder The MOTION FAILED (3-8). DEPARTMENT OF NATURAL RESOURCES Representative Kohring MOVED to ADOPT Amendment DNR-A: Department of Natural Resources BRU: Land Management Component: Land Management (Planning) 100.0 GF DELETE Department of Natural Resources BRU: Land Management Component: Land Management (Shore Fisheries) 100.0 PR There being NO OBJECTION, it was so ordered. Representative Kohring MOVED to ADOPT Amendment DNR-B: ADD Department of Natural Resources BRU: Parks and Recreation Management Component: State Historic Preservation Program 100.0 GF Match DELETE Department of Natural Resources BRU: Land Management Component: Land Management (Shore Fisheries) 100.0 PR There being NO OBJECTION, it was so ordered. Representative Kohring MOVED to ADOPT Amendment DNR-1: Department of Natural Resources BRU: Information/Data Management INTENT: It is the intent of the legislature for the Recorder's Office to be able to fulfill its statutory responsibilities under AS 40.17.070, including the creation and maintenance of a daily log and index for recorded documents to their owners after recording. If workload impacts the ability of the existing Recorder's Office staff to index documents within 24 hours of recording, then it is the intent of the legislature that the Recorder's Office should hire non-permanent employees to assist with the workload and request supplemental funding for fiscal year '00. Representative Kohring noted that there have been backlogs in some of the Recorder Offices. He noted that there has been a decline in the number of real estate transactions. The intent language was at the suggestion of the department. There being NO OBJECTION, Amendment DNR-1 was adopted. Representative Kohring Withdrew Amendment DNR-2 (copy on file.) Representative Foster Withdrew Amendment DNR-3 with the understanding that the issue would be addressed (Nome Recorder's Office) (copy on file.) Representative J. Davies MOVED to ADOPT Amendment DNR-4. Representative Kohring OBJECTED. BRU: Mining, Geological and Water Development Component: Water Development $135. SDPR Representative J. Davies spoke in support of the amendment. He noted that the amendment would restore the program receipt amount. A $50 dollar fee is paid to record water rights. Co-Chair Mulder noted that the funds did not fall under the definition of statutory designated program receipts. Representative J. Davies argued that the funds should be considered as statutory designated program receipts if the department is going to continue to collect the fees. He asked if small miners are being abandoned. Vice Chair Bunde observed that there is an erroneous notion that if an individual has water rights that the state will defend them in court to protect their water rights. The program is a database recording system. Representative Kohring agreed that the state has a minimal role in adjudicating water rights. He maintained that the reduction is minimal. (Tape Change, HFC 99 - 73, Side 2) A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder The MOTION FAILED (3-8). Representative J. Davies Withdrew Amendment DNR-5 (copy on file.) Representative J. Davies MOVED to ADOPT Amendment DNR-6: BRU: Information / Data Management Component: Information Resources Management $100 GENERAL FUNDS Representative J. Davies noted that the intent of the amendment is to maintain the LANS Information Management System at the status quo level. He noted that $75 thousand dollars would cover a 7 percent salary increase given to all information technology positions in an effort to bring state salaries in line with private salaries. There was a $25 thousand dollar reduction from FY99. This would result in a reduction of staff that handles mining claim records. Representative Kohring spoke against the amendment. He observed that there was an additional $50 thousand dollars in federal receipt authority. The department intends to pursue more federal funding. Representative J. Davies pointed out that even with the additional $50 thousand dollars in federal authorization that the component is $200 thousand dollars below the governor's request. A roll call vote was taken on the motion. IN FAVOR: Davies, Grussendorf, Moses OPPOSED: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder The MOTION FAILED (3-8). Vice Chair Bunde maintained that the Recorder's Office has used state publications to encourage lobby the legislature for more funding. Representative J. Davies Withdrew Amendments DNR-7, DNR-8 and DNR-9 (copies on file.) In response to a question by Representative G. Davis, Representative Kohring discussed reductions to the state Historical Preservation Program. He noted that federal mandates prevented the reduction. NICO BUS, ADMINSTRATIVE SERVICES MANAGER, DIVISION OF SUPPORT SERVICES, DEPARTMENT OF NATURAL RESOURCES provided information on DNR-A. He observed that it would change the Shore Fisheries program from a lease to a permit program. This would simplify the program. The existing shore fisheries leases would stay in place until they expire. After they expire they would be offered the same area under a registered permit. Mr. Bus noted that the additional $100 thousand dollar reduction in the Division of Land would restore some of the area wide planning capability. There would still be a $500 thousand dollar reduction. He added that when a reduction occurred two years previously in the Historic Preservation program, there was an expectation that staffing would be reduced. Since this time there has been an increase in the workload through the Department of Transportation and Public Facilities. Staff has been retained through interagency receipts from ISTEA funding. In response to a question by Representative Austerman, Mr. Bus stated that shore fishermen would retain their rights. The adjudication would be faster. DEPARTMENT OF ENVIRONMENTAL CONSERVATION Representative Williams MOVED to ADOPT Amendment DEC-1: DELETE BRU: Environmental Health Component: Food Safety and Sanitation $1,471,000 statutory designated program receipts Agency: Department of Environmental Conservation ADD BRU: Environmental Health Component: Food Safety and Sanitation $1,471,000 GF/PR Co-Chair Mulder OBJECTED for the purpose of discussion. He noted that the issue is the elimination of the Food Safety and Sanitation program. He noted that the department recommended that the program be fee based and operated as a statutory designated program receipts program. He observed that the program does not meet the requirements of statutory designated program receipts. The amendment would return the program from statutory designated program receipts to general fund program receipts (GFPR). He maintained that the food inspection program is an expansion of $300 thousand dollars. BARBARA FRANK, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION maintained that the amendment would not be an expansion of the program. She clarified that there was an increment of $330 thousand dollars that was denied. The amendment would keep the program as it exists with a small increase in fees. Co-Chair Mulder WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. Representative Williams MOVED to ADOPT Amendment DEC-2: Delete Agency: Department of Environmental Conservation Unallocated Reduction $213,000 GF Representative Williams noted that the unallocated reduction was part of the Governor's belt tightening in the supplemental appropriation. (Technical Failure) Representative Williams discussed the amendment. He clarified that the amendment should have stated that the unallocated reduction would be added. He MOVED to AMEND Amendment DEC-2 by deleting "delete" and adding "add". MICHELLE BROWN, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION discussed the proposed reduction. (Tape resumes) Commissioner Brown clarified that the state currently does not have primacy of water permitting. The state has primacy of drinking water. Representative Grussendorf observed that the reduction would result in federal assumption of air and water quality. He observed that the original "belt tightening" reduction was the result of a position that was kept vacant for the last few months of the fiscal year. The department planned to fill the position in the next fiscal year. Co-Chair Mulder questioned if the hiring freeze remains in place for FY00. Commissioner Brown did not know if the freeze would remain. Representative J. Davies maintained that the "belt tightening" measures were not expected to be annualized. He argued that belt tightening reductions were only intended for FY99 and emphasized that the measures taken were identified due to limitations on what could be done toward the end of the fiscal year. Co-Chair Mulder stated that there was an expectation by the Legislature that the belt tightening would continue. A roll call vote was taken on the motion to amend. IN FAVOR: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder OPPOSED: Grussendorf, Moses, Davies The MOTION PASSED (8-3). A roll call vote was taken on the main motion. IN FAVOR: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder OPPOSED: Grussendorf, Moses, Davies The MOTION PASSED (8-3). Representative Williams MOVED to ADOPT Amendment DEC-3: Delete Administrative Services $68,899 general funds Co-Chair Mulder noted that the amendment would remove a public relations officer. Representative J. Davies spoke against the amendment. Co-Chair Mulder maintained that the public service can still be provided with the remaining personnel. Representative J. Davies WITHDREW Amendment DEC-4 (copy on file.) Representative J. Davies MOVED to ADOPT Amendment DEC-5 as amended by the sponsor to read: Environmental Health Component: Food Safety and Inspection 330.0 (SDPR) GFPR Representative J. Davies spoke in support of the amendment. He stressed that the state's inspection frequency is 50 percent below the department's goal. He maintained that the level of inspection is the minimal amount required for health and safety. Less than a dollar a day fee increase would be needed to implement the amendment. Ms. Frank explained that facilities are divided into low and high-risk categories. High-risk facilities include those that process foods with known toxins, full service restaurants, meat processing not covered under federal inspection, labor camps, institutions, secondary schools, day care and pools. The highest risk factor facilities, which the department would like to inspect four times a year, include those that can and smoke seafood or meat, low acid canning and vacuum packed processing. Vice Chair Bunde acknowledged that there are valid areas of state concern. Representative J. Davies noted that in the high-risk areas the average inspection is once every 18 months. The amendment would increase inspections to one and a half to two times a year. Co-Chair Mulder acknowledged the need but emphasized that the budget reflects the change of the program's focus to program receipts. He maintained his objection based on a need to prevent budgetary expansion. (Tape Change, HFC 99 -74, Side 1) Representative Williams explained that the subcommittee considered turning inspections over to communities. In response to a question by Vice Chair Bunde, Ms. Frank noted that the department finds serious hazards on a regular basis. Facilities are closed on a regular basis. Commissioner Brown added that 300,000 pounds of food was destroyed in the last year because it couldn't be sold. A roll call vote was taken on the motion. IN FAVOR: Austerman, Davies, Grussendorf, Moses OPPOSED: Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder The MOTION FAILED (4-7). Representative J. Davies MOVED to ADOPT Amendment DEC-6: BRU: Division of Facility Construction and Operations Component: Construction and Operations 315.8 CIP Receipts Co-Chair Mulder OBJECTED. He questioned the funding source. He asked if the positions were temporary. DAN EASTON, DIRECTOR, DIVISION OF FACILITY CONSTRUCTION AND OPERATION, DEPARTMENT OF ENVIRONMENTAL CONSERVATION clarified that the funding would be for four new permanent positions. He explained that if the new capital funds to support the project do not materialize that the positions would not be filled. If the capital funds cease, the positions would be open to budget reductions. He stated that it might be possible to contract the services. Co-Chair Mulder stated that he would not object to the positions being state employees if he felt assured that once the CIP receipts were gone that the positions would be eliminated. Commissioner Brown assured him that this would be the logical outcome. Representative J. Davies emphasized that the legislature can control the appropriation. In response to a question by Representative Grussendorf, Mr. Easton clarified that the CIP funding is for drinking water, sewer and solid waste projects. Engineers would be working with the design team to assure that projects are suitable to the environment. There are currently 17 employees in the program, of which 12 are engineers. They oversee 140 active projects and approximately $200 million dollars. Representative Austerman OBJECTED. He maintained that the state has taken federal dollars that are unnecessary. Discussion ensued regarding federal funding of state projects. Mr. Easton pointed out that the village safe water program serves unincorporated programs with between 25 and 600 people. Commissioner Brown reiterated that the positions would be eliminated when the CIP funding ends. She added that 70 cents of every dollar is spent in Anchorage and Fairbanks because that is where the professional services are contracted. A roll call vote was taken on the motion. IN FAVOR: Williams, Bunde, Davies, Davis, Foster, Grussendorf, Moses, Mulder OPPOSED: Austerman, Kohring, Therriault The MOTION PASSED (8-3). Representative J. Davies MOVED to ADOPT Amendment DEC-7: Department of Environmental Conservation BRU: Air and Water Quality Component: Air Quality 80.0 CIP Representative Williams OBJECTED. Representative J. Davies explained that the amendment would provide for a full time employee to investigate the issue of state primacy of air and water quality. Representative Williams agreed that it is a policy issue that he did not feel comfortable taking on in the subcommittee. Ms. Frank noted that the department would hire one employee that would set up a work group to complete the study. They would be a temporary employee. She noted that the Resource Development Council (RDC) and the Alaska Oil and Gas Association (AOGA) want to be involved in the planning process. They will be the ones to carry a large portion of the costs. It would be a largely fee based program with a price tag of approximately $2 million dollars. Co-Chair Therriault questioned if state dollars are needed. He noted that accepting primacy for the water program would require legislation. He asked why a bill is not before the committee. Ms. Frank responded that a bill cannot be placed before the legislature until there is a plan to support it. The amendment would provide funding to develop a plan. Representative J. Davies spoke in support of changing the funding source to statutory designated program receipts to allow industry an opportunity to support development of a plan. Commissioner Brown felt that it would be less expensive for the state to development a plan than to contract with the private sector. A motion was made to change the funding source to statutory designated program receipts. There being NO OBJECTION, Amendment DEC-7 was amended. Co-Chair Therriault expressed concern that the use of state dollars would send it down the road to further state expenditures. Commissioner Brown noted that some of the technical expertise and analysis would be done by contractors. She did not anticipate federal dollars to run part of the program. There being NO OBJECTION, Amendment DEC-7 was adopted as amended. DEPARTMENT OF LAW Representative Kohring MOVED to ADOPT Amendment Law-1: ADD Human Services $100.0 General Fund DELETE Environmental Law ($100.0) General Fund Program Receipts Representative Kohring explained that the addition in the Human Services component addresses children in need of aid. He observed that the department has submitted the net zero amendment. KATHRYN DAUGHHETEE, DIRECTOR, ADMINISTRATIVE SERVICES DIVISION, DEPARTMENT OF LAW explained that the general fund program receipts in Environmental Law have not materialized in the last couple of years. She stated that the department would prefer to move the funds as pure general funds to the Human Services component to allow funding for four positions that are already on staff. The positions were added into the FY99 budget, but only partial year funding was authorized. There being NO OBJECTION, it was so ordered. DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS Representative Austerman MOVED to ADOPT Amendment CRA-7: Representative Austerman explained that the amendment corrects technical errors. Co-Chair Mulder noted that the Administration supports the amendment. There being NO OBJECTION, it was so ordered. DEPARTMENT OF HEALTH AND SOCIAL SERVICES Co-Chair Therriault MOVED to ADOPT Amendment HSS-17: DELETE Department of Administration Senior Services BRU Protection, Community Services & Administration component 12.5 MHTAAR Funds The Alaska Mental Health Trust Authority requests this correction. This is a technical adjustment that reduces Mental Health Trust Authority Receipts that were incorrectly placed in the Department of Administration for Planning of the Comprehensive Mental Health Plan. Co-Chair Therriault spoke in support of the amendment. He noted that it was introduced on behalf of the Trustees. There being NO OBJECTION, it was so ordered. Co-Chair Therriault MOVED to ADOPT Amendment HSS-18: ADD Department of Administration Senior Services BRU Protection, Community Services & Administration component 180.0 MHTAAR Funds The Alaska Mental Health Trust Authority has approved the use of Mental Health Trust Authority receipts of 105.0 for Rural Long Term Care Development and 75.0 for Analysis of Economic Impacts of Declining Income of Seniors. These projects were accepted by the Legislature in the FY99 budget last year. The Trust will restrict the use of these funds for FY99. Co-Chair Therriault noted that the amendment was offered on behalf of the Trustees. There being NO OBJECTION, it was so ordered. Co-Chair Therriault did not offer HSS Intent language (copy on file.) FRONT SECTION Co-Chair Therriault WITHDREW Amendment Front-1 (copy on file.) Co-Chair Therriault MOVED to ADOPT Amendment Replacement 2 FRONT-2: MEDICAID SCHOOL BASED CLAIM. If the federal receipts for the School Based Services Administrative Claim under 42 U.S.C. 1396a (1902(a)(4), Title XIX Social Security Act) fall short of the estimate, the amount of the shortfall is appropriated from the general fund. Explanation: In the FY99 Budget the legislature replaced base general funds in the .Human Services Matching Grant and the Maternal Child and Family Health programs with federal revenue from the Medicaid School Based Claim. The level of actual revenue collected in FY99 is approximately $443,000 less than expected. The federal revenue is determined by a formula, which includes the number of Medicaid eligible children in Alaska as well as a number of other factors. The Department projects that there is a 50% chance that the revenue shortfall can be made up if the Denali KidCare program continues as projected to enroll Medicaid eligible children. This language will allow the department to award grants etc. on a timely basis. Without this language the following reductions to the Human Services Matching Grants could occur: FY99 GRANT FYOO SHORTFALL FYOO GRANT Municipality of Anchorage 1,324.4 (293.1) 1,031.3 Fairbanks North Star Borough 427.6 (94.6) 333.0 Co-Chair Therriault spoke in support of the amendment. There being NO OBJECTION, it was so ordered. Co-Chair Mulder MOVED to ADOPT Amendment FRONT-3 as amended by the sponsor to add the language as subsection 1(d). ALASKA HOUSING FINANCE CORPORATION. (a) The sum of $17,444,000 from the available unrestricted cash in the general account of the Alaska housing finance revolving fund (AS 18.56.082) is anticipated to be transferred to the general fund during the fiscal year 2000 by the direction of the board of directors of the Alaska Housing Finance Corporation. Explanation: This places AHFC funds that were replaced by general funds in the Department of Education into the general fund as a dividend. There is a net 0 change in the fiscal gap. The FY 99 base was adjusted to reflect this adjustment, as was the FY 00 allocation. JOHN BITNEY, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE spoke in support of the amendment. He explained that $17,444,000 million dollars was requested by the Governor for K-12 funding. There being NO OBJECTION, it was so ordered. Co-Chair Mulder MOVED to ADOPT replacement Amendment FRONT- 4: ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY. The sum of $18,000,000 from the available unrestricted cash in the Alaska Industrial Development and Export Authority revolving fund (AS 44.88.060) is anticipated to be transferred to the general fund as directed by the Alaska Industrial Development and Export Authority. The transferred money shall be deposited in the general fund when received during fiscal year 2000. This amendment reflects the AIDEA dividend for FY 00. There being NO OBJECTION, it was so ordered. Co-Chair Mulder MOVED to ADOPT Amendment FRONT-5: ADD Housing Assistance Payments Section 8 Program 16,000,000 federal receipts DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR spoke in support of the amendment. He noted that this item was one of the Governor's proposed budget amendments but was inadvertently omitted from the draft CS. There being NO OBJECTION, it was so ordered. Representative Grussendorf MOVED to ADOPT Amendment FRONT- 6: FEDERAL SUBSISTENCE FUNDS. (a) The United States Congress appropriated $11,000,000 to the United States Department of the Interior and the United States Department of Agriculture for the State of Alaska contingent upon the Alaska State Legislature adopting a constitutional amendment for ratification by Alaska voters to allow a rural subsistence priority. The full $11,000,000 appropriated by the Congress is available to the state if the legislature satisfies the contingency by June 1, 1999. If the contingency is satisfied after June 1, 1999, but by September 30, 1999, the sum of $10,000,000 will be available to the state. (b) If the federal contingency requirement described in (a) of this section is satisfied by June 1, 1999, the sum of $11,000,000 is appropriated from federal receipts to the Department of Fish and Game to help implement a unified subsistence management system and to provide support for the Board of Fisheries, Board of Game, regional advisory councils, and local advisory committees in that effort. The appropriation made by this subsection is allocated as follows: Support to the Board of Fisheries, Board of Game, regional advisory councils, and local advisory committees $3,000,000 Biological research, monitoring, and management to 21 ensure sustained yield and to improve utilization of fish and game for subsistence, commercial, and sport purposes 8,000,000 (c) If the federal contingency requirement described in (a) of this section is satisfied after June 1, 1999, but by September 30, 1999, the sum of $10,000,000 is appropriated from federal receipts to the Department of Fish and Game to help implement a unified subsistence management system and to provide support for the Board of Fisheries, Board of Game, regional advisory councils, and local advisory committees in that effort. The appropriation made by this subsection is allocated as follows: Support to the Board of Fisheries, Board of Game, regional advisory councils, and local advisory committees $2,725,000 Biological research, monitoring, and management to ensure sustained yield and to improve utilization of fish and game for subsistence, commercial, and sport purposes 7,275,000" Representative Grussendorf noted that the amendment would restore the governor's subsistence request, with the addition of a pro rata provision, for adoption of a constitutional amendment after June 1, 1999. Co-Chair Mulder stated that it was not his intention to remove the language from the legislation, but added that he would prefer to address the issue in a fiscal note. Representative Grussendorf pointed out that an appropriation bill would be needed. Co-Chair Therriault OBJECTED. Representative J. Davies spoke in support of the amendment. Discussion ensued regarding the chances for resolution of the subsistence issue during the Twenty-First Legislative Session. A roll call vote was taken on the motion. IN FAVOR: Davies, Davis, Grussendorf, Moses, Williams, Austerman OPPOSED: Bunde, Kohring, Therriault The MOTION PASSED (6-5). Representative J. Davies noted the absence of language relating to a needs based longevity bonus program that was contained in the Governor's submitted legislation. Co-Chair Mulder observed that if legislation relating to the longevity bonus program passes, funding could be reflected in the back section of the bill. Authorization is not needed in the front section. RECESSED Co-Chair Mulder recessed the meeting at 5:30 p.m. to allow the Legislative Finance Division to review the adopted amendments. RECONVENED Co-Chair Mulder reconvened the House Finance Committee meeting at 10:00 p.m. He provided members with a Technical Amendment-1 (copy on file). DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION reviewed the amendment. He explained that a number of the changes relate to fund source changes. Amendment CED-1 Commerce and Economic Development Tourism Marketing Council DELETE: .2 GF/Program Receipts ADD: .2 General Fund Mr. Teal explained that there were $200 hundred dollars in general funds within the general fund program receipts deleted by the Committee. Amendment CED-1 Commerce and Economic Development Tourism Development DELETE: 155.3 GF/Program Receipts ADD: 155.3 General Fund Mr. Teal explained that there were $200 hundred dollars in general funds within the general fund program receipts deleted by the Committee. He added that there were 14 full- time positions and 3 permanent part-time positions deleted by the Committee's action in adopting Amendment CED-1, without specific action. He noted that it would be a technical amendment since the positions were not included in the budget bill. Amendment DEC-7 Department of Environmental Conservation Air Quality 80.0 Statutory Designated Program Receipts Department of Environmental Conservation Water Quality ADD: 80.0 Statutory Designated Program Receipts Mr. Teal explained that Amendment DEC-7 did not specifically mention the addition of a position. The position was added. The affected component as listed was Air Quality. The actual affected component is Water Quality. Amendment HSS-7 Department of Health and Social Services Medical Assistance Administration ADD: 326.4 General Fund DELETE: 326.4 GF Match Mental Health/Developmental Disabilities Admin ADD: 164.2 General Fund DELETE: 164.2 GF Mental Health Alaska Mental Health Board ADD: 24.0 General Fund DELETE: 24.0 GF Mental Health Governor's Council on Disabilities and Special Education ADD: 5.0 General Fund DELETE: 5.0 GF Mental Health Advisory Board on Alcoholism and Drug Abuse ADD: 16.8 General Fund DELETE: 16.8 GF Mental Health Mr. Teal noted that there were a number of fund source changes in Amendment HSS-7. Amendment REV-1 Department of Revenue Child Support Enforcement ADD: 386.0 General Fund DELETE: 386.0 GF Program Receipts Mr. Teal noted that general funds were deleted that should have been general fund program receipts. Co-Chair Mulder MOVED to ADOPT Amendment Technical-1. There being NO OBJECTION, it was so ordered. Co-Chair Mulder noted that, according to his office, HB 50 as amended by the House Finance Committee is $35,945,000 million dollars below the FY99 adjusted base. The legislation is also $108,229,000 million dollars below the Governor's submitted request. The House Finance Committee substitute for HB 50 is below the original house draft. The Legislative Finance Division shows CSHB 50 (FIN) to be $18.5 million dollars below FY99 authorized. He noted the difference between summaries by Legislative Finance Division and his office. He explained that the summary compiled by his office took into account that education funding in FY99 should have been on budget. Education was funded through the Alaska Housing Finance Corporation dividend. He added that the House Finance Committee is $90,785,000 million dollars below the Governor's submittal for FY00. Co-Chair Therriault pointed out that funding for the Division of Tourism was removed from the House Finance Committee version. Approximately $5.3 million dollars would be added back in if legislation pertaining to the restructuring of the Division of Tourism were adopted. INTENT Co-Chair Mulder referred to intent language adopted by the subcommittee for the University of Alaska: It is the intent of the House Finance Committee to support the University of Alaska's efforts to increase the University general fund allocation for FY00. We will continue our efforts to identify funds and appropriation resources for the University to, as nearly as possible, meet the University's request of an additional $16.3 million general fund increment. Co-Chair Mulder noted that the letter of intent was directed to the House Finance Committee, not the budget as a whole. Co-Chair Therriault MOVED to report CSHB 50 (FIN) and CSHB 51 (FIN) out of Committee with individual recommendations. Representative Grussendorf observed that Power Cost Equalization (PCE) was not discussed. He noted that there is no funding source connected to the $17 million dollars indicated for PCE. Co-Chair Mulder observed that full funding for PCE is short by $6-7 million dollars. He stated his intent to attempt to find a funding source for a full appropriation. Representative J. Davies expressed concern with deletion of funding for revenue sharing and municipal assistance, reduction to Occupational Safety and Health inspections, reductions to the Department of Natural Resources and the failure to authorize an additional $10.9 million dollars for the University of Alaska. He acknowledged efforts by the Co- Chairs. Vice Chair Bunde acknowledged the difficulty to find a responsible budget that will produce the most value per dollar for the public. Representative Austerman expressed appreciation to the Co- Chairs. Co-Chair Mulder acknowledged that the result is in some ways a maintenance budget. He pointed out that there were shifts in programs. He stressed that the budget emphasizes children and public safety within the funding restraints. (Tape Change, HFC 99 -75, Side 1) Co-Chair Mulder thanked the staff of the Legislative Finance Division and the Administration. Representative G. Davis noted that there is still a projected deficit. He observed that some constituents want as much as $500 million dollars in further reductions. Co-Chair Therriault referred to other legislation still before the Committee. A roll call vote was taken on the motion to move the legislation from committee. IN FAVOR: Austerman, Bunde, Davis, Foster, Kohring, Williams, Therriault, Mulder OPPOSED: Davies, Grussendorf, Moses The MOTION PASSED (8-3). HB 50 and HB 51 were REPORTED out of Committee with a "do pass" recommendations.