HOUSE FINANCE COMMITTEE March 30, 1993 1:40 p.m. TAPE HFC 93-82, Side 1, #000 - end. TAPE HFC 93-82, Side 2, #000 - end. TAPE HFC 93-83, Side 1, #000 - end. TAPE HFC 93-83, Side 2, #000 - end. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 1:40 p.m. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Foster Representative Therriault Representative Grussendorf ALSO PRESENT Mike Greany, Director, Legislative Finance Division; Frank Turpin, Commissioner, Department of Transportation and Public Facilities; Jan Hansen, Director, Division of Public Assistance, Department of Health and Social Services; Janice Adair, Assistant Commissioner, Department of Environmental Conservation; Bruce Botelho, Assistant Attorney General, Department of Law; Karen Rehfeld, Fiscal Analyst, Legislative Finance Division; Theodore A. Mala, MD, MPH, Commissioner, Department of Health and Social Services. SUMMARY INFORMATION HB 55 "An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date." HB 55 was HELD in Committee. HB 67 "An Act relating to eligibility for and payments of public assistance; and providing for an effective date." HB 67 was HELD in Committee. 1 HOUSE BILL NO. 55 "An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date." UNIVERSITY OF ALASKA Co-Chair Larson MOVED to ADOPT AMENDMENT UA-7 (copy on file). He explained that the Amendment would use $150.0 thousand dollars of the Science and Technology Endowment Fund for a seed potato project. KAREN REHFELD, FISCAL ANALYST, DIVISION OF LEGISLATIVE FINANCE observed that there is $3 million dollars in the University of Alaska's budget for grants from the Fund. She noted that the estimated revenue from the Fund would just cover the appropriations from the Fund. from the clarified that funding for Amendment UA-7 would increase grants from the Science and Technology Fund to $3,150.0 million dollars. Representative Martin MOVED to AMEND the motion to specify that the $150.0 thousand dollar grant for the seed potato project will be allocated from the $3.0 million dollars appropriated for University of Alaska grants. There being NO OBJECTION, it was so ordered. Co-Chair Larson MOVED to ADOPT AMENDMENT UA-7 as amended. There being NO OBJECTION, it was so ordered. Representative Hanley MOVED to RESCIND the Committee's action in adopting UA-1 (copy on file). There being NO OBJECTION, it was so ordered. UA-1 was NOT ADOPTED. DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS Representative Foster MOVED to RESCIND the Committee's action in adopting CRA-3, to delete $22.8 thousand dollars for pay increase for a Deputy Commissioner position (copy on file). There being NO OBJECTION, it was so ordered. Representative Brown MOVED to ADOPT AMENDMENT CRA-3. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Hoffman, MacLean, Larson The MOTION FAILED (3-8). DEPARTMENT OF EDUCATION 2 Co-Chair MacLean MOVED to RESCIND the Committee's action in adopting Amendment DOE-2 (copy on file). There being NO OBJECTION, it was so ordered. Co-Chair MacLean provided members with a new Amendment DOE-2 (copy on file). She MOVED to ADOPT AMENDMENT DOE-2. Representative Navarre OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Hoffman, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Navarre The MOTION PASSED (10-1). DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES Co-Chair Larson provided members with a new Amendment DOT-5 (copy on file). He explained Amendment DOT-5. Co-Chair Larson MOVED to ADOPT AMENDMENT DOT-5. Representative Navarre OBJECTED. Representative Navarre noted that the amendment included a $200.0 thousand dollar unallocated reduction in maintenance and operations. FRANK TURPIN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES noted that the amendment represents a heavy administrative reduction. He stressed that the Department's administrative operations have been severely reduced. Representative Navarre asserted that reductions will result in less efficiencies. Commissioner Turpin expressed concern with the Department's ability to absorb the $200.0 thousand dollar unallocated reduction. Representative Grussendorf noted that the Department's budget has been previously diminished. Co-Chair Larson MOVED to AMEND the motion to reduce the unallocated reduction from $200.0 thousand dollars to $100.0 thousand dollars. There being NO OBJECTION, it was so ordered. Representative Navarre MOVED to AMEND the motion to delete the $100.0 thousand dollar unallocated reduction included in DOT-5. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (4-7). Commissioner Turpin noted that there will be jobs lost as a result of the adoption of DOT-5. He stressed that 3 administration has been reduced over the last two years. Co-Chair Larson MOVED to INCORPORATE AMENDMENT DOT-5, as amended, into HB 55. A roll call vote was taken on the motion. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Grussendorf, Hoffman, Navarre The MOTION PASSED (7-4). Representative Navarre MOVED to RESCIND the Committee's action in failing to adopt Amendment DOT-2 (copy on file). He asserted that the failure to provide funding for maintenance and operations of new facilities will result in greater deferred maintenance costs. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (4-7). Co-Chair Larson MOVED to ADOPT INTENT DOT-B: "It is the intent of the Legislature that General Fund reductions to the Alaska Marine Highway system be taken from travel, per diem, dues to the Alaska Visitors Association, education fees, and training costs". Co-Chair MacLean OBJECTED. JOHN BITNEY, LEGISLATIVE STAFF, REPRESENTATIVE LARSON explained that the intent language would replace Amendment 6. A roll call vote was taken on the motion to adopt Intent Language DOT-B. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Grussendorf, Hoffman, Navarre The MOTION PASSED (7-4). DEPARTMENT OF ENVIRONMENTAL CONSERVATION Representative Therriault MOVED to RESCIND the Committee's action in adopting Amendment DEC-6 (copy on file). He indicated his intention to transfer the funding from contaminated site cleanup to the Near Shore Demonstration Project. Representative Navarre OBJECTED. 4 (Tape Change, HFC 93-83, Side 1) Representative Navarre conceded that the Near Shore Demonstration Project has merit. He emphasized that funding for the Project should not be taken from contaminated site cleanup. A roll call vote was taken on the motion. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, Larson OPPOSED: Brown, Grussendorf, Hoffman, Navarre, MacLean The MOTION PASSED (6-5). Representative Therriault MOVED to AMEND Amendment DEC-6 by transferring $100.0 thousand dollars in contractual services OHSSRF to the Near Shore Project. There being NO OBJECTION, it was so ordered. Representative Hoffman MOVED to ADOPT AMENDMENT DEC-22 into HB 55 (copy on file). He explained that $440.0 thousand dollars would be used for Koyukuk School oil spill evaluation and cleanup. REPRESENTATIVE IRENE NICHOLIA explained that there is fuel spill contamination as a result of a faulty fuel line. The contamination is 75 feet from the village safe water facility. The estimated cost of site evaluation is $40.0 thousand dollars. The cleanup cost is estimated at $400.0 thousand dollars. Representative Brown MOVED to AMEND Amendment DEC-22, to insert after "for" "the Koyukuk School". There being NO OBJECTION, it was so ordered. Co-Chair MacLean asked for information regarding other contaminated sites within school districts. JANICE ADAIR, DEPUTY COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION noted that there is an emergency situation at the Kaltag school. She pointed out that the Kaltag school will fail off the Department's list of cleanup sites due to a lack of funding. She further discussed the Koyukuk site contamination. She noted that the contamination is the result of a broken fuel line. Co-Chair Larson noted that the actual cost of cleanup is unknown. Representative Therriault asked if Spill Reserve money could be spent for the Koyukuk contaminated site cleanup. Ms. Adair noted that expenditures of the Spill Reserve require an imminent and substantial threat to the public health or environment. She felt that the project would not qualify until it was closer to the water. She suggested the problem 5 be addressed before the problem becomes an emergency. Representative Therriault spoke in opposition to the amendment. Representative Brown emphasized that schools are involved. Co-Chair Larson suggested that the amendment be amended to appropriate $40.0 thousand dollars from the Mitigation Account to the Department of Environmental Conservation for the Koyukuk oil spill evaluation. Representative Hoffman stressed that if the evaluation demonstrates that the oil is approaching the water source that further appropriations would be a year away. He pointed out that a new well would need to be drilled if the oil is not contained. He observed that if the appropriation is made and the money not needed that it would lapse. Ms. Adair clarified that 470 funds could not be used to drill a new well. Representative Hanley noted that if the spill becomes an imminent danger the Department of Environmental Conservation can go in and cleanup the spill. Ms. Adair agreed and added that the Department would then cost recover against the school district. Co-Chair Larson reiterated the motion to ADOPT AMENDMENT DEC-22. A roll call vote was taken on the motion. IN FAVOR: Brown, Foster, Grussendorf, Hoffman, Navarre OPPOSED: Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (5-6). Representative Brown provided members with AMENDMENT DEC-25 (copy on file). She explained that the amendment would fund contaminated site cleanup at the Kaltag school. She noted that the problem began in 1986. She observed that the Department recommended that $150.0 thousand dollars be appropriated for the cleanup. Representative Hoffman MOVED to AMEND the motion to include $40.0 thousand dollars from the Mitigation Account to Department of Environmental Conservation for contaminated site evaluation for the Koyukuk School district. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to AMEND Amendment DEC-25 to appropriate to the Yukon Koyukuk School District for contaminated site evaluation: $60.0 thousand dollars for the Kaltag school and $40.0 thousand dollars for the Koyukuk school. There being NO OBJECTION, it was so ordered. 6 OIL HAZARDOUS SUBSTANCE RELEASE RESPONSE FUND INTER-AGENCY RECEIPTS (OHSSRF) Representative Therriault provided members with AMENDMENT DEC-24 detailing allocations of OHSSRF to agency's programs (Attachment 1). (Tape Change, HFC 93-83, Side 1) BRUCE BOTELHO, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW discussed OHSSRF appropriations to the Department of Law. He explained that the Department is counsel for Exxon Valdez litigation, assists with cost recovery and is general counsel for the Department of Environmental Conservation. Representative Therriault MOVED to ADOPT AMENDMENT DEC-24. Representative Brown OBJECTED. Representative Navarre noted that Amendment DEC-24 will reduce the Citizen's Oversight Council. Co-Chair Larson suggested that Amendment DEC-24 be adopted with the understanding that the Committee can address the Citizen's Oversight Council during deliberations on the Legislature's budget. Representative Brown referred to the lack of maintenance for repeater stations built during the oil spill. A roll call vote was taken on the motion to adopt AMENDMENT DEC-24. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Grussendorf, Hoffman, Navarre The MOTION PASSED (7-4). DEPARTMENT OF HEALTH AND SOCIAL SERVICES Representative Hanley MOVED to ADOPT a BUDGET NOTE for the Department of Health and Social Services, Public Assistance component: $350.0 thousand dollar of this allocation is to provide job training. There being NO OBJECTION, it was so ordered. Representative Hanley MOVED to RESCIND the Committee's action in adopting Amendment DHSS-6. Representative Navarre OBJECTED. Representative Hanley discussed Amendment DHSS-6. Representative Navarre WITHDREW HIS OBJECTIONS. Representative Grussendorf noted that the Committee retains concerns regarding services provided by Cordova House. 7 THEODORE A. MALA, MD., COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES stressed the importance of providing mental health services to inmates. He asserted that the problem is within the structure of the Department of Corrections. There being NO OBJECTION, Amendment DHSS-6 was rescinded. Representative Hanley MOVED to RESCIND the Committee's action in adopting Amendment DHSS-22. Commissioner Mala noted that the amendment would deny transfer of $39.5 thousand dollars to the Department from the Mental Health Trust Income Account. He emphasized that the Department has sustained over $150.0 thousand dollars in cuts. He observed that the position in question responds to constituent calls in Anchorage. Representative Brown OBJECTED to the motion to rescind Amendment DHSS-22. A roll call vote was taken on the motion. IN FAVOR: Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Hoffman, Navarre Representative Foster was not present for the vote. The MOTION PASSED (7-3). Representative Brown MOVED to RESCIND the Committee's action in failing to adopt Amendment DHSS-9 as amended: Restore $52.6 thousand dollars to the Council on Domestic Violence and Sexual Assault (copy on file). Representative Hanley OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Parnell, MacLean OPPOSED: Foster, Hanley, Martin, Therriault, Larson The MOTION PASSED (6-5). Representative Brown MOVED to ADOPT AMENDMENT DHSS-9. Representative Hanley OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Parnell, MacLean OPPOSED: Foster, Hanley, Martin, Therriault, Larson The MOTION PASSED (6-5). Representative Martin MOVED to ADOPT AMENDMENT DHSS-21: Delete $448,945 thousand dollars from the General Relief 8 Medical component. He explained that federal funding will be available for funding of abortions. Representative Brown questioned if federal dollars will be available. She requested that Amendment DHSS-21 be HELD open. Amendment DHSS-21 was HELD open. DEPARTMENT OF NATURAL RESOURCES Co-Chair MacLean provided members with replacement AMENDMENT DNR-8 (copy on file). She explained that the amendment would allocated $75.9 thousand dollar for state fairs. Co- Chair MacLean noted that the Interior Rivers Fair and Chevak Tundra Fest are new fairs. Co-Chair MacLean MOVED to ADOPT AMENDMENT DNR-8. There being NO OBJECTION, it was so ordered. DEPARTMENT OF REVENUE Representative Foster MOVED to ADOPT AMENDMENT REV-11 (copy on file). The amendment would add four investigators to the Alcohol Beverage Control Board, $279.0 thousand dollars in program receipts. There being NO OBJECTION, it was so ordered. OFFICE OF THE GOVERNOR Representative Therriault MOVED to ADOPT INTENT LANGUAGE GOV-B (copy on file). (Tape Change, HFC 93-83, Side 2) There being NO OBJECTION, INTENT LANGUAGE GOV-B was adopted. LEGISLATURE Co-Chair MacLean MOVED to ADOPT AMENDMENT LEG-1, to delete $237.3 thousand dollars for the Citizen's Oversight Council on Oil and Hazardous Substance (copy on file). Representative Navarre OBJECTED. He stressed the need to continue the Citizen's Oversight Council. Representative Brown noted that the Department of Environmental Conservation's budget has been severely reduced. A roll call vote was taken on the motion to adopt Amendment LEG-1. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, Larson OPPOSED: Brown, Grussendorf, Hoffman, Navarre, MacLean The MOTION PASSED (6-5). 9 HB 55 was HELD in Committee. HOUSE BILL NO. 67 "An Act relating to eligibility for and payments of public assistance; and providing for an effective date." Representative Hanley MOVED to RESCIND the Committee's action in reporting CSHB 67 (FIN) out of Committee. Representative Brown OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Grussendorf, Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Hoffman, Navarre The MOTION PASSED (8-3). A roll call vote was taken on the motion to report CSHB 67 (FIN) from Committee. IN FAVOR: Grussendorf, Brown, Hoffman, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (4-7). Representative Hanley MOVED to RESCIND the Committee's action in adopting Amendment 1 to HB 67. Representative Brown OBJECTED. Representative Brown emphasized the need for COLA adjustments. The amendment would suspend the COLA. Representative Hoffman spoke is support of Amendment 1. He asserted that repealing the COLA for Adult Public Assistance (APA) and Aid to Families with Dependent Children (AFDC) is "one of the most regressive things we can do to poor people in the state." Co-Chair Larson observed that Alaska is the only state that has a COLA clause for these programs. Representative Hoffman noted that if Amendment 1 is not adopted legislative action will be needed in the future to increase APA or AFDC payments. Representative Brown provided members with a Legislative Research Agency memorandum regarding the state of Alaska's children, dated 3/22/93 (Attachment 2). She pointed out that there are 45,000 children in Alaska living below the 10 poverty level. She observed that 27 percent of Alaska's preschool children live in poverty. She maintained that the programs support children. Representative Hoffman provided members with a 3/26/93, memorandum from Terri Lauterbach, Legislative Counsel stating that CSHB 67 (JUD) would not allow COLA payments to be made through appropriation (Attachment 3). Representative Grussendorf spoke against repealing the COLA. A roll call vote was taken on the motion to RESCIND Amendment 1, adopted on 3/27/93. IN FAVOR: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson OPPOSED: Brown, Grussendorf, Hoffman, Navarre The MOTION PASSED (7-4). Representative Brown provided members with a substitute for Amendment 1 (copy on file). Representative Brown MOVED to ADOPT AMENDMENT 1. A roll call vote was taken on the motion. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (4-7). Representative Brown provided members with AMENDMENT 2 (Attachment 4). She explained that Amendment 2 would set a floor for APA and AFDC payment levels. The COLA adjustment would automatically be installed if AFDC and APA recipients fell below 70 percent of the federal poverty guideline. JAN HANSEN, DIRECTOR, PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that it is necessary to specify the household size. She explained that a two person household is at a higher percentage of poverty than a three person household. She suggested that the amendment specify that when a household of two reach 70 percent of the poverty level than the COLA adjustment would be made. She explained that COLAs are the same as the poverty level increase. She gave examples of COLA adjustments. She noted that in 1992 a household of three is at 77 percent of poverty and a household of two is at 86 percent of poverty. Representative Brown MOVED to AMEND AMENDMENT 2 to specify that when a three person household reaches below 70 percent of the poverty level a COLA adjustment would be made. Co- Chair Larson suggested that the amendment be held and 11 drafted be legal counsel. Amendment 2 was held. HB 67 was HELD in Committee. ADJOURNMENT The meeting adjourned at 5:28 p.m. 12