HOUSE FINANCE COMMITTEE HOUSE FINANCE COMMITTEE MARCH 27, 1996 8:40 A.M. TAPE HFC 96 - 96, Side 1, #000 - end. TAPE HFC 96 - 96, Side 2, #000 - end. TAPE HFC 96 - 97, Side 1, #000 - #100. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 8:40 A.M. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Parnell Representative Kelly Representative Therriault Representative Kohring ALSO PRESENT Karen Crane, Director, Libraries, Archives & Museums, Department of Education; Mike Greany, Director, Legislative Finance Division; Karen Rehfeld, Director, Administrative Services, Department of Education; John Shively, Commissioner, Department of Natural Resources; Nico Bus, Director, Division of Administrative Services, Department of Natural Resources. SUMMARY HB 412 An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date. HB 412 was HELD in Committee for further consideration. HB 413 An Act making appropriations for the operating expenses of the state's integrated comprehensive mental health program; and providing for an effective date. 1 HB 413 was HELD in Committee for further consideration. AGENCIES: DEPARTMENT OF EDUCATION DEPARTMENT OF FISH AND GAME DEPARTMENT OF NATURAL RESOURCES DEPARTMENT OF PUBLIC SAFETY HB 230 An Act making appropriations to the Department of Education for support of kindergarten, primary, and secondary education and for community schools programs for fiscal year 1996 and fiscal year 1997; making appropriations from the constitutional budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska; and providing for an effective date. HB 230 was HELD in Committee for further consideration. HB#412 HB#413 HB#230 HOUSE BILL 412 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." HOUSE BILL 413 "An Act making appropriations for the operating expenses of the state's integrated comprehensive mental health program; and providing for an effective date." HOUSE BILL 230 "An Act making appropriations to the Department of Education for support of kindergarten, primary, and secondary education and for community schools programs for fiscal year 1996 and fiscal year 1997; making appropriations from the constitutional budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska; and providing for an effective date." DEPARTMENT OF EDUCATION (DOE) 2 Co-Chair Hanley noted that DOE #3 had been moved into the Capital Budget. Representative Navarre pointed out that the Capital Budget currently was not before the Committee for consideration and that budget also would be cut. He added that DOE #3 would restore funding to the FY97 Governor's proposed level in order to give the State Library sufficient funds to purchase up-to-date materials such as books and periodicals. He stressed that this concern should be contained in the Operating Budget. KAREN CRANE, DIRECTOR, LIBRARIES, ARCHIVES & MUSEUMS, DEPARTMENT OF EDUCATION, pointed out that the proposed allocation would be the only funds provided to the State Library for library materials. The materials budget has been reduced over the last ten years. while the cost of books during that time has risen over 80%, and the cost of periodicals has risen over 150%. Representative Navarre MOVED to adopt DOE #3. Co-Chair Hanley OBJECTED. Representative Grussendorf spoke in support of the amendment remaining in the operational budget. Representative Navarre recommended that a policy call be made to determine if the request should continue to be an on-going operating item. He urged the Committee's support. Representative Brown inquired what had been included in Statewide #2 amendment. KAREN REHFELD, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF EDUCATION, noted that the amendment provided $150 thousand general fund dollars for Statewide Library Electronic Doorway (SLED), $75 thousand program receipt dollars for SLED and $75 thousand dollars for library materials. A roll call was taken on the MOTION to adopt DOE #3. IN FAVOR: Navarre, Brown, Grussendorf, Foster. OPPOSED: Kohring, Martin, Mulder, Parnell, Therriault, Kelly, Hanley. The MOTION FAILED (4-7). Representative Navarre MOVED to adopt DOE #5 which would provide partial funding for the 1997 Vocational Student Leadership Organizations Joint Conference. Co-Chair Hanley asked if the request had been included in the Governor's FY97 budget. Ms. Rehfeld stated that the money had been cut in last years budget. There is no money in the Department's FY97 budget for this concern. 3 A roll call was taken on the MOTION to adopt DOE #5. IN FAVOR: Navarre, Brown, Grussendorf. OPPOSED: Martin, Mulder, Parnell, Therriault, Kelly, Kohring, Hanley, Foster. The MOTION FAILED (3-8). Co-Chair Hanley distributed DOE #7, a technical change to "other funds", which would reflect in the Governor's amended budget. Ms. Rehfeld advised that the action taken by the Committee regarding the Arts Council budget, the numbers for the federal receipts and the gifts and grants authorization did not match the Governor's amended request. The amendment would address that concern. In response to Representative Brown's question, Ms. Rehfeld stated that the maximum federal anticipated amount, based on the amount allocated by the Committee for FY97 would be $296 thousand dollars. The hope would be to raise enough in the gift and grants allocations to be able to match some portion of that amount. The maximum amount of needed federal authorization would be $300 thousand dollars. Representative Therriault questioned if local art contributions had been used for FY96 match. Ms. Rehfeld thought that did happen. There being NO OBJECTION, DOE #7 was adopted. Representative Brown MOVED to reduce federal receipts to $400 thousand dollars. She thought that would more accurately reflect the expected utilization of federal funds. Representative Kohring questioned if that would create an impact to the general fund. Co-Chair Hanley explained that the motion would only reduce the federal authorization. Ms. Rehfeld commented that it would be difficult to determine if $400 thousand dollars would be excessive without a word from the National Endowment for Arts (NEA). Representative Therriault voiced concern that receiving an allocation from the federal government was in question. He thought that Representative Brown's motion was "premature". Representative Brown countered that the amendment would restore the allocation to the Governor's level. With cuts proposed by the Committee, she thought it would not be possible to capture the federal funds. The budget should be accurate and reflect the action of the Committee. Representative Brown MOVED to AMEND the earlier motion and insert $459 thousand dollars instead of $400 thousand dollars as the federal receipt number. There being NO OBJECTIONS, it was adopted. 4 DEPARTMENT OF FISH AND GAME (DFG) Representative Grussendorf MOVED to adopt F&G #1. Co-Chair Hanley MOVED to amend F&G #1 to $40 thousand dollars for the sport fisheries. There being NO OBJECTION to amend the amendment, it was reduced. There being NO OBJECTION to the amendment as amended, it was adopted. Representative Grussendorf MOVED to adopt F&G #2. Co-Chair Hanley OBJECTED. Representative Grussendorf pointed out that F&G #2 would restore money back into the stream and refuge permit, Division of Habitat. Last year, that component was cut by $500 thousand dollars. Federal funding did not provide enough for the salmon stream enhancement, which resulted in inadequate permitting. Co-Chair Hanley MOVED to add back $50 thousand dollars to F&G #2. Representative Navarre OBJECTED. Representative Grussendorf stated that would not be enough to accomplish the necessary tasks of permitting. A roll call was taken on the MOTION to amend F&G #2. IN FAVOR: Parnell, Therriault, Kelly, Kohring, Martin, Foster, Hanley. OPPOSED: Navarre, Brown, Grussendorf. Representative Mulder was not present for the vote. The MOTION PASSED (7-3). Representative Navarre OBJECTED stating that the component was inadequate and would result in less economic development and the Department's ability to deal with requests for permitting. Representative Navarre stressed that such a reduction would have the potential of excellerating destruction within the fishery resources. He pointed out that $50 thousand dollars was a "small" request to address such a "large" concern. Representative Navarre WITHDREW his OBJECTION. Representative Therriault OBJECTED. A roll call was taken on the MOTION to adopt F&G #2. IN FAVOR: Navarre, Brown, Grussendorf, Kelly, Kohring, Hanley, Foster. OPPOSED: Parnell, Therriault, Martin. Representative Mulder was not present for the vote. The MOTION PASSED (7-3). 5 Representative Grussendorf MOVED to adopt F&G #3. Co-Chair Hanley OBJECTED. Representative Grussendorf explained that F&G #3 would provide $200 thousand dollars for subsistence. He stated that if the State is to gain control over Fish and Game management, subsistence issues need to be addressed. Representative Brown observed that the Division of Subsistence which is most closely tied to the people in rural Alaska will now be centralized in urban Alaska. The effects of these cuts would close regional office functions in Dillingham and Bethel. Co-Chair Hanley MOVED to amend F&G #3 to $50 thousand dollars. There being NO OBJECTION, it was amended. There being NO OBJECTION to the amendment as amended, it was adopted. DEPARTMENT OF NATURAL RESOURCES (DNR) Representative Therriault MOVED to adopt DNR #1. Representative Brown OBJECTED. Representative Therriault explained that the amendment would address the special projects in the DNR budget for gifts and grants. Co-Chair Hanley added, last year there was $1.1 million dollars in gifts and grants in DNR. He stressed that there should not count as general funds in last years budget. This fiscal year, the Governor has moved that forward. Co-Chair Hanley explained that either it could be moved into general funds which would have the effect of increasing last year's budget, or it could be treated the same as last year. The actual budget comparison would then be the same. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION, commented that the amendment would provide consistency with general budget authorization from the Legislature. He added, until there is a long term solution to the gifts and grants scenario, the Division would request that item be viewed as a temporary solution specific to a particular case. (Tape Change, HFC 96-96, Side 2). Representative Brown commented that the amendment does not appear to be a gift or grant. She stressed that program receipts are a valid way for the State to function. The decision to treat program receipts as part of the general fund, and reducing them, is not the best approach. Program receipts are not a drain on the general fund. Representative Brown questioned the difference between the amount of the amendment and the amount of the special projects. 6 NICO BUS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF NATURAL RESOURCES, remarked that the amendment would restore two projects back to the Governor's request. Although, he added this amendment would not address the North Star project. There being NO OBJECTION, DNR #1 was adopted. Representative Grussendorf MOVED to adopt DNR #2. Representative Mulder OBJECTED. Representative Grussendorf pointed out that the Forest Practices Act and the functions associated with it have been reduced by 40%. Fishing and logging industries have voiced support for the Forest Practices Act. Representative Mulder MOVED to AMEND DNR #2, reducing the amount from $300 thousand dollars to $150 thousand dollars. Representative Therriault stated that when the Forest Practices Act was passed, it was an unrealistic source of funding. He advised that the Commissioner of DNR does have the latitude to determine that forestry operations be contracted with private consultants. Then the expenses would be picked up outside of the State general fund. Representative Brown asked if $150 thousand dollars would be adequate to do the inspection work required by the Division. JOHN SHIVELY, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, stated that at the $150 thousand dollar level "some" field inspections could be completed. The allocation would not allow a complete job to be accomplished. He agreed with Representative Grussendorf, that the Forest Practices Act provides an insurance policy for the fishing and timber industries. Commissioner Shively also agreed with Representative Therriault that who makes the payment for these concerns should be addressed as a public policy question. Representative Brown asked if DNR currently has the authority to charge the industry a fee for the service. Commissioner Shively replied that regulations would have to be adopted to charge a fee or to adopt contracting. Representative Brown WITHDREW the OBJECTION to the amendment. The amendment to the amendment was adopted. There being NO OBJECTION to the amendment as amended, DNR #2 was adopted. Representative Navarre noted that he would HOLD DNR #3, DNR presented in these amendments were addressed in the DNR #1. Mr. Bus clarified that DNR #3 was addressed in DNR #1; DNR 7 addressed in DNR #1. Representative Navarre MOVED to adopt DNR #6. Representative Therriault OBJECTED. Representative Navarre advised that parks and recreation management could use additional program receipts. DNR #6 would provide an additional $93 thousand dollars to that component. Representative Brown asked if there would be enough program receipts to provide the needed funding. Mr. Bus remarked that the reduction was to general funds. In order to accommodate the recommendation, the Division of Parks would need to curtail operations resulting in minimized revenue collections. Representative Navarre WITHDREW the MOTION to move DNR #6. Representative Navarre MOVED to adopt DNR #7. Representative Therriault OBJECTED. Representative Navarre questioned why there was a reduction to the oil and gas development component, a comity which drives the entire economy of the State. He strongly urged continued support of the requested funding, given the stakes at risk. Representative Therriault replied that the Oil and Gas Division has not taken any reductions over the last few years. He thought this Division should also take reductions, without jeopardizing their core functions. Representative Navarre stressed that there was good reason why that Division has not taken cuts; their activities pay for the budget. Representative Brown elaborated that the reduction would be a mistake. To maintain a stable leasing program will require an adequate number of people to provide analysis to work with the public. A roll call was taken on the MOTION to move DNR #7. IN FAVOR: Brown, Grussendorf, Navarre. OPPOSED: Therriault, Kelly, Kohring, Parnell, Hanley, Foster. Representatives Martin and Mulder were not present for the vote. The MOTION FAILED (3-6). DEPARTMENT OF PUBLIC SAFETY (DPS) Co-Chair Hanley MOVED to adopt DPS #1. He stated that the Fish and Game subcommittee appropriated $200 thousand dollars Department of Fish and Game funds derived from civil fines and forfeitures to pay for an RSA with the Department of Law. The remaining $292 thousand dollars was to be 8 divided between Fish and Wildlife enforcement within the Department of Public Safety and ComFish special projects for damaged resource studies. The net effect would be two new Fish and Wildlife enforcement officers and two new troopers. There being NO OBJECTION, DPS #1 was adopted. Representative Kohring MOVED to adopt DPS #2. Representative Brown OBJECTED. Co-Chair Hanley MOVED to AMEND DPS #2, deleting $561.4 thousand general fund dollars and replacing $250 thousand general fund dollars. There being NO OBJECTION to the amendment to DPS #2, it was changed. Representative Brown indicated that it was Representative Kohring's intent to cut the arts to increase the troopers. She voiced her OBJECTION to taking money out of the Arts Council which serves people throughout the State and putting it into funding troopers which serves only a few communities. She concluded that the Legislature has not done a good job looking at the overall effects of the criminal justice system. A roll call was taken on the MOTION to adopt DPS #2. IN FAVOR: Grussendorf, Kelly, Kohring, Martin, Mulder, Navarre, Parnell, Therriault, Hanley, Foster. OPPOSED: Brown. The MOTION PASSED (10-1). Representative Grussendorf MOVED to adopt DPS #3 which would restore the decrement for program receipt authority. Representative Mulder OBJECTED. Representative Grussendorf noted that the increment would address fire suppression costs. The cost of fire suppression in Alaska is $380 million dollars annually; the state's death toll from fires averages 1.2 persons per week. Representative Parnell MOVED to AMEND DPS #3 from $180.2 thousand dollars to $50 thousand dollars designated program receipts. The subcommittee funded fire suppression level training at the same increment as last year. Representative Brown stressed that the increment should be recognized. This would be a fee for service operations, where the public interest is served. She questioned why it was being reduced to $50 thousand dollars. Representative Brown pointed out that the Legislative Budget and Audit (LBA) Committee was not an efficient way to conduct business during the interim. She suggested that the budget should move toward a sustaining situation, where industry can receive the services that they need. 9 (Tape Change, HFC 96 - 97, Side 1). There was NO OBJECTION to amend the amendment. There was NO OBJECTION to adopting the amended DPS #3. HB 412 was HELD in Committee for further consideration. HB 413 was HELD in Committee for further consideration. HB 230 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 10:05 A.M.MARCH 27, 1996 8:40 A.M. TAPE HFC 96 - 96, Side 1, #000 - end. TAPE HFC 96 - 96, Side 2, #000 - end. TAPE HFC 96 - 97, Side 1, #000 - #100. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 8:40 A.M. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Parnell Representative Kelly Representative Therriault Representative Kohring ALSO PRESENT Karen Crane, Director, Libraries, Archives & Museums, Department of Education; Mike Greany, Director, Legislative Finance Division; Karen Rehfeld, Director, Administrative Services, Department of Education; John Shively, Commissioner, Department of Natural Resources; Nico Bus, Director, Division of Administrative Services, Department of Natural Resources. SUMMARY HB 412 An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the 10 constitutional budget reserve fund; and providing for an effective date. HB 412 was HELD in Committee for further consideration. HB 413 An Act making appropriations for the operating expenses of the state's integrated comprehensive mental health program; and providing for an effective date. HB 413 was HELD in Committee for further consideration. AGENCIES: DEPARTMENT OF EDUCATION DEPARTMENT OF FISH AND GAME DEPARTMENT OF NATURAL RESOURCES DEPARTMENT OF PUBLIC SAFETY HB 230 An Act making appropriations to the Department of Education for support of kindergarten, primary, and secondary education and for community schools programs for fiscal year 1996 and fiscal year 1997; making appropriations from the constitutional budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska; and providing for an effective date. HB 230 was HELD in Committee for further consideration. HOUSE BILL 412 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." HOUSE BILL 413 "An Act making appropriations for the operating expenses of the state's integrated comprehensive mental health program; and providing for an effective date." HOUSE BILL 230 "An Act making appropriations to the Department of Education for support of kindergarten, primary, and 11 secondary education and for community schools programs for fiscal year 1996 and fiscal year 1997; making appropriations from the constitutional budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska; and providing for an effective date." DEPARTMENT OF EDUCATION (DOE) Co-Chair Hanley noted that DOE #3 had been moved into the Capital Budget. Representative Navarre pointed out that the Capital Budget currently was not before the Committee for consideration and that budget also would be cut. He added that DOE #3 would restore funding to the FY97 Governor's proposed level in order to give the State Library sufficient funds to purchase up-to-date materials such as books and periodicals. He stressed that this concern should be contained in the Operating Budget. KAREN CRANE, DIRECTOR, LIBRARIES, ARCHIVES & MUSEUMS, DEPARTMENT OF EDUCATION, pointed out that the proposed allocation would be the only funds provided to the State Library for library materials. The materials budget has been reduced over the last ten years. while the cost of books during that time has risen over 80%, and the cost of periodicals has risen over 150%. Representative Navarre MOVED to adopt DOE #3. Co-Chair Hanley OBJECTED. Representative Grussendorf spoke in support of the amendment remaining in the operational budget. Representative Navarre recommended that a policy call be made to determine if the request should continue to be an on-going operating item. He urged the Committee's support. Representative Brown inquired what had been included in Statewide #2 amendment. KAREN REHFELD, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF EDUCATION, noted that the amendment provided $150 thousand general fund dollars for Statewide Library Electronic Doorway (SLED), $75 thousand program receipt dollars for SLED and $75 thousand dollars for library materials. A roll call was taken on the MOTION to adopt DOE #3. IN FAVOR: Navarre, Brown, Grussendorf, Foster. OPPOSED: Kohring, Martin, Mulder, Parnell, Therriault, Kelly, Hanley. The MOTION FAILED (4-7). 12 Representative Navarre MOVED to adopt DOE #5 which would provide partial funding for the 1997 Vocational Student Leadership Organizations Joint Conference. Co-Chair Hanley asked if the request had been included in the Governor's FY97 budget. Ms. Rehfeld stated that the money had been cut in last years budget. There is no money in the Department's FY97 budget for this concern. A roll call was taken on the MOTION to adopt DOE #5. IN FAVOR: Navarre, Brown, Grussendorf. OPPOSED: Martin, Mulder, Parnell, Therriault, Kelly, Kohring, Hanley, Foster. The MOTION FAILED (3-8). Co-Chair Hanley distributed DOE #7, a technical change to "other funds", which would reflect in the Governor's amended budget. Ms. Rehfeld advised that the action taken by the Committee regarding the Arts Council budget, the numbers for the federal receipts and the gifts and grants authorization did not match the Governor's amended request. The amendment would address that concern. In response to Representative Brown's question, Ms. Rehfeld stated that the maximum federal anticipated amount, based on the amount allocated by the Committee for FY97 would be $296 thousand dollars. The hope would be to raise enough in the gift and grants allocations to be able to match some portion of that amount. The maximum amount of needed federal authorization would be $300 thousand dollars. Representative Therriault questioned if local art contributions had been used for FY96 match. Ms. Rehfeld thought that did happen. There being NO OBJECTION, DOE #7 was adopted. Representative Brown MOVED to reduce federal receipts to $400 thousand dollars. She thought that would more accurately reflect the expected utilization of federal funds. Representative Kohring questioned if that would create an impact to the general fund. Co-Chair Hanley explained that the motion would only reduce the federal authorization. Ms. Rehfeld commented that it would be difficult to determine if $400 thousand dollars would be excessive without a word from the National Endowment for Arts (NEA). Representative Therriault voiced concern that receiving an allocation from the federal government was in question. He thought that Representative Brown's motion was "premature". Representative Brown countered that the amendment would 13 restore the allocation to the Governor's level. With cuts proposed by the Committee, she thought it would not be possible to capture the federal funds. The budget should be accurate and reflect the action of the Committee. Representative Brown MOVED to AMEND the earlier motion and insert $459 thousand dollars instead of $400 thousand dollars as the federal receipt number. There being NO OBJECTIONS, it was adopted. DEPARTMENT OF FISH AND GAME (DFG) Representative Grussendorf MOVED to adopt F&G #1. Co-Chair Hanley MOVED to amend F&G #1 to $40 thousand dollars for the sport fisheries. There being NO OBJECTION to amend the amendment, it was reduced. There being NO OBJECTION to the amendment as amended, it was adopted. Representative Grussendorf MOVED to adopt F&G #2. Co-Chair Hanley OBJECTED. Representative Grussendorf pointed out that F&G #2 would restore money back into the stream and refuge permit, Division of Habitat. Last year, that component was cut by $500 thousand dollars. Federal funding did not provide enough for the salmon stream enhancement, which resulted in inadequate permitting. Co-Chair Hanley MOVED to add back $50 thousand dollars to F&G #2. Representative Navarre OBJECTED. Representative Grussendorf stated that would not be enough to accomplish the necessary tasks of permitting. A roll call was taken on the MOTION to amend F&G #2. IN FAVOR: Parnell, Therriault, Kelly, Kohring, Martin, Foster, Hanley. OPPOSED: Navarre, Brown, Grussendorf. Representative Mulder was not present for the vote. The MOTION PASSED (7-3). Representative Navarre OBJECTED stating that the component was inadequate and would result in less economic development and the Department's ability to deal with requests for permitting. Representative Navarre stressed that such a reduction would have the potential of excellerating destruction within the fishery resources. He pointed out that $50 thousand dollars was a "small" request to address such a "large" concern. Representative Navarre WITHDREW his OBJECTION. Representative Therriault OBJECTED. A roll call was taken on the MOTION to adopt F&G #2. 14 IN FAVOR: Navarre, Brown, Grussendorf, Kelly, Kohring, Hanley, Foster. OPPOSED: Parnell, Therriault, Martin. Representative Mulder was not present for the vote. The MOTION PASSED (7-3). Representative Grussendorf MOVED to adopt F&G #3. Co-Chair Hanley OBJECTED. Representative Grussendorf explained that F&G #3 would provide $200 thousand dollars for subsistence. He stated that if the State is to gain control over Fish and Game management, subsistence issues need to be addressed. Representative Brown observed that the Division of Subsistence which is most closely tied to the people in rural Alaska will now be centralized in urban Alaska. The effects of these cuts would close regional office functions in Dillingham and Bethel. Co-Chair Hanley MOVED to amend F&G #3 to $50 thousand dollars. There being NO OBJECTION, it was amended. There being NO OBJECTION to the amendment as amended, it was adopted. DEPARTMENT OF NATURAL RESOURCES (DNR) Representative Therriault MOVED to adopt DNR #1. Representative Brown OBJECTED. Representative Therriault explained that the amendment would address the special projects in the DNR budget for gifts and grants. Co-Chair Hanley added, last year there was $1.1 million dollars in gifts and grants in DNR. He stressed that there should not count as general funds in last years budget. This fiscal year, the Governor has moved that forward. Co-Chair Hanley explained that either it could be moved into general funds which would have the effect of increasing last year's budget, or it could be treated the same as last year. The actual budget comparison would then be the same. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION, commented that the amendment would provide consistency with general budget authorization from the Legislature. He added, until there is a long term solution to the gifts and grants scenario, the Division would request that item be viewed as a temporary solution specific to a particular case. (Tape Change, HFC 96-96, Side 2). Representative Brown commented that the amendment does not 15 appear to be a gift or grant. She stressed that program receipts are a valid way for the State to function. The decision to treat program receipts as part of the general fund, and reducing them, is not the best approach. Program receipts are not a drain on the general fund. Representative Brown questioned the difference between the amount of the amendment and the amount of the special projects. NICO BUS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF NATURAL RESOURCES, remarked that the amendment would restore two projects back to the Governor's request. Although, he added this amendment would not address the North Star project. There being NO OBJECTION, DNR #1 was adopted. Representative Grussendorf MOVED to adopt DNR #2. Representative Mulder OBJECTED. Representative Grussendorf pointed out that the Forest Practices Act and the functions associated with it have been reduced by 40%. Fishing and logging industries have voiced support for the Forest Practices Act. Representative Mulder MOVED to AMEND DNR #2, reducing the amount from $300 thousand dollars to $150 thousand dollars. Representative Therriault stated that when the Forest Practices Act was passed, it was an unrealistic source of funding. He advised that the Commissioner of DNR does have the latitude to determine that forestry operations be contracted with private consultants. Then the expenses would be picked up outside of the State general fund. Representative Brown asked if $150 thousand dollars would be adequate to do the inspection work required by the Division. JOHN SHIVELY, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, stated that at the $150 thousand dollar level "some" field inspections could be completed. The allocation would not allow a complete job to be accomplished. He agreed with Representative Grussendorf, that the Forest Practices Act provides an insurance policy for the fishing and timber industries. Commissioner Shively also agreed with Representative Therriault that who makes the payment for these concerns should be addressed as a public policy question. Representative Brown asked if DNR currently has the authority to charge the industry a fee for the service. Commissioner Shively replied that regulations would have to be adopted to charge a fee or to adopt contracting. Representative Brown WITHDREW the OBJECTION to the 16 amendment. The amendment to the amendment was adopted. There being NO OBJECTION to the amendment as amended, DNR #2 was adopted. Representative Navarre noted that he would HOLD DNR #3, DNR presented in these amendments were addressed in the DNR #1. Mr. Bus clarified that DNR #3 was addressed in DNR #1; DNR addressed in DNR #1. Representative Navarre MOVED to adopt DNR #6. Representative Therriault OBJECTED. Representative Navarre advised that parks and recreation management could use additional program receipts. DNR #6 would provide an additional $93 thousand dollars to that component. Representative Brown asked if there would be enough program receipts to provide the needed funding. Mr. Bus remarked that the reduction was to general funds. In order to accommodate the recommendation, the Division of Parks would need to curtail operations resulting in minimized revenue collections. Representative Navarre WITHDREW the MOTION to move DNR #6. Representative Navarre MOVED to adopt DNR #7. Representative Therriault OBJECTED. Representative Navarre questioned why there was a reduction to the oil and gas development component, a comity which drives the entire economy of the State. He strongly urged continued support of the requested funding, given the stakes at risk. Representative Therriault replied that the Oil and Gas Division has not taken any reductions over the last few years. He thought this Division should also take reductions, without jeopardizing their core functions. Representative Navarre stressed that there was good reason why that Division has not taken cuts; their activities pay for the budget. Representative Brown elaborated that the reduction would be a mistake. To maintain a stable leasing program will require an adequate number of people to provide analysis to work with the public. A roll call was taken on the MOTION to move DNR #7. IN FAVOR: Brown, Grussendorf, Navarre. OPPOSED: Therriault, Kelly, Kohring, Parnell, Hanley, Foster. Representatives Martin and Mulder were not present for the vote. The MOTION FAILED (3-6). 17 DEPARTMENT OF PUBLIC SAFETY (DPS) Co-Chair Hanley MOVED to adopt DPS #1. He stated that the Fish and Game subcommittee appropriated $200 thousand dollars Department of Fish and Game funds derived from civil fines and forfeitures to pay for an RSA with the Department of Law. The remaining $292 thousand dollars was to be divided between Fish and Wildlife enforcement within the Department of Public Safety and ComFish special projects for damaged resource studies. The net effect would be two new Fish and Wildlife enforcement officers and two new troopers. There being NO OBJECTION, DPS #1 was adopted. Representative Kohring MOVED to adopt DPS #2. Representative Brown OBJECTED. Co-Chair Hanley MOVED to AMEND DPS #2, deleting $561.4 thousand general fund dollars and replacing $250 thousand general fund dollars. There being NO OBJECTION to the amendment to DPS #2, it was changed. Representative Brown indicated that it was Representative Kohring's intent to cut the arts to increase the troopers. She voiced her OBJECTION to taking money out of the Arts Council which serves people throughout the State and putting it into funding troopers which serves only a few communities. She concluded that the Legislature has not done a good job looking at the overall effects of the criminal justice system. A roll call was taken on the MOTION to adopt DPS #2. IN FAVOR: Grussendorf, Kelly, Kohring, Martin, Mulder, Navarre, Parnell, Therriault, Hanley, Foster. OPPOSED: Brown. The MOTION PASSED (10-1). Representative Grussendorf MOVED to adopt DPS #3 which would restore the decrement for program receipt authority. Representative Mulder OBJECTED. Representative Grussendorf noted that the increment would address fire suppression costs. The cost of fire suppression in Alaska is $380 million dollars annually; the state's death toll from fires averages 1.2 persons per week. Representative Parnell MOVED to AMEND DPS #3 from $180.2 thousand dollars to $50 thousand dollars designated program receipts. The subcommittee funded fire suppression level training at the same increment as last year. Representative Brown stressed that the increment should be recognized. 18 This would be a fee for service operations, where the public interest is served. She questioned why it was being reduced to $50 thousand dollars. Representative Brown pointed out that the Legislative Budget and Audit (LBA) Committee was not an efficient way to conduct business during the interim. She suggested that the budget should move toward a sustaining situation, where industry can receive the services that they need. (Tape Change, HFC 96 - 97, Side 1). There was NO OBJECTION to amend the amendment. There was NO OBJECTION to adopting the amended DPS #3. HB 412 was HELD in Committee for further consideration. HB 413 was HELD in Committee for further consideration. HB 230 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 10:05 A.M. 19