HOUSE FINANCE COMMITTEE MARCH 12, 1998 1:50 P.M. TAPE HFC 98 - 66, Side 1. TAPE HFC 98 - 66, Side 2. CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 1:50 P.M. PRESENT Co-Chair Hanley Representative Kelly Co-Chair Therriault Representative Kohring Representative J. Davies Representative Martin Representative G. Davis Representative Moses Representative Foster Representative Mulder Representative Grussendorf ALSO PRESENT Peter Bushre, Chief Financial Officer, Alaska Permanent Fund Corporation; Jim Kelly, Director of Communications, Permanent Fund Corporation; Elmer Lindstrom, Special Assistant, Office of the Commissioner, Department of Health and Social Services; Theresa Tanoury, Administrator, Child Protection Services, Division of Family and Youth and Services, Department of Health and Social Services; Bob Buttcane, Juvenile Probation Officer, Division of Family and Youth Services, Department of Health and Social Services; Ray Gillespie, Spoke on behalf of Kathy Cronen, Charter, Northstar Behavioral Health System, Anchorage; Jim Nordlund, Director, Division of Public Assistance, Department of Health and Social Services; Val Horner, Program Officer, Quality Assessment, Division of Public Assistance, Department of Health and Social Services. SUMMARY HB 16 An Act relating to delinquent minors, to the taking of action based on the alleged criminal misconduct of certain minors, to the services to be provided to the victims of criminal misconduct of minors, and to agency records involving minors alleged to be delinquent based on their criminal misconduct; and amending Rule 19 and repealing Rules 6, 7, 11(a), 12(a), and 21(f), Alaska Delinquency Rules. CS HB 16 (FIN) was reported out of Committee with a "do pass" recommendation and with fiscal notes by the Department of Administration, the Department of Law, the Department of Corrections, the Alaska Court System, the House Finance Committee, and the Department of Health and Social Services. SB 220 An Act making a supplemental appropriation to the Alaska Permanent Fund Corporation; and providing for an effective date. CSSB 220 (FIN)(title am) was reported out of Committee with a "do pass" recommendation. HJR 4 Proposing amendments to the Constitution of the State of Alaska relating to terms of legislators. HJR 4 was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Office of the Lt. Governor dated 1/30/98 and a zero fiscal note by the Legislative Affair Agency dated 1/30/98. HB 325 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. RESULTS BASED GOVERNMENT Welfare to Work HB 325 was HELD in Committee for further consideration. SENATE BILL NO. 220 "An Act making a supplemental appropriation to the Alaska Permanent Fund Corporation; and providing for an effective date." JIM KELLY, DIRECTOR OF COMMUNICATIONS, ALASKA PERMANENT FUND CORPORATION, spoke to the letter in the Committee packet from the Permanent Fund Corporation (PFC) dated 2/27/98. [Copy on File]. The letter addresses the savings realized by combining custody services into one provider. He projected that this year, PFC will save approximately $950 thousand dollars. Currently, the fund value is $24 billion dollars. He pointed out that the fund could earn $2.2 billion dollars this year, noting that this is an amazing growth and that the Legislature should not expect it every year. PETER BUSHRE, CHIEF FINANCIAL OFFICIER, ALASKA PERMANENT FUND CORPORATION, added that the fund has added $500 million dollars this month due to market appreciation. Representative Foster MOVED to report CSSB 220(FIN)(title am) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CSSB 220(FIN)(title am) was reported out of Committee with a "do pass" recommendation. HOUSE BILL NO. 16 "An Act relating to delinquent minors, to the taking of action based on the alleged criminal misconduct of certain minors, to the services to be provided to the victims of criminal misconduct of minors, and to agency records involving minors alleged to be delinquent based on their criminal misconduct; and amending Rule 19 and repealing Rules 6, 7, 11(a), 12(a), and 21(f), Alaska Delinquency Rules." Co-Chair Hanley questioned how the Department's fiscal note would be affected by new Amendment #1. [Copy on File]. ELMER LINDSTROM, SPECIAL ASSISTANT, OFFICE OF THE COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVCIES, pointed out that the Department had submitted two fiscal notes to the Committee. The Division of Medical Assistance submitted a zero note accompanied with an analysis regarding new facilities. He commented that Ms. Tanoury would speak to the fiscal note submitted by the Division of Family and Youth Services (DFYS). THERESA TANOURY, ADMINISTRATOR, CHILD PROTECTION SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, discussed the fiscal note which the Division submitted to cover costs associated with semi-secure beds. Currently, there are 15 grantees that provide group care. She believed that staffing with a 1:3 ratio would be necessary in order to manage behavior problems. The fiscal note recommends increasing staffing patterns. Co-Chair Hanley suggested that the Department was making a policy call with the request of additional staffing. He questioned the $210 thousand dollar grant and claim line. Ms. Tanoury stated that the program would not work without the additional staff support. There has been no rate increase since 1990, whereas, difficult-to-care-for children numbers have dramatically increased. Co-Chair Hanley reiterated his concern. He asked if providers would need extra State grants to make the care worthwhile. Co-Chair Hanley commented that he would not support the amendment with the additional fiscal costs. He questioned if beds could be built without the requested funding. Ms. Tanoury advised that the State would not build the semi-secure beds without the requested funding support. RAY GILLESPIE, SPOKE ON BEHALF OF KATHY CRONEN, CHARTER, NORTHSTAR BEHAVORIAL HEALTH SYSTEM, ANCHORAGE, noting that Ms. Cronen was currently out for family emergency, although, requested to testify on the fiscal and legislative impact of the legislation at a latter date. Representative Kelly referenced SB 289 legislation from two years ago. He asked if the fiscal note, which had been funded with that legislation, had been used. ROBERT BUTTCANE, JUVENILLE PROBATION OFFICER, DIVISION OF FAMILY AND YOUTH SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, noted that he did not have the fiscal notes attached to that legislation, although, believed that the money was not used to create a semi-secure facility. Ms. Tanoury pointed out that at this time, there is not a semi- secure residential care facility in Anchorage or Fairbanks. Co-Chair Hanley asked if the grants would be available only for non-profits. Mr. Lindstrom noted that was correct and that the amendment would provide profits and non-profits to have semi-secure facilities, whereas, the grants would only allow the non-profit's funding. Co-Chair Hanley explained that Amendment #1 had been introduced to clarify profit versus non-profit. It was never the intent that for-profits receive grants. The new draft of the amendment clarifies that the grant process remains the same as current law. Co-Chair Hanley MOVED to adopt Amendment #1. There being NO OBJECTION, the new Amendment #1 was adopted. Representative J. Davies spoke to the new Amendment #3. [Copy on File]. He stated that the amendment would remove 13, 14 & 15 year olds from the bill sentencing provisions and would make that referral discretionary with the Department. He informed members that with the changes proposed in the amendment, costs associated with the bill would drop substantially. Mr. Buttcane commented that Amendment #3 would limit the dual sentencing provisions to youth 16 & 17 years old, who meet two criteria: ? Presented with a felony crime against a person and having a history of felony adjudication in the past; or ? Sexual abuse of a minor in the second degree. The Department has estimated that there would be 8 youth per year that would meet these criteria. The amendment makes dual sentencing discretionary. Representative J. Davies MOVED to adopt Amendment #3. There being NO OBJECTION, it was adopted. Representative Kelly MOVED to adopt Amendment #4. [Copy on File]. He advised that the amendment would address a technical statutory problem. There being NO OBJECTION, it was adopted. Co-Chair Hanley reiterated that he would not be supportive of the $210 thousand dollar grant line proposed in the Department's fiscal note. He MOVED to eliminate the grants and claim line. There being NO OBJECTION, it was deleted. Representative Foster MOVED to report CS HB 16 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. CS HB 16 (FIN) was reported out of Committee with a "do pass" recommendation and with two fiscal notes by the Department Administration, the Department of Health and Social Services, the Alaska Court System, the House Finance Committee, the Department of Law, and the Department of Corrections. HOUSE JOINT RESOLUTION NO. 4 Proposing amendments to the Constitution of the State of Alaska relating to terms of legislators. Co-Chair Therriault explained that HJR 4 proposes to limit terms by limiting the number of regular legislative sessions a person may serve. The resolution proposes that a person may not serve consecutively more than twelve regular sessions in the Legislature. A person may not again serve in the Legislature as a result of election or appointment to fill a vacancy until at least two consecutive regular sessions have lapsed. In addition, when tabulating the number of sessions served, special sessions shall not be countered nor shall time served as the result of appointment to fill a vacancy. He recommended that term limits are a positive legislative reform, guaranteeing that new legislators will be elected along with new ideas. The popularity of term limits indicates that a majority of our citizens do not prefer career politicians representing them. Term limits will also level the playing field for challengers facing long- term incumbents whose power oftentimes is derived primarily from seniority. Representative Martin suggested that Section 3 was not needed. Co-Chair Therriault responded that legal drafters recommended adding that language so that the constitutional amendment could be voted upon; however, at the same time, legislators running on the year for which the language was included, would be precluded from counting that year if Section 3 was not added. The language provides a delayed effective date, so that those people are able to serve their term out. Representative J. Davies pointed out that from a national legislative term study undertaken from 1959 through 1994, legislators that served eight years or less comprised 84%, whereas, legislators who served twelve years or less comprised 94%. He submitted, given those numbers, there is no compelling or practical reason for the legislation which would prohibit that 6% from serving longer terms. Representative J. Davies ascertained that having a few members in the legislative body with institutional knowledge derived from a long tenure is useful. Representative Kelly echoed Representative Davies concerns. Representative Foster MOVED to report HJR 4 out of Committee with individual recommendations and with the accompanying fiscal notes. HJR 4 was reported out of Committee with a "do pass" recommendation and with fiscal notes by the Office of the Lt. Governor dated 1/30/98 and the Legislative Affairs Agency dated 1/30/98. (Tape Change HFC 98- 66, Side 2). HOUSE BILL NO. 325 "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." RESULTS BASED GOVERNMENT - PROGRAM REVIEW ALASKA TEMPORARY ASSISTANCE PROGRAM (ATAP) JIM NORDLAND, DIRECTOR, DIVISION OF PUBLIC HEALTH, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, noted that the Department had reworked the performance measures discussed at a previous Committee work session. The Department discovered that many of the measures could be consolidated to those indicated on the handout. [Copy on File]. Mr. Nordland stated that the Division supports all the performance measures except #3, "ATAP cases closed due to earnings without child support". VAL HORNER, PROGRAM OFICIER, QUALITY ASSESSMENT, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, recommended that item #3 was a direct measurement of the Child Support Enforcement Agency (CSEA) activities. She suggested that it was an interim measure to insure that Public Assistance was partnering up with CSEA, however, would not directly measure performance activities within the ATAP program. Co-Chair Hanley responded that the addition of that language resulted from a concern of Representative Martin's as indication of an overall caseload decline. Ms. Horner replied that regardless of the activities established by ATAP, all referrals go to CSEA for collection. The Division has no direct role in what is collected. Co-Chair Hanley suggested that it would indicate the caseload percentage decreased because of child support. Mr. Nordlund agreed that the information was important for ATAP to have access to, but to suggest that the Division has effect over that information is questionable. Ms. Horner strongly disagreed with tying it to ATAP's budget when measuring success. Representative J. Davies stipulated for the record that the Division of Public Assistance does not carry the entire responsibility but instead must work with CSEA. Representative J. Davies MOVED to adopt the proposed ATAP mission statement including the above-mentioned stipulation. There being NO OBJECTION, it was adopted. HB 325 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 2:50 P.M. H.F.C. 8 3/12/98