HOUSE FINANCE COMMITTEE March 1, 2000 2:21 P.M. TAPE HFC 00 - 45, Side 1 TAPE HFC 00 - 45, Side 2 TAPE HFC 00 - 46, Side 1 TAPE HFC 00 - 46, Side 2 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 2:21 p.m. PRESENT Co-Chair Mulder Co-Chair Therriault Representative Foster Vice Chair Bunde Representative Grussendorf Representative Austerman Representative Moses Representative J. Davies Representative Phillips Representative G. Davis Representative Williams ALSO PRESENT Nico Bus, Administrative Services Manager, Division of Support Services, Department of Natural Resources; Alison Elgee, Deputy Commissioner, Department of Administration; Karen Rehfeld, Director, Division of Education Support Services, Department of Education and Early Development; Janet Clarke, Director, Division of Administrative Services, Department of Health and Social Services; Barbara Ritchie, Deputy Attorney General, Department of Law; Larry Persily, Deputy Commissioner, Department of Revenue; Nancy Slagle, Director, Division of Administrative Services, Department of Transportation and Public Facilities; Annalee McConnell, Director, Office of Management and Budget, Office of the Governor; Kathryn Daughhetee, Director, Administrative Services Division, Department of Law; Carl Rose, Executive Director, Association of School Boards; Mike Tibbles, Staff, Representative Therriault; Kevin Jardell, Staff, Representative Green; Geron Bruce, Legislative Liaison, Department of Fish and Game: Dan Spencer, Director, Division of Administrative Services, Department of Administration. SUMMARY HB 206 "An Act relating to the migratory game bird conservation tag, to a nonresident combined sport fishing and hunting license, to the nonresident military small game and sport fishing license, to applications for certain licenses, tags, and permits issued by the Department of Fish and Game, and to duplicate crewmember licenses." CSHB 206 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with two zero fiscal notes, one by the Department of Public Safety and one by the Department of Fish and Game, both dated 2/23/00; and one fiscal impact note by the Department of Administration. HB 343 "An Act making and amending capital, supplemental, and other appropriations and reappropriations; making a reappropriation under art. IX, sec. 17©, Constitution of the State of Alaska, from the constitutional budget reserve fund; making appropriations to capitalize funds; ratifying certain expenditures; and providing for an effective date." CSHB 343 (FIN) was REPORTED out of Committee with a "do pass" recommendation. HOUSE BILL NO. 343 "An Act making and amending capital, supplemental, and other appropriations and reappropriations; making a reappropriation under art. IX, sec. 17©, Constitution of the State of Alaska, from the constitutional budget reserve fund; making appropriations to capitalize funds; ratifying certain expenditures; and providing for an effective date." DEPARTMENT OF NATURAL RESOURCES NICO BUS, ADMINSTRATIVE SERVICES MANAGER, DIVISION OF SUPPORT SERVICES, DEPARTMENT OF NATURAL RESOURCES provided information regarding section 1. Natural Resources Fire Suppression 6415.1 Mr. Bus explained that the request is for fire suppression expenditures to date and FY00 fixed costs. It is a combination of several fires. Section 14b Natural Resources 3863.7 Mr. Bus noted that this request would ratify: FY99 Fire Suppression expenditures. MILITARY AND VETERANS AFFAIRS Section 6a Army Guard 24.2 Mr. Bus observed that the appropriation is for the National Missile Defense Project. He explained that the request would cover travel for the Alaska National Guard to a conference regarding the program. Some of the travel has occurred. There are two trips remaining. Representative Phillips questioned if the trip to Fort Greely by legislators would be included. Mr. Bus responded that the Fort Greely transportation was covered with federal funds. Vice Chair Bunde MOVED to ADOPT the proposed committee substitute 1-GH2041/I, dated 3/1/00. There being NO OBJECTION, it was so ordered. Section 6b National Guard/Air Guard Fac. Maint 212.4 Mr. Bus noted that the request would cover the fire rescue program for the Air National Guard. Operating costs for Air Guard facilities maintenance is 100 percent federally funded. Section 6c Alaska National Guard/Youth Corps 692.6 Mr. Bus noted that this request includes $582.1 thousand dollars in federal funds from another state that could not accept the funding. It would allow a larger class size. Additional funding of $110.5 thousand dollars was collected from the Municipality of Anchorage in contract fees. Representative J. Davies observed that the fiscal year ends June 30, 2000. Mr. Bus noted that the current class ends March 24, 2000. The request would allow the next class to begin. DEPARTMENT OF ADMINISTRATION Section 2a Senior/Protection Community Svcs & Admin 118.6 ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF ADMINISTRATION explained that the request would cover a shortfall in the General Relief Program. The Division of Senior Services manages the program. Funding is used to cover care for indigent adults in need of protective placement, such as an assistive living environment. The state pays an average of $34 dollars a day for assisted living homes. This is about half the actual cost of operation. The department estimates that current funding would be depleted by April 2000. Representative Austerman questioned why there is a shortfall. Ms. Elgee pointed out that it is difficult to predict the type of clientele and added that there has been an increase in growth rate. Section 2b Admin Centralized Admin Svcs/Ret & Bens 100.0 Ms. Elgee observed that the funding is for an unexpected PERS Board election in March. A member was forced to retire due to illness. Statutes require a 50 percent majority election. The first round did not result in a 50 percent majority. A second round is proceeding. The appropriation covers the cost of balloting and postage. Co-Chair Therriault observed that HB 335 would mitigate future costs. Ms. Elgee was uncertain if it would affect elected board members. Vice Chair Bunde questioned the cost of a regular election. Ms. Elgee stated that a regular election would have similar cost. She noted that the election was unexpected and therefore not previously budgeted. Section 10a Longevity Bonus Grants 0.0 Section 10b Admin Longevity Bonus Grants 1430.0 Ms. Elgee explained that the appropriation is for the Longevity Bonus Program. There are three payments left. There is $10.5 million dollars left in the account. Monthly check runs are between $4.8 and $5.2 million dollars per month. There could be insufficient funding for the April run. Statutes require that everyone is paid or no one is paid. There are not enough funds for the month June. If the next check run exceeds $5.0 million dollars there would not be enough funds for the May run. Vice Chair Bunde questioned the department's ability to project the amount. Ms. Elgee noted that if an individual is gone for more than 30 days that they forfeit their check for the 30-day period. They must be gone for 90 consecutive days th to be disqualified from the program. The 15 of the month is the deadline for verification of in-state status, in order to receive a check on the regular payment date. If a thth recipient returns on the 16 or 17 of the month they would be eligible but would not receive their check till the subsequent month. There is ordinarily a seasonal change in the program during these months. Vice Chair Bunde stressed that the intent of the funds is to allow persons to remain in the state. He pointed out that if there is a $1 million dollar fluctuation that there are a lot of people leaving the state. Representative J. Davies observed that there are many clients that are dependent on the funds and remain in the state all year. In response to a question by Representative Phillips, Ms. Elgee reiterated that statutes do not allow the department to prorate longevity bonus payments. Section 13 Ratifications SPENCER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF ADMINISTRATION noted that section 13 authorizes technical adjustments for the Department of Administration and the Department of Community and Regional Affairs for accounts that are out of balance. They do not appropriate funds. DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT Section 3 Early Development/Day Care Assistance 1500.0 interagency receipts KAREN REHFELD, DIRECTOR, DIVISION OF EDUCATION SUPPORT SERVICES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT provided information on section 3. She noted that the request would pay for childcare assistance grants. In response to a question by Representative Austerman, Ms. Rehfeld explained that they are federal funds from the Temporary Assistance to Needy Families program in the Department of Health and Social Services. Co-Chair Mulder noted that section 4b provides the Department of Health and Social Service's authorization. Section 11 Department of Education & Early Development 0.0 Ms. Rehfeld noted that this section reappropriates funding for the Northwest Arctic Borough Buckland School. This moves funds within district projects. The department does not object to the reappropriation. Co-Chair Mulder explained that it was included in the fast track to allow the contractor to remain on site for a savings of approximately $1 million dollars. DEPARTMENT OF HEALTH AND SOCIAL SERVICES Section 4a Catastrophic & Chronic Illness Asst 608.6 JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES observed that the request would cover operating costs for catastrophic and chronic illness assistance (CAMI). This program replaced the old General Relief Medicare program. To qualify recipients most have less than $300 dollars in monthly income and less than $500 in assets, as well as have serious medical needs. Half of the funds go to medicine. The rest is split between hospital and physician visits. The department predicts that they will run out of money the end of April. Pharmacy costs go to retail pharmacists and are difficulty to cover. Co-Chair Mulder asked what the Governor's request for the program was in FY00. Ms. Clarke noted that the Governor requested $3,537.5 million dollars in FY00. The request was reduced by half a million dollars. She noted that the cost of prescription drugs is increasing. Co-Chair Mulder asked what would happen if the request was not approved. Ms. Clarke responded that they would attempt to first cover pharmacy costs. Physician visits and hospital care would be considered next. Representative J. Davies asked if the request would be sufficient for the rest of the year. Ms. Clarke affirmed that the addition would be sufficient to provide funding for the remaining time. Representative Phillips questioned if there is a significant number of new clients or an increase in pharmacy costs. Ms. Clarke replied that pharmacy costs increased by 30 percent. There were also 114 new cases, which is slightly higher than the previous year. There was an 8 percent growth in FY99. There was an 11 percent growth for FY00. Representative J. Davies pointed out that the request was underfunded. Section 4b Public Asst. Admin/Child Care Benefits 1500.0 Ms. Clarke noted that this request is funded from TANF funds and is available to offset operating costs for the childcare benefits program. Section 4c Public Asst./ Energy Asst. Prgm 2361.1 Ms. Clarke stressed that this request is the result of an unexpected increase in the Low Income Home Energy Assistance Program (LIHEAP) federal Grant for emergency heating assistance. Low-income individuals qualify for the program. Emergency funds were issued nation wide. The formula is based on the amount of heating fuel spent in the state. The state will receive the extra federal receipts. This will allow an increase in the household amount of per grant from $444 to $611 dollars per grant. The qualifying amount is $19,380 dollars for a household of two. Representative Grussendorf pointed out that fuel costs have increased and questioned why Power Cost Equalization is not included in the proposed committee substitute. Co-Chair Mulder responded that PCE would be addressed in an amendment. Section 13 Department of Health and Social Services 3271.6 Ms. Clarke discussed section 13; page 5 lines 22 - 23. This is for ratification of an over expenditure of general funds for FY99 Medicaid Services. The ratification is for $3,271.6 million dollars. During the last month of FY99 payments were stopped. She observed that a lack of matching funds resulted in insufficient general funds to pay the bills. The department should have stopped making payments in June. She observed that it is difficult to predict need. In FY97 $4 million dollars were lapsed. In FY98 $721 thousand dollars were lapsed. There was a shortfall of general funds in FY99 but there was a lapse of federal funds. She pointed out that there is no buffer account DEPARTMENT OF LAW Section 5 Law 0.0 BARBARA RITCHIE, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW explained that this item would extend the lapse date to June 30 2001 for litigation defending the constitutionality of legislation, which implemented tort reformed and placed limits on medical procedures. She gave a brief history of the issue. The Final judgement was appealed and the briefing was extensive. The Supreme Court has allowed the parties to submit additional briefs of up to 90 pages. Completion of the appeal briefs is not expected until late summer. Co-Chair Mulder questioned if there would be sufficient funds to complete litigation. Ms. Ritchie affirmed that the funds would be sufficient. KATHRYN DAUGHHETEE, DIRECTOR, ADMINISTRATIVE SERVICES DIVISION, DEPARTMENT OF LAW provided information on the appropriation. She noted that funds would assist the criminal division's cost associated with the two cases challenging partial birth abortion and parental consent. Co-Chair Mulder questioned if the extension would provide sufficient funds. Ms. Daughetee affirmed. DEPARTMENT OF REVENUE Section 7 Revenue Child Support Enforcement 150 GFPR LARRY PERSILY, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE reviewed section 7. He observed that there are several thousand cases waiting for adjustment. He observed that the request is for a one-time project, with non-permanent workers, to reduce the backlog of case adjustments (and an extended lapse date of 6/30/01). He estimated that there would be an additional $1.4 million dollars in collections and $470.2 thousand dollars in federal matching funds. In response to a question by Representative J. Davies, Mr. Persily explained that the program receipts would come from collections for individuals on public assistance. He emphasized that the sooner the funds are collected the sooner the money would be deposited into the general fund. In response to a question by Representative Phillips, Mr. Persily noted that the current administration inherited problems from former years (1980's). Representative Phillips noted that there has been intent to resolve the issue for several years. Representative Austerman asked for information regarding the current level of backlog. Mr. Persily promised that the department would not be back in the next year for another request to address the backlog. Representative Austerman stated that he did not object to the request as long as there are results. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES Section 8a Marine Vessel Ops/Southeast Vessel Ops 500.0 NANCY SLAGLE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITITES explained that the request would provide funding to cover increased fuel costs for FY00. She observed that the average cost is .82 cents per gallon. (TAPE CHANGE, HFC 00 - 45, SIDE 2)  Ms. Slagle noted that the department cut back on service in an attempt to reduce costs. It was too late to make further adjustments to the services since the schedule had been released. The department is beyond their authorization limit. Representative Austerman questioned the total fuel budget. Ms. Slagle observed that the department spent $5.3 million dollars on fuel in FY99. The department expects to spend between $7.3 or $7.4 million dollars on fuel in FY00. The department intends to cover the increase through a combination of reduced services and increased authorization. Section 8b Statewide Facility Maintenance & Operations/Northern Region Fac. 25.0 Ms. Slagle noted that the request would cover damage to housing in St. Marys damaged by high winds in an unanticipated winter storm. This region was outside the declared Central Gulf Coast storm disaster area. She observed that a small technical amendment would be needed. There was extensive storm damage in the interior of Alaska that was not within the declared disaster area. Section 8c AIA/Operations 900.0 Additional operating costs Ms. Slagle observed that section 8c provides additional authorization for International Airport Revenue funds for temporary baggage handling service while work proceeds at the airport. She noted that the cost was unanticipated. The item was not covered as part of the federal construction work on the roadside. She noted that the request would go before the Airline Carrier's Association. 8d Northern Region Hwys & Aviation 248.9 Ms. Slagle explained that the request would provide funding for snow plowing of specified highways. The department did not submit the request. Co-Chair Mulder observed that the reductions were based on the previous year's allocation. Ms. Slagle acknowledged that reductions were brought forward as part of the department's austerity measures. The money was added back to the department because there was not adequate time to inform communities of the reduction in service. The department has notified communities of the department's intent to delay opening for FY01. There were concerns regarding fuel access to mines in the area. The Alaska Industrial Development and Export Authority (AIDEA) assisted in placing a tank in the area. Representative Austerman referred to a substation closure, which was moved into Kodiak. Ms. Slagle noted that intent language in the operating budget specified that maintenance stations would be closed. Implementation of the closures were left to the department. Co-Chair Mulder noted that a letter was received from the minister of the Yukon territories and others requesting that the road remain open. Representative Foster spoke in support of the request. Vice Chair Bunde noted that residents on the Taylor Highway have indicated to him that government should be downsized and state services returned to the level provided in 1970, before the oil boom. He stated that he would offer an amendment to separate the Taylor Highway area and restore it to the 1970 level of service, when Mother Nature cleared the road. He noted that the communities have been forewarned and that they do not wish to pay taxes. Representative J. Davies argued that road maintenance should be consistent throughout the state. He stressed that there are poorly maintained roads in his district. Representative Phillips confirmed that the road is from Tok to the customs point. Representative Phillips echoed remarks by Co-Chair Mulder in regards to the affect of road closures on the Yukon. Representative J. Davies referred to a road in Co-Chair Therriault's district that had been inadequately maintained. He noted that the road services a hot springs, which provides attracts tourism. Representative Austerman stated that it would be difficult for him to support funding for the department when their practices are inefficient. Representative Williams noted that it is a difficult time to look at reductions in the Alaska Marine Highway System. He noted that everyone is hurting. He stressed the need for a good fiscal plan. UNIVERSITY OF ALASKA Section 9 Ch 139 SLA 98 pg 87 ln 33 (capital) 1000.0 Representative J. Davies observed that the request authorizes university and federal receipts that are needed to continue planning and design for the University museum. Co-Chair Mulder observed that a museum employee gifted $200 thousand dollars to the museum. Representative Phillips questioned if this is an addition to the museum. Representative J. Davies clarified that a significant addition is planned. A fund raising effort has raised over $16 million dollars from private and federal contributors. Sizable personal contributions have been received. Representative Phillips stressed that the current facility needs to be maintained before new projects are begun. Representative J. Davies stressed his frustration with deferred maintenance, but emphasized that the university cannot remain stagnant until the issue is dealt with. Representative Phillips expressed frustration that deferred maintenance has not been addressed. Co-Chair Mulder observed that it is easier to raise money for new buildings. He acknowledged the need for deferred maintenance. He pointed out that the University of Alaska Anchorage has an aggressive maintenance program. Representative J. Davies assured Co-Chair Mulder that the University of Alaska, Fairbanks has also been aggressive in their attempts to address deferred maintenance. He emphasized that the legislature did not fund their request. Funding has been diverted from the academic program to operation and maintenance. He stressed that the university cannot continue to divert funds from academic programs. He acknowledged that funding for dorms was received. There are twenty acres of roofs on the campus. A roof needs to be replaced on an average of every 20 years. Representative Williams pointed out that the university has land available to increase their resources. Co-Chair Mulder noted that the university has been fairly aggressive in their land management. CONSTITUTIONAL BUDGET RESERVE Section 10c Constitutional Budget Reserve 0.0 Co-Chair Mulder observed that since the Y2K appropriation required a vote to remove funding from the Constitutional Budget Reserve (CBR). That a 3/4 CBR vote is needed to reappropriate the lapse. Section 12 Legislature Legislative Council 0.0 Co-Chair Mulder explained that this item deals with the Redistricting Planning Committee. The $190 thousand dollars remaining from the special election and lapsed money in the Legislature's budget would be reappropriated. He noted that the Legislature, Administration and the Court worked together to formulate the plan. Representative J. Davies questioned why the funding is going to the Legislative Council. KEVIN JARDELL, STAFF, REPRESENTATIVE GREEN explained that the Redistricting Committee is the result of SB 99. There are training and data costs. The funds are going to the Legislative Council since it is a board formed between the three branches of government there is no other accounting mechanism. The Legislative Council operates as the accounting entity. ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR stated that the Administration supports the request. Co-Chair Mulder noted that the ratifications are small in number with the exception of fire suppression. AMENDMENTS Co-Chair Mulder provided members with Amendment 1 (copy on file). Co-Chair Mulder explained that the Alaska Industrial Development and Export Authority (AIDEA) has identified a one-time dividend of $8 million dollars for the state of Alaska. The Administration requested that the dividend be used to fund Power Cost Equalization. He explained that .. Representative Austerman clarified that the amendment funds FY00. Co-Chair Mulder MOVED to ADOPT Amendment 1. Amendment 1 noted that there is a one-time $8 million dollar AIDEA dividend available to the state of Alaska. The amendment appropriates the dividend to PCE. He reviewed FY00 funding sources for PCE. There being NO OBJECTION, it was so ordered. Co-Chair Mulder MOVED to ADOPT Amendment 2. Amendment 2 appropriates $2,139,700 million dollars for pupil transportation. The Foundation Program was reduced by the same amount. Co-Chair Mulder explained that the amendment funds pupil transportation. He pointed out that the school year would be almost over by the time the supplemental has been enacted. Representative J. Davies pointed out that, while contracts are negotiated at the local level, the Department of Education and Early Development must approve them. He explained that Fairbanks requested a one-year extension in order to align their contract with other districts. This resulted in additional costs. He pointed out that by aligning with other contracts that the option for a statewide RFP would be possible. Co-Chair Mulder expressed concern with the lack of a state policy in regards to pupil transportation. Representative Phillips stressed that it would be difficult for her district to address a shortfall this late in the school year, and acknowledged that there were not additional school miles to correspond to the increased costs. Representative J. Davies stressed that the Fairbanks School District is conservative and drives a hard bargain, but noted that there is little or no competition in Fairbanks. There being NO OBJECTION, Amendment 2 was adopted. Co-Chair Mulder MOVED to ADOPT conceptual Amendment 3 to delete "for the fiscal year ending June 30, 2000", on page 3, line 14 and 15. This language is handled in section 14 and is unnecessary. There being NO OBJECTION, it was so ordered. Co-Chair Mulder MOVED to ADOPT conceptual Amendment 4, add "constitutional" before "budget reserve fund" on line 5, page 4. There being NO OBJECTION, it was so ordered. Vice Chair Bunde MOVED to ADOPT Amendment 5 (copy on file). The amendment would delete funding for snow plowing of the Taylor Highway. He maintained that the state of Alaska should not feel any strong obligations to the Yukon regarding its tourist industry.   TAPE CHANGE, HFC 00 - 46, SIDE 1 Representative Phillips spoke against the amendment. Co- Chair Mulder noted that Representative James expressed concern regarding fuel distribution. Co-Chair Therriault stated that he was informed that the cost is reasonable and below an amount that could be done by the private sector. Representative J. Davies acknowledged the frustration that has fueled the amendment, but stressed that maintenance is a fundamental role of government. He pointed out that maintenance has been inadequately funded in the past ten years. Representative Williams acknowledged that money has been removed from various portions of the budget to cover this expense. He maintained the importance of keeping the roads open. Vice Chair Bunde pointed out that money is being transferred from areas that pay to support their roads to areas that do not pay to support local roads. He stressed that it will cost more to maintain the road than was collected from the area in taxes. A roll call vote was taken on the motion. IN FAVOR: Bunde, Therriault OPPOSED: Austerman, Williams, Davies, Foster, Grussendorf, Moses, Phillips, Mulder Representative G. Davis was absent from the vote. The MOTION FAILED (2-7). Representative Austerman MOVED to adopt Amendment #6. [Copy on File]. Amendment 6 would add $50.0 thousand dollars for Kodiak Chiniak/Pashaqsak Road Station. He stated that this is a policy call to maintain developing areas. Vice Chair Bunde OBJECTED. He pointed out that it would be an an increase in spending. Representative J. Davies MOVED to amend by adding $10 thousand dollars for the Chena Hot Springs road. He WITHDREW the MOTION. He noted that the amendment would provide infrastructure to develop and diversify the economy. Vice Chair Bunde WITHDREW the OBJECTION. There being NO further OBJECTION, Amendment 6 was adopted. Ms. McConnell applauded the Committee's early action on the supplemental. She observed that the Administration has an additional item to present the Committee. She explained that the Governor had asked Commissioner Otti to develop a proposal for avalanche warnings to address avalanche deaths and the expense of search and rescue. She noted that the avalanche danger would be extreme over the next couple of months. Avalanche warning is a statutory responsibility lodged in the Department of Public Safety, funding was eliminated in 1986. The Governor has requested that the plan do as much as possible to provide warning of avalanche danger and keep people out of those areas. Danger must be identified. She observed that there is extensive involvement by volunteers in search and rescue but emphasized that if is not possible for volunteers to do all the work. There may be an opportunity to use some Federal Emergency Management Agency (FEMA) funds for these costs. The proposal that has been developed calls for work in the areas with the most predispositions for danger. The Departments of Public Safety and Military and Veterans Affairs are currently working together to develop recommendations. The South Central area and Valdez are among the areas where avalanches threaten population centers. She recommended that an appropriation could be made to the Alaska Mountain safety center to continue the work. The Alaska Mountain safety center fulfilled this function prior to the suspension of funds in 1980's. They have continued to coordinate mountain rescue. The dollar amount is not yet available. In response to a question by Representative Austerman, Ms. McConnell stressed that the intent would be to address areas where people are located both through transportation and recreational use. The road system would be the core. She did not anticipate avalanche prediction in areas that are not used. Ski and snow machine clubs would be utilized. The fundamental work of forecasting is significant. Representative Austerman voiced reservations regarding inclusion of recreation areas. Many of those areas have their own avalanche security. Ms. McConnell emphasized that major recreational areas would be the focus. Representative J. Davies spoke in support of providing avalanche warning, but stressed that a broader look should be taken in regards to geological hazards. CARL ROSE, EXECUTIVE DIRECTOR, ASSOCIATION OF SCHOOL BOARDS testified on funding for the Department of Education and Early Development. He explained that $26 million dollars was placed into the Foundation Formula in FY99. This amount will be reduced in FY01 due to an increase in local contribution. He pointed out that an outcome-based process of education has been put in place. Exit and benchmark exams have been put in place. In FY00, there will be $11 million dollars in cuts divided by the remaining three months of April, May and June. He maintained that there is a collision course and noted that schools have been flat funded for 10 years. He stressed that it is an urgent issue that should be fast- tracked. Representative J. Davies asked for further information. Mr. Rose explained that the reductions are the result of SB 36. He noted that the strong economy and how it would affect property value was not predicted. Additional impact aid and low enrollment were not expected. Schools will lose $19 million dollars in FY01. Additional aid could be replaced through operations or grant. He acknowledged that additional funding would go to where the children are located and not necessarily where the funding was reduced. Co-Chair Therriault pointed out that state dollars are being replaced by local contributions and federal impact dollars. He acknowledged that pupil counts do account for fewer dollars. Representative Austerman agreed with Co-Chair Therriault's assessment. Representative J. Davies pointed out that assessed value includes property value that is not taxed. The revenue does not necessarily increase equally to the assessed value. Mr. Rose observed that some school districts are funded at their cap and cannot receive more money as state dollars are reduced. Co-Chair Mulder referred to a letter by Darroll Hargraves, Executive Director, Alaska Council of School Administrators [Copy on file]. Mr. Hargraves did not wish to testify. Representative Phillips observed that she has a relative in the Youth Court contained in section 6(c). She clarified that there is no financial reflection in her family. Representative Foster MOVED to report CSHB 343 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 343 (FIN) was REPORTED out of Committee with a "do pass" recommendation. HOUSE BILL NO. 206 "An Act relating to the migratory game bird conservation tag, to a nonresident combined sport fishing and hunting license, to the nonresident military small game and sport fishing license, to applications for certain licenses, tags, and permits issued by the Department of Fish and Game, and to duplicate crewmember licenses." Co-Chair Therriault observed that the House Finance Committee adopted amendments to HB 206 on 2/29/00, which would change the fiscal note. GERON BRUCE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND GAME discussed the department's fiscal note. He provided members with a spreadsheet (copy on file). The spreadsheet contains calculations on fishing licenses sold to residents of the Yukon Territory in 1999 and 1997. There was a drop in total license purchases after the fee increase. There were 1,589 licenses sold in 1999 and 2,061 sold in 1997. The department took the number of licenses sold in the highest year and estimated that if Yukon residents could buy King Salmon and sport fishing licenses at the same rate as Alaskans that there would be a reduction in revenues of $25 thousand dollars. The reduction would be in fish and game funds. In response to a question by Representative Grussendorf, Mr. Bruce estimated that the largest use by Yukon fisherman would be in the Haines/Skagway area. In response to a question by Co-Chair Therriault, Mr. Bruce noted that Alaskans cannot fish for free in the Yukon. The non-resident fishing license rates in Canada are low. He explained that the Canadian federal government, not the territorial government, would need to take action to set a reciprocal agreement in place. Co-Chair Therriault questioned if there would be a $25 thousand dollar hole in the department's budget. Mr. Bruce responded that the director of Sport Fish was not concern with the immediate loss. He acknowledged that the Fish and Game Fund has been under pressure and that there would be less revenue into the fund if Canada enacts a reciprocal agreement. Representative Grussendorf stressed that there is a relationship to King Salmon tags and the state's effort to enhance the stock. Co-Chair Therriault noted that there was a technical problem with the adoption of Amendment 1. MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT spoke to Amendment 1, passed by the Committee on 2/29/00. He explained that Amendment 1, as drafted, would require the Department of Fish and Game to establish a new license. The intent was that residents of the Yukon would get the existing license at the same price as an Alaskan resident. Mr. Tibbles suggested that the amendment be amended by deleting: "non" before resident, "for the fee charged to residents under (a) of this section for a resident sport fishing licenses," and "for the fee charged to residents under (a) of this section for a resident anadromous king salmon tag." Co-Chair Mulder MOVED to rescind the Committee's action in adopting Amendment 1. There being NO OBJECTION, it was so ordered. Co-Chair Mulder MOVED to ADOPT amended Amendment 1: (h) Residents of Yukon Territory, Canada, may receive (1) a resident annual sport fishing license; and (2) a resident anadromous king salmon annual tag. Co-Chair Therriault OBJECTED. He noted that there is no reciprocal action with the Yukon. Representative J. Davies noted that the legislation requires action before taking affect. Co-Chair Therriault thought that the motivation was to match the policy of the Yukon. TAPE CHANGE, HFC 99 - 46, SIDE 2 A roll call vote was taken on the motion to adopt Amendment 1 as amended. IN FAVOR: Davies, Moses, Phillips, Foster, Mulder OPPOSED: Bunde, Grussendorf, Williams, Therriault The MOTION PASSED (5-4). Representative J. Davies MOVED to report CSHB 206 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 206 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with two zero fiscal notes, one by the Department of Public Safety and one by the Department of Fish and Game, both dated 2/23/00; and one fiscal impact note by the Department of Administration. Adjournment The meeting adjourned at 4:45 p.m.