HOUSE FINANCE COMMITTEE MARCH 7, 2000 7:30 P.M. TAPE HFC 00 - 65, Side 1. TAPE HFC 00 - 65, Side 2. TAPE HFC 00 - 66, Side 1. TAPE HFC 00 - 66, Side 2. CALL TO ORDER Co-Chair Mulder called the House Finance Committee meeting to order at 7:30 P.M. PRESENT Co-Chair Mulder Representative Foster Co-Chair Therriault Representative Grussendorf Representative Austerman Representative Moses Representative Bunde Representative Phillips Representative J. Davies Representative Williams Representative G. Davis ALSO PRESENT Representative Tom Brice; David Teal, Director, Division of Legislative Finance; Janet Clarke, Director, Division of Administrative Services, Department of Health and Social Services; Jeff Jesse, Executive Director, Alaska Mental Health Trust Authority, Juneau; Christi Tillard, Advisory Board, Alcohol and Drug Abuse, Dillingham; Lisa Kirsch, Assistant Attorney, Department of Law; Denny DeWitt, Staff, Representative Eldon Mulder; Larry LaBolle, Staff, Representative Richard Foster. SUMMARY HB 312 An Act making and amending 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©, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date. HB 312 was HEARD and HELD in Committee for further consideration. HB 313 An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date. HB 313 was HEARD and HELD in Committee for further consideration. AMENDMENTS HEARD: Department of Commerce and Economic Development Department of Education and Early Development Office of the Governor Department of Health and Social Services Intent Language Language Legislature Department of Public Safety Department of Transportation and Public Facilities University of Alaska HOUSE BILL NO. 312 An Act making and amending 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©, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date. HOUSE BILL NO. 313 An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT Representative Phillips referenced C&ED-10. [Copy on File]. She noted a technical change and that the $70 thousand dollars general funds should be taken from the International Trade and Marketing component. DELETE: Department of Corrections Administration and Operations Inmate programs $181,700 General Funds ADD: Department of Corrections Administration and Operations Inmate programs $181,700 PFD Funds ADD: Department of Community & Economic Development Executive Administration and Development Commissioner's Office $111,700 General Funds ADD: Department of Community & Economic Development Community Assistance & Economic Development International Trade & Marketing $70,000 General Funds Representative Phillips MOVED to ADOPT Amendment C&ED-10, as amended. Co-Chair Mulder OBJECTED for further clarification. Representative Phillips explained that the amendment would add a Deputy Commissioner for rural affairs and a general trade specialist to the Department. Co-Chair Mulder WITHDREW the OBJECTION. In response to a query by Representative Bunde, Co-Chair Mulder noted that the money would come from prisoner Permanent Fund Dividend's through the Department of Corrections. There being NO further OBJECTION, the amendment was adopted. DEPARTMENT OF PUBLIC SAFETY Representative J. Davies MOVED to ADOPT PS-6 (replacement). [Copy on File]. Co-Chair Mulder OBJECTED for the purpose of discussion. ADD: Department of Public Safety Fire Prevention Fire Service Training $80,000 SDPR Representative J. Davies explained that the amendment would allow for the City of Fairbanks to contract with the State for a fire service-training officer. Co-Chair Mulder WITHDREW his OBJECTION. There being NO further OBJECTION, the amendment was adopted. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT Representative J. Davies WITHDREW CED-2. [Copy on File}. There being NO OBJECTION, it was withdrawn. DEPARTMENT OF HEALTH AND SOCIAL SERVICES Co-Chair Therriault WITHDREW HSS-1. [Copy on File]. Co-Chair Therriault MOVED to ADOPT Amendment HSS-1A. [Copy on File]. Representative Grussendorf OBJECTED. ADD: Department of Health and Social Services Community Mental Health Grants BRU Services to the Chronically Mentally Ill component $203.0 General Funds ADD: Department of Health and Social Services Community DD Grants BRU Community DD Grants component $120.0 General Funds Co-Chair Therriault explained the intent of the amendment. He understood that the Department agreed with the switch. Representative J. Davies asked which programs these funds would support. JEFF JESSEE, EXECUTIVE DIRECTOR, ALASKA MENTAL HEALTH TRUST AUTHORITY (AMHTA), JUNEAU, explained that the problems solved were three fold. · $1 million of the $1.5 million dollar reduction in alcohol grants was of concern to the trustees as the reduction was exasterbated by a similar reduction that will occur in the next three years to the federal block grant funds. It will be a $2 million dollar reduction to services that the trustees believe are effective in addressing the number one public health problem in the State of Alaska, alcohol and drug abuse. · The second situation is that a $203 thousand dollar reduction in community mental health grants and services to the chronically mentally ill are of concern to the trustees. At this time, they are in the midst in developing a strategy that will support both smaller psychiatric institutes. · The reduction of $120 thousand dollars in community grants for institutional prevention. Last year the Legislature was unable to fully fund that increment, so the trustees agreed to fund $360 thousand of that. The Trustees planned to back out of it. The proposed move would assist the Legislature in receiving $120 thousand dollars in general funds to keep the component whole. To accomplish that, the Trustees had to prioritize the items to be funded. Mr. Jesse noted that they are trying to work with Alaska Housing Finance Corporation (AHFC). Co-Chair Therriault clarified that the backing out of general funds from the Medicaid component was a general fund match. Representative Bunde advised that there was testimony pending regarding Fetal Alcohol Syndrome (FAS). CHRISTI WILLARD TILDEN, ADVISORY BOARD, ALCOHOL AND DRUG ABUSE, DILLINGHAM, commented that there is concern that there is $500 thousand dollars assumed to be coming from a federal grant but it is understood that federal money can not be used as proposed. She reiterated that those grants are restricted and asked that it be taken into consideration. Co-Chair Therriault interjected that the Department identified that money to be used for FAS program. There being NO further OBJECTION, the amendment was adopted. Co-Chair Therriault MOVED to ADOPT Amendment HSS-1B. [Copy on File]. Co-Chair Mulder OBJECTED for the purpose of discussion. Department of Health and Social Services State Health Services BRU Nursing component DELETE: $250.0 1002 Fed. Receipts ADD: $250.0 1108 SDPR Co-Chair Therriault explained that the amendment would provide a change regarding an increment for the Alaska Federal Health Care Access Network. In the Governor's original budget, it had been requested through federal funds. There has since been a Governor's budget amendment to correctly change it from Federal Receipts to Statutory Designated Program Receipts. The amendment would indicate that change. Representative J. Davies questioned where the receipts would come from. JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF HELATH AND SOCIAL SERVICES, replied that originally, the grant came directly from the federal government. They chose to contract with a non-profit entity and came through the State not as federal funds. She pointed out that the Department had requested the amendment. There being NO further OBJECTION, HSS-1B was adopted. Representative Grussendorf MOVED to ADOPT Amendment HSS-2. [Copy on File]. Co-Chair Therriault OBJECTED. ADD BRU: Public Assistance Component: General Relief Assistance $212,600 GENERAL FUND Representative Grussendorf explained that the amendment would pay for burials and shelter for the poorest of poor. He asked where else would this burden fall and pointed out that this was a safety net for those on the welfare system. Co-Chair Therriault pointed out that the proposal would fund the FY99 actual level. He stated that the category had been over-authorized for a number of years. Representative Grussendorf responded that there exist situations not being addressed. Ms. Clarke advised that this is a formula program that does fluctuate. Most of the money does go for indigent burials. The program has been around since statehood. She stressed that if there was not enough funding for the component, the Department would come for supplemental funding. A roll call vote was taken on the motion. IN FAVOR: J. Davies, Grussendorf OPPOSED: Phillips, Williams, Austerman, Bunde, G. Davis, Foster, Mulder, Therriault Representative Moses was not present for the vote. The MOTION FAILED (2-8). Representative J. Davies noted that HSS-1A had addressed concerns indicated in Amendment H&SS-3 and that he would WITHDRAW the Amendment. [Copy on File]. There being NO OBJECTION, it was withdrawn. Representative J. Davies MOVED to ADOPT Amendment HSS-4. [Copy on File]. Co-Chair Therriault OBJECTED. DELETE: State Health Services Infant Learning Grants $1199.3 GF ADD: State Health Services Infant Learning Grants $1899.3.0 GF Representative J. Davies stated that the Amendment would add $700.0 GF to Infant learning grants to help reduce the waitlist. REPRESENTATIVE TOM BRICE spoke to the amendment which would provide physical therapy to children with developmental disabilities. He explained that the program was broken into two parts and addresses varying degrees of disabilities. The amendment would provide services to the children that do not meet the federal threshold. The program has been around since the late 1960's. Representative Phillips asked how much money had been approved for the program. Co-Chair Therriault noted that it had been flat funded at $5 million dollars. Ms. Clarke pointed out that the Governor's budget recommended $5.7 million dollars. Representative J. Davies mentioned that if the increment is not funded, there would be another 250 children that do not receive services. A roll call vote was taken on the motion. IN FAVOR: J. Davies, Grussendorf OPPOSED: Williams, Austerman, Bunde, G. Davis, Foster, Phillips, Therriault, Mulder Representative Moses was not present for the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to ADOPT Amendment HSS-5. [Copy on File]. Co-Chair Therriault OBJECTED. Page 3, line 8: Purchased Services Appropriate Total $6,294,600 $5,704,200 general funds $590,400 Other Funds Page 3, line 15 Residential Child Care Appropriate $4,156,300 Ms. Clarke advised that the amendment would restore $100,000 GF/MH. She noted that the Subcommittee had not included funds for training for residential care providers. The funding would help the providers to develop the skills in order to better deal with children with difficult behaviors. Co-Chair Therriault countered that there was not general fund money to "back fill". There had been an increment to the caseload growth and new care center beds. He stressed that there was extra funding placed into the BRU. Representative J. Davies emphasized that this training is required by State regulations. Co-Chair Therriault explained that there had been an over all increase in the Department's budget. The Department has the authority to move the monies into areas as they need. Representative Phillips asked if there was an assessment fee charged to the parents of these children. Ms. Clarke replied that many of the children are in State custody. There is no fee charged A roll call vote was taken on the motion. IN FAVOR: J. Davies, Grussendorf OPPOSED: Austerman, Bunde, G. Davis, Foster, Phillips, Williams, Therriault, Mulder Representative Moses was not present for the vote. The MOTION FAILED (2-8). Representative Grussendorf MOVED to ADOPT Amendment HSS-6. [Copy on File]. Co-Chair Therriault OBJECTED. ADD: BRU: Administrative Services Component: COMP ASS Community grants $25.0 GENERAL FUND Representative Grussendorf explained the amendment would provide "seed" money for building skills for high school students in creating businesses. Representative Phillips mentioned that the program sounded similar to a current program in the schools. She noted there already exists distributive education courses (DECA) through the school system. (TAPE CHANGE HFC 00 - 65, Side 2)  Representative J. Davies explained that the proposed approach helps to bring the Department of Health and Social Services and the Department of Education and Early Development together to address youth problems. Kids have benefited from bringing these resources together. Co-Chair Therriault interjected that was one of the areas which the Subcommittee believed there were other funding needs with higher priority. Representative Brice stated that the proposed amendment was an attempt to get bureaucracy to think differently in terms of establishing new programs for youth. He added that the program would serve mostly Anchorage and Southeast Alaskan students. A roll call vote was taken on the motion. IN FAVOR: J. Davies, Grussendorf OPPOSED: Bunde, G. Davis, Foster, Phillips, Williams, Austerman, Mulder, Therriault Representative Moses was not present for the vote. The MOTION FAILED (2-8). Representative Grussendorf MOVED to WITHDRAW Amendment HSS- 7. [Copy on File]. He noted that the concern had been addressed in HSS-1A. There being NO OBJECTION, it was withdrawn. Representative J. Davies MOVED to WITHDRAW Amendment HSS-8. [Copy on File]. He noted that the concern had been addressed in HSS-1A. There being NO OBJECTION, it was withdrawn. Representative J. Davies MOVED to ADOPT Amendment HSS-9. [Copy on File]. Co-Chair Therriault OBJECTED. ADD: Dept of Health and Social Services BRU: Juvenile Justice Component: McLaughlin Youth Center $1,302.0 General Fund dollars Ms. Clarke emphasized that the McLaughlin Youth Center is very overcrowded, and it is 149% over-capacity. Beds are needed. The overcrowding is unsafe and that area has to be doubled staffed. Ms. Clarke agreed that the master plan is good. If McLaughlin is overcrowded, then the rest of the facilities become overcrowded. She stressed that this funding is one of the Department's top priorities. Co-Chair Therriault advised that there are beds that could come on line, but that they were being delayed. Ms. Clarke noted that the grand opening was scheduled for the Mat-Su facility in May. Representative Phillips asked the status of the Kenai project. Ms. Clarke replied that there are planning funds, with no construction dollars; the funds will be used to determine which site is appropriate. A roll call vote was taken on the motion. IN FAVOR: J. Davies, Grussendorf, Austerman OPPOSED: G. Davis, Foster, Phillips, Williams, Bunde, Therriault, Mulder Representative Moses was not present for the vote. The MOTION FAILED (3-7). Representative J. Davies MOVED to ADOPT Amendment HSS-10. [Copy on File]. Co-Chair Therriault OBJECTED. ADD:  Dept of Health and Social Services BRU: Purchased Services Component: Foster Care Special Needs $29.8 Federal funds $1,103.3 General funds Representative J. Davies explained that if this component was not funded, there will need to be supplemental funding. Co-Chair Therriault pointed out that a 7% above and beyond increase had been granted. Representative J. Davies advised that the target was a 12% increase. Co-Chair Mulder questioned if all states participated in foster care special needs. Ms. Clarke explained it is basically part of the foster care budget. Representative Hanley had broken the budget into four areas. Special needs are those one-time payments for items likes coats and personal care supplementals that occur. The federal government also participates through the Title 4(e) Program, which is 20% of the budget. A roll call vote was taken on the motion. IN FAVOR: Grussendorf, J. Davies OPPOSED: G. Davis, Foster, Phillips, Williams, Austerman, Bunde, Mulder, Therriault Representative Moses was not present for the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to WITHDRAW Amendment HSS-11. [Copy on File]. Representative J. Davies MOVED to WITHDRAW Amendment HSS-12. [Copy on File]. Representative J. Davies MOVED to ADOPT Amendment HSS-13. [Copy on File]. Co-Chair Therriault OBJECTED. Department of Health and Social Services BRU: Purchased Services Component: Foster Care Base Rate $1,144.2 ($510.8 federal & $633.4 GF) Ms. Clarke explained that this is a formula program. In regulation, there exists a schedule of what the parents will be paid. She noted that the Department's best projection is that foster care will grow by 12% in FY2001. The Subcommittee allocated a little more than half of the requested amount. Co-Chair Therriault agreed that supplemental funding was possible if needed. He noted that his staff would follow up throughout the fiscal year tracking the concern and pointed out that there had been a 27% increase over the current year budget. Representative J. Davies reiterated the expected growth rate. Ms. Clarke explained that there is a significant supplemental mode. Representative J. Davies WITHDREW the MOTION to adopt HSS- 13. Representative J. Davies MOVED to ADOPT Amendment HSS-14. [Copy on File]. Co-Chair Therriault OBJECTED. DELETE: Department of Health and Social Services State Health Services Tobacco Control and Prevention $1211.4 General Fund ADD: Department of Health and Social Service State Health Services Tobacco Control and Prevention $2.8million General Fund Representative J. Davies stated that the amendment would add $1,588.6 general fund dollars to the tobacco prevention programs. He believed that program is important to keep young people from starting to smoke. Vice Chair Bunde agreed that the tobacco money should be more focused on tobacco problems throughout the State. Representative Grussendorf noted that the money has become a funding source for other things than prevention. He suggested that the State would be "money ahead" to address the prevention aspect. Representative Phillips understood that the objective of the tobacco tax was to place a mechanism, which would stop young people from smoking. She asked if there were statistics indicating the effectiveness to date of that program. Ms. Clarke did not have that information available. She added that there is an evaluation component available at the Department. Co-Chair Mulder interjected that the money from that fund was allocated for Medicaid programs. He saw the settlement funds as an opportunity to mitigate some costs that the State has experienced in going to court to claim medical related services provided to Alaskan citizens. Co-Chair Therriault added that those funds are used as a revenue stream to help with Medicaid concerns treating the problems associated with smoking. He noted that he agrees with the prevention programs, however, the amendment proposes to double the Governor's request. A roll call vote was taken on the motion. IN FAVOR: Grussendorf, Moses, Austerman, Bunde, J. Davies OPPOSED: Foster, Phillips, G. Davis, Therriault, Mulder Representative Williams was not present for the vote. The MOTION FAILED (5-5). Representative Grussendorf MOVED to ADOPT Amendment HSS-15. [Copy on File]. Co-Chair Therriault OBJECTED. Department of Health and Social Services New Appropriation Abortion Services for Medicaid Eligible Women $506.6 GENERAL FUNDS Representative Grussendorf pointed out that Planned Parenthood Incorporated has taken the State Legislature's decision to not fund therapeutic abortions to the Supreme Court. The Court ruled that the decision was not legal. The State has appealed that case. Representative Grussendorf stated that the Legislature should provide assurance to stand by the Department of Health and Social Services Commissioner in case of an "attempt of court" determination is made. LISA KIRSCH, ASSISTANT ATTORNEY GENERAL, HUMAN SERVICES SECTION, DEPARTMENT OF LAW, noted that she has been representing the State in the Planned Parenthood versus Perdue Case. She explained that the State stands with a contempt motion pending and that it has not yet been decided in the Superior Court. The briefing is yet to be completed before the Supreme Court. That action should be done by early April 2000. The "motion for stay" was also renewed at the Supreme Court level and denied. Ms. Clarke explained what the provision had been intended to cover. She noted that the request would provide a new appropriation in the Department for abortion services for Medicaid eligible women in FY01, for expenses related to the service. Vice Chair Bunde mentioned that the State should not let the public think that the Commissioner would be personally liable. Ms. Kirsch agreed that sanctions would not be against Commissioner Perdue personally. The primary concerns are for fines that will be levied against the State for other sanctions, and that the Court might choose to enforce it. Representative Grussendorf questioned if federal funding could be jeopardized if the State refused to undertake this. Ms. Kirsch replied that there are very complex issues involved in dealing with Medicaid and federally matched funds. She indicated that in the simplified version, the Legislature can fund nothing, however, they can not take a stand on how specific services stay in compliance with federal law. A roll call vote was taken on the motion. IN FAVOR: Grussendorf, Moses, J. Davies OPPOSED: Phillips, Austerman, Bunde, G. Davis, Foster, Therriault, Mulder Representative Williams was not present for the vote. The MOTION FAILED (3-7). Representative J. Davies made a change to Amendment HSS-16. [Copy on File]. He noted the change to the Medicaid Services Component, inserting "-$5,736.1" and deleting "5,924.6". Representative J. Davies MOVED to ADOPT the amended Amendment HSS-16. DELETE: Department of Administration Legal and Advocacy Services BRU Office of Public Advocacy Component -135.8 Tobacco Settlement Public Defender Agency Component -225.0 Tobacco Settle. Department of Law Civil Division BRU Human Services Section Component -134.0 Tobacco Settlement Department of Health and Social Services Medical Assistance BRU Medicaid Services Component -5,736.1 Tobacco Settlement Catastrophic & Chronic Assistance BRU Catastrophic & Chronic Assistance Component -1,145.0 Tobacco Settlement Purchased Services BRU Foster Care Special Need Component -216.3 Tobacco Settlement Residential Child Care Component -497.0 Tobacco Settlement Front Line Social Workers BRU Front Line Social Workers Component -631.5 Tobacco Settlement ADD: Department of Administration Legal and Advocacy Services BRU Office of Public Advocacy Component 135.8 GF Public Defender Agency Component 225.0 GF Department of Law Civil Division BRU Human Services Section Component 134.0 GF Department of Health and Social Services Medical Assistance BRU Medicaid Services Component 5,924.6 GF/Match Catastrophic & Chronic Assistance BRU Catastrophic & Chronic Assistance Component 1,145.0 GF Purchased Services BRU Foster Care Special Need Component 216.3 GF Residential Child Care Component 497.0 GF Front Line Social Workers BRU Front Line Social Workers Component 631.5 GF Representative J. Davies stated that these changes reflect the reduction due to volume adjustments in the amount of the Tobacco Settlement fund expected to be received in FY2001. There being NO OBJECTION, the amendment was adopted. Co-Chair Therriault MOVED to adopt HSS-17. [Copy on File]. ADD: Department of Health and Social Services Public Assistance BRU Alaska Temporary Assistance Program (ATAP) component $630.0 Federal Funds Co-Chair Therriault stated that the amendment would add $630 thousand dollars in Federal Receipts in the ATAP program to allow additional funds to be spent in the Council of Domestic Violence and Sexual Assault to the Department of Public Safety, and in Head Start Grants to the Department of Education and Early Development through Interagency receipts. There are available TANF funds through the component for these purposes. Ms. Clarke recommended that it be placed into the work services component. Co-Chair Mulder MOVED to make the recommended change. There being NO OBJECTION, the amendment was amended to indicate the Work Services Component. There being NO OBJECTION, HSS- 17 was adopted. (TAPE CHANGE HFC 00 - 66, Side 1)    UNIVERSITY OF ALASKA Representative J. Davies MOVED to ADOPT UA-1. [Copy on File]. Co-Chair Mulder OBJECTED. DELETE: University of Alaska $172,143,300 General Funds ADD: University of Alaska $189,244,100 General Funds Representative J. Davies stated that the amendment would add money as requested by the University Board of Regents. The University has identified areas where they could be a "key player" in preparing opportunities for new enterprises and preparation of the participating work force. He stated that it would be a worthwhile investment. Co-Chair Mulder commented that the amendment was beyond the State's means. At this point in time, the State should not make this commitment, however, noted that the Legislature should continue to help find ways to help the University. Representative J. Davies WITHDREW the MOTION. There being NO further OBJECTION, it was withdrawn. LEGISLATURE Representative Moses MOVED TO ADOPT LEG-1. [Copy on File]. Co-Chair Mulder OBJECTED. DELETE: Legislative Affairs Agency Legislative Council Legislators' Salaries & Allowances $225.0 General Funds ADD: Department of Fish and Game Commercial Fisheries Fisheries Development $225.0 General Funds Representative Moses stated that the amendment will provide for the renewal resource in the State. He supported increasing commercial fisheries development and cutting the legislative long term per diem. Co-Chair Mulder pointed out that the Legislative budget had been reduced this year. He encouraged a "no" vote. Vice Chair Bunde noted that he chaired the Department of Fish and Game budget and thought that the amendment may be construed as an anti Mat-Su valley move. Representative Grussendorf voiced support for the amendment. Representative Moses acknowledged that these are the types of cuts which the Legislature should make. He warned members about the "choking off" the State's economy. Representative Moses emphasized that legislators need to either start raising revenues or get serious about where to cut. Co-Chair Mulder pointed out that Y2K funding had been backed out from last year. Representative Moses asked if that had been a carry forward. Co-Chair Mulder replied not what he had spoken to directly, however, there had been some carry forward. Representative Moses noted that was not a "real" cut. Co-Chair Therriault clarified that it had been adjusted from the base up and the Y2K money was backed out. Co-Chair Mulder interjected that only $.5 million dollars less had been authorized from last year. This year's numbers are below what was authorized last year. Representative Moses asked what was actually cut. Co-Chair Mulder replied that it had been an unallocated reduction. A roll call vote was taken on the motion. IN FAVOR: Moses, Grussendorf OPPOSED: Phillips, Williams, Austerman, Bunde, J. Davies, G. Davis, Foster, Therriault, Mulder The MOTION FAILED (2-9). OFFICE OF THE GOVERNOR Co-Chair Mulder advised that GOV-1 would correct a typographical error. The balance of $1,629,000 was appropriated in Section 28. [Copy on File]. DELETE: Office of the Governor Elections $3,668,000 General Funds ADD: Office of the Governor Elections $2,039,600 General Funds Co-Chair Mulder MOVED to ADOPT GOV-1. There being NO OBJECTION, it was adopted. Co-Chair Mulder requested to change GOV-2, deleting "$53,000" and inserting "53,800". [Copy on File]. ADD: Office of the Governor Human Rights Commission $53,800 Federal Funds Co-Chair Mulder MOVED to ADOPT the amended GOV-2. There being NO OBJECTION, it was adopted. LANGUAGE Representative Williams MOVED to ADOPT LANG-1, which would address a drafting error. [Copy on File]. Page 43, Line 7: DELETE: Calendar year 1999 INSERT: fiscal year 2000 There being NO OBJECTION, it was adopted. Representative Austerman MOVED TO ADOPT LANG-2. [Copy on File]. Page 42, following line 6: Insert a new bill section to read: *Sec 5. ALASKA AEROSPACE DEVELOPMENT CORPORATION. That portion of the corporate receipts of the Alaska Aerospace Development Corporation received during the fiscal year ending June 30, 2001, that is in excess of the amount appropriated in sec. 1 of this Act, is appropriated to the Alaska Aerospace Development Corporation for operations during the fiscal year ending June 30, 2001. Renumber the following bill sections accordingly: Page 49, Lines 1 - 2: DELETE: 3, 9, 12(a), 13, 14, 17, 20, 21, 26(c), 26(h), 26(I), and 31(a) INSERT: 3, 10, 13(a), 14, 15, 18, 21, 22, 27(c), 27(h), 27(i), and 32(a) There being NO OBJECTION, it was adopted. Co-Chair Mulder MOVED to ADOPT LANG-3. [Copy on File]. Page 48, following line 26: Insert a new subsection to read: (c) The sum of $100,000 is appropriated as a return of capital from corporate receipts of the student loan fund (AS 14.42.210) to the Alaska Commission on Postsecondary Education for payment in fiscal year 2001 to the Alaska National Guard to pay the University of Alaska for course credits for continuing educational benefits to members of the Alaska National Guard. Co-Chair Mulder explained that the amendment would increase the education benefit for members of the Alaska National Guard by providing educational credits through the University of Alaska. It would improve Alaska National Guard recruiting and retention and provide better opportunity for advancement. Vice Chair Bunde OBJECTED for the purpose of a comment. He advised that any profit that Alaska Postsecondary makes are profits received from the students. He suggested that the amendment would allow for students to fund the tuition for other students. He voiced concern with that measure. Vice Chair Bunde WITHDREW his OBJECTION. There being NO further OBJECTION, LANG-3 was adopted. Co-Chair Mulder MOVED to adopt LANG-3A. [Copy on File]. Page 48, Line 23 DELETE: $1,445,200 INSERT: $1,444,200 Following "appropriated": Insert: as return of capital He explained that the amendment would correct wording to accommodate a request by the Postsecondary Commission and would add "return of capital". DENNY DEWITT, STAFF, REPRESENTATIVE ELDON MULDER, explained that the amendment provided the term requested by the Postsecondary Commission. It would function similar to a bill introduced by the Governor, and would be taken out of net profits. Vice Chair Bunde reiterated his objection as a policy call. He stated that the Student Loan program should break even and carry their own weight. The students should not be to only ones paying taxes. He added that it would be an indirect tax. Representative Bunde suggested that the money should be used to reduce the loan rates for the State loans. Vice Chair Bunde OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Phillips, Williams, Austerman, G. Davis, Foster, Mulder, Therriault OPPOSED: Bunde, J. Davies, Grussendorf, Moses The MOTION PASSED (7-4). Co-Chair Mulder MOVED to ADOPT LANG-4. [Copy on File]. Page 48, Line 14 Language - Section 30 DELETE: $1,090,612 ADD: $1,020,612 He explained that the amendment resulted from information received by Barbara Frank, Department of Environmental Conservation. There being NO OBJECTION, the amendment was adopted. Co-Chair Therriault MOVED to adopt LANG-5. [Copy on File]. *Sec___. Medicare Pharmacy Receipts. If the reimbursement under the Medicare program (42 USC Tile XVIII) for pharmacy coverage is not in effect during Federal Fiscal Year 2001, the amount of the shortfall in recovery to the Medicaid program, not to exceed $3,000,000, is appropriated from the general fund. He explained that the amendment would provide money to Department of Health and Social Services to cover a possible shortfall. There being NO OBJECTION, the amendment was adopted. Representative J. Davies MOVED to ADOPT LANG-6. [Copy on File]. Co-Chair Mulder OBJECTED. Salary and Benefit Adjustments: (a) Subject to (f) of this section, an amount not to exceed $22,947,300 is appropriated to the Office of the Governor, office of management and budget, for the fiscal year ending June 30, 2001, from the funding sources and in the amounts listed in (d) of this section to implement the monetary terms of the collective bargaining agreements in the amounts listed in (b) of this section and for salary and benefit adjustments for executive branch employees who are not members of a collective bargaining unit. (b) Subject to (0 of this section, funding for each of the following collective bargaining agreements, in the amount shown, is included in the appropriation made in (a) of this section: COLLECTIVE BARGAINING AGREEMENT Alaska Public Employees Association for the Supervisory Unit; $2,616,200 Alaska State Employees Association for the General Government Unit; $11,936,800 Alaska Vocational Technical Center Teachers Association, representing teachers at the Alaska Vocational Technical Center; $ 66,200 Alyeska Correspondence School Education Association, representing teachers at the Alyeska Central School; $ 56,000 Confidential Employees Association; $ 344,200 Inlandboatmen's Union of the Pacific, representing the unlicensed marine unit; $1,127,500 International Organization of Masters, Mates, and Pilots, Pacific Maritime Region for the Master, Mates, and Pilots Unit; $ 145,800 Marine Engineers Beneficial Association, representing licensed engineers employed by the Alaska marine highway system; $ 175,000 Public Employees Local 71 for the Labor, Trades, and Crafts Unit; $2,092,600 Public Safety Employees Association, Correctional Officers Unit; $1,139,000 Public Safety Employees Association, representing state troopers and other commissioned law enforcement personnel; and $ 607,100 Teachers' Education Association of Mt. Edgecumbe, representing teachers of the Mt. Edgecumbe High School. $ 29,300 (c) The sum of $980,200 is appropriated from the general fund to the Alaska marine highway system fund (AS 19.65.060(a)). (d) The appropriation made in (a) of this section is from the following funding sources in the amounts listed:  AGENCY Administration $2,158,000 Community & Economic Development $ 726,500 Corrections $2,060,000 Education and Early Development $ 754,400 Environmental Conservation $ 749,100 Fish and Game $1,847,100 Office of the Governor $ 295,000 Health and Social Services $3,457,100 Labor and Workforce Development $1,331,300 Law $ 706,300 Military and Veterans' Affairs $ 350,400 Natural Resources $1,021,000 Public Safety $1,125,000 Revenue $5,076,200 Transportation and Public Facilities $5,076,200  FUNDING SOURCE Federal receipts $3,536,100 General fund match $ 681,800 General fund receipts $6,817,000 General fund program receipts $1,013,000 Inter-agency receipts $1,725,700 Donated commodity handling fee account $ 2,500 Federal incentive payments $ 52,700 Benefit system receipts $ 46,300 Exxon Valdez oil spill settlement $ 42,500 Agricultural loan fund $ 27,500 FICA administration fund account $ 2,800 Fish and game fund $ 388,100 Science and technology endowment income $ 18,500 Highway working capital fund $ 275,000 International airports revenue fund $ 629,900 Public employees retirement fund $ 75,400 Second injury fund reserve account $ 4,700 Disabled fisherman's reserve account $ 5,600 Surplus property revolving fund $ 6,200 Teachers' retirement system fund $ 31,600 Veterans' revolving loan fund $ 2,900 Commercial fishing loan fund $ 52,100 General fund/mental health $ 593,200 Real estate surety fund $ 2,900 National guard retirement system $ 1,500 Training and building fund $ 9,100 Permanent fund dividend fund $ 90,900 Rural development initiative fund $ 1,800 Oil/hazardous prevention/response $ 178,200 Investment loss trust fund $1,960,400 Interagcy recpts/oil and hazardous was. $ 18,500 Capital improvement project receipts $1,626,000 Public school fund $ 400 Fisheries enhancement revolving loan fd.$ 7,500 Alternative energy revolving loan fund $ 3,000 Alaska clean water loan fund $ 6,100 Marine highway system fund $1,633,600 Storage tank assistance fund $ 14,800 Information services fund $ 196,700 Mtl hlth trt.authority authorized rcpts $ 61,800 Clean air protection fund $ 43,000 Mental health trust administration $ 11,200 Children's trust fund earnings $ 300 Alaska drinking water fund $ 7,000 AIDEA receipts $ 52,200 AHFC receipts $ 222,000 Alaska Municipal Bond Bank receipts $ 1,300 APFC receipts $ 78,500 Post-secondary Ed Com receipts $ 158,800 Designated program receipts $ 295,700 Test fisheries receipts $ 67,800 Intrl trade and business endowment inc $ 4,300 Pioneers homes receipts $ 55,900 Indirect cost reimbursement $ 20,200 Regulatory Commission of Alaska rcpts $ 81,300 Public building fund $ 3,500 (e) The following amounts are appropriated to the Alaska Court System and the Legislature for the fiscal year ending June 30, 2001, from the following funding sources in the amounts listed, for salary and benefit adjustments for employees of those agencies who are not members of a collective bargaining unit: AGENCY: Alaska Court System $1,417,300 Legislature $ 634,000 FUNDING SOURCE: General federal receipts $1,417,300 Investment loss trust fund $ 371,200 (f) If a collective bargaining agreement listed in (b) of this section is not ratified by the membership of the respective collective bargaining unit, the appropriation made by (a) of this section is reduced by the amount listed for that collective bargaining agreement in (b) of this section, and the corresponding agency allocations made by, and funding source amounts listed in (d) of this section are reduced accordingly. Amend Section 37, page 11, lines 13 - 15 to read: Sec. 37. NONLAPSE OF APPROPRIATIONS. The appropriations made by secs. 1, 2(b), (c), and (d), 7, 10(a), 11, 12, 13, 16, 20, 21, 25(t), 29(c), (h), and (i), and 34 of this Act are for the capitalization of funds and do not lapse. Representative J. Davies explained that the language would fund all the collective bargaining agreements that have been approved by the Governor. Co-Chair Mulder advised that the position of the Majority has been to determine the combined costs of all the agreements. He inquired if there were any other costs not listed in the amendment. Representative J. Davies understood that the amendment provided the "bulk" of the agreements with the exception of the University ones. Representative J. Davies stressed that the issue must be a priority to this Legislature. He advised that the amount totalled just over $23 million dollars. The analysis that the Department of Administration provided was rigorous and the State is in danger if the Legislature does not allow for these inflationary increases. The value of State services will not be competitive. He noted that the State is beginning to loose workers because of the lack of movement regarding these concerns. Co-Chair Mulder commented that the Majority does understand the importance and realizes that the issues are serious. Representative J. Davies WITHDREW the Amendment. Representative G. Davis MOVED to ADOPT LANG-7. [Copy on File]. Insert the following section: *Sec.___. ALASKA OIL AND GAS CONSERVATION COMMISSION. The unexpended and unobligated balance on June 30, 2000, of the Alaska Oil and Gas Conservation Commission receipts account for regulatory cost charges under AS 31.05.093 and AS 31.05.090 for fiscal year 2000 is appropriated to the Alaska Oil and Gas Conservation Commission for fiscal year 2001 operations. Representative G. Davis stated that the amendment would roll forward the unexpected balances. There being NO OBJECTION, LANG-7 was adopted. Representative G. Davis MOVED to ADOPT LANG-8. [Copy on File]. Department of Public Safety (b) Appropriations totaling the estimated amount of the deposits described in (a) of this section and remaining unappropriated balances from prior-year transfers for these purposes are made in sec. 1 of this act to the Department of Public Safety and the Department of Law for increased enforcement, investigation, and prosecution of state fish and game laws. If the receipts appropriated to the fish and game fund (AS 16.05.100) from the sources described in (a) of this section during fiscal year 2001 and remaining unappropriated balances from prior-year transfers for these purposes fall short of the estimates appropriated by this Act, each department's appropriation set out in sec. 1 of this Act is reduced proportionately. Co-Chair Mulder OBJECTED for the purpose of discussion. Representative G. Davis explained that the amendment was intended for rolling forward unappropriated balances from the prior year for the Department of Public Safety. Co-Chair Mulder indicated that had been done in the past. He WITHDREW the OBJECTION. There being NO further OBJECTION, the amendment was adopted. DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT Co-Chair Mulder explained CED-11. [Copy on File]. He noted that the STEP Funds were one-time funds and are no longer available. He MOVED to ADOPT CED-11. DELETE: Department of Community & Economic Development Revenue Sharing $1,524,000 STEP Funds DELETE: Department of Community & Economic Development Municipal Revenue Sharing Municipal Assistance $1,866,000 STEP Funds There being NO OBEJCTION, CED-11 was adopted. Representative J. Davies MOVED to ADOPT CED-12 which would replace the Step Funds with general funds. [Copy on File]. Department of Community & Economic Development Municipal Revenue Sharing Appropriation Page 4, Line 22 DELETE: $46,893,400 Approp. Items $28,493,400 General Funds $18,400,000 Other Funds ADD: $46,893,400 Approp Items $31,893,400 General Funds $15,000,000 Other Funds Representative J. Davies explained that there are no more STEP funds. The amendment would replace $3,400,000 of STEP funds with general funds to maintain the same level of funding. Co-Chair Mulder OBJECTED. Co-Chair Mulder mentioned that the Subcommittee had tried to prioritize to meet budgetary goals for municipal assistance and revenue sharing. That move came at the expense to trying to maintain the level that the State had funded in the past. Representative J. Davies WITHDREW the MOTION. Department of Education and Early Development Representative Grussendorf MOVED to ADOPT ED-9. [Copy on File]. DELETE: Page 9, Line 8 Department of Education and Early Development Early Development Head Start Grants $20,000 General Funds ADD: Page 9, Line 8 Department of Education and Early Development Early Development Head Start Grants $20,000 I/A (TANF funds from H&SS) ADD: Page 9, Line 20 Department of Education and Early Development Museum Operations Alaska Library and Museums $20,000 General Funds He explained that federal funds could be used for Head Start Grants. The amendment would allow movement of general funds to restore $20,000 to the Shelton Jackson Museum. Combined with the new program receipts, it would approximate the FY00 funding. There being NO OBJECTION, the amendment was adopted. (TAPE CHANGE HFC 00 - 66, Side 2.)    INTENT LANGUAGE Co-Chair Therriault MOVED to ADOPT INTENT-1. [Copy on File]. Department of Health and Social Services Medicaid Services BRU Medicaid Services component It is the intent of the legislature that the Division of Medical Assistance will develop a program of intergovernmental transfers, at 90% return, with public hospitals or nursing homes, which will allow the Medicaid program to capture statutory designated program receipts of $10,000,000 to offset general fund expenditures for fiscal year 2001. Co-Chair Therriault explained that the amendment would establish the Medicaid pro share program with governmental owned hospitals. There being NO OBJECTION, the amendment was adopted. Co-Chair Mulder MOVED to ADOPT INTENT-2. [Copy on File]. Alaska Court System It is the intent of the legislature that the Alaska Court System examine the feasibility of moving its information technology network operations from the Department of Administration's Wide Area Network (WAN) to a network provided by commercial carriers. The Alaska Court System shall use money appropriated to pay network charges to obtain services from the most cost beneficial network service provider. Co-Chair Mulder explained that the amendment would provide a cost-savings for the Court System. He stated that the Subcommittee did adopt the Letter of Intent. Representative J. Davies disagreed that there would be cost savings. He noted that the Department of Administration was in negotiation giving consideration to privatizing all the State's telephone systems. He did not believe that it should be separated out. Co-Chair Mulder MOVED to TABLE INTENT-2. Representative J. Davies MOVED to ADOPT INTENT-3. [Copy on File]. Department of Environmental Conservation It is the intent of the legislature that a portion of the general fund savings which result from the passage of HB 304 be appropriated to the Department of Environmental Conservation, Division of Environmental Health, Food, Safety and Sanitation Component to fund increased frequency of inspections at regulated facilities throughout the State. Co-Chair Therriault questioned how the amendment would work. Representative J. Davies explained that the mechanism would free up approximately $600 thousand general fund dollars, as a contingent consideration. Co-Chair Therriault inquired if there would be a general fund savings in the Department if HB 304 passes. Co-Chair Mulder replied that he planned to help that reach the budget goals. Representative J. Davies pointed out that this motion was only intent language. There being NO OBJECTION, the amendment was adopted. Co-Chair Mulder MOVED to ADOPT LANG-4. [Copy on File]. Department of Transportation and Public Facilities Letter of Intent In order to help ensure safe roadways, adequate brushing must be performed on Alaska's highways. There is a backlog, or "deferred" maintenance problem, on the shoulders of our highways. Alders along our roads not only reduce visibility and are a safety problem, but alder and other brush growth accelerates the destruction of our roadbeds and increases the overall cost of operating, maintaining and replacing roads. It is the intent of the legislature that the Department of Transportation and Public Facilities start the permitting process to use Rodeo or other safe herbicides to control the growth of alders and brush on the shoulders of the roads and highways in Alaska. Co-Chair Mulder acknowledged that the Department must try to save money while controlling the growth along the shoulders of the roads. Representative Grussendorf stressed that the communities of Petersburg, Sitka and Wrangell had passed resolutions that they did not want Rodeo used for that purpose with regards for health and safety concerns. Representative Grussendorf OBJECTED to the language. Representative J. Davies reiterated that in certain areas of the State, there is concern with using herbicides. He noted that there are areas that would prefer to use mechanical methods instead of herbicides. Co-Chair Mulder noted that "mechanical" options cost more to provide. Representative Grussendorf emphasized that these are real concerns. Co-Chair Mulder asked if it would satisfy member's concerns by adding the language "where appropriate" at the end of the Intent Language. Representative J. Davies and Representative Grussendorf replied that would be acceptable. Co-Chair Mulder MOVED to add "where appropriate" at the end of INTENT-4. There being NO OBJECTION, it was added. There being NO OBJECTION, INTENT-4 was adopted. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES Representative Foster introduced DOT/PF-1B. [Copy on File]. AMEND: Letter of Intent Department of Transportation & Public Facilities Line 1 change ($264.2) to $257.6 Change designated roads and amounts to Taylor Highway $132.0 Boundary Spur 10.5 McCarthy Road 8.7 Nome/Teller Road 35.7 Nome/Council Road 34.7 Kugarok Road 36.0 LARRY LA BOLLE explained that DOT/PF-1B would correct the Letter of Intent forwarded by the Subcommittee. [Copy on File]. It is aligned with DOT/PF-1A, adopted earlier. He pointed out that it would reduce the overall amount because snow clearance would not be done on the Dexter By-Pass. The language would correct that Letter of Intent so that it would be parallel to the previous action taken. There being NO OBJECTION, DOT/PF-1B was adopted. LANGUAGE DAVID TEAL, DIRECTOR, DIVISION OF LEGISLATION FINANCE, spoke to LANG-9. He stated that these are not "technical amendments", as they do change the numbers in the bill. He reiterated, the changes do affect what is in the bill. He noted that about $50 million dollars of duplicated expenditures had been backed out. As money flows from the general fund into some of the other funds, it is counted as a general fund expenditure. Some of the funds blend. It is difficult to determine when funds are duplicated. Mr. Teal listed the various components of LANG-9. * Centralized Administrative Services Retirement and Benefits Group Health   * Leases   * Criminal Division Co-Chair Mulder noted that he was "okay" with having a placeholder for the "duplicated funds". Co-Chair Mulder MOVED to ADOPT LANG-9. There being NO OBJECTION, the amendment was adopted. Co-Chair Therriault MOVED that the Legislative Finance Division make all necessary technical adjustments to HB 312 and HB 313. There being NO OBJECTION, the authority was given. HB 312 and HB 313 were HELD in Committee for further consideration. Adjournment The meeting adjourned at 10:06 p.m.