MINUTES SENATE FINANCE COMMITTEE 9 April 1996 10:20 A.M. TAPES SFC-96, # 69, Sides 1 & 2 CALL TO ORDER Senator Steve Frank, co-chairman, convened the meeting at approximately 10:20 A.M. PRESENT Co-chairman Frank along with co-chairman Halford and Senators Rieger and Phillips were present when the meeting convened. Senators Zharoff, Donley and Sharp did not attend. Also Attending: Joseph L. Perkins, Commissioner, Department of Transportation and Public Facilities; Barbara Ritchie, Deputy Attorney General, Civil Division, Department of Law; Nancy Slagle, Director, Office of Management and Budget; Laurie H. Otto, Deputy Attorney General, Criminal Division, Department of Law; Jim Nordlund, Director, Division of Public Assistance, Department of Health & Social Services; Karen Perdue, Commissioner, Department of Health & Social Services; Bob Baratko, Director Administrative Services Division, Department of Revenue; Mike Greany, Director, Division of Legislative Finance; and aides to committee members. Craig Tillery, Environmental Section, Civil Division, Department of Law testified via teleconference. SUMMARY INFORMATION CS FOR HOUSE BILL NO. 468(FIN) am "An Act making supplemental appropriations for the expenses of state government and making and amending appropriations; ratifying certain state expenditures; and providing for an effective date." Senator Halford moved SCS CSHB 468(FIN), draft, and it was adopted for work purposes. Co-chairman Frank reviewed CSHB 468 FY 96 supplemental appropriations for committee members. Senator Halford moved amendment to section 8(a) requesting source changes for additional judgments in the amount of $199,096 and amendment to section 14(a) for additional stale dated warrant in the amount of $43,563 and they were adopted. The above-listed individuals answered questions posed by the committee. Senator Halford moved SCS CSHB 468(FIN) and without objection it was reported out with individual recommendations. CS FOR HOUSE BILL NO. 468(FIN) am "An Act making supplemental appropriations for the expenses of state government and making and amending appropriations; ratifying certain state expenditures; and providing for an effective date." Co-chairman Frank convened the meeting. He reviewed HB 468 for the committee referring to the following sections that were not included: Section 1 referred to the grants to the longevity bonus. The administration has submitted a longevity bonus supplemental for $1.6 million. Next was Kluti-Kaah supplemental appropriations for $8.3 million. That had not been included at this time because the tribal issue was still being researched. The next item not included was the grant to Alaska Legal Services Corporation. Section 4, extension of lapsed date for DOE on the appropriation for the foundation formula was included as requested by the Governor. The way it was planned to structure the disparity issue for 1996 and 1997 is in SB 244 to increase the deduct from 95% as proposed by the administration to 96% to make it revenue neutral and to apply it to FY 96, negating the need for this section, and that was why the above sections were left out. The administration's memo dated yesterday does not have that reflected because SB 244 has not passed yet and it would be premature to take that out. The next area of difference is section 6(b) which was a request for navigable water support in habitat and also wildlife conservation for $150,000 and $200,000. This request was put in by Senate Finance Committee, recommended by Senator Frank. Section 8 was the Department of Law's judgments and claims received after the house had considered their request. Section 9, Military and Veterans retirement fund was increased from $6.5 million to $8 million which would allow a $1 million reduction in the Governor's budget request for FY 97. Section 10(b) also applied to navigable waters under the Department of Natural Resources for $270,000. Section 11(a) the amount for the increased lease costs for AHFC were reduced from $198.2 to $150,000. The next area was the Permanent Fund Dividend Division. The House had not received their request. It was reduced down to $103.8. DOTPF, Copper River Highway Restoration, for which a recommendation was not put in. He referred to a memo from the Commissioner of Department of Transportation dated the day before with further explanation. Section 13 was a salary and benefits study for $500,000 put in at the request of Representative Hanley. It will be up to the LBA committee to decide this matter and Senator Phillips asked that a time frame limit be put on this matter. Section 14 was stale dated warrants. Section 15 was a ratification of prior year expenditures which were not received in time for consideration by the house. Department of Public Safety for $1.1 and the Legislature for $1,000 were also included. Commissioner Joe Perkins was invited to join the committee. He explained the Copper River Restoration and said further comments would come from Craig Tillery via teleconference or Barbara Ritchie who was also invited to join the committee. Craig Tillery testified via teleconference. He explained section 12 and restoration activities which cost about $720,000. Other costs included $20,000 for public service announcements and $40,000 for environmental training for DOT staff. There was damage to the northern part of the Copper River Highway and also the existing road bed while being worked on in 1991. Part of the settlement included that the Department of Justice agreed to not seek restoration of the southern half of work. Restoration was set up that if the legislature did not fund these activities by September 1998 the settlement will become null and void and litigation will be resumed. The next part of the settlement would be for costs and attorney fees arising out of settlements. The money would not be used to sue the State of Alaska. Nancy Slagle, OMB was invited to join the committee and referred to a memo dated 9 April 1996 which asked for changes to sections of the bill dealing with the Department of Law, judgments and claims, and Department of Administration, stale dated warrants. Barbara Ritchie, Department of Law, referred to items 18 and 19 which both arise out of an appeal of a local boundary decision regarding the incorporation of the City of Pilot Point. The first item totalling $6,051. is out of the Supreme Court case and the second item refers to the Superior Court case. The state did prevail on Title 29 for the levying of taxes. The amount of reasonable attorney fees is being paid by the State of Alaska and the City of Pilot Point in equal halves. Laurie Otto, Department of Law was invited to join the committee. She referred to work done on the Cleary case. Most of the fees were related to litigation of the State's decision to transfer inmates to a private facility in Arizona. This litigation is still ongoing. She further explained the historical 1983 federal Cleary case. The State won on the temporary restraining order and the issue of whether it is permitted or not has been argued and briefed but presently is still pending decision by the Court. The amount presently pending before the committee was for Court ordered full attorney fees. Senator Halford moved SCS CSHB 468(FIN) work draft and without objection it was adopted. Senator Halford moved amendment to section 8(a) requesting source changes for additional judgments in the amount of $199,096. and amendment to section 14(a) for additional stale dated warrant in the amount of $43,563. and without objection they were adopted. Karen Perdue, Commissioner, Department Health and Social Services and Jim Nordlund, Director, Division of Public Assistance were invited to join the committee. Mr. Nordlund explained the amount of time spent on programs as outlined in section 7(b). (off record - return) Senator Halford moved numbers 18 and 19 from the summary sheet under judgments and claims in the amounts of $6,000 and $8,000 related to the boundary commission cases and without objection they were adopted. Bob Baratko, Department of Revenue was invited to join the committee. He addressed the request by the permanent fund dividend division for $150,000. It will be necessary to shut down the division for the last two weeks of the fiscal year without this funding. Following further miscellaneous conversation between committee members Senator Halford moved SCS CSHB 468(FIN) and without objection it was reported out with individual recommendations. ADJOURNMENT Co-chairman Frank continued the calendar until 1:30 P.M. today.