MINUTES SENATE FINANCE COMMITTEE March 12, 1999 2:33 PM TAPES SFC-99 #53, Side A (017 - 585) Side B (585 - 000) CALL TO ORDER Co-Chair Sean Parnell convened the meeting at approximately 2:33 P.M. PRESENT In addition to Co-chair Parnell, Senators John Torgerson, Randy Phillips, Dave Donley, Loren Leman, Gary Wilken, Al Adams, Pete Kelly, and Lyda Green were present when the committee was convened. Also Attending: ANNALEE MCCONNELL, Director, Office of Management and Budget; DAN SPENCER, Chief Budget Analyst, Office of Management and Budget; BARBARA BRINK, Office of the Public Defender; SHARON BARTON, Director, Division of Administrative Services, Department of Administration; KATHRYN DAUGHHETEE, Director, Division of Administrative Services, Department of Law; VIRGINIA STONKUS, Financial Services, Division of Administrative Services, Department of Environmental Conservation; NICO BUS, Administrative Services Manager, Division of Support Services, Department of Natural Resources and Department of Military and Veterans' Affairs; JANET CLARKE, Director, Division of Administrative Services, Department of Health and Social Services; CHRIS CHRISTENSEN, Staff Counsel, Alaska Court System; DAVID BLAISDELL, staff to Senator Sean Parnell; JOHN BITNEY, Alaska Housing Finance Corporation; DAVID TEAL, Director, Division of Legislative Finance; JIM HAUCK, Fiscal Analyst, Division of Legislative Finance; GINGER BLAISDELL, Fiscal Analyst, Division of Legislative Finance; aides to committee members and other legislative members. Attending via Teleconference: SUMMARY INFORMATION HOUSE BILL NO. 100 "An Act making and amending capital, supplemental, and other appropriations, and appropriations to capitalize funds; ratifying certain expenditures; and providing for an effective date." CS FOR HOUSE BILL NO. 100(FIN) "An Act making and amending capital, supplemental, and other appropriations; making and amending appropriations to capitalize funds; ratifying certain expenditures; making and amending appropriations under art. IX, sec. 17c, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." CS FOR HOUSE BILL NO. 100(FIN)(brf sup maj fld)(efd fld) "An Act making and amending capital, supplemental, and other appropriations; making and amending appropriations to capitalize funds; ratifying certain expenditures." Co-chair Parnell convened the meeting at approximately 2:35 p.m. He briefly explained SCS CSHB 100(FIN) work draft M, dated 3/12/99. Senator Phillips asked the difference between the Senate Finance Committee substitute and the version of the House bill that had passed. (The committee took a brief at ease at approximately 2:40 p.m.) Co-chair Parnell reconvened the meeting at approximately 2:55 p.m. He asked David Blaisdell to come before the committee and explain the changes. David Blaisdell, staff to Senator Sean Parnell was invited to join the committee. The difference in the disaster fund involved several things. He referred the committee to section 2 of the bill. The Senate Finance Committee substitute requested $3.5 million in federal receipts resulting from the transfer. The House bill added $1.2, which they were transferring for that. They only withheld funding for Perseverance Trail. The Senate Finance Committee removed funding for all three trails. The next difference was the Pioneer Homes 6(h), (g), (f) and the Senate Finance Committee substitute was funding the entire repair of the Fairbanks Pioneer Home boiler from AHFC receipts. The House would fund half through general funds receipts and the other half from AHFC receipts. Under section 7, the Department of Community and Regional Affairs, the Senate Finance Committee substitute funded $1,400 for PCE whereas the House took it out of the bill completely. Senator Donley said the issue of PCE should not have been brought up at all before discussion by the committee. Mr. Blaisdell continued his presentation with Section 11, which was the increase for CAMA and subsidized adoptions. They reduced the Department of Community and Regional Affairs by the same amount. In section 16, the Department of Revenue, $800,000 was requested for CSED by the Senate Finance Committee, which was reflected in the work draft. Senator Phillips referred to page eight, line sixteen, which he said appeared in the House bill. Co-chair Parnell explained that this reflected the funding change. Senator Torgerson said the House did add an amendment regarding program receipts, which was section 24 of the House bill. It was not, however, included in the work draft SCS. Co-chair Parnell asked for a motion to move the work draft, version "M" of SCS CSHB 100(FIN). Senator Torgerson moved SCS CSHB 100(FIN), version "M" as working draft before the committee. Senator Donley objected specifically to section twenty-two and PCE. Co-chair Parnell explained that this would be the first time PCE would be adopted. Senator Phillips MOVED to delete section seven of the work draft. (The committee took a brief at ease at approximately 3:05 p.m.) Co-chair Parnell reconvened the meeting at approximately 3:07 p.m. Senator Phillips renewed his motion #27 to delete section seven of the work draft. Senator Adams OBJECTION. He said the work draft should be adopted first before any amendments. Co-chair Parnell also objected to the amendment. It should be taken up after adoption of the work draft. By a roll call vote of 2 yeas (Phillips, Donley) and 7 nays (Parnell, Torgerson, Leman, Wilken, Adams, P. Kelly, L. Green) amendment #27 FAILED. Senator Torgerson asked UNANIMOUS CONSENT for the adoption of SCS CSHB 100(FIN), version "M". Senator Donley objected. By a roll call vote of 8 yeas (Parnell, Torgerson, Leman, Wilken, Adams, P. Kelly, L. Green, Phillips) and 1 nay (Donley) SCS CSHB 100(FIN) was ADOPTED as the working draft before the committee. Senator Torgerson MOVED amendment #1. Senator Adams OBJECTED. This amendment would add $176,443.00 to the General Fund appropriation. By a roll call vote of 8 yeas (Parnell, Torgerson, Leman, Donley, Wilken, P. Kelly, L. Green, Phillips and 1 nay (Adams) amendment #1 was ADOPTED. Senator Green MOVED amendment #3. By way of explanation she referred to the Historic Bristol Bay Sockeye Harvest handout which she provided the committee members. Senator Adams OBJECTED. He feared there would be lawsuits. Senator Green briefly responded. Senator Adams referred to SB 101, which defined what is a disaster. This should be worked on. Disasters have been taken care of in prior years, such as fires and earthquakes. There is a need to fund declared disasters so that Federal funds can be collected. Co-chair Parnell advised that this amendment was wrestled with considerably. It was felt that the intent of disaster statute was stretched beyond recognition. The supplemental would pass State monies to communities to make the necessary match. In Senator Green's amendment the State would give funds in order to acquire funds. C0-chair Parnell felt they should work on narrowing the emergency statute. He was concerned about how the disaster funds are being used or misused. It was his feeling that the statutes should be narrowed. Senator Green asked if some contingency language might be developed stating that the amendment be included only if SB 101 passed. Co-chair Parnell said this could be hammered out later. Senator Leman voiced his concern with the manner in which the Administration had handled this matter. He said there was an obligation by the Legislature to step up and object. He would support changing the definition of the law. Other economic disasters had not resulted in a State bale-out. He shared much of the sentiment and would support the appropriate language. Senator Green was concerned, however, that this would not cover the community match. Co-chair Parnell commented briefly and then asked for a roll call vote on amendment #3. By a roll call vote of 1 yea (Green) and 8 nays (Parnell, Torgerson, Donley, Leman, Wilken, Adams, P. Kelly, Phillips) amendment #3 FAILED. Senator Adams MOVED amendment #4. Senator Phillips OBJECTED. Senator Adams briefly explained the amendment. His amendment would restore funding for the Southeast wind/raid disaster. Senator Leman said he thought they had agreed to fix the trail and then have the City of Juneau take it over. Co-chair Parnell explained. Monies were appropriated to fix up portions of the trail. They would use the monies, fix up the trail and then convey it to the city. However, the monies were reappropriated because Juneau had volunteers to fix up the trail. The city would then not accept the trail until it was upgraded to their more specific standards. This request related to a different disaster on the trail. There was the possibility of relocating the trail rather than using disaster funds for repairs. Senator Adams MOVED an amendment to amendment #5 and MOVED the withdrawal of amendment #5. WITHOUT OBJECTION amendment #5 was WITHDRAWN and new amendment #5 was MOVED. This amendment would appropriate AHFC receipts to the Western Alaska fisheries disaster. Senator Torgerson OBJECTED. By a roll call vote of 1 yea (Adams) and 8nays (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) new amendment #5 FAILED. Senator Donley MOVED amendment #6. Senator Adams OBJECTED. Senator Adams said a bad precedent would be set with this amendment. Senator Donley responded saying that parameters should be set on attorney fees. Senator Kelly asked to hear from the Court. Chris Christensen, Staff Counsel, Alaska Court System was invited to join the committee. He explained that there was a statute which authorized the judiciary branch to allow for fees. He referred to a case from 1974, Gilbert vs. State. There had been ample opportunities to change the statute. In his nine years of service to the Court System he cannot recall legislation being introduced to fix fees. Each year the committee goes through the judgments and blames the Court. He explained how public individuals view their rights. There was frustration and genuine anger this year. Past Legislatures have never sent a message to the public that the Judge would hear their case in a prejudicial manner and not rule in favor of the plaintiff in order to protect the State. Senator Donley briefly commented. Co-chair Parnell asked for a vote. By a roll call vote of 4 yeas (Donley, Leman, L. Green, Phillips) and 5 nays (Parnell, Torgerson, Wilken, Adams, P. Kelly) amendment #6 FAILED. Senator Donley WITHDREW amendment #7. Senator Donley MOVED amendment #8. Senator Adams OBJECTED. He asked that Chris Christensen be invited back before the committee. Chris Christensen was invited to rejoin the committee. He referred to the Legislative session of 1993. Approximately one hundred thousand pages of Court transcriptions were prepared. That included two full-time State employees and a network of private contractors around the State preparing transcripts. When something is privatized that invites contract claims. Co-chair Parnell asked if the numbers in amendment #8 had been compared to know if they were accurate? Mr. Christensen responded referring to the settlement. Co- chair Parnell said the listed numbers did not match the bill. Senator Donley responded. He said the Court System chose to make the settlement. "This is the problem. State agencies make a settlement and then submit the bill to Legislature for payment. This needs to be accounted for." (There followed a brief pause on record.) David Blaisdell noted a technical change to amendment #8. The correct amounts for lines four, five, seven and eight would be respectively as follows: $1,883,300; $1,856,515; $1,868.000; and $1,841,215. The drafter will conform these corrected amounts if the amendment passes. Senator Kelly asked for an explanation of judgments? Senator Donley responded. These were for attorney fee judgments in the settlement of a claim. By a roll call vote of 6 yeas (Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) and 3 nays (Parnell, Torgerson, Adams) amendment #8 was ADOPTED. Senator Adams MOVED amendment #9. This amendment would restore funding for a third probation officer to manage a caseload of eight hundred seventy-four prisoners. Senator Torgerson OBJECTED. Senator Green asked if the money was in the previous bill. By a roll call vote of 1 yea (Adams) and 8 nays (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) amendment #9 FAILED. Senator Adams MOVED amendment #10. He explained that this would fund minimal staffing needed for anticipated prisoner population at Cook Inlet Pretrial Facility. Senator Torgerson OBJECTED. By a roll call vote of 1 yea (Adams) and 8 nays (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) amendment #10 FAILED. Senator Adams MOVED amendment #11. Senator Donley OBJECTED. Senator Donley said there were more Public Defenders that prosecutors. Thad did not count Office of the Public Advocate. He felt restoring this funding would be a serious mistake. Senator Adams responded and said there had been an increase of eight hundred cases last year. By a roll call vote of 1 yea (Adams) and 8 nays (Parnell, Torgerson, Leman, Wilken, P. Kelly, L. Green, Phillips) amendment #11 FAILED. Senator Leman MOVED amendment #12. He explained this would reappropriate $430,300 in Federal indirect "reimbursements" that may be used as State funds for the SCED shortfall. WITHOUT OBJECTION amendment #12 was ADOPTED. Senator Adams MOVED #13. Senator Torgerson OBJECTED. Senator Adams explained this increment would fund the maintenance costs of the Harborview facility in Valdez. By a roll call vote of 1 yea (Adams) and 8 nays (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) amendment #13 FAILED. Senator Adams WITHDREW amendment #14. He then MOVED the new amendment #14. This amendment would allow for the manual opening of the "plow roads" during spring of 1999. Senator Torgerson OBJECTED. By a roll call vote of 2 yeas (Adams, Phillips) and 7 nays (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green) new amendment #14 FAILED. Senator Torgerson MOVED amendment #15. WITHOUT OBJECTION it was ADOPTED. Senator Torgerson MOVED amendment #16. Senator Donley asked where program receipts came from. Senator Torgerson explained the appropriation would provide authority to receive and expend funds from the Kodiak area fishermen and the funding would not affect the General Fund budget. WITHOUT OBJECTION amendment #16 was ADOPTED. Co-chair Parnell said the committee would take a brief at ease at approximately 4:05 p.m. Co-chair Parnell reconvened the committee at approximately 5:20 p.m. with all members present. Senator Torgerson MOVED amendment #17. He explained that this amendment would add $200 million to the general fund from the budget reserve fund. Senator Adams asked how long $200 million would last and also noted that he would like to hear from the Office of Management and Budget. Annalee McConnell, Director, Office of Management and Budget was invited to join the committee. She said she had not had an opportunity to check with Commissioner Poe on the latest figures. Co-chair Parnell said he did not know where they would all end up at the end of year with the current oil prices. WITHOUT OBJECTION amendment #17 was ADOPTED. Senator Leman MOVED amendment #18. This would appropriate funds for the replacement of the Fairbanks Pioneer Home boiler system. WITHOUT OBJECTION amendment #18 was ADOPTED. Senator Phillips MOVED amendment #19. He explained this amendment would delete the entire section seven of the bill, Power Cost Equalization. Senator Adams OBJECTED. He said there was a commitment by the State regarding PCE. Further, he was willing to work with the committee to find a long-term solution. He asked that this amendment not be adopted. By a roll call vote of 2 yeas (Phillips, Donley) and 7 nays (Parnell, Torgerson, Leman, Wilken, Adams, P. Kelly, L. Green) amendment #19 FAILED. Senator Torgerson MOVED amendment #20. This amendment would increase the miscellaneous claims amount by $450.00 to reflect an additional bill received by the Department of Administration. WITHOUT OBJECTION amendment #20 was ADOPTED. Senator Torgerson moved amendment #21. This amendment would increase the miscellaneous claims amount by $97.95 to reflect an additional bill received by the Department of Fish and Game. WITHOUT OBJECTION, amendment #21 was ADOPTED. Senator Torgerson moved amendment #22. This amendment reflected the Department of Health and Social Services' intention to reduce GF/MH expenditures by $229.200. WITHOUT OBJECTION amendment #22 was ADOPTED. Senator Torgerson moved amendment #23. This amendment reduced the FY99 GF deposit in the AMHS fund by $180,000 to reflect operational savings by the Alaska Marine Highway System with the rest of the reductions to come from other departmental operations. WITHOUT OBJECTION amendment #23 was ADOPTED. Senator Green MOVED amendment #24. She explained this appropriation would raise the number of full-time equivalent direct-care nurses to a minimum ration of one nurse to fifty residents per shift for residents in comprehensive, Alzheimer's disease or related dementia, and enhanced assisted living levels of care, and then, with any remaining balance, for direct-care certified nurse aides. WITHOUT OBJECTION amendment #24 was ADOPTED. Senator Torgerson MOVED amendment #25. Co-chair Parnell explained the amendment briefly. WITHOUT OBJECTION amendment #25 was ADOPTED. (The committee took a brief at ease.) Co-chair Parnell reconvened the committee. Senator Torgerson moved amendment #26 and briefly explained. WITHOUT OBJECTION amendment #26 was ADOPTED. Senator Green MOVED amendment #28. Senator Adams OBJECTED. Senator Green explained that enactment of this section was conditioned upon the enactment into law of SB 101, amending the definition of "disaster". "Things need to change with this legislation," said Senator Adams. "This does not address Kotzebue or North Pole, for instance." He said he would be happy to work with the committee regarding this amendment. Senator Torgerson advised that SB 101 was noticed for hearing before the committee next Tuesday. He said it was his intent to push this bill through. By a roll call vote of 8 yeas (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) and 1 nay (Adams) amendment #28 was ADOPTED. Senator Torgerson moved amendment #29. Senator Donley explained opposition to this amendment and the difficulties with the adoption of the Senate Committee Substitute work draft now before the committee. Senator Leman said he would support amendment #29. Shortfalls were not the fault of PCE recipients. Senator Green commented briefly. There were challenges that must be addressed this year. By a roll call vote of 8 yeas (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) and 1 nay (Adams) amendment #29 was ADOPTED. Senator Donley MOVED amendment #30. Senator Adams OBJECTED. (Tape change to #59, Side A, log 000.) Senator Donley WITHDREW amendments #30 and 31. (There followed a brief at ease.) Co-chair Parnell returns to amendment #30. Senator Donley again MOVED amendment #30. Senator Adams OBJECTED. Senator Donley explained briefly. Senator Torgerson said the numbers do not compute. Senator Adams advised the committee that the Office of Management and Budget had advised that the numbers were off. Annalee McConnell, Director, Office of Management and Budget rejoined the committee. She said some of the cases were missing and that this did not represent a full list. Senator Donley felt she was referring to a whole different issue. Ms. McConnell indicated there was a subsequent list dated 3 March 1999. Co-chair Parnell asked what was the discrepancy? Ms. McConnell said three cases were missing, including updated costs. (There followed a brief at ease.) Co-chair Parnell reconvened the committee at approximately 6:00 p.m. Senator Donley said he had copies of the three cases and asked they be added to the list in amendment #30. They were: "Larson, Timbers & Thomas Edward Davis vs. CSED"; "Tanana Chiefs Conference, Inc. CSED vs. Native Village of Minto"; and "Bryan Timbers Lewis Nakarak vs. CSED". Senator Adams asked that administrative costs also be added. WITHOUT OBJECTION the amendment to amendment #30 was ADOPTED. Senator Adams therefore WITHDREW his objection to amendment #30. WITHOUT OBJECTION amended amendment #30 was ADOPTED. Senator Adams MOVED amendment #32. Senator Torgerson OBJECTED. Senator Leman agreed with Senator Torgerson and said he would rather see if the money could be found somewhere else. Senator Donley referred to amendment #33. He explained the reduction to the Office of the Public Advocate. It would be consistent with the reduction to the Public Defender Agency. Senator Donley MOVED amendment to amendment #32. He explained that he would WITHDRAW his amendment #33 with the exception of the reference to page three, line thirteen and page twelve, line eleven. He asked these two references be incorporated into amendment #32. Senator Adams OBJECTED and suggested the monies be taken from LB&A. By a roll call vote of 5 yeas (Parnell, Donley, Leman, Green, Phillips) and 4 nays (Torgerson, Wilken, Adams, P. Kelly) the amendment to amendment #32 was ADOPTED. Senator Adams MOVED amended amendment #32. Senator Torgerson OBJECTED. By a roll call vote of 7 yeas (Parnell, Donley, Leman, Wilken, Adams, L. Green, Phillips) and 2 nays (Torgerson, P. Kelly) amended amendment #32 was ADOPTED. Senator Donley WITHDREW amendment #33. (There followed a brief at ease at approximately 6:10 p.m.) Co-chair Parnell reconvened the committee at approximately 6:35 p.m. Senator Leman MOVED amendment #34. In addition he explained that he will move to rescind action on amendment amendment #12 and would therefore replace it. Senator Leman MOVED to rescind action in amendment #12. WITHOUT OBJECTION committee action on amendment #12 was RESCINDED. Senator Leman MOVED amendment #34. Senator Adams OBJECTED and asked for an explanation. Ginger Blaisdell, Fiscal Analyst, Division of Legislative Finance was invited to join the committee. She explained the substitution of amendment #34 for #12. The unexpended and unobligated amount, not to exceed $421,889 from program receipts received during the fiscal year ending June 30, 1999 by the child support enforcement division that are collected from Alaska temporary assistance recipients that exceeds $7,244,400 are appropriated to the Department of Revenue, child support enforcement division for operating costs for the fiscal year ending June 30, 1999. Co-chair Parnell explained that if receipts were collected it would be possible to receive $750,000 in receipts and use $421,000 in their projection. Annalee McConnell, Director, Office of Management and Budget was invited to join the committee along with Dan Spencer, Chief Budget Analyst, Office of Management and Budget. She said they supported use of CSED funds. Now they would be relying on two types of receipts. However, they will not know until the end of the year how much will be allowed. The welfare reform effect was greater than had been anticipated. However, it was explained that it would not affect the draw on the CBR fund; also no effect on the combined General Fund number. Senator Adams REMOVED his objection. WITHOUT OBJECTION, amendment #34 was ADOPTED. Senator Donley MOVED amendment #35. This would add a subsection 4(c), the sum of $10,000 to be appropriated from the General Fund to the Department of Law to pay costs associated with the Judgments and Claims listed in subsections (a) and (b). The funds lapse on June 30, 1999. WITHOUT OBJECTION amendment #35 was ADOPTED. Co-chair Parnell asked for a brief at ease at the table. He reconvened the committee again at approximately 7:10 p.m. Senator Donley noted a technical amendment to amendment WITHOUT OBJECTION this technical change was made. Senator Torgerson MOVED SCS CSHB 100(FIN), version "M". Senator Adams OBJECTED. By a roll call vote of 8 yeas (Parnell, Torgerson, Donley, Leman, Wilken, P. Kelly, L. Green, Phillips) and 1 nay (Adams) SCS CSHB 100(FIN) was REPORTED OUT with individual recommendations. Co-chair Parnell thanked the committee and his staff for their hard work. There followed a brief discussion about the request by the Administration for funds last year as compared to this year. ADJOURNMENT Senator Parnell adjourned the meeting at approximately 7:20 p.m. SFC-99 (14) 3/12/99