Legislature(1999 - 2000)

03/01/2000 02:21 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                                                                   
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                                                                   
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                                                                   
DEPARTMENT OF ADMINISTRATION                                                                                                  
Section 2a     Senior/Protection   Community  Svcs   &  Admin                                                                   
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                                                                   
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                                                                   
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                                                                   
Section 4b     Public   Asst.   Admin/Child   Care   Benefits                                                                   
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                                                                   
Section 13     Department of Health and Social Services                                                                         
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                                                                   
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                                                                   
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                                                                   
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)                                                                              
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                                                                   
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.                                                                                  
Co-Chair Mulder  provided members  with Amendment 1  (copy on                                                                   
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                                                                   
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                                                                   
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                                                                   
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                                                                   
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                                                                   
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-                                                                   
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                                                                   
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.                                                                                                           

Document Name Date/Time Subjects