Legislature(2009 - 2010)HOUSE FINANCE 519

02/19/2010 01:30 PM FINANCE


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01:40:22 PM Start
01:40:28 PM HB300 || HB302
03:08:55 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 300 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 302 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Office of Management and Budget TELECONFERENCED
+ Governor's FY11 Operating Budget Ams. TELECONFERENCED
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 300                                                                                                            
                                                                                                                                
     "An  Act making  appropriations  for  the operating  and                                                                   
     loan program  expenses of state government,  for certain                                                                   
     programs, and  to capitalize funds;  making supplemental                                                                   
     appropriations;  making  appropriations  under art.  IX,                                                                   
     sec.  17(c), Constitution  of the  State of Alaska;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
HOUSE BILL NO. 302                                                                                                            
                                                                                                                                
     "An  Act making  appropriations  for  the operating  and                                                                   
     capital    expenses    of   the    state's    integrated                                                                   
     comprehensive mental  health program; and  providing for                                                                   
     an effective date."                                                                                                        
                                                                                                                                
1:40:35 PM                                                                                                                    
                                                                                                                                
OFFICE OF MANAGEMENT AND BUDGET                                                                                             
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
OFFICE OF  THE GOVERNOR, presented  a high level  overview of                                                                   
the  operating  budget  amendments  first  presented  to  the                                                                   
committee on February  17, 2010. In the amended  budget there                                                                   
was a  request of  an additional  $55.8 million in  operating                                                                   
budget  expenditures.   She  noted  that   approximately  $41                                                                   
million is related  to the formula programs  in Medicaid. She                                                                   
began  listing the  items  from the  spreadsheet  (Governor's                                                                   
FY2011  Amended Operation  Budget  Submissions, February  17,                                                                   
2010, Page 1 of 9, copy on file).                                                                                               
                                                                                                                                
Department of Administration                                                                                                
                                                                                                                                
Ms. Rehfeld began with the first  request from the Department                                                                   
of   Administration.   Line  2,   Elected   Public   Official                                                                   
Retirement System  Benefits (EPORS), was reduced  by $250,000                                                                   
due to a reduction  in the member base where  this number has                                                                   
been recalculated.  She  continued with  line 3, Division  of                                                                   
Finance,   which  allows   for  the   authorization  of   the                                                                   
continuation of the COBRA benefit  under the Federal Stimulus                                                                   
Act.  The  Office  of  Public   Advocacy,  line  4,  reflects                                                                   
increased  Operational  Costs.  The Public  Defender  Agency,                                                                   
line 5,  shows a small decrement  in an unrealizable  funding                                                                   
source with line  6 showing the actual  increased operational                                                                   
costs.  She continued  with the  Violent Crimes  Compensation                                                                   
Board,  line 7, which  is a  deletion of  an unrealized  fund                                                                   
source for health insurance for the non-covered.                                                                                
                                                                                                                                
Department of Commerce and Economic Development                                                                             
                                                                                                                              
Ms. Rehfeld reviewed the Department  of Commerce, line 8, for                                                                   
the  Alaska Seafood  Marketing  Institute  reflecting a  fund                                                                   
source  change  to  replace  reduced  federal  receipts  with                                                                   
receipt   supported   services.   The  Office   of   Economic                                                                   
Development,  line 9,  requests funds  that will  be used  to                                                                   
facilitate economic  development through aggressive  outreach                                                                   
to the business community, identifying  and removing barriers                                                                   
to   growth,  and   forging  of   productive   public-private                                                                   
partnerships.                                                                                                                   
                                                                                                                                
1:44:50 PM                                                                                                                    
                                                                                                                                
Representative  Gara  inquired if  this  was  an extra  state                                                                   
expenditure  since the  federal  money was  not received.  He                                                                   
asked if the  $500,000 had not been needed  by the department                                                                   
would be in  general funds. Ms. Rehfeld indicated  that these                                                                   
are  receipts that  come from  industry to  help support  the                                                                   
seafood  marketing  effort.  The   funds  are  accounted  for                                                                   
separately and are available to  the Alaska Seafood Marketing                                                                   
Institute  (ASME)  for  this   purpose.  If  the  legislature                                                                   
approves the fund  source change then these  receipts will be                                                                   
available for seafood marketing.                                                                                                
                                                                                                                                
Representative  Gara remarked that  the incoming  funds could                                                                   
just go into the  general fund. He wondered if  there was any                                                                   
legal requirement to put it just  into seafood marketing. Ms.                                                                   
Rehfeld mentioned that none of  these funds are dedicated and                                                                   
they  could be  used for  something else  other than  seafood                                                                   
marketing, but  the industry supporting this  effort believes                                                                   
the when the  receipts are provided then they  should be used                                                                   
for the purpose given.                                                                                                          
Representative Gara asked where  the $500,000 comes from. Ms.                                                                   
Rehfeld replied that this is an  assessment that the industry                                                                   
pays for this effort.                                                                                                           
                                                                                                                                
Representative Austerman  interjected that the  industry pays                                                                   
$9.5 million toward marketing  and in the general fund budget                                                                   
there is  a $3.7 million match  toward the $9.5  million. The                                                                   
$500,000 is industry receipts out of the $9.5 million.                                                                          
                                                                                                                                
1:47:31 PM                                                                                                                    
                                                                                                                                
Representative Foster  asked what would have  happened to the                                                                   
$500,000 if the  federal funds had still been  available. Ms.                                                                   
Rehfeld  responded  that  without  an  appropriation  of  the                                                                   
$500,000 in industry receipts,  the money would have remained                                                                   
in the general fund to appropriate.                                                                                             
                                                                                                                                
Representative  Austerman  believed   that  federal  receipts                                                                   
coming must have  a match and the federal money  must be used                                                                   
for specific issues.                                                                                                            
                                                                                                                                
1:49:15 PM                                                                                                                    
                                                                                                                                
Ms.   Rehfeld  continued   with   the  Office   of   Economic                                                                   
Development request on line 9  for $250,000 in general funds.                                                                   
Ms. Rehfeld stressed that the  governor is working to promote                                                                   
economic  growth in  Alaska and  these funds  would help  the                                                                   
department  to work with  business and  industry to  identify                                                                   
barriers to economic development.                                                                                               
                                                                                                                                
Representative  Austerman requested  a  further breakdown  on                                                                   
exactly what the funds would be  used for. He wondered if the                                                                   
plan was  to hire new employees  or create new  programs. Ms.                                                                   
Rehfeld  replied  that this  funding  will  be used  to  fund                                                                   
existing positions  in the  agency. Representative  Austerman                                                                   
asked that  the department send  a representative to  talk on                                                                   
this further. Ms. Rehfeld surmised that would be happening.                                                                     
                                                                                                                                
1:51:03 PM                                                                                                                    
                                                                                                                                
Representative   Gara  questioned   why  this   was  not   an                                                                   
interagency  receipt  if  it  was only  a  matter  of  moving                                                                   
positions. Ms. Rehfeld replied  there were not enough general                                                                   
funds available  in the department  to fill the  positions to                                                                   
do the work.  Representative Gara asked if that  would be two                                                                   
new employees. Ms. Rehfeld remarked  it would be people hired                                                                   
in existing  positions.  Representative Austerman  emphasized                                                                   
that an inventory  on vacant positions was  needed throughout                                                                   
the departments.                                                                                                                
                                                                                                                                
1:52:27 PM                                                                                                                    
                                                                                                                                
Representative  Foster  believed  the  funding  was  for  two                                                                   
vacant  positions and  the hiring  of one  new position.  Ms.                                                                   
Rehfeld reported that  the DOC has more details  that will be                                                                   
provided to the subcommittee.                                                                                                   
                                                                                                                                
1:53:03 PM                                                                                                                    
                                                                                                                                
Department of Corrections                                                                                                   
                                                                                                                                
Ms.  Rehfeld  remarked  that   line  10,  the  Department  of                                                                   
Corrections, needed  the funding to meet the  physical health                                                                   
care  shortfalls for  inmate care.  There  is a  supplemental                                                                   
request  of $4.6  million for  the current  fiscal year.  The                                                                   
department  believed it  needed to include  an additional  $3                                                                   
million  in the  FY11  budget.  She added  that  part of  the                                                                   
difficultly is  not knowing  what catastrophic medical  needs                                                                   
might occur.                                                                                                                    
                                                                                                                                
Representative  Kelly contended  that inmate  health care  is                                                                   
very expensive  and encouraged the administration  to put the                                                                   
stops  on some  of these  growing government  cost areas  and                                                                   
think of alternative  actions. He noted that  after the Goose                                                                   
Creek  facility  is on  line  there  will  be a  $50  million                                                                   
increase in the budget.                                                                                                         
                                                                                                                                
1:56:16 PM                                                                                                                    
                                                                                                                                
Representative  Gara noted  that  the legislature  has  moved                                                                   
many crimes  one grade up and  wondered if this added  to the                                                                   
prisoner  population. He  requested more  information on  why                                                                   
the medical costs are so much higher.                                                                                           
                                                                                                                                
Ms.  Rehfeld  agreed  that  this  was  a  great  concern  for                                                                   
everyone.  She believed a  number of  issues have caused  the                                                                   
increase with  the rising incarcerated population  a definite                                                                   
contributor as well as the aging inmate population.                                                                             
                                                                                                                                
1:57:46 PM                                                                                                                    
                                                                                                                                
Department of Education and Early Development                                                                               
                                                                                                                                
Ms. Rehfeld reported on line 11,  the Department of Education                                                                   
for the  Alaska State  Council  of the Arts,  a recent  lease                                                                   
negotiation for new office space at $70,000.                                                                                    
                                                                                                                                
Representative  Austerman  asked   if  the  $70,000  was  the                                                                   
increase  on the lease  space  or the total  lease cost.  Ms.                                                                   
Rehfeld  responded that  it is  the increase.  Representative                                                                   
Austerman inquired  about the  total lease cost.  Ms. Rehfeld                                                                   
stated that  the move  was from the  downtown Anchorage  to a                                                                   
new space is in another location.                                                                                               
                                                                                                                                
1:59:13 PM                                                                                                                    
                                                                                                                                
Representative Fairclough  asked if there was  an increase in                                                                   
space.  Ms. Rehfeld  responded that  she does  not have  that                                                                   
information.                                                                                                                    
                                                                                                                                
1:59:41 PM                                                                                                                    
                                                                                                                                
ANNA KIM, DIVISION DIRECTOR, DEPARTMENT  OF EDUCATION & EARLY                                                                   
DEVELOPMENT,   indicated   that   she   would   provide   the                                                                   
information, but  she does not  presently have it.  She noted                                                                   
part of the  reason for the move  had to do with  air quality                                                                   
issues. The new location is in Mountain View.                                                                                   
                                                                                                                                
Representative  Gara asked  if this  breaks down  to $5600  a                                                                   
month  extra  over what  they  were  paying before.  Ms.  Kim                                                                   
reiterated that she would have to get the information.                                                                          
                                                                                                                                
2:01:13 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  continued with  some technical adjustment  items                                                                   
for Mt. Edgecumbe  Boarding School on line 11,  12, 13. These                                                                   
adjustments  are in  the  interagency receipt  authority  and                                                                   
designated receipt authorization.                                                                                               
                                                                                                                                
2:02:38 PM                                                                                                                    
                                                                                                                                
Department of Fish and Game                                                                                                 
                                                                                                                                
Ms. Rehfeld moved  to page 2, line 16, for  the Department of                                                                   
Fish and Game.  This is a budget cleanup specific  to federal                                                                   
authorization  needed for  the Bering  Sea Crab Research  and                                                                   
Revitalization  program. Lines  17 through  20 are  technical                                                                   
corrections for  the Fish and  Game fund revenue  accounting.                                                                   
She  stated  that  line  21  is  for  the  state  subsistence                                                                   
division  for the  handing of  the Donlin  Creek project  for                                                                   
interagency   receipts  from   the   Department  of   Natural                                                                   
Resources. Line  22 is for  the Habitat Division  for federal                                                                   
receipt  authority  needed  regarding  the  petroleum  diesel                                                                   
spill  that  occurred in  Helment  Creek  on Adak  Island  on                                                                   
January 11, 2010.                                                                                                               
                                                                                                                                
2:05:06 PM                                                                                                                    
                                                                                                                                
Office of the Governor                                                                                                      
                                                                                                                                
Ms.  Rehfeld explained  that line  23  cleans up  statutorily                                                                   
designated receipts; the Office of the Governor.                                                                                
                                                                                                                                
Department of Health and social Services                                                                                    
                                                                                                                                
Ms. Rehfeld  moved to line 24  from the Department  of Health                                                                   
and  Social  Services.  She  noted  there  are  a  number  of                                                                   
requests before the  committee from line 24 to  line 47, many                                                                   
of them of  a technical nature or Medicaid  adjustments. Line                                                                   
24 reflects a few position adjustments,  reversing a transfer                                                                   
of  a position  from Administrative  Services  to Senior  and                                                                   
Disabilities Services.  Line 25 corrects a transfer  of funds                                                                   
from  a  Medicaid  School  Based   Administrative  claims  to                                                                   
stabilize the Administrative Support Services budget.                                                                           
                                                                                                                                
2:07:00 PM                                                                                                                    
                                                                                                                                
Representative   Austerman   asked   for  a   definition   of                                                                   
stabilizing the Administrative Support Services budget.                                                                         
                                                                                                                                
ALISON ELGEE, ASSISTANT COMMISSIONER,  FINANCE AND MANAGEMENT                                                                   
SERVICES,   DEPARTMENT  OF   HEALTH   AND  SOCIAL   SERVICES,                                                                   
indicated that the  department placed a priority  to clean up                                                                   
their  budget  and  reflect  what  could  be  experienced  in                                                                   
federal  revenue  collections.  They requested  general  fund                                                                   
replacement  in  some  areas   where  those  federal  revenue                                                                   
collections  were overstated  in  the budget.  She  explained                                                                   
that  when stabilizing  the budget  it means  to provide  the                                                                   
funding in  terms of money that  is real as opposed  to empty                                                                   
authorization   for  the  existing   operations.  Ms.   Elgee                                                                   
emphasized that this would not be for anything new.                                                                             
                                                                                                                                
Representative  Austerman  noted   that  the  department  had                                                                   
authorization  for $700,000  in federal  receipts, but  since                                                                   
they  did not  receive those  funds the  department wants  to                                                                   
receive them from general funds.                                                                                                
                                                                                                                                
Ms.  Elgee  responded  that  this  program  may  or  may  not                                                                   
continue  to  receive  federal  revenue,  but  the  level  of                                                                   
funding available will not be known until next year.                                                                            
                                                                                                                                
Representative   Austerman  reiterated   that  it   is  still                                                                   
supplanting federal funds with  state funds. Ms. Elgee agreed                                                                   
that  was  correct. This  was  one  of the  many  refinancing                                                                   
schemes employed  by the DHSS to expand Medicaid  and utilize                                                                   
it for ongoing operations.                                                                                                      
                                                                                                                                
2:10:09 PM                                                                                                                    
                                                                                                                                
Representative Doogan remarked  that for the purposes of this                                                                   
document line  25 is a pairing  with line 41 with  the actual                                                                   
cost  at zero,  therefore it  has  just been  moved from  one                                                                   
place to another. Ms. Elgee responded that is correct.                                                                          
                                                                                                                                
2:10:54 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  moved to  line 26  transferring a position  from                                                                   
the Department of Law to the Department  of Health and Social                                                                   
Services so  there can be a  hearing officer in  their budget                                                                   
rather  than  in  the  Department  of  Law  budget.  Line  27                                                                   
reflects a  correction of a position  transfer so there  is a                                                                   
negative here and a positive in Administrative Services.                                                                        
                                                                                                                                
Ms. Elgee expounded that on page  2 and 3, lines 28,32,42,44,                                                                   
that these  are requested budget  amendments to  the Medicaid                                                                   
program. There  has been significant growth in  Medicaid that                                                                   
had originally  not been expected  to continue but  has grown                                                                   
to 12  percent by  FY2010. A  reflection of  this growth  was                                                                   
presented  in  the  supplemental.   These  budget  amendments                                                                   
reflect an  increase necessary  in FY2011  to bring  the base                                                                   
level funding level up to date.                                                                                                 
                                                                                                                                
Representative  Gara  asked  for  the year  to  year  percent                                                                   
Medicaid spending growth. Ms.  Elgee projected a total growth                                                                   
of  the  program  at six  percent.  This  will  vary  between                                                                   
different components of the program.                                                                                            
                                                                                                                                
2:14:33 PM                                                                                                                    
                                                                                                                                
Representative  Austerman  noted  that  the  total  requested                                                                   
budget  increase  in  this  amendment  is  $40  million,  but                                                                   
inquired about the total yearly increase.                                                                                       
                                                                                                                                
Ms. Elgee  responded that  she can  provide that  information                                                                   
later. She added  that there is a direct  correlation between                                                                   
the supplemental and the budget amendment.                                                                                      
                                                                                                                                
2:15:26 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  continued on  line 29 with  an increase  of $1.5                                                                   
million to  cover the growth  in the Adult Public  Assistance                                                                   
enrollment.                                                                                                                     
                                                                                                                                
Representative Austerman asked  if this growth was due to new                                                                   
people  coming into  the system  or  increased benefits.  Ms.                                                                   
Elgee replied that  the benefits have not been  increased for                                                                   
many years, so the growth is due to increased enrollment.                                                                       
                                                                                                                                
Representative  Fairclough inquired  if these enrollees  were                                                                   
first time  to the system or  people migrating to  Alaska for                                                                   
the  benefits. Ms.  Elgee indicated  that  she could  provide                                                                   
some demographic  information later, but did  not believe the                                                                   
growth was due to migration into the state.                                                                                     
                                                                                                                                
2:17:06 PM                                                                                                                    
                                                                                                                                
Representative Gara asked if an  individual can receive adult                                                                   
public assistance their whole life.                                                                                             
                                                                                                                                
Ms. Elgee responded that the adult  public assistance program                                                                   
addresses the aged,  blind and disabled. This is  a state run                                                                   
program so there  are no limitations on how  long someone can                                                                   
be on the  program, but she  stressed that the money  is only                                                                   
nominal and  meant to supplement  the social security  income                                                                   
benefits.                                                                                                                       
                                                                                                                                
Representative Gara  contended that one could not  be an able                                                                   
bodied  working age person  and receive  these benefits.  Ms.                                                                   
Elgee agreed that was correct.                                                                                                  
                                                                                                                                
Ms. Rehfeld  moved  to the line  30 request  from the  Mental                                                                   
Health Trust  Psychiatric Emergency  Services for  designated                                                                   
evaluation and treatment component.  Line 31 and line 33 is a                                                                   
correction between  two components.  She stated that  line 32                                                                   
deals with  Medicaid growth.  On page 3,  line 34  shows ARRA                                                                   
funding for Communities  Putting Prevention to  Work and line                                                                   
35 denotes ARRA funding for Prevention  and Wellness. Line 36                                                                   
requests $3.8  million for general relief  temporary assisted                                                                   
living. This corresponds to the  FY2010 supplemental request.                                                                   
Line 37 and line  39 shows a request for Mental  Health Trust                                                                   
receipts  of   $150,000  for  Student  Loan   repayments  for                                                                   
healthcare practitioners in high need areas. Line 38                                                                            
requests   $1,110,000   in   statutory   designated   program                                                                   
receipts.  She reported  that  the Department  of Health  and                                                                   
Social Services is  working with Oregon and  West Virginia on                                                                   
a program to improve children's  healthcare delivery systems.                                                                   
                                                                                                                                
2:21:28 PM                                                                                                                    
                                                                                                                                
Representative Doogan  asked for the definition  of statutory                                                                   
designated program  receipts. Ms. Rehfeld replied  that it is                                                                   
a contract for  a certain entity to provide receipts  to do a                                                                   
certain body of  work; funds coming into the  state of Alaska                                                                   
for a specific purpose.                                                                                                         
                                                                                                                                
Ms. Rehfeld  indicated that  line 40  reflects a transfer  of                                                                   
positions  from the Department  of Law  to the Department  of                                                                   
Health  and Social  Services.  She  reiterated  that line  42                                                                   
reflected Medicaid  Growth and line 43 requests  $3.5 million                                                                   
in interagency  receipts under  Medicaid services.  These are                                                                   
coming through  the behavioral  health component  which deals                                                                   
with  services   from  Providence,  Fairbanks   Memorial  and                                                                   
Bartlett  Memorial.  Line  45 requests  $942,000  for  senior                                                                   
disabilities Medicaid  services. This  is to comply  with the                                                                   
corrective action  plan mandates by CMS. Lines 46  and 47 are                                                                   
position transfer technical adjustments.                                                                                        
                                                                                                                                
2:24:00 PM                                                                                                                    
                                                                                                                                
Department of Labor & Workforce Development                                                                                 
                                                                                                                                
Ms. Rehfeld  continued with the  Department of Labor  page 3,                                                                   
line  48,  for  a one-time  ARRA  federal  authorization  for                                                                   
Alaska Energy  Section Partnership  Grant. This will  provide                                                                   
funding for training in energy areas.                                                                                           
                                                                                                                                
Representative  Fairclough  asked  if  there  is  a  training                                                                   
program  for  energy  efficiency  within  the  Department  of                                                                   
Labor.                                                                                                                          
                                                                                                                                
2:24:54 PM                                                                                                                    
                                                                                                                                
DAVID  STONE, DEPUTY  COMMISSIONER, DEPARTMENT  OF LABOR  AND                                                                   
WORKFORCE DEVELOPMENT,  responded that  there is  some energy                                                                   
training. The  ARRA grant will  train seven hundred  Alaskans                                                                   
directly  under the Alaska  Work Force  Investment Board  who                                                                   
will oversee  the development of  a training plan.  This will                                                                   
also be in conjunction with a number of other partners.                                                                         
                                                                                                                                
Representative  Fairclough asked  how much  and where  is the                                                                   
current training being expended in the department.                                                                              
                                                                                                                                
Mr.  Stone responded  he  would  have to  get  back with  the                                                                   
specific  information.  Representative  Fairclough  mentioned                                                                   
that there is a one-time $3.5  million request below the line                                                                   
for the Construction Academy.  She wondered if ERA funding is                                                                   
available  to  pay and  keep  employed the  people  currently                                                                   
being  trained  instead of  using  general funds.  Mr.  Stone                                                                   
relayed that he would have to  get back to the committee with                                                                   
that answer.                                                                                                                    
                                                                                                                                
2:26:44 PM                                                                                                                    
                                                                                                                                
Representative Austerman asked  if this program was set up to                                                                   
train twenty people.  Mr. Stone replied it would  train seven                                                                   
hundred people.                                                                                                                 
                                                                                                                                
Representative  Foster asked  if these  people would  also be                                                                   
trained  for  raiders  and  assessors  positions.  Mr.  Stone                                                                   
answered yes.                                                                                                                   
                                                                                                                                
Ms. Rehfeld  informed that  line 49 was  a decrease  in state                                                                   
training and  employment program authorization to  align with                                                                   
planned expenditures.                                                                                                           
                                                                                                                                
Representative Gara  asked if this was for  line expenditures                                                                   
on step or is the money being  used somewhere else. Mr. Stone                                                                   
replied  that the fund  has been  growing substantially  over                                                                   
the years. The contributions to  this fund come from employee                                                                   
contributions  to unemployment insurance  which is  one tenth                                                                   
of one percent. Since it is not  known what the future holds,                                                                   
this would help provide funds for the future.                                                                                   
                                                                                                                                
Representative Gara expressed  his frustration that a request                                                                   
for  $85,000 to  train and  transition  foster children  into                                                                   
jobs was  denied. He asked if  out of the $1.5  million being                                                                   
saved  some could  be used to  job train  foster youths.  Ms.                                                                   
Rehfeld asserted  that she was  not aware of any  prohibition                                                                   
in using  step funds  for such a  program. Mr. Stone  replied                                                                   
that  one  of the  conditions  of  using the  state  training                                                                   
program  is an  individual  must contribute  to  unemployment                                                                   
insurance. There could  be an issue with youths  who have not                                                                   
worked or  contributed to  unemployment. Representative  Gara                                                                   
declared that he does not care  which department is saving or                                                                   
spending the  money. He reminded  that there was a  saving of                                                                   
$1.5 million on  job training in the Department  of Labor and                                                                   
an under training for those coming  out of foster care and he                                                                   
questioned why $85,000 could not be spared for them.                                                                            
                                                                                                                                
2:31:11 PM                                                                                                                    
                                                                                                                                
Representative   Fairclough   commented   that   it   was   a                                                                   
recommendation  from the subcommittee  to save the  money and                                                                   
hold it. She  indicated that unemployment rates  are going up                                                                   
so  Legislative Finance  has indicated  that  paying out  the                                                                   
original  requested amount  by the  department may  adversely                                                                   
affect the  following year's  program. If unemployment  rates                                                                   
keep rising, it was decided to  hold these funds, so there is                                                                   
really not an extra $1.5 million.                                                                                               
                                                                                                                                
2:33:10 PM                                                                                                                    
                                                                                                                                
Representative  Doogan remarked  that this  decrease is  $1.5                                                                   
million  and  questioned  how much  of  the  total is  to  be                                                                   
funded. Mr.  Stone responded  that the  fund is currently  at                                                                   
$10 million so  they would fund $8.5 million  for this fiscal                                                                   
year, leaving $1.5 million in the fund.                                                                                         
                                                                                                                                
Representative  Doogan asked if  it grows  at such  an extent                                                                   
that it  is replenished  at a  greater rate  every year.  Mr.                                                                   
Stone pointed  out that it has  grown in the last  few years,                                                                   
but it could drop if there was increased unemployment.                                                                          
                                                                                                                                
Representative Fairclough  presented the forecast  for FY2010                                                                   
and FY2011 for that fund showing  an ending balance in FY2009                                                                   
of $5.9  million. There is  expected revenue of  $6.5 million                                                                   
in  FY2010  and  $9  million is  being  paid  out.  They  are                                                                   
trending down to maintain payout.                                                                                               
                                                                                                                                
2:35:46 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  continued to line 50, Vocational  Rehabilitation                                                                   
Client Services with a one-time  carry forward of $200,000 in                                                                   
the  ARRA federal  authorization for  employment services  to                                                                   
disabled  Alaskans.  Line  51  shows  decrease  training  and                                                                   
building  fund authorization  to align  with their  projected                                                                   
expenditures  of  $250,000.  Line   52  reveals  an  increase                                                                   
requested  in  federal  authorization  of  $4  million  under                                                                   
unemployment  insurance   which  is  workload   and  caseload                                                                   
driven. Line  53 request  of $600,000 is  for a onetime  ARRA                                                                   
federal    authorization    for     unemployment    insurance                                                                   
development.                                                                                                                    
                                                                                                                                
2:37:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  remarked there  are so many additional  ARRA                                                                   
monies in  some departments that  the committee will  want to                                                                   
look if  this is money being  reauthorized from  last session                                                                   
or if it is new federal money under the umbrella of ARRA.                                                                       
                                                                                                                                
2:38:36 PM                                                                                                                    
                                                                                                                                
Department of Law                                                                                                           
                                                                                                                                
Ms. Rehfeld continued  on line 54 with the  Department of Law                                                                   
for  a  request  of  $165,000   from  the  Tobacco  Education                                                                   
Cessation  Arbitration regarding  a dispute  with the  master                                                                   
settlement  agreement.  This would  prepare  for the  pending                                                                   
arbitration.  Line 55 and  56 reflects  the two general  fund                                                                   
source requests that  had been made on general  funds because                                                                   
they department  was not sure at  the time if there  would be                                                                   
an extension  of federal grants.  They have recently  learned                                                                   
the federal  funds will be extended.  On line 57 and  58 show                                                                   
the transfer of  positions from the Department  of Health and                                                                   
Social Services for replacement  to another position. Line 59                                                                   
requests $400,000  to add two  new permanent full  time Kenai                                                                   
District attorneys.                                                                                                             
                                                                                                                                
Department of Natural Resources                                                                                             
                                                                                                                                
Ms. Rehfeld  moved to  line 60 in  the Department  of Natural                                                                   
Resources requesting  $130,000 that reflects an  error in the                                                                   
December  budget that  needs to  be corrected.  Line 61  is a                                                                   
decrement  of  $300,000  as  the   project  for  the  reverse                                                                   
statewide  parcel database is  not ready  to proceed  for the                                                                   
next fiscal year.                                                                                                               
                                                                                                                                
Representative Austerman  requested a return to  line 60 with                                                                   
a better  description  of the Guide  Concession Area  Program                                                                   
development.                                                                                                                    
                                                                                                                                
LETA  SIMONS,   DIRECTOR,  DIVISION   OF  SUPPORT   SERVICES,                                                                   
DEPARTMENT OF NATURAL RESOURCES,  responded that it will be a                                                                   
statewide  program, but based  on the  amount of funding,  it                                                                   
might start in  parts or pieces. This funding  is to complete                                                                   
the process of  getting information back from  the public and                                                                   
to understand  how to  better develop a  program and  work on                                                                   
developing regulations.                                                                                                         
                                                                                                                                
Representative  Austerman remarked  that this  is creating  a                                                                   
new program. Ms. Simons stressed  that there was a program at                                                                   
one time,  but it  was declared  unconstitutional and  thrown                                                                   
out. There has not been a guide program since the 1980s.                                                                        
                                                                                                                                
Representative  Kelly  remarked  that in  the  Department  of                                                                   
Natural Resources  subcommittee there  was a hearing  on this                                                                   
issue. He was  shocked to see the additional  funding request                                                                   
as that is a lot of money for  this work. He remarked it is a                                                                   
contentious issue on both sides.                                                                                                
                                                                                                                                
2:43:42 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  asked if some of the old  history regarding                                                                   
the dissolution of the old Big  Game Commercial Guiding board                                                                   
is  involved. Ms.  Simons  said that  was  correct. The  game                                                                   
guide concessions that were set  up long ago were challenged,                                                                   
but it  does have  its roots  in that  situation. This  is an                                                                   
attempt to  revise it so  there is a  permit policy  on state                                                                   
land.                                                                                                                           
                                                                                                                                
Co-Chair  Stoltze mentioned  there might  have been  a larger                                                                   
fiscal note with  reestablishing the Big Game  and Commercial                                                                   
Services board. Ms. Simons replied  that she was not sure she                                                                   
was aware  of all  the history,  but she  would research  and                                                                   
provide the answers.                                                                                                            
                                                                                                                                
Representative  Austerman  commented  that there  are  always                                                                   
complaints on the guiding permits.                                                                                              
                                                                                                                                
Ms. Rehfeld  moved to the line  62 request for  $113,000 land                                                                   
sales  receipts  to help  the  department  fund some  of  the                                                                   
positions  who  do  this  work.  Line 63  is  a  request  for                                                                   
$240,000  in general funds  for the  Outer Continental  Shelf                                                                   
lease planning mineral management  to fund cooperating agency                                                                   
status  with the  Minerals  Management  Service  in order  to                                                                   
address the  Outer Continental  Shelf issues. The  Department                                                                   
of Natural Resources would act  as the coordinator concerning                                                                   
environmental impact statements.                                                                                                
                                                                                                                                
Representative  Kelly understood  that the  step was  needed,                                                                   
but normally these services are  billed and he wanted to know                                                                   
if this could  be reviewed. The whole idea  of the permitting                                                                   
services is to  that those being regulated in  that area ends                                                                   
up paying the costs of that regulation.  He indicated that he                                                                   
would like some feedback how these  services might be billed.                                                                   
                                                                                                                                
Ms. Simons  furthered that the  Office of Project  Management                                                                   
and  Permitting  normally is  reimbursed  for  their work  by                                                                   
industry. In this case they are  asking for the state to be a                                                                   
participant in order for the state  to have more input in the                                                                   
environmental  impact  studies that  are  being conducted  by                                                                   
Mineral Management  Services for the outer  continental shelf                                                                   
work. The  state would  like to add  their expertise  in this                                                                   
area, but  there is no industry  that can reimburse  for this                                                                   
type of work if they are not directly involved.                                                                                 
                                                                                                                                
Representative Kelly suggested  getting industry involved. He                                                                   
added that the state was trying  to get a handle on growth on                                                                   
the number of state employees and growth in government.                                                                         
                                                                                                                                
2:50:27 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker agreed that passing  the costs to another at-                                                                   
interest party  was a good plan,  but inquired if  they would                                                                   
need  statutory  authority  to   establish  a  contract  with                                                                   
someone  who  might  be  pursuing   a  permit.  If  statutory                                                                   
authority  is  needed  to  undertake  a  contract,  then  the                                                                   
legislature could provide that.  Ms. Simons replied that they                                                                   
would look into that.                                                                                                           
                                                                                                                                
Department of Public Safety                                                                                                 
                                                                                                                                
Ms. Rehfeld reviewed  line 64 request for $125,000  in Public                                                                   
Safety for Domestic Violence and  Sexual Assault for victim's                                                                   
services. The  goal is to make  sure that within  the Council                                                                   
of Domestic Violence  and Sexual Assault component  that they                                                                   
could  cover some  of  the lost  funds  and  also added  some                                                                   
general funds  into the component.  It is hard to  predict if                                                                   
the applied  for federal grants  will be successful.  On line                                                                   
65,  on  prisoner  transportation  there  is  a  request  for                                                                   
$300,000 in general funds. There  was a request in the FY2010                                                                   
supplemental bill and this would be an addition for FY2011.                                                                     
                                                                                                                                
2:53:23 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld explained  that in Public Safety,  line 66, under                                                                   
Special Projects there is $97,000  in federal funds under the                                                                   
stimulus for combating internet crimes against children.                                                                        
                                                                                                                                
Department of Public Safety                                                                                                 
                                                                                                                                
2:54:39 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  continued with  line 67  for $220,000  under the                                                                   
Department of  Revenue for funding  a new Investment  Officer                                                                   
position. This  is a position  within the Treasury  Division.                                                                   
On page 5, line  68, is the request to hire  a new Investment                                                                   
Officer position.                                                                                                               
                                                                                                                                
Co-Chair  Hawker  explained  that the  negative  $850,000  is                                                                   
exactly related to the change  in the previous one adding the                                                                   
internal   investment    officer.   These    are   integrated                                                                   
transactions.                                                                                                                   
                                                                                                                                
Representative Austerman  requested a return to  line 67 with                                                                   
the funding of a new Investment  Officer and asked if that is                                                                   
full or part  time. Ms. Rehfeld replied that  the position is                                                                   
already  in   the  budget,  but   the  funding   is  lacking.                                                                   
Representative Austerman asked  if it was a new position. Ms.                                                                   
Rehfeld noted that technically  it is not a new position, but                                                                   
it has  not yet been  funded so the  department is  using the                                                                   
term new  position. Representative  Austerman reiterated  the                                                                   
need to look at the vacancy positions throughout the state.                                                                     
                                                                                                                                
2:57:17 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  referred to  the line  69 Alaska Permanent  Fund                                                                   
Corporation $8 million request  from the for adjusted manager                                                                   
fees.  There  has  been  a  stronger  than  projected  market                                                                   
recovery   with  some   changes  to   the  fund's   portfolio                                                                   
structure, but there is still a decrement.                                                                                      
                                                                                                                                
Co-Chair  Stoltze  returned  to  the question  of  the  Kenai                                                                   
attorneys and wondered  if there were people  already in mind                                                                   
to fill these positions.                                                                                                        
                                                                                                                                
Ms.  Rehfeld  informed  that there  are  approximately  seven                                                                   
attorneys who cannot  meet the work load so  she is confident                                                                   
they would move rapidly to fill those positions.                                                                                
                                                                                                                                
Co-Chair Stoltze  asked if the  positions would be  filled by                                                                   
July  1. Ms.  Rehfeld noted  that  the funding  would not  be                                                                   
available  until   July  1.  He  wanted  to   make  sure  the                                                                   
department would  have attorneys ready to come  on board. Ms.                                                                   
Rehfeld responded  that the Department  of Law could  come to                                                                   
the  table, but  they  are interested  in  moving forward  on                                                                   
hiring. Co-Chair  Stoltze stressed that he was  looking for a                                                                   
commitment.                                                                                                                     
                                                                                                                                
2:59:19 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  continued with  line 70  with the Child  Support                                                                   
Services Division. She indicated  this request was a "just in                                                                   
case" scenario.  In the past federal incentive  payments were                                                                   
used to  match federal  funds and with  the ARRA  program the                                                                   
extension  was allowed.  This funding  would provide  room to                                                                   
cover  the federal  incentive  payments.  There  is also  the                                                                   
potential that  with the  temporary assisted needy  families,                                                                   
they  may be  unable  to cover  with  as many  receipts.  She                                                                   
agreed there may need to be some  language improvements so it                                                                   
is clear what is being attempted.                                                                                               
                                                                                                                                
Co-Chair   Hawker  interjected   that   this   is  the   same                                                                   
transaction  where  it is  not  positive  if the  state  will                                                                   
receive a certain amount of federal  receipts, so this is the                                                                   
most beneficial position for the  state in the number section                                                                   
of the budget to back fill if  these federal receipts are not                                                                   
authorized.                                                                                                                     
                                                                                                                                
3:01:58 PM                                                                                                                    
                                                                                                                                
Ms.  Rehfeld  maintained  that  on line  71,  Permanent  Fund                                                                   
Dividend Division,  there is a  request for central  mailroom                                                                   
equipment replacement.  Co-Chair Hawker  noted this  would be                                                                   
one-time increment, not an ongoing expenditure.                                                                                 
                                                                                                                                
Mr.  Rehfeld  continued   with  line  72  and   line  73  for                                                                   
additional   requests  from  the   Permanent  Fund   Dividend                                                                   
Division,  concerning   bandwidth  cost  increases   and  the                                                                   
ability to  access data from  vital statistics.  Each request                                                                   
is for $25,000.                                                                                                                 
                                                                                                                                
Co-Chair  Hawker wondered  if  there is  something  different                                                                   
about  this  request.  Ms. Rehfeld  replied  that  there  was                                                                   
nothing  different about  this  particular item.  There is  a                                                                   
struggle  in each  department  to  provide the  services  and                                                                   
support  expectations.   These  requests  are   small  dollar                                                                   
amounts,  but it  was important  to bring  them forward.  Ms.                                                                   
Rehfeld  continued with  line 74,  Treasury Division  funding                                                                   
for an Investment  Officer to replace an  external Investment                                                                   
Manager.                                                                                                                        
                                                                                                                                
3:04:35 PM                                                                                                                    
                                                                                                                                
Representative  Austerman  inquired  if  this  was  the  same                                                                   
position  discussed in  line 67. Ms.  Rehfeld responded  this                                                                   
was  interagency receipts  from  the other  component so  the                                                                   
answer is yes.                                                                                                                  
                                                                                                                                
Department of Transportation                                                                                                
                                                                                                                                
Ms.  Rehfeld moved  to  page 7,  line  75 for  the  Southeast                                                                   
Design and  Engineering Services  request of $50,000  receipt                                                                   
supported services  on the  utility permitting program.  Line                                                                   
76, Statewide Public Facilities,  is a fund source change for                                                                   
a  position  for  capital improvement  projects.  This  is  a                                                                   
change from interagency receipts to CIP receipts.                                                                               
                                                                                                                                
3:05:51 PM                                                                                                                    
                                                                                                                                
University of Alaska                                                                                                        
                                                                                                                                
Ms. Rehfeld continued  on line 77 with the  request to return                                                                   
to a single appropriation for technical reasons.                                                                                
                                                                                                                                
Representative Austerman  stated the system is  broken and he                                                                   
would oppose this.                                                                                                              
                                                                                                                                
Ms. Rehfeld  moved to  the line 78  request for $2.1  million                                                                   
for  the   University  of   Alaska  Federation  of   Teachers                                                                   
compensation   adjustment   for   the   ratified   collective                                                                   
bargaining agreement approved by the Board of Regents.                                                                          
                                                                                                                                
3:07:11 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker asked  if  the university's  initial  budget                                                                   
request  included  an  aggregate   of  some  $11  million  in                                                                   
compensation  in adjustments  and increases.  He wondered  if                                                                   
this  $11 million  was anticipating  changes or  is this  for                                                                   
additional  bargaining  changes.  Ms. Rehfeld  informed  that                                                                   
this agreement was  not in when the original  request was put                                                                   
forward  in December.  Co-Chair  Hawker asked  if these  were                                                                   
calculated on  authorized positions or with  an actual person                                                                   
already  in that position.  Ms. Rehfeld  commented that  they                                                                   
were calculated on authorized positions.                                                                                        
                                                                                                                                
3:08:55 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  commented that the committee  would not need                                                                   
to go  through all the language  for the remaining  list, but                                                                   
requested more information on line 89.                                                                                          
                                                                                                                                
Ms.  Rehfeld  moved  to  page  9, line  89  that  amends  the                                                                   
management of the Constitutional  Budget Reserve (CBR). There                                                                   
had been  general fund request  rather than from the  CBR and                                                                   
this request was being continued for the FY2011 budget.                                                                         
                                                                                                                                
Co-Chair Hawker explained the  motivation for this section is                                                                   
that in  the FY2010 operating  supplemental budget,  the $400                                                                   
million would pay off the state's  obligation to the CBR. The                                                                   
historic use  of CBR proceeds  to pay for its  own management                                                                   
fees is  a circular inefficient  and unnecessary  pattern. It                                                                   
is better to  fund the management fees out  of excess general                                                                   
funds.                                                                                                                          
                                                                                                                                
Ms. Rehfeld  elaborated about  an earlier question  regarding                                                                   
the Arts  Council lease.  The previous  lease square  footage                                                                   
was 2200 at $1.54 a square foot  and new lease is 2802 square                                                                   
feet at $3.28 per square foot.                                                                                                  
                                                                                                                                
Ms. Kim interjected that the annual  amount for the old lease                                                                   
was $40,754  and the  new lease  is $110,373. The  additional                                                                   
space will  accommodate the  contemporary art bank,  delicate                                                                   
art storage,  and art maintenance  areas. The lease  is about                                                                   
10 years  old and  they were  informed by  the Department  of                                                                   
Administration   that  the   lease   space  was   reasonable.                                                                   
Representative Fairclough asked  if this was prime space. Ms.                                                                   
Kim responded that it is a much  better space. Representative                                                                   
Gara asked  what the monthly total  is for 2800  square feet.                                                                   
Ms. Kim responded $110,373 a year or about $9,000 a month.                                                                      

Document Name Date/Time Subjects
HB 300 HB 302GOVs Operating Amendments February 17 2010.pdf HFIN 2/19/2010 1:30:00 PM
SFIN 3/24/2010 9:00:00 AM