Legislature(2003 - 2004)

04/14/2003 09:01 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     SPONSOR SUBSTITUTE FOR SENATE BILL NO. 35                                                                                  
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize  funds; making appropriations  under art. IX,                                                            
     sec.  17(c), Constitution  of  the State  of  Alaska, from  the                                                            
     constitutional   budget reserve  fund;  and  providing  for  an                                                            
     effective date."                                                                                                           
     CS FOR SS FOR HOUSE BILL NO. 75(FIN) am(brf sup maj fld)                                                                   
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize  funds; and providing for an effective date."                                                            
     SPONSOR SUBSTITUTE FOR SENATE BILL NO. 36                                                                                  
     "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."                                                                             
     CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 76(FIN)                                                                       
     "An  Act making appropriations  for the  operating and  capital                                                            
     expenses of the state's  integrated comprehensive mental health                                                            
     program; and providing for an effective date."                                                                             
Department of Community and Economic Development                                                                              
Co-Chair Wilken, Chair                                                                                                          
Senator Fred Dyson                                                                                                              
Senator Gary Stevens                                                                                                            
Senator Donny Olson                                                                                                             
     The Senate  Finance Budget Subcommittee  for the Department  of                                                            
     Community   and  Economic  Development  met   and  reports  the                                                            
     following  budget  closeout  summary.  For  complete  numerical                                                            
     analysis  of this budget,  please refer  to the actual  numbers                                                            
     contained in the budget  documents published by the Legislative                                                            
     Finance Division.                                                                                                          
     The Senate  Finance Budget Subcommittee recommends  funding the                                                            
     Department  of Community and Economic Development  general fund                                                            
     budget at the Governor's  requested level of $32,870,600, which                                                            
     represents  a 19.1 %  reduction in general  funds spending  for                                                            
      this department compared to its FY 03 Management Plan.                                                                    
     The Subcommittee  recommends that Total Agency  expenditures be                                                            
     increased  by  $485,300  above the  Governor's  Amended  budget                                                            
     request.  Please note that this increase is funded  entirely by                                                            
     receipt-supported  services and Regulatory Commission of Alaska                                                            
     Receipts (not general  funds). Furthermore, this recommendation                                                            
     comes at  the request of the Department and is  embodied by two                                                            
     1. The fiscal  note associated with House Bill 159, relating to                                                            
        the  Alaska Commercial  Fishing  and Agriculture  Bank,  was                                                            
        originally  expected  to yield a total  savings of  $244,400                                                            
        within   the   Division    of  Banking,    Securities,   and                                                            
        Corporations.   However,   upon   further   review  by   the                                                            
        Department,  it was determined  that the true savings  would                                                            
        be closer to  $126,000. Therefore, and in anticipation of HB
        159 passing  into law, the Subcommittee chose to acknowledge                                                            
        the  revised  fiscal note  and impose  a  decrement to  that                                                            
        Division by $118,400.                                                                                                   
     2. The  Governor shifted the Public Advocacy  duties within the                                                            
        Regulatory  Commission  of  Alaska (RCA)  to  the Office  of                                                            
        Attorney General,  and, originally, moved seven of its staff                                                            
        and  funding  along  as well.  However,  it has  since  been                                                            
        determined  that these  staff are  not involved with  Public                                                            
        Advocacy  work, so the Department requests  that these staff                                                            
        and  funding  remain in  RCA.  Hence, $359,300  in  receipt-                                                            
        supported   services  funds  were put  back  into  that  BRU                                                            
        [Budget Request Unit].                                                                                                  
     The  Senate Finance  Subcommittee also  accepts the  Governor's                                                            
     elimination   of  all  funding  for  the  Alaska   Science  and                                                            
     Technology  Foundation (ASTF). However, the Subcommittee  would                                                            
     like  to recommend  not transferring  the balance  of the  ASTF                                                            
     Endowment   into  the   General  Fund   (as  the  Governor   is                                                            
     proposing).  It may be worthwhile  to consider maintaining  the                                                            
     balance of the endowment  as is and instead use those monies as                                                            
     one-time spending under "other funds".                                                                                     
Co-Chair Wilken read the subcommittee report into the record.                                                                   
Co-Chair Wilken  noted this results  in reduction of five  permanent                                                            
full time and two permanent part time positions.                                                                                
Senator Hoffman asked how  the Power Cost Equalization (PCE) program                                                            
would be affected by this proposal.                                                                                             
Co-Chair Wilken  replied PCE would be funded at the  level requested                                                            
by the Governor.                                                                                                                
Senator Hoffman  understood  there to be a  $3.1 reduction  over the                                                            
previous year's funding.  He indicated he would research the matter.                                                            
Co-Chair Wilken  stated that PCE was  not specifically discussed  by                                                            
the subcommittee  subsequently  no changes  were made to the  amount                                                            
recommended by the Governor.                                                                                                    
Co-Chair  Green understood  there to  be no reduction  to the  FY 03                                                            
management plan appropriation.                                                                                                  
Senator  Bunde  asked  how  funding  would  be offset  if  the  ASTF                                                            
endowment were  not deposited into the general fund  as requested by                                                            
the Governor.                                                                                                                   
Co-Chair Wilken  relayed that the  subcommittee recommendation  does                                                            
not continue the ASTF program,  although flexibility is requested to                                                            
hold the funds for future consideration in the FY 04 budget.                                                                    
Department of Education and Early Development                                                                                 
Co-Chair Wilken, Chair                                                                                                          
Senator Fred Dyson                                                                                                              
Senator Bettye Davis                                                                                                            
             Department of Education and Early Development                                                                      
                   FY 04 Senate Finance Subcommittee                                                                            
                             April 11, 2003                                                                                     
     The Senate Finance Subcommittee for the Department of                                                                      
     Education and Early Development forwarded a proposed FY 04                                                                 
     budget to the full Senate Finance Committee for consideration                                                              
     that totals $902,843,900. This amount includes:                                                                            
     1) $708,599,800 in general purpose funds (33.1% of total state                                                             
        general purpose funds);                                                                                                 
     2) $160,922,800 in federal funds; and                                                                                      
     3) $33,361,300 in other funds.                                                                                             
     K-12 Funding Summary                                                                                                       
        · Education  Funding Formula is funded at $4,010 per student                                                            
        · Learning  Opportunity  Grants  (LOGs)  are  funded at  $20                                                            
          million  within the language section, a drop of $9,340,900                                                            
          from the supplemental amount approved last session.                                                                   
        · Pupil  Transportation costs  will be reimbursed  at 80% of                                                            
          FY  03 funding. (However, based on the  projected increase                                                            
          of    transportation   FY   04   expenses,    the   actual                                                            
          appropriation  of $43,188,200  is 74% of the actual  FY 04                                                            
        · Tuition/Ward  of the State Program funding ($2,225,000) is                                                            
          eliminated,  affecting  mainly Anchorage,  Fairbanks,  and                                                            
     Fund Source Changes                                                                                                        
        · Slightly  over  $2.5  million  of  general  purpose  funds                                                            
          replaced  federal  TANF  [Temporary Assistance  for  Needy                                                            
          Families]  funds  to  maintain a  current  level for  Head                                                            
          Start Grants.                                                                                                         
        · A  new  Autism  Training  and  Educational  Initiative  is                                                            
          funded   with  $150,000   MHTAAR   [Mental  Health   Trust                                                            
          Authority Authorized Receipts] funds.                                                                                 
        · Approximately  $45  million No Child  Left Behind  federal                                                            
          funds  will be passed through  53 local school  districts.                                                            
        · The  Museum  component  received  a  $30,000  increase  in                                                            
          Receipt  Supported Services  to help maintain the  current                                                            
          level  of service at the Sheldon Jackson  Museum in Sitka.                                                            
     Program Changes                                                                                                            
        · Child  Care Assistance and Licensing is transferred to the                                                            
          Department of Health and Social Services.                                                                             
        · Alaska  State Community Service Commission  is transferred                                                            
          to  the Department of Community and Economic  Development.                                                            
        · Alaska    Vocational   Training   Education    Center   is                                                            
          transferred  to  the  Department  of Labor  and  Workforce                                                            
        · Alaska   Youth  Initiative   and  Out-of-State   Placement                                                            
          programs  are transferred to the Department  of Health and                                                            
          Social Services.                                                                                                      
Co-Chair  Wilken  highlighted   that  the  subcommittee   recommends                                                            
adopting  the Governor's  proposal with the  exception of  increased                                                            
receipt authority for the Sheldon Jackson Museum.                                                                               
Co-Chair  Wilken  voiced  concerns  of  the subcommittee   regarding                                                            
reductions  to  education  funding   and  listed  those  amounts  as                                                            
reflected in the subcommittee report.                                                                                           
Co-Chair  Wilken pointed out  that the subcommittee  found  that the                                                            
number  of students  claimed  as "intensive  service  students"  has                                                            
increased  26.2 percent in  the past five  years. He explained  that                                                            
school districts  receive five times the normal student  dollars, or                                                            
approximately $20,000,  for each of these students. He reported that                                                            
the subcommittee  recommends  an  audit of  this system  at cost  of                                                            
$223,000. He surmised  that a return from this audit  could be "well                                                            
in excess" of the amount spent.                                                                                                 
Co-Chair Wilken  noted the subcommittee  recommends the elimination                                                             
of Alyeska  Central  School interagency  receipts,  although he  was                                                            
unsure  of  the  impact  of this  action  if  the  pending  SB  107-                                                            
CORRESPONDENCE  STUDY does not pass into law. He informed  that this                                                            
budgetary change would eliminate 48 positions.                                                                                  
Co-Chair  Wilken stated  that  passage of  SB 110-UNDER  SCHOOL  AGE                                                            
STUDENTS, SB 121-COMMUNITY  SCHOOLS and SB 107-CORRESPONDENCE  STUDY                                                            
are necessary  to implement the subcommittee's  recommended  budget.                                                            
He predicted that amendments  to the FY 04 operating budget would be                                                            
necessary if any of the aforementioned bills do not pass.                                                                       
Co-Chair  Wilken indicated  that the  transfer  of several  programs                                                            
from the Department to  other agencies has resulted in a decrease of                                                            
87 permanent full  time positions, 25 permanent part  time positions                                                            
and one  temporary  position. He  qualified that  funding for  these                                                            
positions  would be  reflected as  increases to  the budgets  of the                                                            
affected departments.                                                                                                           
Co-Chair  Wilken  referenced  a  letter  of concern  signed  by  the                                                            
subcommittee  members  and expressing  concern  over the  Governor's                                                            
proposed  $29.3  million reduction  to  the  Department  from FY  03                                                            
appropriations  and intent  to  identify additional  funding,  which                                                            
reads as follows.                                                                                                               
     The  Senate   Finance  Subcommittee   for  the  Department   of                                                            
     Education  and Early Development met on Friday,  April 11, 2003                                                            
     and  voted to  forward the  attached spreadsheets  to the  full                                                            
     Senate Finance Committee for consideration.                                                                                
     The Subcommittee's  recommendation for the Department's  budget                                                            
     meets  the  requested  allocation   target,  however,  we  have                                                            
     serious  reservations about the  proposed level of funding  for                                                            
     K-12 public  education. The cumulative  effect of the  proposed                                                            
     reductions  to the Learning Opportunity  Grants program,  pupil                                                            
     transportation,  debt reimbursement, and a lack  of recognition                                                            
     of the increased  school operating costs will  seriously impact                                                            
     the educational programs in all 53 school districts.                                                                       
     As the Senate Finance  Committee continues its deliberations on                                                            
     the  total   state  operating  budget,  we  are   hopeful  that                                                            
     additional  funding will  also be available  so that our  local                                                            
     school  districts  can continue  to offer  Alaska students  the                                                            
     best educational opportunity possible.                                                                                     
Senator Bunde  noted members received extensive input  regarding the                                                            
Alyeska  Central   School  (ACS).  He  noted  arguments   were  made                                                            
challenging  the claim that closure  of this program would  save the                                                            
State money. He asked if the subcommittee addressed the matter.                                                                 
Co-Chair Wilken  responded the ACS  is comprised of two components:                                                             
the summer school program  and the correspondence program. He stated                                                            
that closure  of the summer school  program would result  in savings                                                            
to the  State. He  reported that  the subcommittee  determined  that                                                            
closure of the  correspondence program would be revenue  neutral. He                                                            
explained  that because  participating students  would attend  other                                                            
schools, the State would continue to expend funds.                                                                              
Senator Hoffman was encouraged  that the co-chair had concerns about                                                            
the limited funding for  education. He expressed he would anticipate                                                            
the Committee's actions  to rectify the situation. He preferred that                                                            
the budget  include funding  for those programs  subject to  changes                                                            
pending  the passage  of other  legislation. He  suggested that  the                                                            
budget could be amended in the event those bills were to pass.                                                                  
Co-Chair  Green  commented  on the  difficulties  in  preparing  the                                                            
budget for this Department,  due to the separate pending legislation                                                            
and the  transfer of  programs to  other agencies.  She pointed  out                                                            
that enactment  of  SB 345, relating  to school  districts  becoming                                                            
vendors,  from the  previous  legislative  session  could result  in                                                            
increased  funds   for  this  Department.  She  furthered   that  if                                                            
psychiatric students were  returned to Alaska, funds would no longer                                                            
be sent  to out of  State facilities  for the  purpose of  educating                                                            
these Alaskan students.                                                                                                         
Department of Transportation and Public Facilities                                                                            
Co-Chair Wilken, Chair                                                                                                          
Senator Scott Ogan                                                                                                              
Senator Tom Wagoner                                                                                                             
Senator Georgianna Lincoln                                                                                                      
          Talking Points on DOT&PF Subcommittee Closeout                                                                        
   · The purpose of this meeting is to closeout the DOT&PF                                                                      
     operating budget subcommittee  and adopt the recommendations to                                                            
     be  forwarded   to  the  full  Senate  Finance  Committee   for                                                            
   · The Senate Finance Operating Budget allocation for DOT&PF                                                                  
     resulted   in  a  $699,700  general   fund  reduction   to  the                                                            
     Governor's  Amended Request. This has been accomplished  and is                                                            
     reflected  in  the  transaction   sheets  [Available  from  the                                                            
     Division of Legislative Finance 907-465-3795].                                                                             
   · The first handout "Agency Totals - FY 04 Operating Budget -                                                                
     Senate  Structure"   shows  a summary   of the  subcommittee's                                                             
     recommendation  [Available  from  the Division  of Legislative                                                             
     Finance 907-465-3795].                                                                                                     
   · First is a $30,000 reduction in contractual expenses from the                                                              
     Highways   and  Aviation  BRU.   This  money  was  a   one-time                                                            
     appropriation   in  the  FY 03  Management   Plan  intended  to                                                            
     increase  the number  of signs reminding  slow drivers  to pull                                                            
     over  so  the congested  traffic  behind  them can  pass.  This                                                            
     reduction was recommended in the House subcommittee.                                                                       
   · Second, the subcommittee recommends a $699,700 reduction in                                                                
     General  Funds  and  increase  the  CIP  [Capital  Improvement                                                             
     Projects]  by the same  amount which will  be reflected  in the                                                            
     Department's indirect cost allocation plan (ICAP).                                                                         
          ΠIt has come to my attention that the Department has                                                                 
             elected to charge rates lower than what is permissible                                                             
             by the Federal Highway Administration for their ICAP.                                                              
          ΠThis subcommittee believes that the Department should                                                               
             take full advantage of federal CIP receipts that can                                                               
             be used for overhead costs in order to relieve some                                                                
             pressure from the general fund.                                                                                    
   · This subcommittee report fully funds the Governor's request                                                                
     for FY 04 and supports  his commitment to continue an increased                                                            
     level  of highway  and airport  maintenance.  This report  also                                                            
     reflects   the  subcommittee's   support  for  the   Governor's                                                            
     reorganization of the Department.                                                                                          
Co-Chair Wilken overviewed the talking points.                                                                                  
Co-Chair Wilken  commented he was  impressed at the willingness  and                                                            
cooperation  of Department  personnel  to achieve  efficiencies  and                                                            
utilize   funds   for   maintenance   and   operations,   which   he                                                            
characterized as priorities.  He stated this Department is receiving                                                            
"intense  scrutiny" by the  commissioner and  that further  advances                                                            
would be reflected in the FY 05 operating budget request.                                                                       
Senator  Taylor asked  about the  subcommittee's  recommendation  to                                                            
fund  the  Marine  Highway System  $579,000  less  than  the  amount                                                            
approved by the House of Representatives.                                                                                       
[Note tape interruption]                                                                                                        
Senator Taylor agreed to discuss the matter at a later time.                                                                    
Senator Olson  asked if  the subcommittee  discussed the delays  and                                                            
budget overruns  of the  improvements to  the Ted Stevens  Anchorage                                                            
International Airport.                                                                                                          
Co-Chair  Wilken  responded  the issue  was  not addressed  in  this                                                            
budget, as it is "a whole different subject".                                                                                   
Department of Corrections                                                                                                     
Co-Chair Green, Chair                                                                                                           
Senator Scott Ogan                                                                                                              
Senator Gary Stevens                                                                                                            
Senator Gretchen Guess                                                                                                          
     The   Senate  Finance   subcommittee   on  the  Department   of                                                            
     Corrections   has  considered  the  Governor's   FY  04  budget                                                            
     proposal.  Administrative  Order  No.  207  was issued  by  the                                                            
     Governor  directing the Department  to "streamline operations,                                                             
     realize efficiencies, contain costs and improve functions."                                                                
     In response,  the Department  consolidated its operations  into                                                            
     three  divisions:   Institution,  Probation   and  Parole,  and                                                            
     Administrative  Services. The  Department is in the  process of                                                            
     consolidating functions  at both the management and operational                                                            
     levels to  save and redirect funding for front  line positions.                                                            
     Legislation  is making its way through the House  and Senate to                                                            
     save State  general funds through  the Correctional  Industries                                                            
     Program  and the concept  of medical  parole for prisoners  who                                                            
     are  terminally ill  and incapable  of presenting  a danger  to                                                            
     The  Governor's FY  04 budget  proposal  reduces State  general                                                            
     fund  expenditures   by  $6.5  million,  and  reduces   overall                                                            
     spending by $2.8 million.                                                                                                  
     The  subcommittee  recommends  the  Governor's proposed  FY  04                                                            
     budget with the following  structural change: creation of a new                                                            
     component,  the Anchorage Correctional  Complex, that  combines                                                            
     the  Anchorage Jail  and the Cook  Inlet Correctional  Facility                                                            
     into   one  management  unit.   This  change  is  outlined   in                                                            
     Administrative  Order  No.  207, and  does  not result  in  any                                                            
     change in FY 04 funding levels.                                                                                            
     Governor's Amended                                                                                                         
          General Purpose       $148,239,900                                                                                    
          Federal                  3,451,100                                                                                    
          Other                   26,180,500                                                                                    
          Total FY 04            177,925,500                                                                                    
     Changes                             $0.0                                                                                   
     Subcommittee Recommendation                                                                                                
          General Purpose       $148,239,900                                                                                    
          Federal                  3,451,100                                                                                    
          Other                   26,180,500                                                                                    
          Total FY 04            177,925,500                                                                                    
Co-Chair Green overviewed the subcommittee report.                                                                              
Co-Chair Green  furthered that additional funds from  permanent fund                                                            
dividend garnishments would  be utilized to fund this Department and                                                            
that reductions  would be made to some inmate programs.  She pointed                                                            
out the Governor's  proposed budget includes a one-half  percent, or                                                            
$800,000, reduction "across the board".                                                                                         
Department of Health and Social Services                                                                                      
Co-Chair Green, Chair                                                                                                           
Senator Ben Stevens, Chair                                                                                                      
Senator Ralph Seekins                                                                                                           
Senator Hollis French                                                                                                           
     The  Senate Finance  subcommittee on  the Department of  Health                                                            
     and Social  Services held meetings  with the Department  during                                                            
     the last  two weeks to discuss the agency's programs  and FY 04                                                            
     budget  proposal.  Major  changes  have  been proposed  by  the                                                            
     Governor that include:                                                                                                     
     · Internal reorganization and consolidation of functions.                                                                  
     ·  Creation  of a  department-wide  program review  office  for                                                            
        program efficiencies, coordination, and integrity.                                                                      
     ·  Decentralized  administration  of  the Medicaid  Program  of                                                            
        four areas of care:                                                                                                     
          o Children's Services                                                                                                 
          o Behavioral Health Services                                                                                          
          o Seniors and Disabilities Services                                                                                   
          o Health Care Services                                                                                                
     ·  Senior  and  children's  programs  transferred   from  other                                                            
          o Longevity Programs and Boards, Pioneers' Home, and                                                                  
             Senior Services from the Department of Administration                                                              
          o Child Care Assistance from the Department of Education                                                              
             and Early Development                                                                                              
     · Elimination of the Longevity Bonus Grants program.                                                                       
     ·  General fund  reductions through  cost containment  measures                                                            
        and reduced services:                                                                                                   
          o Program reductions through legislation (SB 109, SB
             117, SB 123, SB 124)                                                                                               
          o Medicaid cost containment and ProShare refinancing                                                                  
          o Reductions to lower priority grants and advocacy                                                                    
     ·  Full funding increases  in formula driven programs to reduce                                                            
        supplemental requests.                                                                                                  
     The  subcommittee  has  accepted  the  Governor's  recommended                                                             
     changes  outlined above.  The Department  is making  tremendous                                                            
     strides toward improving  the quality and delivery of services,                                                            
     maximizing existing  resources, and ensuring accountability and                                                            
     integrity in its programs.                                                                                                 
     In addition  to the Governor's baseline FY 04  budget proposal,                                                            
     the  subcommittee   recommends  the  changes  detailed  in  the                                                            
     following  pages [available  from the  Division of Legislative                                                             
     Finance 907-465-3795].   These changes net a  decrease of State                                                            
     general fund expenditures  of $7.4 million below the Governor's                                                            
     Governor's Amended                                                                                                         
          General Purpose       $552,961,100                                                                                    
          Federal                897,103,000                                                                                    
          Other                  221,994,000                                                                                    
          Total FY 04          1,672,058,100                                                                                    
          General Purpose        ($7,394,400)                                                                                   
          Federal                         0.0                                                                                   
          Other                   (8,300,800)                                                                                   
          Total FY 04            (15,695,200)                                                                                   
     Subcommittee Recommendations                                                                                               
          General Purpose       $545,566,700                                                                                    
          Federal                897,103,000                                                                                    
          Other                  213,693,200                                                                                    
          Total FY 04          1,656,362,900                                                                                    
Co-Chair  Green   remarked  that   in  addition  to  accepting   the                                                            
Governor's proposal, the  subcommittee recommends the "reprogramming                                                            
of alcohol tax and tobacco  settlement funds." She furthered that at                                                            
the request of the Alaska  Mental Health Trust Authority (MHTA), the                                                            
subcommittee  also  recommends   elimination  of  two  programs  and                                                            
changes to the State's comprehensive mental health programs.                                                                    
Co-Chair Green  commented on the many  interest groups and  affected                                                            
parties  participating  in this  budgetary  process,  some of  which                                                            
contribute  funds.  She  told  of  efforts  made  to  satisfy  these                                                            
entities and ensure feasibility for the Department.                                                                             
Co-Chair  Green  detailed reductions  to  the  Children's'  Services                                                            
Budget  Request Unit (BRU)  of $1.5  million and  the change  to the                                                            
Foster  Care,  Special Needs  base  rate,  due to  over-funding  and                                                            
nonuse of funds.  She also noted a $500,000 appropriation  for court                                                            
orders  and reunification  has  historically  been  included in  the                                                            
budget appropriation,  although this item would be  funded through a                                                            
supplemental  appropriation,  as actual  expenditures  could not  be                                                            
anticipated.  She  pointed  out  this  is  similar  to  the  funding                                                            
procedure for judgments and miscellaneous claims.                                                                               
Co-Chair Green explained  that the subcommittee recommends utilizing                                                            
alcohol  tax revenues to  fund existing  behavioral health  programs                                                            
within Medicaid  and utilizing tobacco  settlement receipts  to fund                                                            
treatment of tobacco  related illnesses. She added  that the tobacco                                                            
prevention and  control program would no longer be  partially funded                                                            
with general funds  and that overall funding would  be reduced to FY                                                            
02   appropriation    amounts   according   to   the   subcommittee                                                             
Co-Chair  Green  spoke  to  the  subcommittee  recommendations   for                                                            
incremental  increases   to grant  programs   including  the  Infant                                                            
Learning  program grants, and  of efforts to  achieve a standard  to                                                            
reach all  at-risk children  and those  demonstrating developmental                                                             
disabilities or  delays, similar to the federal standard.  She added                                                            
that the subcommittee recommends the programs be needs based.                                                                   
Co-Chair Green relayed  that the subcommittee focus on the community                                                            
health grants  has been to direct  services to individuals  based on                                                            
priority  and  that less  funds  would be  expended  for  non-direct                                                            
Co-Chair Green  then informed of the  subcommittee's recommendation                                                             
to reduce the  Department's budget by $490,000 with  the intent that                                                            
the reduction  would be  distributed throughout  personal  services,                                                            
travel expenses and contractual services.                                                                                       
Co-Chair  Green explained  the proposed elimination  of the  Balloon                                                            
Project, noting  that the three-year pilot project  was extended two                                                            
more  years.  She  assured  the  efforts  would  continue  with  the                                                            
transfer of front  line social worker positions and  the creation of                                                            
an Adoption  Placement Legal  Services component.  She stressed  the                                                            
importance  of  funding  the legal  expenses  involved  in  adoption                                                            
Co-Chair  Green  stated  that  the  Healthy   Families  program  had                                                            
previously  been funded  utilizing  Temporary Assistance  for  Needy                                                            
Families (TANF)  funds, which are no longer available.  However, she                                                            
pointed out the  subcommittee recommends that the  Better Beginnings                                                            
portion  of  the  program  be  transferred  to  Children's   Service                                                            
Management with funding "earmarked" by US Senator Ted Stevens.                                                                  
Co-Chair Green relayed  that the subcommittee and the MHTA addressed                                                            
the  Community  Health,  Alaska  Psychiatric   Institute  (API)  and                                                            
recommended funding the  "single point of entry" program, as well as                                                            
"minor changes" to accommodate those needs.                                                                                     
Co-Chair  Wilken understood  the  subcommittee  recommends  reducing                                                            
general fund funding to  the $4.9 million infant learning program by                                                            
$250,000. He calculated  this would be approximately five percent of                                                            
the total  expenditure.  He also  noted subcommittee  guidelines  on                                                            
delivery of the services in a more efficient manner.                                                                            
Co-Chair Green affirmed.                                                                                                        
Co-Chair  Wilken next  clarified  that the  subcommittee  recommends                                                            
elimination  of the  $158,000  general  fund component  for  Tobacco                                                            
Prevention  and Control item, and  transferring the remaining  $2.04                                                            
million of  tobacco settlement funds  amongst other tobacco  related                                                            
Co-Chair Green affirmed  the tobacco settlement receipts would still                                                            
be used to  fund tobacco-related services,  specifically  to pay the                                                            
Medicaid portion  of the expenses for those who suffer  from alcohol                                                            
or tobacco-related diseases and illnesses.                                                                                      
Co-Chair  Green   furthered  that   the  creation  of  the   Tobacco                                                            
Prevention and  Control program required a certain  level of funding                                                            
and  that   the  program   is  now  operational,   with   television                                                            
commercials completed and brochures printed, etc.                                                                               
Senator Bunde  cautioned that the  program is currently working  and                                                            
should not be changed so that it no longer works.                                                                               
Co-Chair  Green  assured that  the  program  would receive  over  $2                                                            
million  under the  subcommittee  proposal,  which  she surmised  is                                                            
adequate to maintain operations.                                                                                                
Senator  Hoffman continued  to support the  Longevity Bonus  program                                                            
and noted that  the subcommittee recommends  completely eliminating                                                             
the funding.  He asserted  that  the Legislature  made a  commitment                                                            
regarding this program.                                                                                                         
Senator Hoffman  next addressed the Balloon Project,  which has been                                                            
very successful,  with  90 percent  achievement.  He asked with  the                                                            
transfer  of  the  two  social  worker  positions   if  the  primary                                                            
functions  of  those   positions  would  continue   to  address  the                                                            
fundamentals of the program.                                                                                                    
Co-Chair  Green  indicated  this is  her  intent.  She told  of  the                                                            
expectation that as the  number of children in foster care "left the                                                            
system" through  adoption, the workload of this program  would level                                                            
off.  She  requested  further  detail  from   the Department   about                                                            
protecting the integrity of the project.                                                                                        
JANET  CLARKE,  Director,   Division  of  Administrative   Services,                                                            
Department of  Health and Social Services, affirmed  the intent that                                                            
the positions  would remain focused  on the Balloon Project  and not                                                            
become assigned to other functions.                                                                                             
Senator  Hoffman  shared  Senator  Bunde's  concerns  regarding  the                                                            
appropriation  of tobacco settlement  funds for uses other  than the                                                            
Tobacco Prevention and Control program.                                                                                         
Ms.  Clarke   pointed  out   the  adjustment   recommended   by  the                                                            
subcommittee is not consistent  with Governor's proposed budget. She                                                            
expressed disappointment  with the  proposed transfer of  the funds,                                                            
although  understood  the  budget  constrains   and  recognized  the                                                            
relationship  between the  high Medicaid costs  of treating  tobacco                                                            
related illnesses.                                                                                                              
Office of the Governor                                                                                                        
Co-Chair Green, Chair                                                                                                           
Co-Chair Wilken                                                                                                                 
Senator Gene Therriault                                                                                                         
Senator John Cowdery                                                                                                            
Senator Donny Olson                                                                                                             
                Governor's Office FY 04 Operating Budget                                                                        
                      Subcommittee Recommendations                                                                              
     The Senate Finance  subcommittee on the Governor's Office FY 04                                                            
     operating   budget   denied  the   request   for  a   statewide                                                            
     unallocated  reduction  of $2,000,000,  putting the  Governor's                                                            
     Office FY 04 authorization  at $14,455,900 in general funds and                                                            
     $14,679,500 in total.                                                                                                      
     With  the   exception  of  a  general  fund  increase   to  the                                                            
     Governor's  Contingency  Fund for unexpected  situations,  this                                                            
     recommendation   is primarily  a  maintenance  budget  for  the                                                            
     Governor's  Office.  After  adjustments  are made  for  program                                                            
     transfers   within   the  Governor's   Office   and  to   other                                                            
     departments,  the  result is  the FY  03 management  plan  plus                                                            
     increases  necessary to pay higher  health insurance  premiums,                                                            
     an  increase  in interagency  receipts  for  Denali  Commission                                                            
     staff,  and federal receipts  for the Human Rights Commission.                                                             
     The  FY  04  Governor's  Office  budget  request  reflects  the                                                            
     following organizational changes:                                                                                          
     ·  Primary   responsibilities    of   the   Equal    Employment                                                            
        Opportunity Office are transferred to the Department of                                                                 
        Administration, Division of Personnel.                                                                                  
     ·  Responsibilities    of   the   Division   of   Governmental                                                             
        Coordination and the Seismic Hazards Safety Commission are                                                              
        transferred to the Department of Natural Resources.                                                                     
     ·  Savings  from this  reorganization  are transferred  to  the                                                            
        Office of Management and Budget to support new audit                                                                    
     ·  The Division  of Elections  is assuming  responsibility  for                                                            
        APOC [Alaska Public  Offices Commission] reporting  provided                                                            
        SB  119 /  HB  157 passes.  If  legislation  does  no  pass,                                                            
        funding and positions  will remain within  the Department of                                                            
Co-Chair Green read the subcommittee report into the record.                                                                    
Alaska Court System                                                                                                           
Co-Chair Green, Chair                                                                                                           
Senator John Cowdery                                                                                                            
Senator Tom Wagoner                                                                                                             
Senator Hollis French                                                                                                           
     The Senate  Finance Subcommittee recommendations  for the Court                                                            
     System's  FY 04 operating budget result in an  operating budget                                                            
     for the  Court System of $55,998,400,  of which $54,845,500  is                                                            
     general funds.  Below is a summary of the increments  approved.                                                            
     The following requests  for general fund increases are approved                                                            
     under this proposal:                                                                                                       
        · $75  per month per employee  increase in health  insurance                                                            
          premiums                                          $598,800                                                            
        · Wide-area    network   fee  increase    (data   processing                                                            
          chargeback)                                       $271,500                                                            
        · Courtroom  security for Juneau, Kenai and Palmer  $230,000                                                            
        · Third District - Judge and Court Clerk            $180,100                                                            
        · Second  District - Kotzebue  Court Relocations    $128,000                                                            
        · Second District - Rent increase in Unalakleet        $6,100                                                           
        · Fourth District - Bethel Courtroom addition          $45,000                                                          
     Requests  for increments in other funding sources  are approved                                                            
     as follows:                                                                                                                
        · Authority  to Receive and  Expend Non-Federal Grant  Funds                                                            
          (Statutory Designated Program Receipts)            $10,000                                                            
        · Court-Coordinated  Resources  Project (MHTAAR)      $8,200                                                            
        · Domestic  Violence  Case  Handling  Improvements  (Federal                                                            
          Receipts)                                         $200,000                                                            
        · Family  Law  Self-Help  Center Facilitator  (Inter-Agency                                                             
          Receipts - federal funds from the Child Support                                                                       
          Enforcement Division, [Department of Revenue])  $45,600                                                               
     These   increments  represent   the   court  system's   highest                                                            
     priorities  and  allow the  courts  to improve  efficiency  and                                                            
     security of judicial proceedings.                                                                                          
Co-Chair Green read the subcommittee report into the record. She                                                                
noted the increase over the FY 02 budget would allow the Alaska                                                                 
Court System to operate at a maintenance level.                                                                                 
Co-Chair  Green   relayed  that  after  hearing  testimony   on  the                                                            
conditions  of  some  of  the  courtrooms,  the  subcommittee   felt                                                            
compelled to recommend  funding for the aforementioned improvements.                                                            
Co-Chair Green informed  that the subcommittee recommendation denied                                                            
a requested $1.15 million in increments.                                                                                        
Senator  Hoffman  pointed  out that  funding  for  health  insurance                                                            
increases is not included  in the subcommittees' recommendations for                                                            
other departments and asked the intent of the Committee.                                                                        
Co-Chair Wilken clarified  that funding for this item is included in                                                            
the proposals of the three budget subcommittees that he chairs.                                                                 
Co-Chair  Green  was  unsure  if  funding  was  included  for  every                                                            
department and assured the matter would be addressed.                                                                           
Senator  Hoffman stated  that the  Department  of Natural  Resources                                                            
budget subcommittee  recommendation  does not  include such  funding                                                            
because  the chair of  that subcommittee,  Senator Bunde,  indicated                                                            
the full Committee would address the matter.                                                                                    
Co-Chair Green, Chair                                                                                                           
Co-Chair Wilken                                                                                                                 
Senator Gene Therriault                                                                                                         
Senator John Cowdery                                                                                                            
Senator Lyman Hoffman                                                                                                           
     The  Senate   Finance  subcommittee   recommendation   for  the                                                            
     Legislature's   FY  04 budget  totals   $38,969,400,  of  which                                                            
     $38,043,800  is general  funds. The  recommendation reflects  a                                                            
     total reduction of  $622,100 from the FY 03 management plan and                                                            
     is  $1,050,600 below  the Governor's  amended  request for  the                                                            
     This  recommendation   provides  funding  for  the   individual                                                            
     components  at the  amounts requested  by Legislative  Affairs,                                                            
     Legislative   Audit   and   Legislative   Finance.   With   two                                                            
     exceptions,  it  is the  same budget  as adopted  by the  House                                                            
     1) The  Office of  Victim's  Rights  requested an  increase  of                                                            
        $35,300  in  PFD  [Permanent  Fund  Dividend]  funds  and  a                                                            
        $14,800 fund source  change from general funds  to PFD funds                                                            
        to cover increased  costs for FY 04. The House  approved the                                                            
        increase and fund  transfer and reduced PFD  funds available                                                            
        for  the Department   of Corrections.   This recommendation                                                             
        approves the requested  increase, but funds  it with general                                                            
        funds rather than PFD funds.                                                                                            
     2) The House authorized  an FY 04 allocation  of $1,557,800 for                                                            
        Committee Expenses of the  Budget and Audit Committee. After                                                            
        consultation   with  the  chair   of  that  committee,   the                                                            
        contractual line of this  allocation was reduced by $100,000                                                            
        in the Senate recommendation.                                                                                           
Co-Chair Green read the subcommittee report into the record.                                                                    
Department of Fish and Game                                                                                                   
Senator Ben Stevens, Chair                                                                                                      
Senator Scott Ogan                                                                                                              
Senator Tom Wagoner                                                                                                             
Senator Kim Elton                                                                                                               
                      Senate Finance Subcommittee                                                                               
                   Department of Fish and Game Budget                                                                           
     The  Senate  Finance  Fish  and  Game  Budget  Subcommittee  is                                                            
     funding   the  Department's   FY  04  budget  request   at  the                                                            
     Governor's   level  for  general   funds  with  the   following                                                            
     ·  At the Department's request,  the subcommittee recommends an                                                            
        increment  of $500,000  federal  receipt authority  for  the                                                            
        implementation of the US/Canada Yukon River Treaty.                                                                     
     ·  Transfer   $800,000  of   general  funds   from  the   State                                                            
        Subsistence  component   to  various  Commercial   Fisheries                                                            
        Regional components.                                                                                                    
     ·  Increase  fish and  game funds  by $190,000:  $95,000 to  be                                                            
        allocated to the  Sport Fisheries appropriation  and $95,000                                                            
        to the Wildlife Conservation appropriation.                                                                             
     ·  Sport Fisheries  Habitat  requested $264,000  general  funds                                                            
        resulting from  the transfer of  habitat functions  from the                                                            
        Department   of   Natural   Resources.   The   subcommittee                                                             
        recognizes this  general fund transfer is  part of an agency                                                            
        reorganization  cost and expects this to be  a one-time need                                                            
        of general fund.                                                                                                        
Senator B. Stevens overviewed the information contained in the                                                                  
budget subcommittee report.                                                                                                     
Senator B. Stevens noted the subcommittee recommends the Division                                                               
of Subsistence be funded at the FY 03 level of $224,000 general                                                                 
funds. He  told of a temporary  transfer of  some Division  of Sport                                                            
Fish duties  to the Division  of Habitat,  until habitat  biologists                                                            
could be found positions within the Division of Sport Fish.                                                                     
Senator  Hoffman  referenced $35  million  for disaster  relief  and                                                            
asked how  the State would  receive and expend  those funds,  as the                                                            
Legislature  has  the  power  of  appropriation  regardless  of  the                                                            
Governor's intention.                                                                                                           
Senator B. Stevens understood  the Governor was preparing a proposal                                                            
for the use of these funds.                                                                                                     
Senator  Hoffman  asked if  separate  legislation would  be  enacted                                                            
during this session  or whether the appropriation  would be included                                                            
in the operating budget.                                                                                                        
Senator B. Stevens was unsure of the process.                                                                                   
Senator Hoffman stressed  the importance of beginning implementation                                                            
before  the fishing  season begins.  He encouraged  the Legislature                                                             
take action before the session concludes.                                                                                       
Senator  Taylor  asked  the  funding  source  of  the  Crystal  Lake                                                            
Hatchery appropriation of $192,700.                                                                                             
Senator B.  Stevens recalled discussion  on the matter and  deferred                                                            
to the Department.                                                                                                              
KEVIN  BROOKS,  Director,   Division  of  Administrative   Services,                                                            
Department  of  Fish  and Game,  testified  that  the  Crystal  Lake                                                            
Hatchery component was  transferred to the Sport fish BRU. He stated                                                            
that  the $192,000  was "tied  up in  a contract  with the  Southern                                                            
Southeast Aquaculture  Association" and is a "permanent  part of the                                                            
Senator Taylor understood this to be the case.                                                                                  
SFC 03 # 46, Side B 09:49 AM                                                                                                    
Senator Taylor  asked if the Department  intended to utilize  salmon                                                            
enhancement funds  for Hatchery operations, as has  been done in the                                                            
Mr. Brooks responded that  fish and game funds would be used for the                                                            
Department's  portion of  the operational  expenses. He noted  these                                                            
funds are garnered  from the sale  of fishing and hunting  licenses.                                                            
Senator  Taylor  asked if  the  appropriation  for the  Hatchery  is                                                            
specifically  revenue  from  the king  salmon  stamps  purchased  in                                                            
conjunction with fishing licenses.                                                                                              
Mr. Brooks  replied that  a combination of  both licenses and  stamp                                                            
sale revenues would be used.                                                                                                    
Senator  Taylor  recalled  negotiations  at the  time  the  Southern                                                            
Southeast Aquaculture Association  assumed operation of the Hatchery                                                            
and other  facilities regarding  debt forgiveness,  interest  levels                                                            
and other issues to ensure  adequate cash flow. He asked if a "final                                                            
solution" could be found for this "on-going difficulty".                                                                        
Mr.  Brooks  responded  that under  the  contractual  agreement  the                                                            
Association  continues to operate  the Hatchery. He stated  he would                                                            
need to research the use of salmon enhancement funds.                                                                           
Senator Taylor expressed this would provide a solution.                                                                         
Senator Hoffman  asked the implication  of the transfer of  $800,000                                                            
from  the Division  of Subsistence  to  the Division  of  Commercial                                                            
Mr. Brooks  replied the situation  would be the same as encountered                                                             
the prior  year, which  "poses  challenges". He  qualified that  the                                                            
Department  has yet to determine  a course  of action. He noted  the                                                            
House of Representatives approved funding for this.                                                                             
Senator  Hoffman  asked how  the $800,000  would  have  be spent  if                                                            
Mr. Brooks  answered that these funds  were expended in prior  years                                                            
for subsistence  harvest assessments  and to leverage federal  funds                                                            
from the Office of Subsistence Management.                                                                                      
Department of Public Safety                                                                                                   
Senator Ben Stevens, Chair                                                                                                      
Senator Gene Therriault                                                                                                         
Senator Ralph Seekins                                                                                                           
Senator Gretchen Guess                                                                                                          
                      Senate Finance Subcommittee                                                                               
                   Department of Public Safety Budget                                                                           
     The Senate Public Safety Budget subcommittee is funding the                                                                
     department's budget at the Governor's level with the following                                                             
     · Transfer of $246,000 general funds, with the agencies                                                                    
        approval,  for   moving  Victim's   For  Justice   from  the                                                            
        Department of Public Safety to the Department of Law.                                                                   
     · Fund source change of $431,600 from general funds to                                                                     
        receipt supported services for a net zero.                                                                              
     · Increase inter-agency receipts of $280,000 for Fish and                                                                  
        Wildlife  Protection   appropriation,   Marine  Enforcement                                                             
        component, to receive funds  from the Department of Fish and                                                            
        Game to  support  Western Alaska  law enforcement  by  fully                                                            
        funding the Woldstad and Stimson patrol vessels.                                                                        
     · Deny the department's request to move $431,600 general                                                                   
        funds  out of  AST [Alaska  State  Troopers]  Detachment  to                                                            
        fifteen   components    agency-wide   to   fund    the   ACS                                                            
        telecommunication  and computer  services billing  contract.                                                            
        The subcommittee  recommends funding  these components  with                                                            
        general fund increments  that were made available  through a                                                            
        receipt supported services  carry-forward in Fire Prevention                                                            
        (increase of  $231,600) and Alaska  Criminal Records  and ID                                                            
        (increase of $200,000).                                                                                                 
     · Recommend a technical, line item transfer under the Alaska                                                               
        Public Safety  Information  Network by  moving $47,700  from                                                            
        contractual services  to miscellaneous line  item to correct                                                            
        the Governor's request.                                                                                                 
Senator B. Stevens read  the subcommittee report into the record. He                                                            
pointed  out the  subcommittee  recommendation  is $667,000  general                                                            
fund less than  the amount requested  by the Governor, although  the                                                            
total budget  would be a higher amount  than that in the  Governor's                                                            
proposal. He attributed this to fund source transfers.                                                                          
Senator  Hoffman  requested  an  outline  of how  the  Woldstad  and                                                            
Stimson patrol vessels operations would be funded.                                                                              
Senator B. Stevens replied  that an increase of $280,000 interagency                                                            
receipts in accordance  with an agreement between  the Department of                                                            
Fish and  Game and the  Department of Public  Safety to utilize  the                                                            
patrol vessels for common missions.                                                                                             
Senator Hoffman clarified  that funds would be appropriated for both                                                            
vessels rather than just the Stimson.                                                                                           
Senator  B. Stevens affirmed  and explained  that the appropriation                                                             
would provide adequate  funding to continue operations as done in FY                                                            
Senator Hoffman  understood additional  capital project funds  would                                                            
be required to operate the Woldstad.                                                                                            
Senator  B. Stevens  affirmed  and commented  that  if funds  become                                                            
available  to  refurbish  the Woldstad,  the  appropriation  in  the                                                            
operating budget would  be utilized to operate the completed vessel.                                                            
KAREN MORGAN, Director,  Department of Administration, Department of                                                            
Public  Safety, affirmed  Senator  Hoffman that  additional  capital                                                            
funding  is  required  to  return  the  Woldstad   to  service.  She                                                            
indicated  the  Department  and the  budget  subcommittee  has  been                                                            
addressing the matter.                                                                                                          
Senator Taylor  referenced the proposed  $127,000 funding  reduction                                                            
for aircraft and  opined that the budgeting process  is a "crude way                                                            
to  approach  what   should  be  a  policy  decision   made  by  the                                                            
Legislature" regarding  whether search and rescue  activities should                                                            
be undertaken  by  the Department  or by  the Civil  Air Patrol  and                                                            
volunteers,  as  done  in  the  past.  He  relayed  complaints  that                                                            
volunteers  are not dispatched and  instead an Alaska State  Trooper                                                            
is paid overtime wages to conduct a mission.                                                                                    
Senator Taylor  expressed concern with the current  policy that only                                                            
allows  Troopers  to fly  Department-owned  aircraft  and  only  for                                                            
Division  of Alaska  State Troopers  (AST) business.  He  complained                                                            
about  the use  of  AST Complained  about  use  of AST  aircraft  to                                                            
transport   the  Governor,  and  asserted   that  funds   for  these                                                            
activities  should be paid from the  Office of the Governor  budget.                                                            
Senator  Taylor  next spoke  to  the  "quality  of pilots"  and  the                                                            
increased qualification  requirements of private pilots  contracting                                                            
with the Department  of Fish and Game to perform stream  surveys. He                                                            
remarked that  the size of the Department of Public  Safety aircraft                                                            
fleet  has steadily  increased  along with  the use  of that  fleet;                                                            
however  the experience  of the  pilots  is limited.   He  suggested                                                            
private  sector  pilots  with more  experience  should  be  utilized                                                            
Senator Taylor relayed  that the Commissioner intends the Department                                                            
to  have the  "finest  fleet  in the  world."  While he  agreed  the                                                            
Department  should have the best possible  equipment, he  questioned                                                            
the  need  for 46  fixed  wing  aircraft  and  six  helicopters.  He                                                            
remarked that  review of flight logs found that the  majority of the                                                            
use of Department aircraft has been for training purposes.                                                                      
Senator Olson  understood the need for Troopers to  access villages,                                                            
given  the  limited  number  of  personnel   in  comparison  to  the                                                            
jurisdiction. However,  he expressed concern with the general policy                                                            
regarding  the  significant  expansion  of the  aircraft  fleet  and                                                            
specifically how  it would be implemented. He recalled  the previous                                                            
year's  intent  to   replace  some  aircraft  with  newly   acquired                                                            
secondhand aircraft,  which did not occur. He cautioned  against the                                                            
need to house and maintain a large aircraft in the future.                                                                      
Senator  Olson also  disagreed with  the changes  to the search  and                                                            
rescue procedures.  While he understood the need for  Troopers to be                                                            
involved in  these activities, he  surmised the AST should  focus on                                                            
coordination efforts.                                                                                                           
Department of Labor and Workforce Development                                                                                 
Senator Con Bunde, Chair                                                                                                        
Senator Fred Dyson                                                                                                              
Senator Ralph Seekins                                                                                                           
Senator Bettye Davis                                                                                                            
            Senate Finance Subcommittee - Department of Law                                                                     
     The Senate  Finance Subcommittee  has adopted the following  FY                                                            
     04   budget  for  the   Department  of   Labor  and   Workforce                                                            
     Development.   This budget  contains   $10,993,200  in  general                                                            
     funds, $97,029,100  in federal funds, and $45,517,600  in other                                                            
     funds as proposed in the Governor's amended budget.                                                                        
     In this  budget, there are changes  to the Employment  Security                                                            
     appropriation,  which is now  divided into two appropriations.                                                             
     The  first appropriation,  Compensation  and  Safety,  contains                                                            
     programs  for Workers'  Compensation  and  Labor Standards  and                                                            
     Safety.   The  second  appropriation,   Business  Partnership,                                                             
     contains  all  of the  employment,  training  and unemployment                                                             
     insurance   programs.  The  restructuring  of  the   Employment                                                            
     Security appropriations  reflects the funding specific to those                                                            
     programs  and  will  enable   the Department   to  work  toward                                                            
     compliance with the Workforce Investment Act of 1998.                                                                      
     While there  is a general fund reduction to Independent  Living                                                            
     Rehab, the Department  has identified $300,000 in carry-forward                                                            
     federal funds that can be used to help continue services.                                                                  
     The subcommittee  concurs with  the Administration's  effort to                                                            
     increase   efficiency  throughout  State  government   and  the                                                            
     changes   made   through   Administrative    Order   No.   205,                                                            
     Establishing  the  Division  of Business  Partnerships  in  the                                                            
     Department  of Labor and Workforce  Development, are  reflected                                                            
     in this budget.                                                                                                            
      The subcommittee adopted the following intent language.                                                                   
     Compensation and Safety         Alaska Safety Advisory Council                                                             
     The  amount appropriated  by  this appropriation  includes  the                                                            
     unexpended  and unobligated  balance on  June 30, 2003,  of the                                                            
     Department  of Labor and Workforce  Development, Alaska  Safety                                                            
     Advisory Council receipts under AS 18.60.840.                                                                              
Senator Bunde read the subcommittee report into the record.                                                                     
Senator Bunde requested  the Department provide clarification of the                                                            
funding   reductions    proposed   for   the   Independent    Living                                                            
Rehabilitation program.  He understood that approximately $5 million                                                            
would be available to fund the program.                                                                                         
Senator  Olson asked  the  impact on  vocational  training in  rural                                                            
Senator  Bunde predicted  a  positive  impact, indicating  that  the                                                            
Commissioner   is  supportive   of  community   college  and   other                                                            
vocational training.                                                                                                            
ED FISHER,  Deputy Commissioner, Department  of Labor and  Workforce                                                            
Development,  testified  that approximately  $1.5  million would  be                                                            
available for  the Independent Living Rehabilitation  program, under                                                            
the subcommittee's  proposal.  He informed  that approximately  $4.9                                                            
million in  "independent funds  flow around  the Department"  to the                                                            
independent living centers,  which in some cases are "used for other                                                            
Senator  Olson restated  his question  about the  overall effect  on                                                            
vocational training for residents in Rural Alaska.                                                                              
Mr. Fisher  reminded that  the functions  were transferred  from the                                                            
Department of  Education and Early Development to  the Department of                                                            
Labor and Workforce Development.                                                                                                
Senator Olson also was unsure of the funding sources.                                                                           
Mr. Fisher  understood that funding  for these programs was  reduced                                                            
before  the  transfer  occurred,  although  he  did  not  anticipate                                                            
further reductions.                                                                                                             
Senator Olson asked the amount of the reductions.                                                                               
Senator Bunde replied that  the administration grant to the Kotzebue                                                            
Technical  Center would  be reduced  from $1.1 million  in FY  03 to                                                            
$809,000 in FY 04 under the subcommittee's proposal.                                                                            
Senator Olson  asked how same level of services would  be continued.                                                            
Mr. Fisher was  unsure, and suggested operations could  be addressed                                                            
in a different manner.                                                                                                          
Co-Chair Green directed  the witness to provide further information.                                                            
Senator  Hoffman   asked  for  clarification  of  funding   for  the                                                            
Independent  Living and Rehabilitation  program,  pointing out  a 48                                                            
percent reduction  of $763,900.  He wanted  to know the impact  this                                                            
would have on the program.                                                                                                      
Mr. Fisher indicated that  $300,000 federal funds appropriated in FY                                                            
03 would be available for FY 04.                                                                                                
GREG  O'CLARAY,  Commissioner,  Department  of Labor  and  Workforce                                                            
Development,  testified that  the subcommittee  proposes a  $318,000                                                            
reduction to  the program in FY 04.  He stated his intent  to reduce                                                            
general fund funding for the program by $618,000.                                                                               
Senator  Hoffman asked  what services  would no  longer be  provided                                                            
with the lesser funding.                                                                                                        
Mr. O'Claray  shared  that he recently  met with  the Access  Alaska                                                            
organization  and  requested  this information.  He  predicted  that                                                            
fewer participants  would be served.  He detailed two components  of                                                            
the   program,  one   of   which  prepares   individuals   to   live                                                            
independently  and return to work and the other, which  provides 24-                                                            
hour assisted  living care without  a "work plan". He remarked  that                                                            
the second function is  not aligned with the Department of Labor and                                                            
Workforce  Development's  core service  mission. He  shared that  he                                                            
directed  Access  Alaska  to identify  alternate  funding  for  this                                                            
purpose, although the organization expects this to be difficult.                                                                
Co-Chair  Green returned  to  the matter  of funding  for  increased                                                            
employee  health insurance  costs.  She informed  that  the $75  per                                                            
person insurance  fee pertains  to nonunion  personnel and  that the                                                            
full Committee  would address funding for employees  who are members                                                            
of a  bargaining  unit. She  explained  that negotiations  with  the                                                            
bargaining units  were not completed by the subcommittees'  deadline                                                            
to submit budget recommendations.                                                                                               
Department of Law                                                                                                             
Senator Con Bunde, Chair                                                                                                        
Senator Ralph Seekins                                                                                                           
Senator Tom Wagoner                                                                                                             
Senator Kim Elton                                                                                                               
            Senate Finance Subcommittee - Department of Law                                                                     
     The Senate  Finance Subcommittee  has adopted the following  FY                                                            
     04 budget for the  Department of Law. The changes shown in this                                                            
     subcommittee  report reflect changes to the Governor's  amended                                                            
     budget.  This budget  contains  $26,570,800  in general  funds,                                                            
     $495,500 in federal funds, and $18,556,400 in other funds.                                                                 
     The  Victims for Justice  function and  associated funding  was                                                            
     transferred  from the Department  of Public Safety,  Council on                                                            
     Domestic  Violence  and  Sexual Assault  appropriation  to  the                                                            
     Department   of  Law,   Third  Judicial   District:   Anchorage                                                            
     component   in  the  Criminal   Division  appropriation.   This                                                            
     transfer  moves the function and $246,000 general  funds to the                                                            
     Department of Law.                                                                                                         
     This budget also reflects  the Department's reorganization from                                                            
     five  BRUs to  three (Criminal  Division,  Civil Division,  and                                                            
     Administration and Support).                                                                                               
     The subcommittee  concurs with  the Administration's  effort to                                                            
     increase efficiency throughout State government.                                                                           
     The subcommittee  adopted the following language  for the Civil                                                            
     Division - Fair Business Practices.                                                                                        
     The  amount appropriated  by  this appropriation  includes  the                                                            
     unexpended  and  unobligated  balance  on  June  30,  2003,  of                                                            
     designated  program receipts and general fund  program receipts                                                            
     of the Department of Law, fair business practices section.                                                                 
Senator  Bunde read  the subcommittee  report  into  the record.  He                                                            
noted the Governor has  proposed a $700,000 unallocated reduction to                                                            
the Department.  Senator Bunde informed  that an audit was  underway                                                            
to determine the best way to implement this reduction.                                                                          
Senator Taylor asked for clarification of the transfer of funding                                                               
for the Council on Domestic Violence and Sexual Assault from                                                                    
Department of Public Safety to the Department of Law.                                                                           
Co-Chair Green  explained the specific  "pass through" funding  is a                                                            
grant  allocated  to  the  Victims  for  Justice  program  and  this                                                            
transfer is the  request of the Victims for Justice  administration.                                                            
She assured that the Council itself would not be transferred.                                                                   
Senator Bunde  affirmed the Council remains in Department  of Public                                                            
Senator  Hoffman  asked  if  the  number   of  full  time  permanent                                                            
positions within the Department would change.                                                                                   
Senator  Bunde responded  that  the number  of permanent  full  time                                                            
positions  would  be the  same  as that  approved  by  the House  of                                                            
Representatives, which he listed as a decrease of .2 percent.                                                                   
Senator Hoffman asked the number of positions.                                                                                  
Senator  Bunde informed that  the Attorney  General has transferred                                                             
several positions within  the Department and subsequently the number                                                            
of positions was unknown.                                                                                                       
KATHERYN   DAUGHEETTEE,   Director,   Division   of  Administrative                                                             
Services,  Department  of Law,  testified  that  the subcommittee's                                                             
budget recommendation does  not reflect any changes to the number of                                                            
positions   contained  in  the  Governor's   proposed  budget.   She                                                            
reiterated  that  the  Department  is  awaiting  the  results  of  a                                                            
performance review conducted  by the Conference of Western Attorneys                                                            
General to  assist in the  implementation  of the proposed  $700,000                                                            
Department-wide budget reduction.                                                                                               
Department of Natural Resources                                                                                               
Senator Con Bunde, Chair                                                                                                        
Senator Gary Stevens                                                                                                            
Senator Tom Wagoner                                                                                                             
Senator Lyman Hoffman                                                                                                           
                      Senate Finance Subcommittee                                                                               
                    Department of Natural Resources                                                                             
     The Senate  Finance Subcommittee  has adopted the following  FY                                                            
     04 budget for the  Department of Natural Resources. This budget                                                            
     contains  $47,403,000 in general funds, $15,487,500  in federal                                                            
     funds, and $33,100,600  in other funds. The difference from the                                                            
     Governor's amended  budget to the Subcommittee's recommendation                                                            
     is an  increase of $7,363,500  in general funds to be  used for                                                            
     Fire Suppression Activity.                                                                                                 
          In  an effort  to separate  activity  and funding  between                                                            
          fire  preparedness and actual  fire suppression  activity,                                                            
          the  subcommittee's budget  divides Fire Suppression  into                                                            
          two  components - Fire Preparedness  and Fire Suppression                                                             
          There  is an increase of $7,363,500 general funds for Fire                                                            
          Suppression  Activity. This amount was calculated by using                                                            
           a 10-year average of fire suppression costs.                                                                         
          To  keep all of the Fire  Suppression functions  together,                                                            
          the  functions of  the Fire Preparedness  Function  in the                                                            
          Resource   Development   BRU  of  Forest  Management   and                                                            
          Development   has  been   transferred  to  the   new  Fire                                                            
          Suppression Preparedness.                                                                                             
     The Subcommittee  concurs with  the Administration's  effort to                                                            
     increase   efficiency  throughout  State  government   and  the                                                            
     Executive  Orders introduced  by the Governor are reflected  in                                                            
     this budget.                                                                                                               
      The Subcommittee adopted the following intent language.                                                                   
          "The  amount appropriated  by this appropriation  includes                                                            
          the  unexpended and unobligated balance  on June 30, 2003,                                                            
          of the timber receipts account (AS 38.05.100)."                                                                       
Senator Bunde  overviewed the subcommittee report,  pointing out the                                                            
proposed  changes to the  fire suppression  budget is an attempt  to                                                            
align the initial appropriation with actual expenses.                                                                           
Co-Chair  Green approved  of the  proposed accounting  of the  fixed                                                            
costs  associated with  fire suppression  in  the fire preparedness                                                             
component,  and  actual  fire suppression  activities  in  the  fire                                                            
suppression activity component.                                                                                                 
Senator Taylor  asked the amount of  the unexpended and unobligated                                                             
balance of  the timber sales  receipts account  and how those  funds                                                            
would be appropriated.                                                                                                          
NICO  BUS, Administrative   Services Manager  and  Acting  Director,                                                            
Division  of Support  Services,  Department  of  Natural  Resources,                                                            
testified the  amount is approximately $240,000 and  that the timing                                                            
of the receipts  from timber sales is not always known.  He informed                                                            
that FY 03 has  experienced an increase in the timber  sales receipt                                                            
authorization,  and noted that efforts are ongoing  to carry forward                                                            
fewer funds from this account each year.                                                                                        
Senator Taylor asked how the funds were appropriated.                                                                           
Mr. Bus  responded that  the receipts  are utilized  to prepare  for                                                            
future timber sales.                                                                                                            
Co-Chair Green recalled  the Committee held this discussion earlier.                                                            
Senator Taylor agreed,  remarking he wanted to ensure the funds were                                                            
appropriated for future sales as discussed.                                                                                     
Senator Olson  asked about the contract  for aircraft used  for fire                                                            
suppression  activities and  whether the contract  was for  multiple                                                            
Senator Bunde was not familiar with this matter.                                                                                
Mr. Bus informed the terms of the contract are for ten years.                                                                   
Senator  Olson clarified  the  Department  is bound  by contract  to                                                            
employ certain  aircraft that is only  utilized 500 hours  annually.                                                            
He recalled earlier Committee  discussion regarding the use of other                                                            
aircraft, in  which the witness testified  that aircraft  was loaned                                                            
to the  federal government  for use in  fire suppression  activities                                                            
outside of Alaska. Senator  Olson informed that he has since learned                                                            
that a number of aircraft  were not utilized by federal agencies but                                                            
rather remained  in the State. He was concerned about  idle aircraft                                                            
at a time when attempts are underway to reduce spending.                                                                        
Mr. Bus told of  two types of aircraft in question,  one of which is                                                            
loaned to  the federal government  at the  conclusion of the  Alaska                                                            
fire  seasons.  He noted  that  because  the  contract is  a  lease-                                                            
purchase agreement,  equity is built  each year in the aircraft  and                                                            
that  eventual ownership  is  beneficial to  the State  in the  long                                                            
Senator Olson  questioned the benefit  of owning these aircraft  and                                                            
expressed concern with  the accident history of the PC7. He asked if                                                            
the  State  would   be  burdened  with  unsafe  aircraft   once  new                                                            
technology is available.                                                                                                        
Senator Taylor asked the  current funding appropriation for the land                                                            
sales  program and  the anticipated  amount of  land the  Department                                                            
would sell.                                                                                                                     
Mr.  Bus  listed  the total  funding  for  land  disposal  would  be                                                            
approximately  $3 million under the subcommittee recommendation.  He                                                            
noted that currently  most of the available land could  be purchased                                                            
"over the counter"  and via the Internet. He stated  that additional                                                            
land would be  offered during the current and upcoming  fiscal years                                                            
and that he would provide further details.                                                                                      
Senator  Taylor asked the  volume of  land for sale  as well  as the                                                            
amount of land that has been sold.                                                                                              
Mr. Bus would provide the total number of acres.                                                                                
Senator Taylor asked for a comparison with previous years.                                                                      
Mr. Bus responded that  each year the Department has been selling an                                                            
increased amount  of land, pointing  out that the program  began two                                                            
years prior. He commented,  "Our sales are ahead of our projections.                                                            
There is clearly  interest… [and therefore]  this budget  includes a                                                            
$2.5 million transfer."                                                                                                         
SFC 03 # 47, Side A 10:37 AM                                                                                                    
Mr. Bus  continued that the  Department is  optimist that the  goals                                                            
for  selling  more  land would  be  reached  and  subsequently  more                                                            
revenue would be generated from these sales.                                                                                    
Senator Taylor  asked if this is a "receipts program"  and if either                                                            
twice the amount of land  was sold or the land was sold at twice the                                                            
value than anticipated.                                                                                                         
Mr. Bus  affirmed  and noted  most of  the revenue  generated was  a                                                            
result of purchasers  refinancing  their loans and therefore  paying                                                            
off their debt to the State sooner.                                                                                             
Senator Taylor  requested the amount  of acres sold and the  revenue                                                            
received  from these sales.  He relayed  he has  been told that  the                                                            
value of the land  is low and could not be sold; however,  he stated                                                            
the land is  valuable and that people  are "anxious to buy  it".  He                                                            
compared  the potential  revenue  generated  by land  sales to  that                                                            
predicted to be collected from the sale of studded tires.                                                                       
Department of Environmental Conservation                                                                                      
Senator Robin Taylor, Chair                                                                                                     
Senator Scott Ogan                                                                                                              
Senator Lyman Hoffman                                                                                                           
             FY 04 Department of Environmental Conservation                                                                     
                        Operating Budget Closeout                                                                               
                             April 10, 2003                                                                                     
     Department  of  Environmental  Conservation's  FY 04  Operating                                                            
     Budget was  thoroughly reviewed. Each division's  services were                                                            
     reviewed  for purposes  of determining  if  they supported  the                                                            
     Department's   legislated  duties  to  establish   and  enforce                                                            
     predictable  and rational standards  for the control  of water,                                                            
     land, subsurface  land, and air pollutions, and  the regulation                                                            
     of  sanitary  practices  in  the  interest  of  public  health.                                                            
     Alternative   methods   were  considered   for   each  of   the                                                            
     Department's  programs.  It  was determined  that  none of  the                                                            
     alternatives  offered more effective  or efficient delivery  of                                                            
     the programs.                                                                                                              
     The Department's  FY 04 total operating budget  is $52,249,100,                                                            
     which is  $153,000 less than the Department's  FY 03 authorized                                                            
     operating  budget and includes a net reduction  of 13 full time                                                            
     positions.  The total reduction  in State general fund  sources                                                            
     is $733,000 or 6.4 %.                                                                                                      
Senator Taylor read the subcommittee report into record.                                                                        
Senator Taylor qualified  that at the time this report was prepared,                                                            
the status  of other legislation  relating  to the transfer  of food                                                            
safety inspections  from the State to municipalities  was uncertain.                                                            
He understood  the affected  municipalities  were not supportive  of                                                            
the proposed  transfer. He  cautioned that  if the legislation  does                                                            
not pass, funds for these activities would be required.                                                                         
Co-Chair Green  relayed that due to  concerns about the proposal  to                                                            
transfer the  food safety activities,  the enabling legislation  was                                                            
awaiting resolution  of the issues.  Therefore, she recommended  the                                                            
budget should not be dependent upon such transfer.                                                                              
Senator  Taylor  agreed, but  pointed  out  that the  general  funds                                                            
required  for the Department  would  not change,  as the program  is                                                            
funded through fees collected.                                                                                                  
Co-Chair Wilken  referenced the subcommittee's  recommended  general                                                            
fund reduction of $300,000  for laboratory services and asked if the                                                            
services would  be reduced or whether private laboratories  would be                                                            
contracted to conduct the activities.                                                                                           
Senator Taylor assured the workload would not be reduced.                                                                       
MIKE  MAHER,   Director,   Division  of   Administrative   Services,                                                            
Department of Environmental Conservation,                                                                                       
BARBARA TOWN, Budget Services,  Division of Administrative Services,                                                            
Department  of Environmental  Conservation,  introduced  herself  at                                                            
Senator Taylor's request.                                                                                                       
Mr. Maher  anticipated that  a combination  of reduced services  and                                                            
contracting with private laboratories would occur.                                                                              
Senator  Taylor indicated  that  the  laboratory located  in  Juneau                                                            
would  no  longer  be  staffed.  He  commented   that  much  of  the                                                            
activities  conducted  at  this facility  are  "literally  not  core                                                            
function for this Department"  but rather assisting high schools and                                                            
conduction  water studies. He stated  that other functions  would be                                                            
transferred to private facilities.                                                                                              
Co-Chair  Wilken   next  noted  the  proposed  13  percent   funding                                                            
reduction  of  $181,000  to  the air  quality  component  and  asked                                                            
whether this would result in less testing.                                                                                      
Mr. Maher answered  this reduction  represents a "reprioritization"                                                             
within  the Department.  He  read  a statement  into  the record  as                                                            
     While  more study  may be needed  to know if  air toxins  are a                                                            
     problem in  Alaska, existing known air quality  problems are in                                                            
     need of additional  resources. The Department's  [FY] 04 budget                                                            
     proposes using savings  shown by postponing a more rigorous air                                                            
     toxic  initiative  to strengthen  the Department's  ability  to                                                            
     respond  to more pressing air  quality issues, like  the health                                                            
     risks from diesel fuel in rural communities.                                                                               
Senator  Taylor  recalled  questions  arose asking  why  the  diesel                                                            
studies were conducted.                                                                                                         
Mr. Maher  informed  that the Department  sent a  memorandum  to the                                                            
subcommittee responding  to those questions [copy  not provided]. He                                                            
noted that the  questions related to federal funds  requested in the                                                            
FY 04 capital  budget relating to  a study of the impacts  of diesel                                                            
from  highway  traffic.  By  contrast,  he  explained,  this  matter                                                            
relates  to  the  use  of  diesel  generation  activities  in  close                                                            
proximity to homes and schools in rural Alaska.                                                                                 
Senator  Taylor expounded  on the  proposed studies  to measure  the                                                            
impacts of utilizing a  cleaner diesel fuel, which would be required                                                            
for vehicular  use by  the federal  government in  the next  several                                                            
years. He  disagreed that  funds should be  expended in this  manner                                                            
given that the new fuel  would be utilized for all purposes in rural                                                            
communities regardless  of whether it was designated for vehicles or                                                            
for generators. He predicted the air quality would improve.                                                                     
Mr. Maher stated he would provide an additional copy of the                                                                     
memorandum to the subcommittee chair.                                                                                           

Document Name Date/Time Subjects