Legislature(2009 - 2010)HOUSE FINANCE 519
04/07/2009 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB114 | |
| HB199 | |
| HB113 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 114 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 199 | TELECONFERENCED | |
| += | HB 113 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 7, 2009
8:35 a.m.
8:35:51 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 8:35 a.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas, Jr., Vice-Chair
Representative Allan Austerman
Representative Harry Crawford
Representative Anna Fairclough
Representative Les Gara
Representative Mike Kelly
Representative Reggie Joule
Representative Woodie Salmon
MEMBERS ABSENT
Representative Richard Foster
ALSO PRESENT
Representative Jay Ramras, Sponsor; McHugh Pierre, Liaison,
Department of Military and Veterans Affairs; David Teal,
Director, Legislative Finance Division
PRESENT VIA TELECONFERENCE
None
SUMMARY
HB 114 "An Act relating to availability of state
transportation facilities and state-owned or
state-operated transportation modes for delivering
compassionate aid during a disaster emergency."
CSHB 114 (TRA) was REPORTED out of Committee with
a "do pass" recommendation and with zero fiscal
notes by the Department of Military and Veterans
Affairs, the Department of Commerce, the
Department of Community and Economic Development,
the Department of Transportation and Public
Facilities, and the Department of Fish and Game.
HB 199 "An Act making supplemental appropriations and
capital appropriations; amending appropriations;
and providing for an effective date."
CSHB 199 (FIN) was REPORTED out of Committee with
a "do pass" recommendation.
HB 113 "An Act making supplemental appropriations,
capital appropriations, and other appropriations;
amending appropriations; making appropriations 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."
CSHB 113 (FIN) was REPORTED out of Committee with
a "do pass" recommendation.
8:36:12 AM
hb114
HOUSE BILL NO. 114
"An Act relating to availability of state
transportation facilities and state-owned or state-
operated transportation modes for delivering
compassionate aid during a disaster emergency."
REPRESENTATIVE JAY RAMRAS, SPONSOR, explained the history of
the bill. The proposed legislation arose in January when
his office was approached for help with transportation for a
relief effort to the western villages of Alaska. The relief
was organized by faith based and community non-profit groups
in Fairbanks and across the state. The groups raised money,
but over 50 percent of the money would have gone toward
transportation of the food. He related that HB 114 would
allow the governor to use state transportation modes in
times of need without declaring a disaster.
MCHUGH PIERRE, LIAISON, DEPARTMENT OF MILITARY AND VETERANS
AFFAIRS, explained that the department responds to disasters
and is the lead on the bill. The administration does
support the bill. The fiscal notes show that the agencies
have planned for contingency efforts and are available to
support in times of need.
8:39:08 AM
Co-Chair Stoltze noted that the bill appears to protect
public safety and health. It has four zero fiscal notes.
Co-Chair Hawker MOVED to REPORT CSHB 114 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 114 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with zero fiscal notes by the
Military and Veterans Affairs, the Department of Commerce,
Community and Economic Development, the Department of
Transportation and Public Facilities, and the Department of
Fish and Game.
8:41:18 AM
hb199
HOUSE BILL NO. 199
"An Act making supplemental appropriations and capital
appropriations; amending appropriations; and providing
for an effective date."
Co-Chair Hawker assumed the gavel.
Co-Chair Hawker informed the Committee that they would be
working off of a new Committee Substitute, the S Version.
8:42:33 AM
Co-Chair Stoltze MOVED to ADOPT the CS for HB 199, labeled
26-GH1260\S, Kane, 4/6/09. There being NO OBJECTION, it was
so ordered.
Co-Chair Hawker explained that the non-transportation
stimulus fund bill accepts all federal stimulus funding
pending approval by the governor.
8:44:03 AM
Co-Chair Hawker explained the revisions to the CS for HB
199, Version S:
Revisions to CS for HB 199 Version \E: Non-
Transportation Stimulus Funds Incorporated in the New
CS for HB 199 Version \S
1) Language changes needed to ensure funding will be
available in FY09 and FY10 for operating appropriations
- added in Lapse Section 15 (b).
2) Over Authorization of Stimulus Funding for the
University Research Vessel was removed from the
language section. The total amount of federal stimulus
funding currently available for this project is $116.0
million and is authorized in the CS. The $80million
fund source change from Federal to Federal Stimulus for
the prior year appropriation Section 2. ch. 159, SLA
2004, page 54, line 8 (FY05 Capital Budget) has been
removed. The $80million in Federal authorization
remains.
3) Fund Source Language: (page 18, line 20)
Delete: Federal Economic Stimulus
Add: Federal Stimulus: ARRA 2009
4) Updated Education Temporary Emergency Food Assistance
number in DEED: add $3.5 of federal stimulus funding,
bringing the total allocation to $389.5.
(In numbers, section 1)
5) Language section: directing $20.7 million to the
Capital Income Fund was deleted and new language
directing funding:
Section 13:
from OFFICE OF THE GOVERNOR to Community Revenue
Sharing on a per capita basis to entities that are
eligible to receive Community Revenue Sharing under AS
29.60.850 in FY09.
Co-Chair Hawker noted that a proposed Conceptual Amendment 2
will clean up the language in Section 13.
8:47:46 AM
Co-Chair Hawker discussed the relationship of the Federal
Matching Assistance Percentage (FMAP), the federal share of
Medicaid programs, to the federal stimulus money. There was
an increase in the FMAP rate in the supplemental budget for
FY 09 and the base FMAP increment was included in the FY 10
operating budget. There is a potential for obtaining a
higher FMAP increment than has already been incorporated in
those budgets. If Alaska's unemployment rate exceeds 7.5
percent over a certain base period, the state is eligible
for more money. It appears as if the state's unemployment
rate will exceed that amount shortly. Conceptual Amendment
1 is an open appropriation that says if the state reaches
the benchmark and the FMAP is increased, the state requests
more money for FY 09 and FY 10.
8:49:54 AM
Co-Chair Stoltze added that there is an assumption that most
communities would use the additional $20.7 million for
education. Co-Chair Hawker concurred. The federal stimulus
money can be used for anything; however, any extra money
will probably go toward education. Co-Chair Stoltze
commented that new programs act to save old programs in some
cases.
8:51:07 AM
Representative Gara requested an at-ease.
AT-EASE: 8:51:26 AM
RECONVENED: 8:55:03 AM
Co-Chair Hawker MOVED to ADOPT Conceptual Amendment 1:
New Section - Conditional Language
DEPARTMENT OF HEALTH AND SOCIAL SERVICES. An
appropriation is made from federal economic stimulus
funding for the Federal Matching Assistance Percentage
(FMAP) for Medicaid programs in the amount to be
received for FY09 and FY10 contingent upon state
unemployment rates increasing. General fund
appropriations for the same periods will be reduced in
the amount offset by the additional federal stimulus
funding received.
EXPLANATION:
The Medicaid FMAP rate will likely increase again once
the Unemployment Rate figures come out for March on
April 17th.
Alaska's FMAP rate will increase by another 2.44% if
our unemployment rate is above 7.5% (seasonally
adjusted) for three consecutive months. Since
January's Unemployment rate is 7.8% and February is
8.0%, it is probably that March will be at or higher
than 7.5%.
This could impact both FY09 and FY10 Medicaid budgets.
The impact to FY09 could be relatively small depending
on whether we can claim retroactive to Oct. 1st 2008
(the law is not clear on this point); It is clear that
we can claim the state 4th quarter and all of FY10 at
the higher rate of an additional 2.44% (FY09 likely $5
million? and FY10 approx. $20 million).
Co-Chair Stoltze OBJECTED.
Co-Chair Hawker explained the change to FMAP funding as a
result of an unemployment rate increase.
Co-Chair Stoltze WITHDREW his objection. There being NO
further OBJECTION, Conceptual Amendment 1 was adopted.
8:57:07 AM
Co-Chair Hawker MOVED to ADOPT Conceptual Amendment 2:
Page 18, Line 23, following "2009)"
Add: to be transferred
Page 18, Line 25, following "29.60.879"
Add: during the fiscal year ended June 30, 2009
Page 18, Line 26, following "P.L. 111-5
Delete: for the fiscal year ending June 30, 2011
Page 19, Line 3, following "Sec.1"
Add: and 13
Co-Chair Stoltze OBJECTED.
Co-Chair Hawker summarized that Conceptual Amendment 2
refers to Section 13, which relates to the education
stimulus money. It clarifies the intent for the money to
flow to the governor's office and then to the Department of
Commerce, Community and Economic Development for the per
capita revenue sharing grant program. He emphasized the
words "to be transferred" in the amendment. He explained
line 25 and the statutory reference for revenue sharing
established in the previous legislature. The clarification
addresses the communities that qualify during 2009. He
highlighted the deletion on page 18 and the addition of "and
13" on page 19, which ensures that the revenue sharing
appropriation is distributed in FY 10 for those who
qualified in FY 09.
Co-Chair Stoltze WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
9:00:35 AM
Representative Gara commented that the appropriations may be
accepted without the governor's requesting of the funds. He
thought the federal education money, for example, fell into
this category.
Co-Chair Hawker clarified that this is an appropriation
bill, which is not contingent upon any act of the
governor's. The legislature can appropriate, but not compel
the executive to apply for or spend the funds. The
education component is the exception. The legislature was
empowered in a previous bill to authorize receipt of that
money, around the executive. Now the money must be
appropriated in this bill.
9:03:31 AM
Representative Gara understood that the legislature could
accept the funds, which may or may not be spent by the
governor. He thought that the legislature did not have to
wait for the governor to apply for the funds, according to
federal law. Co-Chair Hawker maintained that the executive
must apply for the various amounts of money. Appropriation
does not trigger the release of the money. Representative
Gara concluded that the legislature was appropriating the
stimulus funds and then asking the governor to apply for
them. Co-Chair Hawker agreed.
9:05:12 AM
Representative Fairclough said there was discussion at a
federal level of a bypass mechanism. Co-Chair Hawker agreed
that the issue had been raised, but at the moment, nothing
has moved.
AT-EASE: 9:06:28 AM
RECONVENE:9:11:42 AM
Representative Gara MOVED to ADOPT Conceptual Amendment 3:
Page 16, Line 30
Delete "does not intend to replace"
Insert after "legislature" "makes no representation
that it will replace"
There being NO OBJECTION, it was so ordered.
9:12:53 AM
Representative Gara questioned page 17, lines 8 and 9, as it
relates to spending the federal education money. He
wondered if the funds could be used to hire teachers. Co-
Chair Hawker reported that it was intent language and it
would allow school districts to spend money according to the
federal stimulus guidelines. The intent of the language was
not to leave schools in a more precarious position after the
money was invested. Representative Gara agreed.
9:14:25 AM
Co-Chair Stoltze MOVED to REPORT CSHB 199 (FIN), as amended,
out of Committee with individual recommendations.
Representative Fairclough OBJECTED. She referred to a town
hall meeting with constituents who were concerned with
indebting future generations with these funds. She said she
understood their concern. She hoped that the legislation
was moving forward with the intent to benefit Alaskans who
will have to continue to pay for this in the future.
Co-Chair Hawker replied that he shared those concerns at the
onset of the stimulus package process. He pointed out that
if Alaska does not use the funding, it will be redistributed
to other states. He noted that Alaska could refuse on
principal. He maintained that it would be responsible of
Alaska to accept the funds.
9:17:33 AM
Representative Fairclough WITHDREW her objection. There
being NO OBJECTION, it was so ordered.
CSHB 199 (FIN) was REPORTED out of Committee with a "do
pass" recommendation.
9:18:48 AM
hb113
HOUSE BILL NO. 113
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; amending
appropriations; making appropriations 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."
Co-Chair Stoltze MOVED to ADOPT the working draft for HB
113, labeled 26-GH1005\P, Kane, 4/6/09.
Co-Chair Hawker OBJECTED for discussion purposes.
9:19:48 AM
Co-Chair Hawker requested information regarding the
decisions made to date on the bill.
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that the Office of Management and Budget (OMB)
went through their supplemental items and House and Senate
staff reviewed the bill in detail with Legislative Finance
staff. At that point a color code system was used to decide
on individual items. He pointed out that the bill is the
fast track supplemental. An assumption is that supplemental
appropriations can be put into the capital bill, so a
rejection during the process simply means there was not full
agreement. The four Senate and House Finance co-chairs then
reviewed the bill.
9:21:56 AM
Co-Chair Hawker related that appropriation bills can be
confusing. Legislative Finance has produced a spreadsheet
entitled "FY 2009 Supplemental Requests" (copy on file).
Mr. Teal referred to the spreadsheet to explain the Analysis
of the Governor's Supplemental Request. He noted a $59
million reduction in operating costs and a $3.2 million
increase in capital projects.
Mr. Teal detailed the unallocated operating reductions,
which were due to the governor's restricting the money.
That adds another $11.5 million to the budget, making the
total general fund impact $70 million - operating. With the
$3 million positive in capital, the impact on the deficit is
a reduction of $67 million.
Mr. Teal reported that the unallocated reductions were all
pulled from the bill. Co-Chair Hawker commented that
unallocated reductions are not good policy as a matter of
course and constitutionally suspect.
9:24:41 AM
Mr. Teal referred to item 21 under Operating Lapse
Extensions, items that came before the committee during the
operating budget. Co-Chair Hawker added that there was a
thorough discussion about these lapses, which included legal
advice. Mr. Teal explained that because they make money
available during the 2010 budget process, they needed to be
reviewed as part of that budget process. Items 21-29 were
extended and items 28 and 29 were new. Some items were not
included, either because they belonged in the operating
budget, or because OMB pulled them. Item 41 is the first of
the specific operating reductions, all of which were
included.
9:26:15 AM
Co-Chair Hawker summarized that these were reductions
recommended by OMB. Mr. Teal related that everything in the
supplemental was at the governor's request.
Mr. Teal pointed out that item 61 begins a list of items not
included. Co-Chair Hawker noted that a decision was made
not to accept the governor's desire to reduce Village Public
Safety Officer (VPSO) contracts this year. Instead the
funding will remain available in FY 09. Item 65 shows the
rejection of a reduction, leaving the full $450 million
intact.
Mr. Teal related that in the operating bill, on the Senate
side, there was a $450 million transfer from the Oil and Gas
Tax Credit Fund to the general fund, reducing the FY 09
deficit.
9:27:54 AM
Mr. Teal addressed the operating request items. Items 69-
164 were accepted. Co-Chair Hawker reported that these were
closely examined for essential expenditures.
Mr. Teal noted that beginning with 164 a number of items
were removed, some at the request of OMB. He reminded the
committee that these rejected items could go into the
supplemental bill. Co-Chair Hawker reported that the bill
goes to the Floor, to the Senate, and then to the House for
a concurrence vote.
9:29:49 AM
Mr. Teal turned to Capital Projects, beginning with item
186.
Representative Gara asked if the items not requested were in
the original bill, but not included in this version of the
bill. Mr. Teal said that was correct.
Representative Gara inquired about the $12 million amount
for Medicaid services, items 168 and 169. He wondered why
neither one was in the supplemental. Mr. Teal explained
that it was an amendment of the governor's received on March
13, which showed an updated projection that the funds would
not be needed. Mr. Teal explained that much of the orange
column was in the original bill and then OMB removed it.
For example, items 173-177 all deal with Anchorage snow haul
and were removed.
9:32:06 AM
Mr. Teal addressed Capital Projects or re-appropriations,
repeals of older appropriations no longer needed and re-
spending of that money. Those decisions were separated into
"scooping the old money" and "spending the money freed up".
In every case, all of the money no longer needed for capital
projects was accepted. In many cases that money was put
into the capital income fund and spent from that fund rather
than tie the spending decision back to the decision to scoop
from a particular project.
9:33:31 AM
Mr. Teal continued by describing Capital Projects - Items
for Consideration, beginning with item 213. It begins with
items in the fast track. A few of these projects were in
the capital budget and the governor requested that they be
moved to the fast track. Item 215 funds the Kalskag High
School replacement; Item 216 corrects an error for school
funding major maintenance. There are several scope changes.
A few of the more complicated re-appropriations were left
alone, such as item 223, which deals with the Alaska
Railroad Corporation.
Mr. Teal noted that items 231-279 are capital requests that
can be left to the supplemental slow track, as 2010
projects, or rejected.
Mr. Teal addressed the Ratifications items 284-291, all of
which were accepted. Co-Chair Hawker explained the dollar
amounts of ratifications are listed in whole dollars, not
thousands.
9:36:52 AM
Representative Gara asked how a ratification differs from an
obligation. Mr. Teal explained that a ratification is money
that was spent without authorization. Often they are
errors. The way they are fixed is the money is appropriated
after the fact. Representative Gara asked where the money
comes from. Mr. Teal said the money comes from within the
accounting system.
Co-Chair Hawker added that a frequent occurrence is that
there are past items, such as unpaid bills, that are
legitimate obligations incurred in good faith. Mr. Teal
gave an example of a late foster care bill.
AT-EASE: 9:40:43 AM
RECONVENED: 9:48:24 AM
Co-Chair Hawker MOVED to ADOPT Conceptual Amendment 1:
Page 2, Line 3, following "beginning"
Delete: July 1, 2009 and ending June 30, 2010
Add: July 1, 2008 and ending June 30, 2009
Co-Chair Stoltze OBJECTED.
Co-Chair Hawker explained that there was a date shift error
that needs to be corrected.
Co-Chair Stoltze WITHDREW his objection. There being NO
further OBJECTION, it was so ordered.
9:49:44 AM
Representative Gara asked what the total financial impact of
the bill was now that the legislature has backed out the
governor's savings. Co-Chair Hawker asked if Representative
Gara was referring to the unallocated reductions.
Representative Gara said yes. Mr. Teal agreed that the
unallocated reductions were no longer in the bill and the
money would be saved.
Representative Gara asked what the total general fund
expenditure was. Mr. Teal stated that is was $59,059,700
million.
Representative Gara asked about the $70 million reduction.
Mr. Teal explained that the total general fund impact on the
deficit is $70 million, if the total amount of the
unallocated savings - $11.6 million - is added to the $59
million. In response to a question by Representative Gara,
Mr. Teal corrected that $59 million is a reduction in
expenditures. Representative Gara asked what the total
amount of expenditure in the supplemental budget was. Mr.
Teal offered to find out.
9:52:37 AM
Co-Chair Hawker clarified that the bill has a net negative
result of $67 million in general funds. Representative Gara
concluded that it was a $67 net reduction. Mr. Teal agreed.
Representative Gara asked about page 30, line 191, a lapse
of $39 million that was appropriated to Ready to Read -
Ready to Learn work group. He wondered why the funds could
not be left in. Mr. Teal related that it was at the request
of the governor, who said the funds were no longer needed.
The agency, through OMB, said the funds were no longer
required. Co-Chair Hawker clarified that these were
unexpended funds from completed capital projects.
Representative Gara suggested if the funds were left, the
workgroup could use them. Co-Chair Hawker reiterated that
it was a capital investment and the spending authority has
been completed.
Mr. Teal added that it would depend on the scope of the
project and whether it could be modified. He suggested
going to the agency or OMB for the lapse information.
Representative Gara turned to item 195, $1 million for
Pioneers Home Safety upgrades. Co-Chair Hawker corrected
that it was for $1,000.
Representative Austerman recalled a $1.5 billion shortfall
in FY 09. He wondered what that number was today. Co-Chair
Hawker stated that it was reduced to approximately $1
billion from $1.5 billion.
Mr. Teal agreed. There was a $1.5 billion deficit at the
beginning of the process in FY 09. In the operating bill,
there was a $450 million transfer from the oil and gas tax
credit fund, combined with the current bill's approximately
$70 million, the result would be a $1 billion deficit.
Co-Chair Hawker cautioned about using the word "deficit"
because money was parked in the reserve funds. He used the
word "shortfall" due to money in the savings accounts.
Representative Austerman agreed and wanted to make sure this
was clarified. It is a shortfall, not a deficit.
Co-Chair Hawker thanked Representative Austerman for the
clarification.
9:58:47 AM
Co-Chair Stoltze MOVED to REPORT CSHB 113, as amended, from
Committee with individual recommendations. There being NO
OBJECTION, it was so ordered.
CSHB 113 (FIN) was REPORTED out of Committee with a "do
pass" recommendation.
ADJOURNMENT
The meeting was adjourned at 10:00 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS HB199 Non Trans Simulus_Funding Summary_S Version.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 199 |
| CS HB199 Non Trans Stimulus_Funding Summary_P Version.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 199 |
| HB114CS(TRA)-CED-ARR-03-16-09FNNEW.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 114 |
| CSHB114-dfg-CO-3-16-09 FN F&GNEW.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 114 |
| HB 199 Amendment FMAP Conceptual #1.doc |
HFIN 4/7/2009 8:30:00 AM |
HB 199 |
| CSHB 199 version S.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 199 |
| CSHB 113 version P.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 113 |
| HB 199 Amendment Revenue Sharing Conceptual #2.doc.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 199 |
| CSHB199(FIN) conceptual amendment 3.doc |
HFIN 4/7/2009 8:30:00 AM |
HB 199 |
| HB 113 Amendment 1.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 113 |
| CSHB 113(FIN) VERSION C.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 113 |
| CSHB 199(FIN) VERSION P.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 199 |
| HB114CS-DOT-AS-C0-3-16-09 (2)FN DOT.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 114 |
| HB114SposnorStatement.doc |
HFIN 4/7/2009 8:30:00 AM |
HB 114 |
| Support020909.pdf |
HFIN 4/7/2009 8:30:00 AM |
HB 114 |