04/15/2009 09:00 AM Senate FINANCE

CS FOR HOUSE BILL NO. 113(FIN) am(brf sup maj fld)                                                                            
                                                                                                                                
     "An  Act  making  supplemental  appropriations,  capital                                                                   
     appropriations,   and  other  appropriations;   amending                                                                   
     appropriations;  making   appropriations  to  capitalize                                                                   
     funds; and providing for an effective date."                                                                               
                                                                                                                                
9:09:11 AM                                                                                                                    
                                                                                                                                
DAVID   TEAL,   DIRECTOR,   LEGISLATIVE   FINANCE   DIVISION,                                                                   
presented  the  supplemental  budget  via  spreadsheet  dated                                                                   
April 9,  2009, titled  "FY2009 Supplemental Requests"  (Copy                                                                   
on  File). He  offered  to review  the  spreadsheet with  the                                                                   
committee.  He noted that  legislative  items were absent  in                                                                   
the bill,  as every item was  submitted by the  governor. The                                                                   
cost  of the  bill  is noted  on Page  1  with the  operating                                                                   
portion  of  the  supplemental  budget  illustrating  general                                                                   
funds down  $59 million  and federal  funds up $53.6  million                                                                   
reflecting  the substitution  of federal  Medicaid match  for                                                                   
general funds  in the Health  and Social Services  budget. He                                                                   
noted a  net reduction  of $12 million  in the "other  funds"                                                                   
category.                                                                                                                       
                                                                                                                                
9:11:51 AM                                                                                                                    
                                                                                                                                
Mr.  Teal addressed  the  capital  items in  the  legislation                                                                   
illustrated  on  Page 1.  He  explained  the $59  million  in                                                                   
operating  reductions  with  $11.6   million  in  unallocated                                                                   
reductions  viewed  as  savings although  excluded  from  the                                                                   
bill. The total reduction is $70.7  million including capital                                                                   
of $3.2  million creating a  net reduction of  $67.5 million.                                                                   
He explained  that the  process employed  to create  the bill                                                                   
included meetings between House  and Senate staff with agency                                                                   
review  when necessary.  Changes were  made by  the four  co-                                                                   
chairs leading to  the color coded spread sheet  presented to                                                                   
the  committee.  He  explained  that items  coded  green  are                                                                   
included in  the bill,  while items  coded orange are  absent                                                                   
from the legislation.                                                                                                           
                                                                                                                                
9:14:05 AM                                                                                                                    
                                                                                                                                
Mr. Teal  discussed unallocated  operating reductions,  which                                                                   
were  all  rejected  because  there was  no  reason  to  take                                                                   
legislative action  for something  that the executive  branch                                                                   
had  accomplished.   He  noted   that  the  reductions   were                                                                   
categorized   as   savings  in   the   legislation   allowing                                                                   
expectations that  the allocated reductions will  be achieved                                                                   
by  the executive  branch because  they are  included in  the                                                                   
savings category of the fiscal summary.                                                                                         
                                                                                                                                
9:15:36 AM                                                                                                                    
                                                                                                                                
Mr.  Teal addressed  operating lapse  extensions, which  were                                                                   
temporarily  removed from  the supplemental  bill and  put in                                                                   
front  of  the  House  Finance  Committee.  Lapse  extensions                                                                   
typically evade  the scrutiny that other  extensions receive.                                                                   
Some  lapse extensions  were  accepted  and others  rejected.                                                                   
Some extensions went back into  the bill on Page 4, and color                                                                   
coded  orange.  Some  extensions  were  incorporated  in  the                                                                   
operating budget.                                                                                                               
                                                                                                                                
Mr. Teal addressed Page 6 and  specific operating reductions.                                                                   
He explained  the items  not included in  the bill.  He noted                                                                   
page 11, item  61, illustrating five items excluded  from the                                                                   
bill.                                                                                                                           
                                                                                                                                
Mr.  Teal  informed  about  operating   requests,  which  are                                                                   
generally   requests   for   additional   funding   including                                                                   
substitution of federal funds for general funds.                                                                                
                                                                                                                                
9:17:56 AM                                                                                                                    
                                                                                                                                
Mr.  Teal  noted  capital  items beginning  on  Page  34.  He                                                                   
explained  that  most capital  items  were  reappropriations.                                                                   
Rather  than view  a reappropriation  as a  single item,  the                                                                   
choice was split and dead capital  projects no longer in need                                                                   
of money are taken.                                                                                                             
                                                                                                                                
9:18:28 AM                                                                                                                    
                                                                                                                                
Mr. Teal explained that the funds  were placed in the capital                                                                   
income  fund, rather  than  directed immediately  to  another                                                                   
project. In  some cases the capital  income fund was  used to                                                                   
fund supplemental requests. One  project included in the dead                                                                   
projects, Number  218, Page 35, takes money  from the capital                                                                   
project  that was  a legislative  add  on. He  noted that  an                                                                   
amendment will address this number  in the upcoming committee                                                                   
substitute (CS). All capital projects  identified as finished                                                                   
had money  removed from  them except  for the projects  where                                                                   
the  Office   of  Management   and  Budget  (OMB)   submitted                                                                   
amendments reversing the original  request, examples of which                                                                   
begin on Page 43-45.                                                                                                            
                                                                                                                                
9:20:41 AM                                                                                                                    
                                                                                                                                
Mr. Teal  referred to  Page 34 and  the new capital  projects                                                                   
with  a number  of items  included  as supplemental  projects                                                                   
extending through  Page 43 at which point a  few projects are                                                                   
included  that  were  unaccepted  in  the  legislation.  Many                                                                   
supplemental  projects  were later  included  in the  capital                                                                   
budget. He  stated that he did  not know how many  items were                                                                   
added from the governor's original request.                                                                                     
                                                                                                                                
Senator Huggins asked about Page  4, Item 26, and the federal                                                                   
requirement  for  Department  of  Transportation  and  Public                                                                   
Facilities  (DOT).  He  opined  that both  the  in-state  gas                                                                   
pipeline  and   a  larger  pipeline  are  included   in  this                                                                   
appropriation language.                                                                                                         
                                                                                                                                
Mr.  Teal  answered  that  the  mentioned  item  is  a  lapse                                                                   
extension applying to gas line  right of way applications. He                                                                   
explained that funds will lapse  on June 30, 2009 without the                                                                   
lapse  extension  and  the Department  of  Natural  Resources                                                                   
(DNR) states  that a  need for the  money exists.  Either the                                                                   
lapse is extended or a new 2010 appropriation can be made.                                                                      
                                                                                                                                
9:23:28 AM                                                                                                                    
                                                                                                                                
HB  113  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
9:23:40 AM  AT EASE                                                                                                           
9:54:01 AM  RECONVENED