Legislature(1995 - 1996)

03/23/1995 01:44 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE BILL NO. 100                                                           
                                                                               
       An Act making appropriations for the operating and loan                 
       program  expenses of state government 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.                                                      
                                                                               
  FRONT SECTION                                                                
                                                                               
  NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF                 
  MANAGEMENT  AND BUDGET,  OFFICE  OF  THE  GOVERNOR  provided                 
  members with a sectional analysis of the front section of HB                 
  100 (Attachment 1).  She reviewed Attachment 1 by section:                   
                                                                               
       *    Section 1.     Identifies  the  balances   in  the                 
                           Highway  and   Aviation  Fuel   Tax                 
                           accounts        available       for                 
                           appropriation.                                      
                                                                               
       *    Section 2.     Provides   a   process    for   the                 
                           Legislative   Budget   and    Audit                 
                           Committee   to   allow   additional                 
                           receipt authority for  general fund                 
                           and excess federal receipts.                        
                                                                               
       *    Section 3 & 4. Provides that state funds cannot be                 
                           used  to  replace  a  shortfall  in                 
                           federal    receipts     and    that                 
                           appropriations are  reduced by  the                 
                           amount of any shortfall.                            
                                                                               
       *    Section 5.     Provides that general funds will be                 
                           appropriated  in  the  event  of  a                 
                           shortfall  in   Title  XX   federal                 
                           funds.    Title  XX is  the  Social                 
                           Services  Block  Grant  received by                 
                           the Department of  Health &  Social                 
                           Services.                                           
                                                                               
  Representative Martin asked if general  funds have been used                 
  to cover any  shortfalls in  Title XX funding.   Ms.  Slagle                 
  replied  that  there has  not  been  any  transfers  due  to                 
  shortfalls  of  Title  XX funding.    Representative  Martin                 
  suggested that section 6 is unnecessary.                                     
                                                                               
  JANET CLARK, DIRECTOR, DIVISION OF ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT OF HEALTH AND SOCIAL  SERVICES explained that the                 
  Title XX Block Grant  Offset Component in the  Department of                 
                                                                               
                                2                                              
                                                                               
                                                                               
  Health  & Social  Services'  budget  represents  a  negative                 
  general  fund  and positive  federal  amount since  they are                 
  unable  to predetermine which  areas will  be allowed  to be                 
  charged.  Allowable expenditures are charged in the Division                 
  of Family  and Youth  Services' component.   She  emphasized                 
  that the Block  Grant has grown to a current  budget of $6.3                 
  million dollars.                                                             
                                                                               
       *    Section 6.     Allows the  Department of  Commerce                 
                           and Economic Development to utilize                 
                           funds in the  Insurance Catastrophe                 
                           Reserve Account for the  payment of                 
                           claims.                                             
                                                                               
       *    Section 7.     Allows  the  Commissioner   of  the                 
                           Department  of  Revenue   to  issue                 
                           revenue bond anticipation notes.                    
                                                                               
       *    Section 8.     Provides a state guarantee for AHFC                 
                           Veterans Mortgage bonds.                            
                                                                               
       *    Section 9.     Provides  a  payment   of  $5,793.8                 
                           million     dollars     for     the                 
                           International Airport  Revenue Fund                 
                           debt service.                                       
                                                                               
       *    Section 10.    Appropriates    $9,628.2    million                 
                           dollars to the Debt Retirement Fund                 
                           which  is  then  reappropriated for                 
                           specific lease payments.                            
                                                                               
       *    Section 11.    Appropriates    $21,337.3   million                 
                           dollars for payment of  the general                 
                           obligation debt.                                    
                                                                               
  Ms. Slagle noted that the  Administration has requested that                 
  the existing balance in the Debt  Retirement Fund be used to                 
  offset  the  payment instead  of  an appropriation  from the                 
  general  fund.    There  is a  balance  of  $1,885.3 million                 
  dollars  in the  Fund  due  to  refinancing efforts  by  the                 
  Department of  Revenue.  She  noted that an  early effective                 
  date would be needed  to prevent the money from  being swept                 
  into  the  Constitutional Budget  Reserve  Fund on  June 30,                 
  1995.                                                                        
                                                                               
       *    Section 12.    Appropriates    income    of    the                 
                           Permanent  Fund  to   the  dividend                 
                           account to pay dividends.                           
                                                                               
       *    Section 13.    Appropriates the  amount calculated                 
                           for inflation proofing the earnings                 
                           of the Permanent Fund.                              
                                                                               
                                3                                              
                                                                               
                                                                               
       *    Sections 14 & 15.   Deposits to the Permanent Fund                 
                           interest  earned  on  the 25  -  50                 
                           percent for mineral  lease rentals,                 
                           royalties,  royalty sale  proceeds,                 
                           net   profit   share   and  federal                 
                           mineral revenue sharing  designated                 
                           for  deposit  to   the  Fund   that                 
                           accrues  prior  to  receipt by  the                 
                           State.                                              
                                                                               
  Ms.  Slagle  explained,   in  response  to  a   question  by                 
  Representative Therriault, that these revenues are collected                 
  and then transferred to the Permanent Fund.                                  
                                                                               
       *    Section 16.    Allows  the  lapse  balance of  the                 
                           STEP Program to be deposited in the                 
                           Unemployment Compensation Fund.                     
                                                                               
       *    Section 17.    Makes  appropriations  to  the AHFC                 
                           Revolving   Loan    Fund,   Housing                 
                           Assistance  Loan  Fund  and  Senior                 
                           Housing Revolving Loan Fund.                        
                                                                               
       *    Section 18.    Appropriates   general   fund   and                 
                           federal fund money to  the Disaster                 
                           Relief Fund.                                        
                                                                               
       *    Section 19.    Appropriates 1996 tank registration                 
                           fees to the Storage Tank Assistance                 
                           Fund.                                               
                                                                               
  Ms. Slagle explained that Sections 20,  21, 22 and 23 relate                 
  to  the  Oil  and  Hazardous  Substance Release  Response  &                 
  Prevention  Fund  and associated  mitigation accounts.   She                 
  noted that the Prevention Mitigation Account may be effected                 
  by the Constitutional Budget Reserve Fund sweep.                             
                                                                               
  Ms.  Slagle reviewed the  flow of funding  associated to the                 
  Mitigation  Account.    She explained  that  the  Mitigation                 
  Prevention Account  flows into the  general fund.   Money is                 
  being appropriated from the Mitigation Prevention Account to                 
  the Storage  Tank Assistance  Fund.   The remaining  balance                 
  will be deposited to the Oil and Hazardous Substance Release                 
  Response & Prevention Funds' Prevention Account.                             
                                                                               
  Representative  Martin questioned  if Section  22 should  be                 
  deleted  since  the surcharge  has  been discontinued.   Ms.                 
  Slagle  explained  that  the  language  is need  to  address                 
  surcharges  that were  assessed prior  to the shut  off date                 
  which must be appropriated to the Fund.                                      
                                                                               
                                                                               
                                4                                              
                                                                               
                                                                               
       *    Section 24.    Approves  an  appropriation  to the                 
                           Information  Services  Fund  in the                 
                           Department of Administration.                       
                                                                               
  Representative Martin suggested that  the charge back system                 
  creates unnecessary paper  work.  Ms. Slagle  noted that the                 
  charge  back  system   was  instituted   to  assure   agency                 
  accountability and  responsibility  for  the  services  they                 
  request.                                                                     
                                                                               
       *    Section 25.    Appropriates  funding  for  oil and                 
                           gas litigation in the Department of                 
                           Law and the Department of Revenue.                  
                                                                               
  Ms. Slagle noted that this request  has been reduced and the                 
  funding  source  changed  from   the  Constitutional  Budget                 
  Reserve Fund to the  general fund based on the  structure of                 
  the cases involved.                                                          
                                                                               
  Ms.  Slagle  noted  that  an   amendment,  proposed  by  the                 
  Governor,  to  this  section  has   been  submitted  to  the                 
  committee  along   with  other   front  section   amendments                 
  (Attachment 2).                                                              
                                                                               
  Co-Chair Hanley explained that the intent  is to provide oil                 
  and gas litigation funding for  a full year.  He  noted that                 
  the reduction  in  the  appropriation  corresponds  to  case                 
  settlements.                                                                 
                                                                               
  Representative  Brown questioned if  the Department of Law's                 
  cap accommodates a full year funding.  Co-Chair Hanley noted                 
  that oil and gas litigation for FY 95 was funded through the                 
  Constitutional Budget  Reserve Fund.   He did not  think the                 
  cap would be adversely effected.                                             
                                                                               
       *    Section 26.    Appropriates     $80,322.4  million                 
                           dollars to the Debt Retirement Fund                 
                           for School Construction Debt.                       
                                                                               
       *    Section 27.    Appropriates  $60  -  $80  thousand                 
                           dollars in receipts  from the  1995                 
                           Safety Advisory  Council conference                 
                           to  allow  funding   of  the   1996                 
                           conference.                                         
                                                                               
       *    Section 28.    Allows the Real Estate  Surety Fund                 
                           to pay claims.                                      
                                                                               
       *    Section 29.    Allows the  expenditure of  program                 
                           receipts  in  FY  96   of  receipts                 
                           collected  in  FY  95   for  Alaska                 
                           Public Utilities Commission (APUC).                 
                                                                               
                                5                                              
                                                                               
                                                                               
  Ms. Slagle  explained that Section  29 is the  carry forward                 
  amount.                                                                      
                                                                               
  GUY BELL,  DIRECTOR, ADMINISTRATIVE SERVICES,  DEPARTMENT OF                 
  COMMERCE AND ECONOMIC DEVELOPMENT stated that the regulatory                 
  cost charge next fiscal year would  be reduced by the amount                 
  of the carry forward.                                                        
                                                                               
       *    Section 30.    Allows for  the use  of FY  95 ASMI                 
                           tax    receipts    for     FY    96                 
                           expenditures.                                       
                                                                               
       *    Section 31.    The administration  recommends that                 
                           section  31   pertaining  to   fire                 
                           suppression  be  deleted  from  the                 
                           front section and contained  in the                 
                           back section of HB 100.                             
                                                                               
       *    Section 32.    The administration  has recommended                 
                           an  amended  number   of  $29,616.3                 
                           million  dollars  for   the  Marine                 
                           Highway System Fund.                                
                                                                               
  Representative   Martin   questioned  the   status   of  the                 
  supplemental  request  for  funding to  the  Marine  Highway                 
  System Fund.   Ms.  Slagle explained  that the  supplemental                 
  request is a result of labor contract costs.                                 
                                                                               
       *    Section 33.    Appropriates from the Four Dam Pool                 
                           Transfer  Fund  to  the Power  Cost                 
                           Equalization  and   Rural  Electric                 
                           Capitalization    Fund,   Southeast                 
                           Energy Fund and  the Power  project                 
                           Fund   based   on   the   statutory                 
                           40/40/20 split.   The total  amount                 
                           is approximately $10 to $11 million                 
                           dollars.                                            
                                                                               
       *    Section 34.    Allows    the     use    of     the                 
                           Constitutional Budget  Reserve Fund                 
                           in  the  case  that   revenues  are                 
                           insufficient        to        cover                 
                           appropriations.                                     
                                                                               
  (Tape Change, HFC 95-61, Side 2)                                             
                                                                               
  Ms.   Slagle  reviewed   new  amendments,  offered   by  the                 
  Administration, to the front section contained on page 5  of                 
  Attachment  1.   Co-Chair  Hanley  questioned if  the $764.5                 
  thousand dollar addition  to the Marine Highway  System Fund                 
  for collective bargaining costs of the InlandBoatmen's Union                 
                                                                               
                                6                                              
                                                                               
                                                                               
  relates to the additional $853.0 thousand dollars in section                 
  33.   Ms. Slagle agreed  that the  funding is  for the  same                 
  contract.   She noted  that an  appropriation is  being made                 
  into the  Marine Highway System Fund from  the general fund.                 
  The  new  amendment  would provide  authorization  from  the                 
  Marine Highway System Fund.                                                  
                                                                               
  Ms. Slagle noted that an addition to the  Highways Equipment                 
  Working Capital Fund is need to accommodate increases in the                 
  Labor Trades and Crafts Agreement.                                           
                                                                               
  Ms.  Slagle  noted  that the  Administration  is  requesting                 
  $1516.3                                                                      
  thousand dollars in general funds for the Alaska Clean Water                 
  Fund.  The  funding will  capture $7.581.5 thousand  dollars                 
  and provide low interest loans for clean water projects.                     
                                                                               
  Ms. Slagle pointed  out that  the Administration expects  to                 
  receive settlements from  Executive Life  to be returned  to                 
  the Investment Lost  Trust Fund.  Money  from the settlement                 
  must be  returned  to the  funds that  they were  originally                 
  appropriated from.   A portion of  the settlement came  from                 
  the Statutory Budget  Reserve Fund.  The  Administration has                 
  recommended language to allow the  use of any funds returned                 
  to the Statutory Budget Reserve Fund.   Ms. Slagle suggested                 
  that language be considered to clarified if funding to cover                 
  revenue  shortfalls  would come  from  the Statutory  Budget                 
  Reserve Fund prior  to accessing  the Constitutional  Budget                 
  Reserve Fund.                                                                
                                                                               
  In  response  to a  question  by Representative  Martin, Ms.                 
  Slagle noted that the statutory references for the Statutory                 
  Budget Reserve Fund remain intact.                                           
                                                                               
  Ms. Slagle discussed the front section for formula programs.                 
  She  noted  that  shared taxes  are  estimated  at $24,571.4                 
  million dollars.  Salmon Enhancement  Taxes are estimated at                 
  $5.516 million dollars.                                                      
                                                                               
  Representative Martin questioned if the Governor intended to                 
  delete  the  shared taxes  from inclusion  in  HB 100.   Ms.                 
  Slagle stressed that  the appropriation  is needed to  allow                 
  the pass through of funds.  She stated that the numbers were                 
  not  included in  the accounting  of total  FY 95  or FY  96                 
  operating budget amounts.                                                    
                                                                               
  Co-Chair Hanley explained that shared taxes were taken "off-                 
  budget"   and  put  in   the  front  section,   so  that  an                 
  appropriation of the dollar amount was  not shown.  This had                 
  the effect  of reducing the known  value of the budget.   He                 
  noted that shared taxes have increased by $7 million dollars                 
  over  FY 95.   He observed  that if  the numbers  for shared                 
                                                                               
                                7                                              
                                                                               
                                                                               
  taxes are  included  the  budget appears  to  grow  by  $7.0                 
  million  dollars.   He  emphasized that  the  tax is  a pass                 
  through by the State.  Members continued  to discuss methods                 
  for accounting shared taxes used in previous budgets.                        
                                                                               
  Co-Chair Hanley referred  to the anticipated sweep  into the                 
  Constitutional Budget Reserve Fund.  He stated that language                 
  is  being  drafted  to  allow  any  money  swept   into  the                 
  Constitutional  Budget Reserve Fund  to be appropriated back                 
  to the sources  from which it  was swept at  the end of  the                 
  fiscal year.  He  noted that a three-quarter vote  is needed                 
  to adopt the language.  He stressed that this would maintain                 
  the status quo.   He emphasized the  controversy surrounding                 
  which   funds   would  be   appropriately  swept   into  the                 
  Constitutional  Budget  Reserve  Fund.   He  noted  that the                 
  Department of Law  is working  on suggestions pertaining  to                 
  what  should be swept.  He  illustrated that confusion could                 
  result  if  issues concerning  the  sweep are  not addressed                 
  prior to the sweep.                                                          
                                                                               
  SUBCOMMITTEE RECOMMENDATIONS                                                 
                                                                               
  Representative Mulder MOVED to adopt and incorporate into HB                 
  100 the House Finance  Subcommittees recommendations for the                 
  following operating budgets:                                                 
                                                                               
       Department of Administration                                            
       Department of Revenue                                                   
       Department of Labor                                                     
       Department of Education                                                 
       Department of Commerce and Economic Development                         
       Department of Military and Veterans Affairs                             
       Department of Natural Resources                                         
       Department of Transportation and Public Facilities                      
       Department of Environmental Conservation                                
       Department of Community and Regional Affairs                            
       Department of Corrections                                               
       Alaska Court System                                                     
       Office of the Governor                                                  
                                                                               
  Discussion  pursued   regarding   the   inclusion   of   the                 
  accompanying  letter  of   intents.    Representative  Brown                 
  OBJECTED to the adoption of letters of intent which were not                 
  adopted in the subcommittees.                                                
                                                                               
  Co-Chair Hanley clarified  that letters of intent  that were                 
  not officially  adopted by  the subcommittees  would not  be                 
  adopted.                                                                     
                                                                               
  Representative  Brown OBJECTED  for  purpose of  discussion.                 
  She  stated  that  she  did  not  support  the  subcommittee                 
  recommendations.                                                             
                                                                               
                                8                                              
                                                                               
                                                                               
  There   being  NO   further   OBJECTION,  the   subcommittee                 
  recommendations for the noted departments were adopted.  The                 
  Governor's proposed  amendments for the  front section  were                 
  not adopted.                                                                 
                                                                               
  Discussion pursued regarding scheduling of amendments.                       

Document Name Date/Time Subjects