Legislature(2009 - 2010)HOUSE FINANCE 519

04/07/2009 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 114 USE STATE TRANS FACILITY FOR DISASTER AID TELECONFERENCED
Moved CSHB 114(TRA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 199 APPROPS: NON-TRANSPORTATION STIMULUS TELECONFERENCED
Moved CSHB 199(FIN) Out of Committee
+= HB 113 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS TELECONFERENCED
Moved CSHB 113(FIN) Out of Committee
                  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