Legislature(2011 - 2012)HOUSE FINANCE 519

03/02/2012 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HJR 4 CONST. AM: TRANSPORTATION FUND TELECONFERENCED
Moved CSHJR 4(FIN) Out of Committee
+= HB 78 INCENTIVES FOR CERTAIN MEDICAL PROVIDERS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 307 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS TELECONFERENCED
Moved CSHB 307(FIN) Out of Committee
HOUSE BILL NO. 307                                                                                                            
                                                                                                                                
     "An  Act  making supplemental  appropriations,  capital                                                                    
     appropriations,  and   other  appropriations;  amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:37:51 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  MOVED  to   ADOPT  a  proposed  committee                                                                    
substitute  for  HB  307, Work  Draft  27-GH2601\B  (Martin,                                                                    
3/1/12). There being NO OBJECTION, it was so ordered.                                                                           
                                                                                                                                
PETE ECKLUND,  STAFF, REPRESENTATIVE BILL THOMAS  pointed to                                                                    
a ten  page document  prepared by  the Office  of Management                                                                    
and  Budget (OMB):  "FY12  Supplemental  Schedule" (copy  on                                                                    
file).  He  addressed  the operating  portion  and  language                                                                    
section  initially.  The  following items  changed:  item  2                                                                    
included  a  $50  thousand reduction  from  the  initial  $1                                                                    
million request for the Public Defender Agency.                                                                                 
                                                                                                                                
1:40:50 PM                                                                                                                    
                                                                                                                                
Mr. Ecklund explained that the  four co-chairs from both the                                                                    
House  and  Senate  Finance Committees  worked  together  to                                                                    
create the  committee substitute. He explained  that reduced                                                                    
or removed  items may be  funded later in the  session using                                                                    
another  vehicle. He  stressed  that those  items that  were                                                                    
removed  or  reduced   might  come  up  again   in  a  later                                                                    
supplemental request.                                                                                                           
                                                                                                                                
Representative Doogan  clarified that item 2  remained in HB                                                                    
307, but was reduced by $50 million.                                                                                            
                                                                                                                                
Mr.  Ecklund  responded  in  the  affirmative.  Item  4  was                                                                    
reduced by $100  thousand of authority. He  mentioned a note                                                                    
from  the  Legislative  Finance Division  (LFD)  questioning                                                                    
whether the full request could  be expended in the remainder                                                                    
of  the FY  12 fiscal  year, which  prompted the  reduction.                                                                    
Item 6,  a request for  $3,439,800 in general  fund receipts                                                                    
to  the  Department  of  Commerce,  Community  and  Economic                                                                    
Development (DCCED)  was removed. Item 7  included a request                                                                    
for $250 thousand for receipt  supported services, which was                                                                    
granted, but  the funding sources were  changed. The sources                                                                    
were split  and $210 thousand remained  as Receipt Supported                                                                    
Services (RSS)  and $40 thousand consisted  of general funds                                                                    
from   corporate  business   licensing  receipts.   Item  10                                                                    
included a  request from Department  of Education  and Early                                                                    
Development (DEED) for $1 million,  and the item was removed                                                                    
pending further discussions with  the subcommittee chair and                                                                    
LFD.                                                                                                                            
                                                                                                                                
1:43:41 PM                                                                                                                    
                                                                                                                                
Mr. Ecklund continued  with items 15 and 16,  which had been                                                                    
funded with alternate funding sources  and were moved to the                                                                    
language  section of  HB 307.  Item 22  on page  3 for  $250                                                                    
thousand to  replace unrealized  program receipts  at Alaska                                                                    
Vocational  Technical Center  (AVTEC) was  removed. Item  24                                                                    
included $600,000  for fast ferry  litigation. The  item was                                                                    
approved and moved  to the language section of  the bill and                                                                    
became a multi-year appropriation  encompassing FY 12 and FY                                                                    
13. Item 25 was approved,  but $300,000 was relocated to the                                                                    
language section and funding was  divided into multiple year                                                                    
increments, again  for FY 12 and  FY 13. He moved  to page 9                                                                    
of  the   spreadsheet.  Item  78   included  a   request  by                                                                    
Department of Corrections (DOC)  for reappropriation of $100                                                                    
thousand  for the  Highland Mountain  Center Land  Transfer.                                                                    
The item was removed  for further investigation to determine                                                                    
whether  DOC  was  the correct  department  to  receive  the                                                                    
funds.  He pointed  to  item  80, with  a  total request  of                                                                    
$20,770,800.  He noted  that $20  million  was removed  from                                                                    
item 80, an optional  retirement program for the university.                                                                    
He  stated  that  the  funding  was  removed  to  allow  for                                                                    
discussions about alternative funding sources.                                                                                  
                                                                                                                                
1:46:34 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  asked   whether  the  university                                                                    
settlement had been finalized.                                                                                                  
                                                                                                                                
Mr.  Ecklund responded  in  the  affirmative. He  elaborated                                                                    
that  the item  might be  approved  in the  near future.  He                                                                    
moved  on to  item  89 on  page 10  of  the spreadsheet.  He                                                                    
pointed out  that a provision  existed in the  original bill                                                                    
stating that  additional unspent funding was  swept into the                                                                    
budget  reserve fund  in FY  12. The  provision was  removed                                                                    
from   the  bill,   but  would   be   considered  in   other                                                                    
appropriation bills. The effective  date of the bill changed                                                                    
to March 15.                                                                                                                    
                                                                                                                                
JOAN  BROWN, STAFF,  REPRESENTATIVE  BILL THOMAS,  discussed                                                                    
that some  "negative" supplemental  items were added  to the                                                                    
language  section of  the bill  totaling $715  thousand. The                                                                    
reason for the negative items  was to address funds given to                                                                    
the agencies  for FY12  for new  positions. She  stated that                                                                    
DCCED had  $84,100 in  economic development.  The Department                                                                    
of Health and  Social Services (DHSS) lost  $200 thousand in                                                                    
front-line social  workers and $250 thousand  in nursing for                                                                    
positions  remaining vacant.  She  noted  Department of  Law                                                                    
(DOL) lost  $21,100 for vacancy  in criminal  appeal special                                                                    
litigation and  $53,800 for a new  child protection attorney                                                                    
and paralegal. She mentioned the  $96,200 vacancy related to                                                                    
a fiscal  note for SB 58,  which passed the prior  year. She                                                                    
noted that  the Department of Military  and Veterans Affairs                                                                    
(DMVA),  $10 thousand  was removed  from the  legislation in                                                                    
the army guard maintenance component.                                                                                           
                                                                                                                                
1:49:26 PM                                                                                                                    
                                                                                                                                
Ms. Brown pointed  to other changes in  the legislation. The                                                                    
governor's  original supplemental  bill  included a  request                                                                    
for  $2,620,300 to  fully fund  the Low  Income Home  Energy                                                                    
Assistance  Program  (LIHEAP)  appropriations.  The  request                                                                    
included two  contingency appropriations for FY  12 totaling                                                                    
$8   million.   The    contingency   language   was   deemed                                                                    
ineffective. The supplemental  bill repealed the contingency                                                                    
appropriations and instead appropriated  a flat $8.5 million                                                                    
reducing the  supplemental budget by $2  million. The amount                                                                    
fully  funded  the  department's  expected  energy  assisted                                                                    
heating  costs.  She pointed  to  the  disaster relief  fund                                                                    
located  in  the  fund capitalization  (Section  14),  which                                                                    
increased from $3 million to  $5 million in conjunction with                                                                    
the  governor's amendment  received  on March  1, 2012.  She                                                                    
pointed  out a  new  repeals section  in  Section 16,  which                                                                    
included  an  unworkable LIHEAP  contingency  appropriation.                                                                    
The lapse and retroactivity were adjusted accordingly.                                                                          
                                                                                                                                
Mr. Ecklund explained that the  changes discussed were found                                                                    
in  the operating  and  language sections  of  the bill.  He                                                                    
pointed out  that James Armstrong  would detail  the capital                                                                    
portions of the bill.                                                                                                           
                                                                                                                                
JAMES   ARMSTRONG,  STAFF,   REPRESENTATIVE  BILL   STOLTZE,                                                                    
pointed  to   pages  7  and   8  of  the   OMB  supplemental                                                                    
spreadsheet. Projects  55 through  72 were removed  from the                                                                    
bill and would  probably be included in  the capital budget.                                                                    
He  pointed to  page 10  of HB  307, which  included capital                                                                    
budget  items. Items  12  through 18  addressed  a grant  to                                                                    
Anchorage  to   replace  a  fire  and   rescue  station.  He                                                                    
continued  that  items  16  through  18  included  emergency                                                                    
repairs to the Cordova hospital.  He mentioned that lines 28                                                                    
through 30  were included in  the governor's  capital budget                                                                    
for  FY  13.   He  explained  that  his office  received  an                                                                    
amendment from OMB to accelerate the item.                                                                                      
                                                                                                                                
1:53:38 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  about  items that  had not  been                                                                    
adjusted. He pointed to page  4, item 33 of the spreadsheet.                                                                    
He surmised  that the funds  had been received from  the Red                                                                    
Dog Mine and would be spent on the Red Dog Mine.                                                                                
                                                                                                                                
Mr.  Ecklund responded  in the  affirmative. He  stated that                                                                    
the funds  were supplied by  an outside entity to  the state                                                                    
for a specific purpose.                                                                                                         
                                                                                                                                
Representative Gara  directed attention to page  3, line 23.                                                                    
He expressed that he felt like  the item would never end. He                                                                    
noted that it was less  expensive to hire in-house employees                                                                    
to do the  work that had been done by  outside attorneys. He                                                                    
expressed concern about the hourly rates of the attorneys.                                                                      
                                                                                                                                
Co-Chair Thomas heard the argument  every year. He explained                                                                    
that the Department  of Law (DOL) lost  employees and needed                                                                    
to  contract  the  prior  employees   with  expertise  on  a                                                                    
subject.  He believed  that the  labor  was contracted  only                                                                    
under limited and special cases.                                                                                                
                                                                                                                                
Representative  Gara contended  that  a  new attorney  could                                                                    
integrate  the department's  knowledge  without trouble.  He                                                                    
believed that  a new attorney  could be trained  to continue                                                                    
litigation.                                                                                                                     
                                                                                                                                
1:57:14 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  added that  backup for  the four  sections he                                                                    
had discussed were included in members' packets.                                                                                
                                                                                                                                
REPRESENTATIVE BOB  HERRON, informed  the committee  about a                                                                    
disaster  over the  winter break  regarding the  water/sewer                                                                    
line  in Bethel  that  occurred due  to  winter weather.  He                                                                    
explained  that the  cause of  the disaster  was the  winter                                                                    
weather. He  explained that the  children did not  return to                                                                    
school until  mid-January. He appealed  to the  governor and                                                                    
the co-chairs  of the  finance committees  to move  the item                                                                    
into the capital budget.                                                                                                        
                                                                                                                                
REPRESENTATIVE DAN SADDLER,  explained that excessive winter                                                                    
snow  had caused  damage to  the roof  of the  fire station,                                                                    
high density housing,  and schools in the  Eagle River area.                                                                    
He asked  for committee consideration of  the capital budget                                                                    
request, which was crucial to his community.                                                                                    
                                                                                                                                
Co-Chair Thomas  stressed the  immediate need  for attention                                                                    
to  the projects  discussed  by  Representatives Herron  and                                                                    
Saddler.                                                                                                                        
                                                                                                                                
Co-Chair Stoltze  remarked on the intentional  nature of the                                                                    
decision  to  include  the   emergency  nature  items.  Non-                                                                    
emergency items were moved to the FY 13 capital budget.                                                                         
                                                                                                                                
Co-Chair Thomas  explained that  the communities  should not                                                                    
wait for the funding for emergency items.                                                                                       
                                                                                                                                
2:01:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Thomas CLOSED public testimony.                                                                                        
                                                                                                                                
Co-Chair Thomas asked whether there were any amendments.                                                                        
                                                                                                                                
Co-Chair  Stoltze  MOVED  to report  CSHB  307(FIN)  out  of                                                                    
committee with individual recommendations.                                                                                      
                                                                                                                                
Representative Gara  OBJECTED for purpose of  discussion. He                                                                    
pointed to  page 1,  line 2  of the  bill. He  discussed the                                                                    
Office  of Public  Advocacy and  would like  to see  funding                                                                    
restored for the $50 thousand requested in item 2.                                                                              
                                                                                                                                
Co-Chair Thomas  explained that funding had  been requested.                                                                    
He detailed  that the  Office of  Public Advocacy  was fully                                                                    
funded and that the new position was filled.                                                                                    
                                                                                                                                
Representative Gara  WITHDREW his OBJECTION. There  being NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
CSHB  307(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with no fiscal notes.                                                                                  
                                                                                                                                
2:04:43 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:23:03 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
Support Letter HJR4.doc HFIN 3/2/2012 1:30:00 PM
HJR 4
CS HJR4 WORKDRAFT FIN 27-LS0197-T-3.1.12.pdf HFIN 3/2/2012 1:30:00 PM
HJR 4
HJR004CS(TRA)-NEW FN-DOR-TRS-02-28-12.pdf HFIN 3/2/2012 1:30:00 PM
HJR 4
HB307 CS WORKDRAFT B version SUPPLEMENTAL.pdf HFIN 3/2/2012 1:30:00 PM
HB 307
HB307 Repot 3.2.12 Statewide Totals.pdf HFIN 3/2/2012 1:30:00 PM
HB 307
HB 307 SUPPLEMENTAL CS Backup.pdf HFIN 3/2/2012 1:30:00 PM
HB 307
Supplemental_Spreadsheet_1-31-12.pdf HFIN 3/2/2012 1:30:00 PM
HB 307
HB78 CS WORKDRAFT 27-LS0147-O.pdf HFIN 3/2/2012 1:30:00 PM
HB 78