Legislature(2019 - 2020)ADAMS 519

02/28/2020 09:00 AM FINANCE

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Audio Topic
09:07:31 AM Start
09:08:29 AM HB205 || HB206
09:35:37 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 205(FIN) Out of Committee
Moved CSHB 206(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 205                                                                                                            
     "An  Act making  appropriations  for  the operating  and                                                                   
     loan  program  expenses  of  state  government  and  for                                                                   
     certain    programs;    capitalizing    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."                                                                         
HOUSE BILL NO. 206                                                                                                            
     "An  Act making  appropriations  for  the operating  and                                                                   
     capital    expenses    of   the    state's    integrated                                                                   
     comprehensive mental  health program; and  providing for                                                                   
     an effective date."                                                                                                        
9:08:29 AM                                                                                                                    
Co-Chair  Johnston  MOVED  to  report CSHB  205(FIN)  out  of                                                                   
Committee with individual recommendations.                                                                                      
Vice-Chair Ortiz OBJECTED for discussion.                                                                                       
Co-Chair  Foster invited  his staff  to the  table to  review                                                                   
the changes in the committee substitute (CS).                                                                                   
9:09:21 AM                                                                                                                    
BRODIE   ANDERSON,   STAFF,   REPRESENTATIVE   NEAL   FOSTER,                                                                   
reviewed the  changes in  the CS. The  bill reflected  all of                                                                   
the  governor's   amendments   and  House  Finance   member's                                                                   
amendments accepted  by the committee.  The House  Finance CS                                                                   
reflected  the total FY  21 budget  of $9,827,181,200  of all                                                                   
funds. The  total for  agency operations was  $9,029,586,200.                                                                   
Statewide  items  totaled  $797,595,000.  The  total  of  all                                                                   
spend funding equaled the following totals:                                                                                     
     Federal Funds: $2,872,441,600                                                                                              
     Designated General Funds (DGF): $899,792,900                                                                               
     Other Funds: $1,603,421,600                                                                                                
     Unrestricted General Funds (UGF): $4,451,525,100                                                                           
Mr.  Anderson   continued  that  for  agency   operations  of                                                                   
statewide  items the UGF  spending was  $305.2 million  above                                                                   
or a 7.4  percent increase from  the FY 21 adjusted  base. He                                                                   
reported that  within statewide items, the  largest increases                                                                   
were  debt  service  totaling  $76.6 million,  a  66  percent                                                                   
increase. The  amount included  the $55 million  requested by                                                                   
the governor  for oil tax  credit debt payments.  Also, state                                                                   
retirement  grew   by  12.5  percent   or  a   $38.4  million                                                                   
increase.  The unrestricted general  funds after  considering                                                                   
the  governor's amendments  and  the House  Finance  members'                                                                   
amendments, the  UGF spend reflected  an overall  increase of                                                                   
$193.4 million in  agency operations from the  original FY 21                                                                   
adjusted base,  a 5.2  percent increase.  A large  portion of                                                                   
the  increase   still  reflected  the  corrections   made  to                                                                   
Medicaid funding  since the adjusted  base did not  factor in                                                                   
the supplemental  additions the body approved  earlier in the                                                                   
current  week. He  relayed that  when compared  to the  FY 20                                                                   
management  plan  plus  the  supplemental   budget  that  was                                                                   
passed,  the UGF  spend for  agency operations  dropped to  a                                                                   
reduction  in  spending of  $108  million  or a  2.7  percent                                                                   
reduction from the  previous year's spend. He  concluded that                                                                   
the  budget compared  to the  governor's  amended budget  was                                                                   
currently  up  by  $9.6  million   reflecting  a  .2  percent                                                                   
9:12:55 AM                                                                                                                    
Representative  Sullivan-Leonard  asked  for an  overview  of                                                                   
what  would  happen  to  the Permanent  Fund  monies  in  the                                                                   
amount  of  $2.027   billion  that  were  removed   from  the                                                                   
governor's  FY 21 amended  budget. Mr.  Anderson thought  her                                                                   
question should be directed to the legislature.                                                                                 
Co-Chair  Foster  responded  that there  were  two  Permanent                                                                   
Fund bills  being debated. He  noted that the  Permanent Fund                                                                   
had not  been placed  into the  operating budget because  the                                                                   
legislature  did  not know  if  there  would be  a  different                                                                   
split for the percent of market value (POMV).                                                                                   
Co-Chair  Johnston  noted there  was  only  one bill  with  a                                                                   
statutory  change to  the dividend  and the  POMV. The  Rules                                                                   
Committee bill had not been introduced.                                                                                         
Co-Chair Foster  responded that  presently the committee  did                                                                   
not  have  a  number  to  plug   in,  therefore  it  was  not                                                                   
reflected in the operating budget.                                                                                              
Representative  Carpenter  asked  if inflation  proofing  was                                                                   
included in  the bill.  Co-Chair Foster  relayed that  in the                                                                   
previous  year  the legislature  included  $641  million  for                                                                   
inflation  proofing.  He  asked  Mr.  Anderson  to  cite  the                                                                   
amount for the budget being discussed.                                                                                          
Mr. Anderson confirmed  that there was inflation  proofing in                                                                   
the budget.  He reported  the amount  was slightly  more than                                                                   
$1 billion.  He could  be more specific  but needed  a moment                                                                   
to find the number.                                                                                                             
Co-Chair  Foster  indicated  the   amount  would  be  in  the                                                                   
language section of the budget.                                                                                                 
Mr.  Anderson referred  to page  53, starting  in section  7,                                                                   
line  13 which  was  the  section  for the  Alaska  Permanent                                                                   
Fund. He started reading from line 22, subsection d:                                                                            
     (d) The amount  calculated under AS  37.13.145(c), after                                                                   
     the  appropriation   made  in   (b)  of  this   section,                                                                   
     estimated  to be  $1,055,600,000,  is appropriated  from                                                                   
     the  earnings  reserve  account (AS  37.13.145)  to  the                                                                   
     principal  of the  Alaska permanent  fund to offset  the                                                                   
     effect  of  inflation on  the  principal  of the  Alaska                                                                   
     permanent   fund  for  the   fiscal  year   ending  June                                                                   
9:16:31 AM                                                                                                                    
Representative  Carpenter asked  for  the inflation  proofing                                                                   
amount  that was passed  in budget  for the  prior year.  Mr.                                                                   
Anderson  responded that  it was  approximately  $970 million                                                                   
or $973 million.                                                                                                                
Co-Chair Foster initially  amount of $900 million  was in the                                                                   
budget. However,  the inflation  number was calculated  to be                                                                   
was  $641 million.  Mr. Anderson  concurred. Co-Chair  Foster                                                                   
offered to get clarification from LFD.                                                                                          
Representative  Carpenter  thought  the legislature  had  put                                                                   
$4 billion away  in the previous year for  inflation proofing                                                                   
for FY  21 through  FY 24. Co-Chair  Foster confirmed  that 4                                                                   
billion was  transferred. Intent  language was also  included                                                                   
that indicated  the money was  for forward funding  inflation                                                                   
proofing.  He thought Representative  Carpenter was  correct.                                                                   
He continued  that there were  some folks from  the Permanent                                                                   
Fund  that indicated  they  did  not consider  it  to be  the                                                                   
case. However, it was the amount that was in the budget.                                                                        
Representative Carpenter  clarified that the  legislature was                                                                   
not including  the additional  25 percent royalties  that the                                                                   
statute required.                                                                                                               
Co-Chair Foster offered  that he was talking  about the post-                                                                   
1979  fields.  The  money  should   be  appropriated  in  the                                                                   
budget.  He  asked  Mr.  Anderson   where  the  language  was                                                                   
included in the bill.                                                                                                           
Mr. Anderson  clarified  that the committee  did not  include                                                                   
the  extra  25   percent  in  the  current   budget.  It  was                                                                   
currently out.                                                                                                                  
Vice-Chair Ortiz WITHDREW his OBJECTION.                                                                                        
9:19:25 AM                                                                                                                    
AT EASE                                                                                                                         
9:25:14 AM                                                                                                                    
Co-Chair Foster clarified  that there were changes  to the CS                                                                   
for HB  205 which  Mr. Anderson had  just reviewed.  The work                                                                   
draft was  adopted, and the committee  would move the  CS out                                                                   
of House Finance.                                                                                                               
Co-Chair  Johnston  MOVED  to  report CSHB  205(FIN)  out  of                                                                   
Committee with individual recommendations.                                                                                      
There being NO OBJECTION, it was so ordered.                                                                                    
CSHB  205(FIN) was  REPORTED out  of committee  with six  "do                                                                   
pass" recommendations and four "amend" recommendations.                                                                         
9:26:57 AM                                                                                                                    
Co-Chair  Johnston  MOVED  to  report CSHB  206(FIN)  out  of                                                                   
Committee with individual recommendations.                                                                                      
There being NO OBJECTION, it was so ordered.                                                                                    
CSHB  206(FIN)  was REPORTED  out  of  committee with  a  "do                                                                   
pass" recommendation.                                                                                                           
9:28:13 AM                                                                                                                    
AT EASE                                                                                                                         
9:33:36 AM                                                                                                                    
Co-Chair Foster  indicated that  the committee had  a meeting                                                                   
scheduled in  the afternoon. He  did not believe  the meeting                                                                   
would occur, but  he was leaving it open in  case Legislative                                                                   
Legal needed  to have any  changes made. The  committee would                                                                   
be addressing bills  for the remainder of the  session and he                                                                   
would  be handing  the gavel  over to  Co-Chair Johnston  who                                                                   
would  be taking  up legislation.  He thanked  his staff  and                                                                   
the  committee  staff for  all  of  their  hard work  on  the                                                                   
operating and mental health budgets.                                                                                            

Document Name Date/Time Subjects
HB 205 HCS2 Agency Summary GF vK 022820 (2).pdf HFIN 2/28/2020 9:00:00 AM
HB 205
HB 205 HCS2 Agency Summary All FundsvK 022820 (1).pdf HFIN 2/28/2020 9:00:00 AM
HB 205
HB 205 HCS2 Agency Summary UGF vK 022820 (3).pdf HFIN 2/28/2020 9:00:00 AM
HB 205
HB 205 CS FIN vK 022820.pdf HFIN 2/28/2020 9:00:00 AM
HB 205
HB 206 CS FIN v S 022820.pdf HFIN 2/28/2020 9:00:00 AM
HB 206