Legislature(2007 - 2008)SENATE FINANCE 532
02/29/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB256 | |
| HB13 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 256 | TELECONFERENCED | |
| += | HB 13 | TELECONFERENCED | |
| + | SB 229 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 256
"An Act making supplemental appropriations, capital
appropriations, reappropriations, and other
appropriations; amending certain appropriations;
ratifying certain expenditures; making appropriations
to capitalize funds; and providing for an effective
date."
Co-Chair Hoffman noted it was the third hearing on SB 256 by
the Senate Finance Committee.
9:11:09 AM
TIM GRUSSENDORF, STAFF, CO-CHAIR LYMAN HOFFMAN, turned to
page 7 of the supplemental requests spreadsheet for CSSB 256
(FIN) to explain modifications and additions that have been
made:
Sections 7-9 Natural Resources Oil & Gas
Cost to implement ch.1, SSSLA 2007 (HB 2001) Alaska's
Clear and Equitable Share legislation. Add two Oil &
Gas Revenue Audit Master exempt positions. The amount
is reduced from the original fiscal note due to later
than anticipated hiring of the positions. The FY09
budget contains a related increase of $303.5.
Mr. Grussendorf explained that the number was reduced from
$110,000 to $85,000 due to positions not yet hired.
Sections 7-9 Public Safety Judicial Services - Anchorage
Assume Anchorage prisoner transport duties. Assumes
December 2007 hire date for six new positions. Covers
one-time purchases and share of annual expenses. If
one-time costs are not funded here, additional funds
will be needed in FY09. In the FY09 budget at $656.3
for a full year's costs, but that does not include one-
time costs.
Mr. Grussendorf related that the reduction from $620,300 to
$477,600 is because the new positions have not been hired
yet.
Section 13(a) Environmental Conservation Water Quality
Implementation of the Ocean Ranger program. The
contract needs to be established early enough to allow
the contractor to hire and train Ocean Rangers prior to
the season beginning in May 2008. The contractor will
incur substantial expenditures for hiring, training,
and purchasing equipment in preparation for the
upcoming season. In addition to the contractor's
costs, the department is incurring expenditures for
paying staff and other expenditures for implementation
of the program.
Mr. Grussendorf reported that the language was modified to
clarify that the program spends no more than the $4 berth
tax that it generates.
Section 22 Education School Performance Incentive Program
If the amount necessary to pay school performance
incentives exceeds the amount appropriated for FY08,
the additional amount necessary is appropriated. The
department won't know the final amount until after the
legislature has adjourned. Similar language is
included in the FY09 operating budget.
Mr. Grussendorf explained that the Governor had proposed a
three-year line for the performance incentive program. An
additional $1.4 million will be funded for the program and
allow a report to be generated to see if the program is
working as expected.
9:13:47 AM
Section 27 Debt Fund Capitalization PCE Fund
Increase PCE Fund capitalization by $700.0 from
$12,999.4 GF to $13,699.4 GF (total funds from
$25,273.0 to $25,973.0) in order to provide more PCE
funding needed due to increased fuel costs.
Mr. Grussendorf explained that the number was changed from
$700,000 to $1.2 million for FY 08, and the FY 09 request
would be reduced by $500,000 in order to fully fund PCE for
FY 08.
Mr. Grussendorf reported on a new appropriation of
$13,261,000 to Retirement & Benefits that will depend on the
passage of SB 125, which is the PERS/TRS bill. It will be a
one-time payment for the "heroes list" and those who were
under the rate of 22 percent. If SB 125 passes, the
language regarding the "phase up" to 22 percent will be
removed.
9:15:16 AM
Mr. Grussendorf reported on a new appropriation to Commerce
regarding QTA Independent Travelers Grants. All non-Vehicle
Rental Tax funds will be replaced with Vehicle Rental Tax
funding. The Vehicle Rental Tax will be placed into the
Department of Natural Resources, Parks Management.
Mr. Grussendorf related that there would be a new
appropriation of $150 million for the capitalization of the
new fund for revenue sharing to Commerce, Revenue Sharing,
contingent on the passage of SB 72.
Mr. Grussendorf explained a new appropriation to Fish and
Game for the Anchorage Hatchery. It is a scope change that
removes language enabling funding to be spent on a hatchery
in Fairbanks (leaving a hatchery for Anchorage in the
appropriation language).
Mr. Grussendorf said that there is a new Fund Capitalization
to the Statutory Budget Reserve which appropriates $1
billion of the FY 08 surplus to the SBR.
Mr. Grussendorf reported another new Fund Capitalization to
the Constitutional Budget Reserve of an appropriation of
$2.6 billion of the Fy08 surplus to the CBR.
Mr. Grussendorf explained a language change in the
Department of Revenue, Shared Taxes and Fees, which would
add shared taxes and fees language for revenue collected in
FY 08, remove the commercial passenger vessel excise tax
from FY 09's budget, and not include it in the FY 08
supplemental to ensure that the correct persons receive the
payment.
9:18:04 AM
Mr. Grussendorf related that a new appropriation of $200
million to the Department of Revenue, Alaska Housing Finance
Corporation (AHFC), is part of a new energy program called
the Alaska Housing Energy Efficiency and Weatherization
Program. Another appropriation of $100 million is part of
the new Alaska Housing Home Energy Rating Rebate Program.
Mr. Grussendorf noted that there is a new placeholder of $50
million for the Department of Transportation and Public
Facilities, for capital projects.
Mr. Grussendorf reported on an appropriation of $68 million
to the Department of Administration for capital in order to
replace the Master Lease Line of Credit Funding with general
funds. This will reduce the FY 09 budget by $4 million
(reduction in debt service payments) and will add $68
million to the supplemental: $10 m (SATS/ALMR), $41 m
(AKPAY), $17 m (phone system).
9:19:34 AM
Mr. Grussendorf highlighted the total projects that were
deleted and approved, and the amount the Senate Finance
Committee has added, including supplemental savings.
Section 26 (f) Transportation
The Environmental Protection Agency (EPA) has initiated
an enforcement action against DOT&PF, alleging multiple
violations of the Clean Water Act. In addition, EPA is
requesting information regarding sand and gravel
sources. EPA believes that DOT&PF and its contractors
have been operating material sites without appropriate
storm water permits.
The EPA has proposed settling the case if the State
agrees to the entry of a consent decree(s) that could
involve the payment of significant fines (Idaho and
Hawaii have paid fines between $500,000 and
$1,000,000), be required to conduct supplemental
environmental projects, and provide training within
DOT&PF.
This funding would be used to collect evidence, present
a defense and begin negotiating a settlement. It is
anticipated that costs are expected to be at least
$500.0 during calendar year 2008 so an extended lapse
date through June 30, 2009 is requested.
AMANDA RYDER, FISCAL ANALYST, LEGISLATIVE FINANCE, explained
that the modification was because of EPA's enforcement
action and the money would be used for legal action. The
money was appropriated to enable the state to pay settlement
costs.
9:21:31 AM
Co-Chair Stedman MOVED to ADOPT the CS for SB 256, labeled
25-GS2009\C, Kane, 2/29/08.
Co-Chair Hoffman OBJECTED for discussion purposes.
Co-Chair Hoffman commented that the original bill was for
approximately $205 million and the committee is approving
$172,816,800 in the new version of the bill. There is an
increase in general funds of $4,150,730,800. The vast
majority of this appropriation is savings of $2.6 billion to
the CBR, a payment of 50 percent of the outstanding balance,
leaving a balance of $2.6 billion. The CBR currently has a
balance of $3.3 billion and the addition of $2.6 billion
would bring the fund balance to $5.9 billion. If this trend
continues, it is conceivable that the CBR could be
completely paid off in a few years.
9:24:09 AM
Co-Chair Hoffman continued to explain that a deposit of $1
billion to the SBR requires only a simple majority. Also
included in the fast track supplemental is $18.5 billion
needed to ensure that the senior services legislation
recently passed gets funded. He noted that $300 million is
set aside for grants for energy assistance. Another major
change is $150 million for revenue sharing, contingent on
passage of SB 72.
9:26:17 AM
Co-Chair Stedman clarified that $3.6 billion is being put
into savings, $300 million into energy conservation, and
$150 million into revenue sharing. Co-Chair Hoffman
commented that the bill front-end loads the revenue sharing
program that will ensure the life of a $50 million program
each year. Co-Chair Stedman continued to explain that there
is also, $18.5 million for Senior Care in the bill. He
added that there was also a $50 million place holder for
dealing with capital appropriations which were vetoed by the
Administration. Those will be flushed out in the next few
days.
Co-Chair Hoffman emphasized that Alaskans are concerned
about not spending the entire surplus; therefore, the
committee is proposing to set aside $3.6 billion in savings.
Alaskans are concerned about energy costs and this bill is a
first step to ensure that Alaskans can take the initiative
to weatherize their homes. He termed the bill a major
increase to what the Administration has proposed and a major
step in the right direction.
9:29:15 AM
Senator Thomas inquired about the appropriation regarding
the Anchorage hatchery. He shared his understanding that
there was an agreement based on bond funding paid by license
fees. He noted that cost overruns contributed to the
decision to have only one hatchery. He questioned why the
Fairbanks hatchery was removed from the funding. He did not
approve of the approach. He suggested splitting the money
equally between Fairbanks and Anchorage.
Co-Chair Hoffman thought there would be further debate on
the issue.
Senator Dyson requested a review of the vetoed capital
budget items.
Co-Chair Stedman recalled that the Administration vetoed
over $100 million in the capital budget last year. He
thought there was lack of information and miscommunication
which led to the items being vetoed. The list is being
reviewed with a target range of about $50 million. He noted
that there is no intent to put all of the vetoed items on
the table. He hoped that additional savings would be
forthcoming during this budget cycle. He mentioned that
there are also social issues that need to be addressed.
9:34:57 AM
Senator Dyson wondered if some of the vetoed projects would
be put back into the supplemental budget. Co-Chair Stedman
called it a work in progress.
Senator Dyson took that as a maybe. He emphasized that the
current supplemental document does not contain any vetoed
projects. He voiced concern about mixing budget items
across the fiscal year barrier and mixing capital and
operating items.
Co-Chair Hoffman recalled that that practice has been around
for a long time.
AT EASE: 9:37:33 AM
RECONVENED: 9:38:13 AM
Co-Chair Hoffman pointed out that in this budget process,
fiscal years are not being crossed. Co-Chair Stedman
pointed out that there is a $50 million place holder in the
bill and the vetoed items have not been listed in the bill
yet. He commented that during the last two years an attempt
to add transparency was made. He explained that there may
be problems, but care must be taken when looking at the
supplemental budget to look at operating impacts, and not to
get caught up in the dollar amounts. He urged committee
members to concentrate on looking at the impact to the
agencies in order to achieve an accurate budget and the
smallest supplemental budget possible. The goal is to have
all of FY 09 funded out of FY 09 funds, plus savings.
Senator Dyson summarized that the $50 million is a place
holder for vetoed capital projects. Co-Chair Hoffman
concurred.
9:41:42 AM
Co-Chair Hoffman noted his intent to expedite the
supplemental budget. He summarized that the total savings
in the bill are in excess of $11.5 billion.
Co-Chair Stedman agreed if the earnings reserve account is
removed, the total is about $7 billion. The operating
account is about $4 billion. He concluded that these are
huge steps forward.
There being NO OBJECTION CSSB 256 (FIN) was adopted.
AT EASE: 9:43:55 AM
RECONVENED: 9:47:12 AM
Co-Chair Stedman brought the meeting back to order.
9:48:33 AM
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