Legislature(1995 - 1996)
03/23/1995 01:44 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 23, 1995
1:30 P.M.
TAPE HFC 95-61, Side 1, #000 - end.
TAPE HFC 95-61, Side 2, #000 - 557.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 1:44 p.m.
PRESENT
Co-Chair Hanley Representative Martin
Co-Chair Foster Representative Mulder
Representative Brown Representative Navarre
Representative Grussendorf Representative Parnell
Representative Kelly Representative Therriault
Representative Kohring
ALSO PRESENT
Nancy Slagle, Director, Division of Budget Review, Office of
the Management and Budget, Office of the Governor; Janet
Clark, Director, Division of Administrative Services,
Department of Health & Social Services; Guy Bell, Director,
Division of Administrative Services, Department of Commerce
and Economic Development.
SUMMARY
HB 100 An Act making appropriations for the operating and
loan program expenses of state government and to
capitalize funds; making appropriations under art.
IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve
fund; and providing for an effective date.
HB 100 was HELD in Committee for further
discussion.
HB 101 An Act making appropriations for operating
expenses for certain programs for which the costs
are derived from mandated formulas or criteria,
and for expenses for certain leases and contracts
for state services and operations; and providing
for an effective date.
HB 101 was HELD in Committee for further
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discussion.
HOUSE BILL NO. 100
An Act making appropriations for the operating and loan
program expenses of state government and to capitalize
funds; making appropriations under art. IX, sec. 17(c),
Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing for
an effective date.
FRONT SECTION
NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR provided
members with a sectional analysis of the front section of HB
100 (Attachment 1). She reviewed Attachment 1 by section:
* Section 1. Identifies the balances in the
Highway and Aviation Fuel Tax
accounts available for
appropriation.
* Section 2. Provides a process for the
Legislative Budget and Audit
Committee to allow additional
receipt authority for general fund
and excess federal receipts.
* Section 3 & 4. Provides that state funds cannot be
used to replace a shortfall in
federal receipts and that
appropriations are reduced by the
amount of any shortfall.
* Section 5. Provides that general funds will be
appropriated in the event of a
shortfall in Title XX federal
funds. Title XX is the Social
Services Block Grant received by
the Department of Health & Social
Services.
Representative Martin asked if general funds have been used
to cover any shortfalls in Title XX funding. Ms. Slagle
replied that there has not been any transfers due to
shortfalls of Title XX funding. Representative Martin
suggested that section 6 is unnecessary.
JANET CLARK, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that the
Title XX Block Grant Offset Component in the Department of
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Health & Social Services' budget represents a negative
general fund and positive federal amount since they are
unable to predetermine which areas will be allowed to be
charged. Allowable expenditures are charged in the Division
of Family and Youth Services' component. She emphasized
that the Block Grant has grown to a current budget of $6.3
million dollars.
* Section 6. Allows the Department of Commerce
and Economic Development to utilize
funds in the Insurance Catastrophe
Reserve Account for the payment of
claims.
* Section 7. Allows the Commissioner of the
Department of Revenue to issue
revenue bond anticipation notes.
* Section 8. Provides a state guarantee for AHFC
Veterans Mortgage bonds.
* Section 9. Provides a payment of $5,793.8
million dollars for the
International Airport Revenue Fund
debt service.
* Section 10. Appropriates $9,628.2 million
dollars to the Debt Retirement Fund
which is then reappropriated for
specific lease payments.
* Section 11. Appropriates $21,337.3 million
dollars for payment of the general
obligation debt.
Ms. Slagle noted that the Administration has requested that
the existing balance in the Debt Retirement Fund be used to
offset the payment instead of an appropriation from the
general fund. There is a balance of $1,885.3 million
dollars in the Fund due to refinancing efforts by the
Department of Revenue. She noted that an early effective
date would be needed to prevent the money from being swept
into the Constitutional Budget Reserve Fund on June 30,
1995.
* Section 12. Appropriates income of the
Permanent Fund to the dividend
account to pay dividends.
* Section 13. Appropriates the amount calculated
for inflation proofing the earnings
of the Permanent Fund.
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* Sections 14 & 15. Deposits to the Permanent Fund
interest earned on the 25 - 50
percent for mineral lease rentals,
royalties, royalty sale proceeds,
net profit share and federal
mineral revenue sharing designated
for deposit to the Fund that
accrues prior to receipt by the
State.
Ms. Slagle explained, in response to a question by
Representative Therriault, that these revenues are collected
and then transferred to the Permanent Fund.
* Section 16. Allows the lapse balance of the
STEP Program to be deposited in the
Unemployment Compensation Fund.
* Section 17. Makes appropriations to the AHFC
Revolving Loan Fund, Housing
Assistance Loan Fund and Senior
Housing Revolving Loan Fund.
* Section 18. Appropriates general fund and
federal fund money to the Disaster
Relief Fund.
* Section 19. Appropriates 1996 tank registration
fees to the Storage Tank Assistance
Fund.
Ms. Slagle explained that Sections 20, 21, 22 and 23 relate
to the Oil and Hazardous Substance Release Response &
Prevention Fund and associated mitigation accounts. She
noted that the Prevention Mitigation Account may be effected
by the Constitutional Budget Reserve Fund sweep.
Ms. Slagle reviewed the flow of funding associated to the
Mitigation Account. She explained that the Mitigation
Prevention Account flows into the general fund. Money is
being appropriated from the Mitigation Prevention Account to
the Storage Tank Assistance Fund. The remaining balance
will be deposited to the Oil and Hazardous Substance Release
Response & Prevention Funds' Prevention Account.
Representative Martin questioned if Section 22 should be
deleted since the surcharge has been discontinued. Ms.
Slagle explained that the language is need to address
surcharges that were assessed prior to the shut off date
which must be appropriated to the Fund.
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* Section 24. Approves an appropriation to the
Information Services Fund in the
Department of Administration.
Representative Martin suggested that the charge back system
creates unnecessary paper work. Ms. Slagle noted that the
charge back system was instituted to assure agency
accountability and responsibility for the services they
request.
* Section 25. Appropriates funding for oil and
gas litigation in the Department of
Law and the Department of Revenue.
Ms. Slagle noted that this request has been reduced and the
funding source changed from the Constitutional Budget
Reserve Fund to the general fund based on the structure of
the cases involved.
Ms. Slagle noted that an amendment, proposed by the
Governor, to this section has been submitted to the
committee along with other front section amendments
(Attachment 2).
Co-Chair Hanley explained that the intent is to provide oil
and gas litigation funding for a full year. He noted that
the reduction in the appropriation corresponds to case
settlements.
Representative Brown questioned if the Department of Law's
cap accommodates a full year funding. Co-Chair Hanley noted
that oil and gas litigation for FY 95 was funded through the
Constitutional Budget Reserve Fund. He did not think the
cap would be adversely effected.
* Section 26. Appropriates $80,322.4 million
dollars to the Debt Retirement Fund
for School Construction Debt.
* Section 27. Appropriates $60 - $80 thousand
dollars in receipts from the 1995
Safety Advisory Council conference
to allow funding of the 1996
conference.
* Section 28. Allows the Real Estate Surety Fund
to pay claims.
* Section 29. Allows the expenditure of program
receipts in FY 96 of receipts
collected in FY 95 for Alaska
Public Utilities Commission (APUC).
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Ms. Slagle explained that Section 29 is the carry forward
amount.
GUY BELL, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF
COMMERCE AND ECONOMIC DEVELOPMENT stated that the regulatory
cost charge next fiscal year would be reduced by the amount
of the carry forward.
* Section 30. Allows for the use of FY 95 ASMI
tax receipts for FY 96
expenditures.
* Section 31. The administration recommends that
section 31 pertaining to fire
suppression be deleted from the
front section and contained in the
back section of HB 100.
* Section 32. The administration has recommended
an amended number of $29,616.3
million dollars for the Marine
Highway System Fund.
Representative Martin questioned the status of the
supplemental request for funding to the Marine Highway
System Fund. Ms. Slagle explained that the supplemental
request is a result of labor contract costs.
* Section 33. Appropriates from the Four Dam Pool
Transfer Fund to the Power Cost
Equalization and Rural Electric
Capitalization Fund, Southeast
Energy Fund and the Power project
Fund based on the statutory
40/40/20 split. The total amount
is approximately $10 to $11 million
dollars.
* Section 34. Allows the use of the
Constitutional Budget Reserve Fund
in the case that revenues are
insufficient to cover
appropriations.
(Tape Change, HFC 95-61, Side 2)
Ms. Slagle reviewed new amendments, offered by the
Administration, to the front section contained on page 5 of
Attachment 1. Co-Chair Hanley questioned if the $764.5
thousand dollar addition to the Marine Highway System Fund
for collective bargaining costs of the InlandBoatmen's Union
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relates to the additional $853.0 thousand dollars in section
33. Ms. Slagle agreed that the funding is for the same
contract. She noted that an appropriation is being made
into the Marine Highway System Fund from the general fund.
The new amendment would provide authorization from the
Marine Highway System Fund.
Ms. Slagle noted that an addition to the Highways Equipment
Working Capital Fund is need to accommodate increases in the
Labor Trades and Crafts Agreement.
Ms. Slagle noted that the Administration is requesting
$1516.3
thousand dollars in general funds for the Alaska Clean Water
Fund. The funding will capture $7.581.5 thousand dollars
and provide low interest loans for clean water projects.
Ms. Slagle pointed out that the Administration expects to
receive settlements from Executive Life to be returned to
the Investment Lost Trust Fund. Money from the settlement
must be returned to the funds that they were originally
appropriated from. A portion of the settlement came from
the Statutory Budget Reserve Fund. The Administration has
recommended language to allow the use of any funds returned
to the Statutory Budget Reserve Fund. Ms. Slagle suggested
that language be considered to clarified if funding to cover
revenue shortfalls would come from the Statutory Budget
Reserve Fund prior to accessing the Constitutional Budget
Reserve Fund.
In response to a question by Representative Martin, Ms.
Slagle noted that the statutory references for the Statutory
Budget Reserve Fund remain intact.
Ms. Slagle discussed the front section for formula programs.
She noted that shared taxes are estimated at $24,571.4
million dollars. Salmon Enhancement Taxes are estimated at
$5.516 million dollars.
Representative Martin questioned if the Governor intended to
delete the shared taxes from inclusion in HB 100. Ms.
Slagle stressed that the appropriation is needed to allow
the pass through of funds. She stated that the numbers were
not included in the accounting of total FY 95 or FY 96
operating budget amounts.
Co-Chair Hanley explained that shared taxes were taken "off-
budget" and put in the front section, so that an
appropriation of the dollar amount was not shown. This had
the effect of reducing the known value of the budget. He
noted that shared taxes have increased by $7 million dollars
over FY 95. He observed that if the numbers for shared
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taxes are included the budget appears to grow by $7.0
million dollars. He emphasized that the tax is a pass
through by the State. Members continued to discuss methods
for accounting shared taxes used in previous budgets.
Co-Chair Hanley referred to the anticipated sweep into the
Constitutional Budget Reserve Fund. He stated that language
is being drafted to allow any money swept into the
Constitutional Budget Reserve Fund to be appropriated back
to the sources from which it was swept at the end of the
fiscal year. He noted that a three-quarter vote is needed
to adopt the language. He stressed that this would maintain
the status quo. He emphasized the controversy surrounding
which funds would be appropriately swept into the
Constitutional Budget Reserve Fund. He noted that the
Department of Law is working on suggestions pertaining to
what should be swept. He illustrated that confusion could
result if issues concerning the sweep are not addressed
prior to the sweep.
SUBCOMMITTEE RECOMMENDATIONS
Representative Mulder MOVED to adopt and incorporate into HB
100 the House Finance Subcommittees recommendations for the
following operating budgets:
Department of Administration
Department of Revenue
Department of Labor
Department of Education
Department of Commerce and Economic Development
Department of Military and Veterans Affairs
Department of Natural Resources
Department of Transportation and Public Facilities
Department of Environmental Conservation
Department of Community and Regional Affairs
Department of Corrections
Alaska Court System
Office of the Governor
Discussion pursued regarding the inclusion of the
accompanying letter of intents. Representative Brown
OBJECTED to the adoption of letters of intent which were not
adopted in the subcommittees.
Co-Chair Hanley clarified that letters of intent that were
not officially adopted by the subcommittees would not be
adopted.
Representative Brown OBJECTED for purpose of discussion.
She stated that she did not support the subcommittee
recommendations.
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There being NO further OBJECTION, the subcommittee
recommendations for the noted departments were adopted. The
Governor's proposed amendments for the front section were
not adopted.
Discussion pursued regarding scheduling of amendments.
ADJOURNMENT
The meeting adjourned at 3:00 p.m.
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