Legislature(2009 - 2010)HOUSE FINANCE 519
02/03/2009 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HJR11 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 11 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
February 3, 2009
8:33 a.m.
8:33:05 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 8:33 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 Reggie Joule
Representative Mike Kelly
Representative Woodie Salmon
MEMBERS ABSENT
Representative Richard Foster
ALSO PRESENT
Randall Ruaro, Special Assistant, Office of the Governor;
Representative Beth Kerttula
PRESENT VIA TELECONFERENCE
John Katz, Director, State/Federal Relations and Special
Counsel, Washington, D.C.
SUMMARY
HJR 11 Relating to the federal stimulus package.
CSHJR 11(FIN) was REPORTED out of Committee with a
"do pass" recommendation and with a new zero
fiscal note by the Legislature.
8:33:41 AM
HOUSE JOINT RESOLUTION NO. 11
Relating to the federal stimulus package.
RANDALL RUARO, SPECIAL ASSISTANT, OFFICE OF THE GOVERNOR,
provided insight into the procedural posture of the economic
stimulus bill. He related that the U.S. House has passed a
version of the economic stimulus bill, which is
significantly different than the version currently being
debated in the U.S. Senate. The version passed out of the
Senate will have to be reconciled with the House version
through a conference committee process. That version will
have to be passed by a majority vote in both bodies. It is
expected that the bill will be on President Obama's desk by
February 16.
8:35:54 AM
Mr. Ruaro explained that the Governor's office has been
proceeding on two tracks with the economic stimulus bill.
The first track has been to follow the bill's language in
both the House and Senate and provide comment to the Alaska
delegation. The bill contains no earmarks and is mainly
formula driven with competitive loan programs and grant
programs. He gave examples of comments made to the Alaska
delegation. There are strict time constraints in the House
version, and it is felt that the time constraints should be
extended to 180 days. Comments were also provided on the
scope of formulas, some of which need to be adjusted to meet
Alaska's needs.
Mr. Ruaro highlighted the second track which consists of
working with state agencies to get them ready to receive
funds from the stimulus program and meet federal
requirements for spending the funds. The bill adds on new
procurement requirements and time restrictions. The
administration has also been working with the legislature
and individual legislators on specific parts of the bill.
He gave an example of meeting with Senator Kookesh about
funds for roads on Indian reservations.
8:38:50 AM
JOHN KATZ, DIRECTOR, STATE/FEDERAL RELATIONS AND SPECIAL
COUNSEL, WASHINGTON, D.C., testified via teleconference, and
concurred with Mr. Ruaro's comments.
Representative Gara commented that there are no longer
earmarks contained within the stimulus bill, however, there
are projects with time constraints that may not work in
rural areas. He wondered if the 180 day extension will work
in the more remote areas of Alaska. He referred to the $300
million major maintenance list and said that many of those
projects are off the road system.
Mr. Katz said that issue has been raised with the Alaska
delegation who share similar concerns. He thought the 180
days would be sufficient. The final deadline has yet to be
determined. He said that Alaska's two senators are closely
watching the amendment process.
8:41:25 AM
Representative Gara asked if day 180 is the day construction
will begin. Mr. Katz defined it as when funds would be
obligated by whatever deadline Congress ultimately
specifies. There could be a problem if the deadline refers
to an award of federal funds for a particular project, which
would create significant issues. The tendency at the moment
is toward a formulation that would look like obligating
funds. The state Department of Transportation and Public
Facilities is gearing up to accept these funds and is well
aware of the requirements.
8:42:36 AM
Representative Joule pointed out that most of the requests
are coming from municipalities and other entities besides
the state. He wondered if the language was sufficient to
identify the source of the requests. Mr. Katz said he has
problems with the last "whereas" clause. It requires that
the list be submitted to Congress. He proposed another
clause that indicates that the Governor and legislature are
working together to prepare for the receipt of the funds.
It is at the state level where decisions will be made.
Mr. Katz said that within the area of infrastructure,
requirements will be imposed. Within federal parameters,
the legislature and the Governor will decide how to use the
funds. They should be deal with within the context of the
normal appropriation process for the next fiscal year. Both
Senator Begich and Senator Murkowski have formulated lists
based on the input by communities and nonprofits. They have
asked for finalized forms by February 17. He opined that
the list issue is more relevant to Alaska for the immediate
future. For the longer term it will come up again in the
context of the next fiscal year.
8:46:34 AM
Representative Fairclough asked for information about
federal funds regarding education and Alaska, which is
already forward funding. Mr. Katz emphasized that the issue
concerning states that forward fund for education is a
priority issue that needs to be resolved. States that have
not decreased funding would actually be penalized under the
House bill. The Senate is working on changing that so that
Alaska is not penalized and would receive its proportionate
share of allocated funds. The problem exists in the House
version of the bill and that unintended problem has now been
recognized. He expressed hope that the problem will be
resolved in the conference committee next week.
8:48:22 AM
Representative Fairclough questioned whether the stimulus
package is good for America or not. She noted support "on
both sides of the isle". She asked if the federal stimulus
package is an issue for debate, or whether it is a
certainty. Mr. Katz replied that "the train has left the
station" with respect to the wisdom of an economic stimulus
package in some form. There are a few members in the House
and Senate that would argue that no economic stimulus of
this kind is necessary. The debate is now over the proper
balance between infrastructure spending, taxes, and normal
appropriation process programs. It is still a tremendous
work in progress. In the Senate, the Democratic leadership
has indicated that they are open to amendments. The
Republicans maintain that they are not stalling and have
genuine concerns. Amendments throughout the week will be an
attempt at a balance between infrastructure spending, tax
reduction for individuals and businesses, and a social net
that would deal with things like unemployment, insurance,
health care, and education.
Co-Chair Stoltze commented on the merits of a debate
regarding the stimulus package.
8:51:15 AM
Representative Gara noted that Alaska is just getting up to
speed on the stimulus plan. He said there is a fear that
some of these programs would generate funding for new
programs that would be hard to end. Mr. Katz said that for
the most part there are not new programs, but an extension
or enhancement of existing programs. There are some new
requirements that might pertain into the future. The debate
is, on one side, that there is an immediate need for a
safety net due to the economic crisis and this is a response
to that need. Others believe that there are some
requirements that would create an expectation that programs
would continue to exist into the future without federal
funding for them.
Representative Gara mentioned an unemployment program
extension that would not require a financial obligation. He
requested examples of programs that would need to be cut off
if funding was lacking. Mr. Katz highlighted the increase
in Medicaid and trigger mechanisms for states with high
unemployment, where the federal government would increase
its share of the federal Medicaid match by 4.9 percent for
the period of the bill. States would be expected to adhere
to certain Medicaid benefits after the 4.9 percent is no
longer available. Others have argued that certain aspects
of the education funding would also fit into that category.
In particular, Title I funds for IDEA would be enhanced and
then states might be left to their own devices. Also,
health information technology broad band would fall into the
category. Those who adhere to that argument feel that,
aside from infrastructure and tax relief, other aspects of
the bill should be dealt with in the normal appropriations
process.
8:56:43 AM
Representative Gara spoke of enhanced funding and suggested
a requirement that accepting the money today would not
require continuous funding. He wondered if that decision
would be up to the states. Mr. Katz thought that regarding
Medicaid, the states would have the option to opt into the
enhanced program. He said each category would have to be
examined. In some categories there is a requirement that
some programmatic changes exist into the future, and in
other areas, states would have the option to curtail the
program.
Co-Chair Stoltze asked what percentage of the bill are
capital infrastructure funds, tax reductions, and social
program funds. Mr. Katz offered to provide those numbers.
The Senate ratios are changing, but the House numbers are
available.
Mr. Ruaro gave an example of transit funding. Communities
may be able to buy some new buses, but they would have to be
run on new routes, which means ongoing maintenance and
operations costs. Co-Chair Stoltze asked if that example
was the tip of the iceberg. Mr. Ruaro said was just one
example.
8:59:36 AM
Representative Kelly said he understands that the promise of
infrastructure building ended up being less than 10 percent
at the end. He requested the data as soon as possible. Mr.
Katz said there was currently an attempt on the Senate floor
to increase the infrastructure part of the bill.
Representative Fairclough asked about renewable energy
project incentives in the bill. Mr. Katz said there was a
lot of focus on renewable energy in the bill. The
expectation is that a lot of that funding would go through
the Department of Energy. It is one of the President's
philosophies to make a transition from conventional fuels to
renewable energy, so there is considerable funding for
projects and research.
9:01:49 AM
Vice-Chair Thomas asked how local hire would be assured for
these new projects. Mr. Ruaro thought that currently
projects must meet federal Title 23 requirements, as well as
Disadvantaged Business Enterprise (DBE) requirements. Vice-
Chair Thomas recalled past jobs that did not emphasize local
hire.
Vice-Chair Thomas asked if the Department of Transportation
and Public Facilities is considering any construction of
harbors. Mr. Ruaro thought that harbor projects must come
through the transit category of funding because there is not
an existing formula as there is for roads. He thought the
House side had a broader definition that would allow port
projects and ferry terminals to qualify.
Co-Chair Stoltze pointed out that there is an ongoing debate
about the definition of local hire.
9:04:58 AM
Co-Chair Stoltze opened the meeting to public testimony.
Seeing none, the meeting was closed to public testimony.
Representative Gara referred the Committee to a website -
NCS.org - regarding the categories of the bill. He recalled
40 percent going to highways, school construction,
weatherization, and energy.
9:07:09 AM
Co-Chair Hawker MOVED to ADOPT Amendment 1:
Page 2, line 1 through line 3
DELETE all language
INSERT "WHEREAS to accomplish this purpose, the federal
government is relying on existing formulas and grant
programs to allocate funds to the state, President
Obama and the Congressional leadership of both parties
having indicated that no specific projects will be
included in the economic stimulus package;"
Co-Chair Stoltze OBJECTED.
Co-Chair Hawker explained that the language in Amendment 1
was provided by Mr. Katz. It removes the paragraph that
referred to submitting a project package to the government
and states that this will be a formulaic program and not an
earmark program.
Mr. Ruaro said the language was accurately described by Co-
Chair Hawker.
9:08:43 AM
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 1 was adopted.
Representative Crawford said he decided not to offer an
amendment because he has determined that the bill would
benefit the domestic steel industry.
9:09:56 AM
Representative Gara MOVED to ADOPT Conceptual Amendment 2,
to add "job training," before "school construction" on page
1, line 14.
Co-Chair Hawker OBJECTED.
Representative Gara expressed gratitude for the nonpartisan
manner in which the resolution has been written. He voiced
concern about the need to build job training facilities for
the gas pipeline. He wanted to emphasize job training in
the bill.
Co-Chair Hawker spoke to his objection. He agreed that the
effort has been made to make the resolution a generic
endorsement of the stimulus package. He thought that job
training should not be a particular focus. The programs
listed are formulaic programs being considered for funding
in Congress. Job training has not been specifically
targeted.
9:12:40 AM
Representative Crawford spoke in favor of Conceptual
Amendment 2. He argued that education has been specifically
targeted in the bill and job training is just as worthwhile.
Representative Austerman thought the core of the stimulus
package was creating jobs. He spoke of the problem in
Alaska of not having a trained work force. He spoke in
favor of the amendment.
Representative Gara withdrew Conceptual Amendment 2 and
offered a New Conceptual Amendment 2 in order to include the
words "job training," in the appropriate place - before
energy on page 2, line 9.
Co-Chair Hawker did not maintain his OBJECTION to the
motion. New Conceptual Amendment 2 was adopted.
Co-Chair Stoltze noted a zero fiscal note by the
Legislature.
9:16:20 AM
Representative Kelly referred to page 1, line 6, of the
resolution. He thought there was debate over the clarity of
that line. He suggested eliminating that line. Co-Chair
Hawker argued that "current price" does not prejudice a high
or low price and has the ability to encompass both
circumstances. Representative Kelly said he would have
difficulty supporting HJR 11. He thought it would be
penalizing the future generation.
9:18:20 AM
Representative Austerman returned to the question about
Medicaid and unemployment unfunded mandates and voiced a
concern. Co-Chair Stoltze asked if an indeterminate fiscal
note was needed.
Co-Chair Hawker explained that the fiscal note applies to
the legislation before the Committee, a strongly worded
letter to Congress. There is no fiscal consequence to this
resolution.
Co-Chair Stoltze noted the concern by Representative
Austerman.
9:20:03 AM
Representative Gara said there was some truth to the
obligation to the state if the Medicaid component is
included in the stimulus package. The federal match has
decreased in recent years. He pointed out that this
proposal would return the funding to the level experienced
three years ago, which was a 54 percent federal match. He
maintained that that part is intended to relieve the states
and does not concern him.
Co-Chair Hawker MOVED to REPORT HJR 11 out of Committee, as
amended, with individual recommendations and the
accompanying fiscal note.
Vice-Chair Thomas OBJECTED.
Vice-Chair Thomas suggested that "buying American" should
apply to Alaska salmon.
9:22:28 AM
Representative Austerman said he has a problem with the
direction the nation is going regarding spending. He called
today a "sobering point". He disagreed with the philosophy
of spending and preferred trying to balance the budget on a
constant basis.
Co-Chair Hawker also shared concerns about the federal
stimulus package. He stated that the federal government is
going to pass this legislation and Alaska has to be
prepared. Nothing in the legislation binds the state - it
is just another form of a federal receipt and the
legislature has the exclusive prerogative to accept or
reject the funding.
9:25:22 AM
Representative Kelly commented that some would prefer to not
receive this stimulus package. He agreed with the
Governor's take on it. He maintained that the more the
state is dependant on federal funds, the less creative it
becomes and the less wisely it governs. He spoke of the
decreases in federal funding and how it affects the state.
He questioned how the state would backfill the loss of
federal funds, a 60 percent drop in revenue. He favored
only infrastructure support. He did not want the stimulus
package to be a burden to future generations.
9:28:47 AM
Representative Salmon said that the district he is from has
been in a slump since statehood. His area has experienced
hard economic times, unlike urban areas. If this stimulus
package will help the rural areas, he said he is in favor of
it. The villages have a different perspective of the
economic stimulus package. He emphasized the despair in the
villages during hard economic times and the inequity between
areas throughout the state.
9:31:28 AM
Representative Joule said he understands the angst over the
bill. He questioned the alternative if a stimulus package
is not provided.
Co-Chair Stoltze empathized with the economic problems in
parts of the state. He thought there were deep divisions
over the method of providing economic stimulus. He spoke of
a goal to improve the country.
9:32:45 AM
Vice-Chair Thomas commented on the Governor's hiring freeze
and the need to reevaluate job recruitment.
Representative Salmon disagreed with recruiting from the
Lower 48.
Representative Kelly OBJECTED to the motion to move the bill
from Committee.
A roll call vote was taken on the motion.
IN FAVOR: Austerman, Crawford, Fairclough, Gara, Joule,
Salmon, Thomas, Hawker, Stoltze
OPPOSED: Kelly
Representative Foster was absent from the vote.
The MOTION PASSED (9-1).
CSHJR 11(FIN) was REPORTED out of Committee with a "do pass"
recommendation and with a new zero fiscal note by the
Legislature.
Representative Fairclough announced a meeting on the
economic stimulus at noon today.
ADJOURNMENT
The meeting was adjourned at 9:36 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Federal Economic Stimulus Update 1 15 2009.pdf |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |
| CBPP Medicad Asst..pdf |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |
| Gov Press Release Economic Stimulus 1-12-09.pdf |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |
| HJR11-LEG-COU-2-2-09.pdf |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |
| Letter to Delegation 1 7 09.pdf |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |
| Medicaid Economic Stimulus House.doc |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |
| US House Approps 01-21-09.pdf |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |
| US Senate Approps 01-23-09.pdf |
HFIN 2/3/2009 8:30:00 AM |
HJR 11 |