Legislature(2011 - 2012)HOUSE FINANCE 519
05/10/2011 03:00 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB107 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 107 | TELECONFERENCED | |
| + | SB 46 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 10, 2011
3:07 p.m.
3:07:10 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 3:07 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Dan Saddler; Representative Steve Thompson;
James Armstrong, Staff, Representative Bill Stoltze; Karen
Rehfeld, Director, Office of Management and Budget, Office
of the Governor.
SUMMARY
HB 107 BUDGET: CAPITAL
HB 107 was HEARD and HELD in Committee for
further consideration.
HOUSE BILL NO. 107
"An Act making and amending appropriations, including
capital appropriations and other appropriations;
making appropriations to capitalize funds; and
providing for an effective date."
3:07:33 PM
Co-Chair Stoltze observed that the capital budget was
before the committee for review.
Vice-chair Fairclough MOVED to ADOPT the workdraft for CS
HB 107(FIN) (27-GH1740\E, Kurtz, 5/9/11). Co-Chair Stoltze
OBJECTED for discussion.
3:09:35 PM
AT EASE
3:10:30 PM
RECONVENED
JAMES ARMSTRONG, STAFF, REPRESENTATIVE BILL STOLTZE,
reviewed the committee substitute (CS). The committee
substitute totals $3,049,170,00: $1.6 billion general
funds, $236 million designated general funds, almost $50
million other state funds, and $1.146 million federal
funds.
Mr. Armstrong reviewed the grants contained in Section 1.
Grants for municipalities begin on page 5, line 4. Grants
to named recipients start on page 45, line 4. He observed
and that the House added $100 million in revenue bond
authority and $37.5 million in general funds for the
University of Alaska, which would allow the university to
issue their own revenue bonds over the next five years for
deferred maintenance projects (page 118, lines 5 - 17). The
funding is broken down by region. House and Senate
additions were primarily contained in Section 1 and a
majority of the governor's capital budget was retained.
Mr. Armstrong moved to Section 4, page 126, statewide
energy projects. The legislation appropriates $120 million
to the Alaska Energy Authority and lists projects that were
formerly general fund appropriations to municipalities
(Senate version) as allocations within the section. The
intent language on page 127, lines 17 - 21 has been
modified.
Co-Chair Stoltze noted that the 50 percent language in the
Senate version was still under review by the House [intent
language requiring that the state's capital investment not
exceed 50% of the cost of a project].
Mr. Armstrong continued with his overview of the bill. He
explained that $71.5 million would be appropriated to the
Alaska Energy Authority for all of the ARCTEC projects. The
50% intent language is not applicable to the ARCTEC
projects.
Mr. Armstrong discussed page 138, line 11, which added an
extra $5 million to the AHFC weatherization and Home Energy
Rebate Program. He returned to the $21 million FY 12
appropriation for the Alaska Gasline Pipeline Development
Corporation on page 137. He observed that this
appropriation was not in the Senate version.
Mr. Armstrong reviewed Section 7, pages 141-142, cruise
ship related projects. Two projects were added: Anchorage -
Alaska Aviation Museum Energy and Safety improvements for
$495 thousand, and Alaska Wildlife Conservation Center for
$400 thousand. Co-Chair Stoltze pointed out that these
House additions were modest compared to other expenditures
and that they were connected to tourism projects.
3:16:05 PM
Mr. Armstrong continued to Section 10, pages 145 - 150,
$200 million for education projects: $76 million for three
new schools, $76 million for major maintenance of 33
schools, and $50 million for individual grants to
municipalities.
Mr. Armstrong discussed the $61 million in supplemental
projects contained in the governor's supplemental
legislation, which were not previously funded (pages 153-
155). He observed that $7.2 million of FY 11 supplemental
funding was included for the Alaska Gasline Development
Corporation, as requested by the Office of the Governor.
Mr. Armstrong directed attention to page 158, lines 1 - 6,
which appropriates $7.8 million from the Alaska Children
Trust Fund as grants to aid in prevention of child abuse
and neglect. This is a new section that mimics language in
the previous year's budget.
Mr. Armstrong reviewed Section 17, page 158, line 7, Bond
Defeasance. He noted that members were provided with an
associated handout, "Debt Retirement" (copy on file).
Co-Chair Stoltze observed that the provision represents a
caucus priority to pay off some of the retirement debt as a
true savings and reduction in the operating budget. Mr.
Armstrong explained that bonded debt and certificate of
participation would be paid off: $25 million in Anchorage
lease revenue refunding bonds, and $24 million for three
projects (Alaska Psychiatric Institute occurred in 2002,
the seafood and food safety laboratory in 2003, and the
state virology laboratory in 2005) for a total of $49
million.
3:19:11 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, noted that there had been
discussions on the opportunity for bond defeasance that
would result in an annual savings to the state through debt
service needs. There would be an ongoing savings in the
amount of $12 million. Co-Chair Stoltze interjected that
the mortgages would be paid off early. Mr. Armstrong noted
that there would be a $12 million decrement in next year's
supplemental since the operating budget had already been
reported out.
Mr. Armstrong reviewed Section 19, page 159. Section 19 (d)
appropriates $200 million in Alaska Housing Finance
Corporation (AHFC) funds to an in-state gas pipeline fund,
when and if it is created in Alaska Statute 18.56 by the
Twenty-Seventh Legislature. Section 19 (e) would
appropriate $400 million in AHFC funds to the Alaska
performance scholarship investment fund, when and if it is
created in Alaska Statute 18.56 by the Twenty-Seventh
Legislature.
Mr. Armstrong observed that Section 20 contains fund
transfers. Subsection (b) appropriates $222 million from
the Renewable Energy Grant Fund for Section 4 energy
projects. He explained that the fund transfers in Section
20 (c) and (d) pertain to Section 19. Subsection (c)
appropriates $200 million in FY 12 general funds to the
AHFC Fund. Subsection (d) would appropriate $400 million in
FY 11 general funds to the Alaska Housing Finance
Corporation Fund.
Mr. Armstrong explained that there were several items
removed from the governor's proposed capital legislation
that were deemed operating appropriation in nature. These
items were returned as multi-year operating appropriations
since they had not made it into the other version of the
budget. Four items were added: $45 thousand for testing of
seed potatoes, page 161, line 11 - 15; $400 thousand for a
recreational shellfish beach monitoring pilot project on
page 162, lines 8-11; $14 million to the Department of Law
for the BP Corrosion case and litigation before the Federal
Energy Regulatory commission on Trans-Alaska Pipeline
System tariff issues, page 162, line 24 - page 163, line 6;
and $100 million to the Department of Revenue, Permanent
Fund Division for software training and staff, page 163,
line 10.
3:24:01 PM
Mr. Armstrong discussed Section 31, page 163. He observed
that a bond package was passed in 2008 and adopted by
voters for $330 million in transportation GO Bonds. The
appropriation retires the $180 million in bonds issued to
date by the Department of Transportation and Public
Facilities and the Department of Revenue for construction
projects.
Co-Chair Stoltze noted that the debt reimbursement is a mix
of certificate of participations and general obligation
bonds, which is all public obligation debt. There is just
under $200 million in debt retirement.
Mr. Armstrong observed that legislative district
reappropriations begin on page 165, line 2 and urged
committee members to make certain their individual
reappropriations were contained in the bill. Legislative
agency reappropriations begin on page 175, line 13.
Co-Chair Stoltze REMOVED his objection. There being NO
further OBJECTION, CS HB 107(FIN), (27-GH1740\E, Kurtz,
5/9/11) was adopted.
3:27:53 PM
Co-Chair Stoltze discussed the intent of the committee
related to the capital budget. He asked the committee
members to review the bill. He emphasized that Senate
projects were retained [in the House CS]. He stessed that
the House additions, notwithstanding the operating budget
items that were restored, were under $200 million.
Co-Chair Stoltze reviewed the proposed amendment process.
Representative Gara wondered what the calculation would be
related to left over fiscal year savings. Mr. Armstrong
replied that there was a running total on the last page of
the "Debt Retirement" handout.
Representative Gara clarified his question and asked
whether there was a deposit to the statutory constitutional
budget reserve. Mr. Armstrong responded that any funds not
spent were addressed in the supplemental legislation,
previously adopted. Unspent funds from FY 11 were
automatically rolled-over to the Statutory Budget Reserve
Fund.
Representative Gara asked whether there was an estimate on
the rollover number. Mr. Armstrong agreed to provide the
estimate to the committee.
3:31:36 PM
Mr. Armstrong noted that Rob Carpenter with Legislative
Finance Division would post the comparisons between the
House and Senate versions to the division's website.
Co-Chair Stoltze observed that it was the intent of the
committee to advance the Senate version.
HB 107 was HEARD and HELD in Committee for further
consideration.
ADJOURNMENT
3:32:33 PM
The meeting was adjourned at 3:32 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 107 1-4 Summary of $200 million liability reduction 4-21-11 JB.docx.pdf |
HFIN 5/10/2011 3:00:00 PM |
HB 107 |
| HB 107 LFD Summary.pdf |
HFIN 5/10/2011 3:00:00 PM |
HB 107 |
| CSHB 107 WorkDraft versionE.pdf |
HFIN 5/10/2011 3:00:00 PM |
HB 107 |
| Use of cash for debt payment analysis 200 milllion option & recommendation 4-21-2011.xlsx |
HFIN 5/10/2011 3:00:00 PM |
HB 107 |