Legislature(2021 - 2022)ADAMS 519
04/23/2021 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB69 || HB71 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 23, 2021
2:32 p.m.
2:32:13 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 2:32 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair (via teleconference)
Representative Dan Ortiz, Vice-Chair
Representative Bryce Edgmon (via teleconference)
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen (via teleconference)
Representative Steve Thompson
Representative Adam Wool (via teleconference)
MEMBERS ABSENT
Representative Ben Carpenter
ALSO PRESENT
Kelly Cunningham, Analyst, Legislative Finance Division;
Brodie Anderson, Staff, Representative Neal Foster; Neil
Steininger, Director, Office of Management and Budget,
Office of the Governor.
PRESENT VIA TELECONFERENCE
Co-Chair Merrick; Representative Edgmon; Representative
Rasmussen; Representative Wool.
SUMMARY
HB 69 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 69 was HEARD and HELD in committee for further
consideration.
HB 71 APPROP: MENTAL HEALTH BUDGET
HB 71 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 69
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental appropriations; 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. 71
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; making
supplemental appropriations; and providing for an
effective date."
2:33:27 PM
Vice-Chair Ortiz MOVED to ADOPT the proposed committee
substitute for HB 69, Work Draft 32-GH1509\N (Marx,
4/22/21).
Co-Chair Foster OBJECTED for discussion. He asked his staff
to review the changes in the bill. He asked which documents
committee members should have on hand.
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
referred to a document from the Legislative Finance
Division (LFD) titled "HB 69 All Funds." He noted there
would be a slight discrepancy in the undesignated general
funds (UGF) because the page 2 referenced a Permanent Fund
Dividend (PFD) under the total. He clarified the best place
to find the UGF total was on an LFD document titled "HB 69
UGF Funds."
Co-Chair Foster noted the second document mentioned was
located on the top of the LFD reports in members' packets.
Mr. Anderson explained the changes in the committee
substitute (CS) beginning with the document titled "HB 69
All Funds." He detailed that the CS reflected all
subcommittee actions, changes made to the language sections
compared to a CS introduced on March 9th (version I), and
funds made available through the American Rescue Plan Act
(ARPA). The CS reflected an agency operations total FY 22
budget of $9.3 billion and $714 million in statewide items
(including things like debt service, retirement payments,
fund capitalizations, and transfers). The bill included
$3.4 billion in federal funds.
2:37:51 PM
Co-Chair Foster asked for verification that Mr. Anderson
was referring to the document titled "HB 69 All Funds." He
asked which column Mr. Anderson was reviewing.
Mr. Anderson directed members to the funding summary on
page 2 under column 6. The bill included $3.4 billion in
federal funds; $868.3 million in designated general funds
(DGF); $1.58 billion in other funds including corporate
receipts for Alaska Industrial Development and Export
Authority (AIDEA), Alaska Housing Finance Corporation
(AHFC), aerospace, interagency receipts, and airport
receipts; and $4.16 billion UGF. He stated that the FY 22
budget reflected a decrease of $291.8 million or 6.5
percent from the FY 21 management plan (in total UGF agency
and statewide operations).
Co-Chair Foster asked for clarification on the location in
the document.
Mr. Anderson directed attention to page 1 of the LFD
document titled "HB 69 UGF Funds." He highlighted the
difference between columns 6 and 1 in a column labeled "[6]
- [1]" comparing the FY 21 management plan with the CS. He
pointed to the $291.7 million or 6.5 percent decrease shown
under the column in the last row on the slide [labeled
"Total Agency and Statewide Operations"].
Co-Chair Foster was trying to locate the data Mr. Anderson
was referring to.
Mr. Anderson clarified that he was referring to the
document titled "HB 69 UGF Funds."
2:40:56 PM
Mr. Anderson reviewed the difference between columns 6 and
2 under a column labeled "AdjBase+ to HCS1" comparing the
adjusted base to the CS. He highlighted that according to
the adjusted base for UGF funds, the budget was down $197.6
million or 4.5 percent from the adjusted base.
Mr. Anderson relayed the operating and capital items had
been incorporated from the supplemental bills into the FY
21 budget. He explained the reasoning for the method. He
stated that very few capital items had been included in the
FY 21 budget due to the abbreviated session; there had been
further additions and changes to items relating to the
Coronavirus Aid, Relief, and Economic Security (CARES) Act
and other COVID-19 funding such as the Coronavirus Response
and Relief Supplemental Appropriations Act (CRRSAA); and
there were funds available from ARPA for the FY 21 and FY
22 budgets. He referenced the document titled "HB 69 Supp
OP Budget UGF."
Vice-Chair Ortiz asked for the document name to be
repeated.
Mr. Anderson complied. He additionally pointed to documents
titled "HB 69 Supp Op All Funds," "HB 69 Supp Capital UGF,"
and "HB 69 Supp Capital All Funds."
Co-Chair Foster asked Mr. Anderson to let committee members
know when he changed documents.
Mr. Anderson began with page 1 of the "HB 69 Supp Op All
Funds" document. He pointed to column 4 and listed the
agency operation spend at $1,069,930,200 and statewide
items spend at $151 million, for a total of $1,221.3
billion. He detailed the amounts were broken up into fund
sources on page 2 of the document. He pointed to column 4
and highlighted that the FY 21 budget had been reduced by
$161.6 million UGF and $1 million DGF. The supplemental
operating budget added $123 million in other funds and $1.3
billion in federal funds.
2:46:14 PM
Mr. Anderson referred to the document "HB 69 Supp Capital
All Funds." The total supplemental capital budget was
$315.6 million broken up into the following fund sources:
$9.4 million UGF, $11.3 million DGF, $13 million in other
funds, and $281.9 million in federal funds.
Mr. Anderson directed attention to page 1 of a document
titled "ARP/CRRSA Comparison of HB69 Version N to HB 181."
He detailed that the first page was made up of items
referred to by Treasury as limited flexibility items or
passthroughs. The items had to pass through the budget
prior to dissemination. He explained that columns contained
item numbers found in various locations in the budget. He
elaborated that the first column showed a section number
referring to HB 69 version N and a section number for the
governor's original ARPA legislation - HB 181 - if
applicable. The second column showed amounts under both
bills and the third column specified the timeframe both
bills authorized the appropriations.
2:49:10 PM
Mr. Anderson turned to the second page showing Coronavirus
State and Local Fiscal Recovery Funds (CSLFRF) flexible
items referred to as the $1 billion. He explained that the
bill would appropriate 70 percent of the $1 billion in FY
21 and FY 22 and the remaining 30 percent in FY 23. He
listed the breakdown of the $700 million as follows:
Section 18 included a $6 million appropriation for FY 21 to
FY 24 for domestic violence and sexual assault grants known
as VOCA [Victims of Crime Act]; the numbers section of the
bill included FY 22 fund source changes for revenue
replacement totaling $83 million; Section 45 included
$91.95 million related to FY 22 revenue replacement in debt
service (UGF was swapped with ARPA funding in FY 22);
Section 4 included FY 21 fund source changes for revenue
replacement in the amount of $235 million; Section 25(c)
included FY 21 revenue replacement for shared commercial
vessel passenger (CVP) tax in the amount of $21.2 million;
Section 52(h) replaced $2.1 million in shared CVP tax for
FY 22 because cruise ships would likely not be traveling in
the coming season; Section 52(i) replaced $2.1 million in
shared fisheries business tax for FY 22; Section 7 included
$30 million in grants to small businesses to offset revenue
loss beginning in FY 21, identified as a capital project;
Section 7 included $80 million in grants to local
governments to offset revenue loss in FY 21, identified as
a capital project; Section 7 included $30 million in grants
to nonprofits to offset revenue loss in FY 21, identified
as a capital project; Section 7 included $20 million in
tourism promotion funding to ARDORs in FY 21, identified as
a capital project; and Section 7 included $10 million for
the Alaska Travel Industry Association (ATIA) in FY 21,
identified as a capital project.
2:53:00 PM
Mr. Anderson stated that the aforementioned items concluded
the roll up of the ARPA and CRRSA funding. He noted there
would be some additional changes related to CRRSA discussed
later on in the language section. He reported that all
remaining supplemental items were located a document
breaking down all supplemental items. He offered to review
the document.
Co-Chair Foster asked for a summary of the items. He
believed the governor had proposed a supplemental package
of around $62 million. He asked Mr. Anderson to highlight
items proposed by the governor that were not accepted in
the CS in addition to any items added in the CS.
Mr. Anderson referenced the document "HB 69 Supp Op All
Funds." He directed attention to column 1 showing the
governor's supplemental request prior to the rollout of the
ARPA funding bill (HB 181). The governor had requested $304
million for agency operations and $21.9 million in
supplemental statewide items for a total request of $326.3
million.
Mr. Anderson looked at column 1 of the document titled "HB
69 Supp Capital All Funds." He pointed out that the
governor had asked for $165.68 million for statewide
capital project items. He noted that the figure reflected
the governor's request prior to ARPA, CRRSA, and CSLFRF
funds. He did not have a breakdown on hand but could follow
up with the information.
2:58:05 PM
Mr. Anderson moved to the numbers section of HB 69. He
reported that the numbers section of the CS reflected all
actions by subcommittees in addition to ARPA and COVID
funding. Additionally, all of the governor's procurement
consolidations under the Department of Administration had
been accepted. He elaborated that the CS also restored
public broadcasting (radio, television, and the commission)
funding to FY 19 funding levels. The CS included the
addition of an increment for library operations under the
Department of Education and Early Development (DEED) to
allow for the continuation of the statewide online library
system including the Statewide Library Electronic Doorway
(SLED).
Co-Chair Foster asked for verification that Mr. Anderson
was not reading from any document in members' packets. He
believed Mr. Anderson was identifying budget highlights.
Mr. Anderson agreed.
Vice-Chair Ortiz asked for verification Mr. Anderson was
addressing HB 69 version N.
Mr. Anderson agreed.
2:59:55 PM
Mr. Anderson continued with the DEED SLED program and
library catalogue program funded through the Higher
Education Investment Fund. He relayed there had been a
technical change with Mt. Edgecumbe's carryforward
authority by removing the "estimated to be" figure. The
revised language referenced only the statutory authority in
which the calculation was made. The change was in alignment
with the [disaster] declaration bill; if passed, the
language would allow for the conforming of any additional
funds that could be made available. He moved to the
Department of Commerce, Community and Economic Development
and highlighted that a grant had been added to named
recipients for the maintenance of the Kuskokwim ice road.
Under the Department of Law, the Janus structure was
created as a second civil appropriation for legal contracts
relating to the interpretation of the Janus vs. AFSCME
decision. He reported that two new tax auditor positions
had been added to the Department of Revenue budget. Within
the Department of Transportation and Public Facilities
(DOT), the CS accepted all of the governor's lease
consolidations. Additionally, the CS moved all Alaska
Marine Highway System (AMHS) funds including CRRSA funding
from the numbers section to the language section, which he
would address later.
3:01:35 PM
Mr. Anderson stated there were other fund changes within
DOT as well. He explained that due to the high number of
supplemental items, LFD separated the supplemental sections
from non-supplemental sections; therefore, compared to
previous bill versions, many items had been moved and were
designated as supplemental items beginning in the language
section. He referenced page 68 of HB 69 and highlighted
that many items had been listed as supplemental. He pointed
out that two items were not included on the document. The
first was the RPL [Revised Program Legislative] language.
He stated that the CS reflected the language currently used
in the disaster declaration bill in the other body limiting
the governor's RPL authority for all COVID-related federal
authority and included the potential future infrastructure
and employment legislation currently being discussed by
Congress. He explained that the same language applied to
the language section in Section 46 of HB 69. The second was
a labor contract that had not been included in the prior
year budget and was part of the governor's fast track bill.
Mr. Anderson noted that the totals versus the LFD reports
on the supplemental included a $2,300 difference because
the Blood Bank was accidentally omitted from the
calculations in the CS. He remarked that the error would be
corrected, and the updated document would be provided to
committee members.
3:03:56 PM
Mr. Anderson addressed the language section of the bill.
He shared that the CS removed the open-ended receipt
authority for employment training and the reappropriation
for fire suppression preparedness (the item would be
reflected in the capital budget). The CS changed the way
the Disaster Relief Fund was capitalized. He elaborated
that the governor had utilized lapsing funds directly
funded by the Constitutional Budget Reserve (CBR), which
would have required a three-quarter vote. Instead, the CS
used $30 million UGF in FY 21. The CS removed the portion
of the language section related to funding the Base Student
Allocation (BSA) formula and pupil transportation for
education as it had been included in a separate piece of
legislation. The CS removed the $35 million governor's
request for Medicaid reappropriation of lapsing funds.
Additionally, the CS removed the receipt and federal
authority related to the Alaska Gasline Development
Corporation's (AGDC) Alaska Liquified and Natural Gas
project fund.
3:05:13 PM
Mr. Anderson addressed language sections in the CS
beginning with Section 30(g) on page 77 through 78, lines
31 through 5 of the legislation. He detailed that the
section extended an RPL for Alaska Housing Finance
Corporation (AHFC). He noted the RPL had been approved in
January and the language would allow for the continuation
of the program. He moved to Section 31 on page 78, line 6,
which changed the amount of the $14.4 million Alaska
Industrial Development and Export Authority (AIDEA)
dividend to $14.3 million to reflect the proper amount. He
turned to Section 34(h) on page 81, line 5, which extended
an RPL for local communities to FY 22. He elaborated that
the federal government had extended the timeframe in which
the funds could be used; the amount was estimated at zero
dollars.
Mr. Anderson moved to page 81, line 14 pertaining to the
Department of Corrections (DOC). The CS replaced language
related to the man-day billing allowing for carryforward of
federal receipts. He turned to Section 36(d) on page 82,
line 6, which added $5 million for Pre-K. He advanced to
page 84, line 7 through page 87 line 4 (Sections 41(b)
through (k)). The segment had been moved from the numbers
section that authorized all funds, including CRRSA's FTA
and FHWA funds for implementing an 18 month funding plan
that would allow AMHS to change its schedule release to a
calendar year from a fiscal year with the certainty of
funding going forward.
3:08:34 PM
Mr. Anderson turned to an increment in Section 41(m) on
page 87, line 14 of $6 million in CRRSA funds for the
Interisland Ferry Authority. He detailed that the entity
had experienced heavy losses due to the pandemic; if it
failed, the AMHS would have to absorb the responsibilities.
He highlighted Section 42(c) on page 87, line 29 that added
$950,000 to cover the cost to elections for implementation
of the upcoming redistricting plan. Section 43 on page 88,
line 1, added $20 million in receipt authority to the
University of Alaska if the current amount was not
sufficient. Section 45(m) on page 93, lines 13 through 23,
fully funded school bond debt at $83.5 million. He detailed
that $30.8 million would come from the school fund and
$52.7 million would come from a reappropriation of FY 21
lapsing Medicaid funds. He explained that due to the use of
the reappropriation, the CS also included UGF backstop
language in case funds were not available. Sections 47(g)
and (h) on pages 95 line 29 through page 96, line 1, funded
the Community Assistance Fund from FY 21 to FY 22,
capitalized at $90 million. He detailed that the payment
distribution to communities would be fully funded.
3:11:09 PM
Mr. Anderson turned to Sections 47(i) through (j), page 96,
lines 2 through 12, which fully capitalized the Regional
Educational Attendance Area (REAA) fund capitalized at
$34.2 million. The increment also utilized Medicaid lapsing
funds and the UGF backstop. Section 47(t) on page 97, line
20, reflected $60 million in oil tax credit purchases using
AIDEA funds in the governor's original request. He noted
the CS removed the reference to the statutory formula
referenced in a previous version of the bill. Section 48(l)
on page 99, line 28, changed the gambling tax estimate to
zero and changed the deposit of the funds (of zero) to the
General Fund from the Capital Income Fund in previous
versions of the bill.
Mr. Anderson moved to Section 48(m) on page 99, line 31 to
page 100 line 2, which included a request from the governor
for repaying the Higher Education Fund for Washington,
Wyoming, Alaska, Montana, and Idaho (WWAMI) loans. Section
49 on page 100, line 3 added $1 million and extended the
appropriation for another year to FY 23 for the
redistricting board. Section 52(f) on page 103, line 27
updated the CVP tax estimate to reflect the updated spring
forecast.
Representative Thompson asked for the page number.
Mr. Anderson replied he was addressing Section 52(f) on
page 103, line 27. The CS updated the CVP to zero as
reflected in the spring forecast. He noted that the item
would be addressed in the CSLFRF where funds would be
included to replace the zero funding level. He concluded
his presentation on the language section of the bill. He
noted the bill also included various technical and
conforming changes. He stated that after reviewing the CS,
some issues with the effective dates had been identified.
The issues would need to be addressed at a later time, most
likely via a technical amendment in the amendment process.
3:14:57 PM
Co-Chair Foster asked if there were questions. He
acknowledged the extra challenge with the introduction of
the ARPA funds, which had made budget comparisons more
difficult. He noted that funds had been added and UGF funds
had been replaced in some places. He remarked that the
process had made things more complicated and harder to
compare year-over-year in some cases. He encouraged
committee members to reach out to his office with any
questions.
Representative LeBon referenced the LFD document titled
"ARP/CRRSA Comparison of HB69 Version N to HB 181." He
looked at page 2 related to CSLFRF flexible items. He noted
the committee had heard substantial feedback in public
testimony regarding sexual assault and domestic violence
funding. He asked if the $6 million on the page was an
effort to try to fill a reduction in federal funding.
Mr. Anderson replied in the affirmative. He remarked that
the committee had heard a significant amount of public
testimony on VOCA reductions He noted that the governor had
recognized the reduction in HB 181 as well. He explained
that the $6 million was replacement funding to try to make
grantees whole.
Vice-Chair Ortiz referenced a $6 million request for the
AMHS due to an absence in fares because ships had not
sailed. He asked where the funds were located.
Mr. Anderson answered that it was still a hole that would
be required to be filled possibly through the amendment
process.
Representative Josephson referenced the VOCA funding
specifying a timeframe of FY 21 to FY 24. He asked for
verification that if the state were spending within the
domestic violence and sexual assault component as it had
been five or six years back, the amount would be around $6
million per fiscal year.
Mr. Anderson believed the statement was correct.
Representative Josephson surmised that committee members
should not be mislead that the timeframe suggested the need
was met for three years.
Mr. Anderson deferred the question to LFD.
KELLY CUNNINGHAM, ANALYST, LEGISLATIVE FINANCE DIVISION
answered that an annual increment would be around $1.4
million whereas the $6 million was a multiyear increment
from FY 21 through FY 24. The increment did not bring the
annual funding up to its prior level six years back, but it
provided funding for three years.
3:19:08 PM
Co-Chair Foster added that during public testimony,
testifiers had stated they had been unexpectedly shorted by
the federal government by $6 million. He clarified his
office had later found out the lost federal funds were $1.4
million. The remaining $4.6 million was lost state funding
that had slowly deteriorated over the past few years. The
$6 million increment included in the budget would bring the
organizations up to the "high water mark" of state funding
in addition to the lost federal funds.
Ms. Cunningham replied that she would have to follow up.
Representative Josephson looked at page 74 of the
legislation pertaining to supplemental salary and benefit
adjustments. He had been told that partially exempt
salaries typically moved up alongside other salaries. He
asked for verification that it was not the case in the
current budget.
Mr. Anderson relayed that Section 24 on pages 74 and 75
included an SLA change in the last year's budget, which
only included the Inlandboatmen's union. He was aware of a
possible ongoing conversation with another labor contract,
but it was located under salary and benefits adjustment
authorizations later in the bill for FY 22 starting on page
100. He directed attention to item 4 on page 101, beginning
on line 4 related to the Public Safety Employees'
Association representing the regularly commissioned public
safety officer's unit. He believed Representative
Josephson's requestion pertained to the specific contract
and possible increment.
3:22:13 PM
Representative Josephson clarified that he was interested
in information that the state's partially exempt workers
had been left out of the increases, which they typically
received along with other unions. He stated that he could
ask the Office of Management and Budget about it.
Mr. Anderson agreed that OMB would be better to address the
question.
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, stated his understanding of the
question. He shared that salary schedules were set in
statute and a statutory change was required to make an
adjustment. He clarified that the partially exempt salary
schedule did not move with any other bargaining unit
contract.
Representative Josephson stated his understanding that
adjustments had been made through COLAs [cost of living
adjustments]. He would follow up with OMB.
Co-Chair Foster WITHDREW his OBJECTION to the adoption of
the CS.
There being NO further OBJECTION, Work Draft 32-GH1509\N
was ADOPTED.
3:24:43 PM
Vice-Chair Ortiz MOVED to ADOPT the proposed committee
substitute (CS) for HB 71, Work Draft 32-GH1508\G (Marx,
4/22/21).
Co-Chair Foster OBJECTED for discussion. He asked his staff
to review the changes in the bill.
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER, relayed
that the majority of the changes were reflected in the
operating budget, with the exception of one document titled
"HB 71 Mental Health Capital." The document showed the
totals for each of the mental health capital projects. He
explained that the majority of changes to the mental health
budget involved changing fund sources back to the
recommended and improved budget offered by the Alaska
Mental Health Trust Authority (AMHTA) trustees swapping
back the mental health trust reserves for the typical
General Fund mental health fund source and Alaska Housing
Finance Corporation (AHFC) funds. Additionally, the CS
removed one deferred maintenance capital budget project
with the expectation the Senate would add the project back
in. The change ensured the mental health budget would be
conferenceable at the end of session.
3:26:29 PM
Co-Chair Foster asked for verification that the governor's
request to use approximately $13 million in mental health
reserves had been replaced with UGF [undesignated general
funds].
Mr. Anderson replied in the affirmative. There had been $13
million in the operating and $3 million in the capital
budget for a total of $16 million. All of the funds had
been replaced with the original recommendation from the
[AMHTA] board.
Co-Chair Foster WITHDREW his OBJECTION.
There being NO further OBJECTION, Work Draft 32-GH1508\G
was ADOPTED.
Co-Chair Foster shared that the amendment deadline would be
Monday at 5:00 p.m. He hoped to begin taking up amendments
on Tuesday morning. He was available for questions.
HB 69 was HEARD and HELD in committee for further
consideration.
HB 71 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
3:28:29 PM
The meeting was adjourned at 3:28 p.m.