Legislature(2019 - 2020)ADAMS ROOM 519

03/25/2019 01:30 PM FINANCE

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Audio Topic
01:35:53 PM Start
01:36:41 PM HB39 || HB40
01:37:18 PM Fy 20 Budget Subcommittee Reports
01:37:18 PM Department of Transportation and Public Facilities
01:47:31 PM Office of Governor
01:51:44 PM Legislature
01:59:36 PM Department of Commerce, Community and Economic Development
02:05:12 PM Department of Corrections
02:19:25 PM Department of Education and Early Development
02:24:35 PM Department of Environmental Conservation
02:26:40 PM Department of Fish and Game
02:32:49 PM Department of Natural Resources
02:38:24 PM Department of Labor and Workforce Development
02:50:34 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 39 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 40 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
Subcommittee Reports/Closeout
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 25, 2019                                                                                            
                         1:35 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:35:53 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:35 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Tammie Wilson, Co-Chair                                                                                          
Representative Jennifer Johnston, Vice-Chair                                                                                    
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Kelly Merrick                                                                                                    
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Paul  Labolle,   Staff,  Representative  Neal   Foster;  Rob                                                                    
Carpenter,  Analyst,  Legislative   Finance  Division;  Ryan                                                                    
Johnson,  Staff,  Representative  Neal Foster;  David  Teal,                                                                    
Director,  Legislative  Finance   Division;  Caroline  Hamp,                                                                    
Staff,  Representative   Dan  Ortiz;  Liz   Harpold,  Staff,                                                                    
Representative Dan Ortiz;  Morgan Foss, Analyst, Legislative                                                                    
Finance Division;  Shay Siegert, Staff,  Representative Gary                                                                    
Knopp;   Alexei   Painter,  Analyst,   Legislative   Finance                                                                    
Division.                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 39     APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          HB 39 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 40     APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          HB 40 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
FY 20 BUDGET SUBCOMMITTEE REPORTS:                                                                                              
     GOVERNOR                                                                                                                   
     LEGISLATURE                                                                                                                
    DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                                                                          
     DEPARTMENT   OF   COMMERCE,  COMMUNITY   AND   ECONOMIC                                                                    
     DEVELOPMENT                                                                                                                
     DEPARTMENT OF CORRECTIONS                                                                                                  
     DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT                                                                              
     DEPARTMENT OF ENVIRONMENTAL CONSERVATION                                                                                   
     DEPARTMENT OF FISH AND GAME                                                                                                
     DEPARTMENT OF NATURAL RESOURCES                                                                                            
     DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT                                                                              
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
                                                                                                                                
HOUSE BILL NO. 39                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     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. 40                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive   mental    health   program,   including                                                                    
     supplemental  appropriations;  and   providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
1:36:41 PM                                                                                                                    
                                                                                                                                
^FY 20 BUDGET SUBCOMMITTEE REPORTS                                                                                              
                                                                                                                                
1:37:18 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  provided  information  about  the  meeting                                                                    
process. He  intended to spend  approximately 10  minutes on                                                                    
each department.                                                                                                                
                                                                                                                                
^DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                                                                           
                                                                                                                                
1:37:18 PM                                                                                                                    
                                                                                                                                
PAUL LABOLLE, STAFF, REPRESENTATIVE  NEAL FOSTER, provided a                                                                    
subcommittee  report for  the  Department of  Transportation                                                                    
and Public  Facilities (DOT)  FY 20  budget with  a prepared                                                                    
narrative (copy on  file). He shared his intent  to omit any                                                                    
non-undesignated  general  fund  (UGF)  items,  but  he  was                                                                    
prepared  to  speak  to  the   items  at  the  will  of  the                                                                    
committee.  The subcommittee  recommended  deleting the  UGF                                                                    
portion  of  the  reduced  executive  branch  travel  by  50                                                                    
percent or -$596,900 UGF; deleting  50 percent cost of rural                                                                    
airport  maintenance  by  -$22,600;  approving  the  Airport                                                                    
Contracts and  Maintenance of  $422,000 UGF;  implementing a                                                                    
fund  source change  for capital  improvement project  (CIP)                                                                    
receipts  for  general funds  for  the  Adak airport  at  an                                                                    
increase  of  $146,000  UGF; and  adding  office  technology                                                                    
salary adjustments billed to agencies for $43,800.                                                                              
                                                                                                                                
Mr. Labolle reviewed recommendations  made by members of the                                                                    
subcommittee including  a reduction in Marine  Highway Funds                                                                    
personal service  line from Marine  Shore Operations  and to                                                                    
transfer those funds  to replace UGF funds  in Marine Vessel                                                                    
Operations at  a reduction of  $1.2 million UGF;  and intent                                                                    
language  for  the  department to  examine  adding  a  third                                                                    
weekly  sailing from  the Port  of  Bellingham. The  actions                                                                    
resulted in  a UGF spend  of $178.8 million (a  reduction of                                                                    
approximately $1.2  million compared  to the FY  20 adjusted                                                                    
base) and a $630.9 million  total spend including all funds.                                                                    
He  highlighted  an  addition  of  $42  million  in  receipt                                                                    
authority  to allow  collection of  revenue for  facilities,                                                                    
maintenance,  and  operations.  The change  did  not  impact                                                                    
DOT's  UGF  fund, but  it  may  affect  UGF spend  in  other                                                                    
agencies where the funds would be collected.                                                                                    
                                                                                                                                
1:40:25 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  added that overall  the budget was  down by                                                                    
about  $1.2  million  year-over-year   in  state  funds.  He                                                                    
mentioned  he had  introduced another  amendment that  would                                                                    
have reduced  the budget by  another $8.4 million  and would                                                                    
have spread out  the cost of $4.2 million  to state highways                                                                    
and aviation and  another $4.2 million to  the Alaska Marine                                                                    
Highway System  (AMHS). He reported  that the  amendment had                                                                    
failed in subcommittee.                                                                                                         
                                                                                                                                
Representative   Sullivan-Leonard   highlighted   that   the                                                                    
committee's   budget   showed   an   overall   increase   of                                                                    
$55,976,000 or  45.6 percent over the  governor's amended FY                                                                    
20 budget.                                                                                                                      
                                                                                                                                
Co-Chair  Wilson referenced  the reduction  by $1.2  million                                                                    
UGF to designated  general funds (DGF). She  asked where the                                                                    
DGF were coming from.                                                                                                           
                                                                                                                                
Mr. Labolle replied  that the DGF were  moved from shoreside                                                                    
operations to vessel  operations and UGF of  the same amount                                                                    
were reduced from vessel operations.                                                                                            
                                                                                                                                
Co-Chair Wilson  asked for  the balance  in the  vessel fund                                                                    
aside from the $1.2 million.                                                                                                    
                                                                                                                                
ROB  CARPENTER,   ANALYST,  LEGISLATIVE   FINANCE  DIVISION,                                                                    
clarified that  the vessel  fund had  not been  amended. The                                                                    
shoreside  operations  budget  had   been  reduced  by  $1.2                                                                    
million  of marine  highway funding.  The  funding had  been                                                                    
utilized in vessel operations to  replace UGF. He summarized                                                                    
that  there  had  been  a   decrement  of  $1.2  million  in                                                                    
shoreside operations and the money  had been moved to vessel                                                                    
operations.                                                                                                                     
                                                                                                                                
Co-Chair Wilson was  trying to figure out where  the DGF had                                                                    
come from.                                                                                                                      
                                                                                                                                
1:43:20 PM                                                                                                                    
                                                                                                                                
Mr. Carpenter answered that the  funding source was the AMHS                                                                    
fund, which housed all of the revenue collected by AMHS.                                                                        
                                                                                                                                
Co-Chair Wilson asked for the balance of the fund.                                                                              
                                                                                                                                
Mr.  Carpenter  replied that  at  the  beginning of  session                                                                    
there  had been  a  projected surplus  of approximately  $27                                                                    
million at the end of FY 19.                                                                                                    
                                                                                                                                
Co-Chair Wilson  asked for verification there  was a balance                                                                    
of $27 million although there  was $20 million of the amount                                                                    
included  in  the  supplemental budget.  She  surmised  that                                                                    
since the  supplemental had  not yet  passed, there  was $27                                                                    
million in the fund.                                                                                                            
                                                                                                                                
Mr. Carpenter replied in the affirmative.                                                                                       
                                                                                                                                
Vice-Chair Johnston  referenced the  $42 million  in receipt                                                                    
authority. She  asked if the  subcommittee had  included any                                                                    
intent   language   to   track   measurable   outcomes   and                                                                    
efficiencies from the $42 million.                                                                                              
                                                                                                                                
Mr. Labolle replied in the negative.                                                                                            
                                                                                                                                
1:44:36 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  asked if  Representative  Sullivan-Leonard                                                                    
had  been  referencing  the  comparison  to  the  governor's                                                                    
budget or all funds.                                                                                                            
                                                                                                                                
Representative Sullivan-Leonard replied UGF.                                                                                    
                                                                                                                                
Co-Chair Foster  asked if it was  UGF compared to the  FY 20                                                                    
budget or the governor's budget.                                                                                                
                                                                                                                                
Representative  Sullivan-Leonard  replied  that it  was  the                                                                    
governor's budget compared to the subcommittee budget.                                                                          
                                                                                                                                
Co-Chair  Foster relayed  that the  governor had  proposed a                                                                    
cut of $65  million to AMHS, which the  subcommittee had not                                                                    
approved.  However, the  subcommittee had  cut $1.2  million                                                                    
from the prior year's adjusted base budget.                                                                                     
                                                                                                                                
Representative  Josephson asked  for detail  on the  receipt                                                                    
authority of $42 million.                                                                                                       
                                                                                                                                
Mr.  Labolle answered  that the  $42 million  was part  of a                                                                    
restructuring   of  maintenance   across  departments.   The                                                                    
administration  believed efficiencies  could be  achieved if                                                                    
DOT   ran   facilities   maintenance   for   all   agencies.                                                                    
Departments other than DOT would  funnel funds they had used                                                                    
for maintenance  through DOT. He  elaborated that  DOT would                                                                    
use   the   interagency   receipts    to   take   over   the                                                                    
responsibility of the work.                                                                                                     
                                                                                                                                
Representative Josephson  asked if  it meant  other agencies                                                                    
would not receive the funds.                                                                                                    
                                                                                                                                
1:46:25 PM                                                                                                                    
                                                                                                                                
Mr.  Labolle  replied  that the  change  would  most  likely                                                                    
affect  other budgets  [outside  of DOT]  because the  funds                                                                    
would need  to be forwarded to  DOT; it would be  up to each                                                                    
department appropriation to obtain  funds to forward to DOT.                                                                    
He added  the funds  should already  be in  the departments'                                                                    
base  because  they  had  been  historically  operating  the                                                                    
function.                                                                                                                       
                                                                                                                                
^OFFICE of GOVERNOR                                                                                                           
                                                                                                                                
1:47:31 PM                                                                                                                    
                                                                                                                                
RYAN JOHNSON,  STAFF, REPRESENTATIVE NEAL  FOSTER, addressed                                                                    
the budget  for the Office  of the Governor with  a prepared                                                                    
narrative (copy on file):                                                                                                       
                                                                                                                                
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF) $22,094.3                                                                                 
     Designated General Funds (DGF)   $0.0                                                                                      
     Other Funds                      $4,171.8                                                                                  
     Federal Funds                    $229.0                                                                                    
     Total                            $26,494.9                                                                                 
                                                                                                                                
     The  Unrestricted  General  Fund difference  from  FY20                                                                    
     Adjusted   Base  to   the  House   Subcommittee  budget                                                                    
     recommendation  is a  reduction of  $906.2 thousand  of                                                                    
     Unrestricted General  Funds, which  is 3.9%  below FY20                                                                    
     Adjusted Base.                                                                                                             
                                                                                                                                
Mr. Johnson continued  to address the budget  for the Office                                                                    
of  the Governor.  Positions in  the  governor's office  had                                                                    
increased  from   159  to  175   due  to  the   transfer  of                                                                    
administrative   services   directors    (ASD)   from   each                                                                    
department into  the Office of Management  and Budget (OMB).                                                                    
Additionally,  the   governor's  budget  included   two  new                                                                    
positions for a deputy director and a budget director.                                                                          
                                                                                                                                
Mr. Johnson reviewed other  governor's budget items approved                                                                    
by  the subcommittee  including the  reduction to  executive                                                                    
branch travel by 50 percent  or $618,400 UGF; a $300,000 UGF                                                                    
decrease to  the governor's contingency fund;  the alignment                                                                    
of receipt authority  of $2,893,400 to pay  for the transfer                                                                    
of the  ASD positions  to OMB.  The subcommittee  also moved                                                                    
the  appropriation of  $1 million  UGF for  the 2020  census                                                                    
based redistricting  process from the capital  budget to the                                                                    
operating   budget  based   on  a   recommendation  by   the                                                                    
Legislative  Finance  Division.  The division  believed  the                                                                    
item  belonged  in the  language  section  of the  operating                                                                    
budget and  not as  a capital  appropriation in  the capital                                                                    
budget.                                                                                                                         
                                                                                                                                
1:50:11 PM                                                                                                                    
                                                                                                                                
Representative  Josephson asked  about  an  item related  to                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
(DCCED) staff.                                                                                                                  
                                                                                                                                
Mr.  Johnson responded  that the  subcommittee had  rejected                                                                    
one of the  governor's budget items, which  would have added                                                                    
three positions with a focus on economic development.                                                                           
                                                                                                                                
Vice-Chair Ortiz asked if the  increased number of positions                                                                    
due  to  moving  ASD  positions   from  departments  to  the                                                                    
governor's   office    reflected   the   actions    of   the                                                                    
subcommittee. He  explained that the Department  of Fish and                                                                    
Game (DFG) the subcommittee  had not accepted the governor's                                                                    
proposal  to move  positions. He  asked  if the  information                                                                    
reflected the governor's plan or subcommittee actions.                                                                          
                                                                                                                                
Mr.  Johnson answered  that the  number in  the subcommittee                                                                    
report was accurate.  He explained there were  two brand new                                                                    
positions  in  the  governor's  budget.  He  stated  that  a                                                                    
[position]  transfer may  not have  gone  through from  DFG;                                                                    
therefore, the increment had created the two new positions.                                                                     
                                                                                                                                
^LEGISLATURE                                                                                                                  
                                                                                                                                
1:51:44 PM                                                                                                                    
                                                                                                                                
Mr. Johnson reviewed  the budget for the  Legislature with a                                                                    
prepared narrative (copy on file):                                                                                              
                                                                                                                                
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF)  $64,129.2                                                                                
     Designated General Funds (DGF)    $327.7                                                                                   
     Other Funds                       $1,883.8                                                                                 
     Federal Funds                     $00.0                                                                                    
     Total                             $66,340.7                                                                                
                                                                                                                                
     The  Unrestricted  General  Fund difference  from  FY20                                                                    
     Adjusted   Base  to   the  House   Subcommittee  budget                                                                    
     recommendation  is  a  decrease  of  $3.2  thousand  of                                                                    
     Unrestricted General Funds, which is 0.005% below FY20                                                                     
     Adjusted Base.                                                                                                             
                                                                                                                                
Mr. Johnson  elaborated that  the subcommittee  had accepted                                                                    
the following governor's requests:  the approval of two PCNs                                                                    
[position control  number] for  the expansion of  the Senate                                                                    
Finance  Committee  for  $390,000   UGF;  $210,000  UGF  for                                                                    
federal compliance  audits for Legislative Budget  and Audit                                                                    
(LB&A);   $85,900  to   reduced  vacancy   factor  for   the                                                                    
Legislative Finance Division; and  various fund source swaps                                                                    
to  reduce  the General  Fund  obligations  by $640,200  UGF                                                                    
(including  Wells  Fargo  rent  receipts  in  Anchorage  and                                                                    
teleconference revenue to offset  costs). He elaborated that                                                                    
because of  the passage  of HB  216 in  2018, the  Office of                                                                    
Victims'  Rights  (OVR)  had restorative  justice  funds  to                                                                    
offset  their General  Fund costs.  He explained  that fewer                                                                    
UGF  was spent  in OVR  and more  restorative justice  funds                                                                    
were used.                                                                                                                      
                                                                                                                                
Mr. Johnson  reported that the subcommittee  had denied $1.1                                                                    
million UGF for  performance audits that had  been placed on                                                                    
hold.  He   relayed  LB&A  had  not   requested  the  funds.                                                                    
Additionally,   the  legislature   had  reduced   the  state                                                                    
facilities  rent   by  $50,000  UGF  to   match  anticipated                                                                    
expenditures.                                                                                                                   
                                                                                                                                
1:54:10 PM                                                                                                                    
                                                                                                                                
Representative Sullivan-Leonard  saw that  other departments                                                                    
had  reduced their  travel. She  asked if  there had  been a                                                                    
discussion about reducing travel for the legislature.                                                                           
                                                                                                                                
Mr.  Johnson answered  that the  governor's request  had not                                                                    
included a  travel reduction for the  legislature; the issue                                                                    
had not been discussed by the subcommittee.                                                                                     
                                                                                                                                
Representative  Josephson referenced  the LB&A  request that                                                                    
had  been  approved  by  the   subcommittee.  He  asked  for                                                                    
verification  that  LB&A had  control  over  its budget  and                                                                    
could, by  committee action, spend  resources as  needed. He                                                                    
asked  if  the increment  was  a  housekeeping issue  or  an                                                                    
update of the budget status.                                                                                                    
                                                                                                                                
DAVID  TEAL, DIRECTOR,  LEGISLATIVE FINANCE  DIVISION, asked                                                                    
for clarification  on the question. He  asked Representative                                                                    
Josephson to provide the dollar amount he was referring to.                                                                     
                                                                                                                                
Representative Josephson  stated there  had been  some funds                                                                    
denied for  performance audits. He asked  if the legislature                                                                    
had directed  LB&A that it  could not  entertain performance                                                                    
audits  in   the  coming  fiscal  year.   Alternatively,  he                                                                    
wondered  if LB&A  could act  on  its own  to authorize  the                                                                    
audits.                                                                                                                         
                                                                                                                                
Mr.  Teal  replied  that  the  law  remained  on  the  books                                                                    
relating  to  the responsibility  or  duty  to complete  the                                                                    
performance  audits,  which were  on  a  five or  seven-year                                                                    
schedule. For  the past three years,  the performance audits                                                                    
had  not  been  funded.  He reported  that  the  legislative                                                                    
auditor [Kris  Curtis, Legislative Auditor,  Alaska Division                                                                    
of   Legislative   Audit]    believed   that   because   the                                                                    
responsibility remained  on the  books, she was  required to                                                                    
ask for  the money and have  the request denied in  order to                                                                    
feel  comfortable  with  not  performing  those  duties.  He                                                                    
elaborated that  the auditor  had put  the issue  before the                                                                    
committee and  the committee had  failed to  appropriate the                                                                    
money to  the Division of Legislative  Audit; therefore, the                                                                    
division did  not have the  funds to perform the  audits. He                                                                    
expected  it would  take direction  from the  legislature to                                                                    
the division to  communicate that the audits  were not being                                                                    
funded;  therefore, the  division  did not  need  to do  the                                                                    
work.                                                                                                                           
                                                                                                                                
Representative Josephson  would like to hear  more about the                                                                    
issue. He  thought it sounded  that the legislature  was not                                                                    
compliant.  He thought  the legislature  should comply  with                                                                    
the law.  He wanted to delve  into the issue further  at the                                                                    
appropriate time.                                                                                                               
                                                                                                                                
Co-Chair Wilson  referenced discussion about  the governor's                                                                    
50 percent  travel reductions. She  believed the  50 percent                                                                    
reduction was  not across  the board,  but the  governor had                                                                    
decided  where   the  reduction   would  be  made   in  each                                                                    
department.   She   asked   for    the   accuracy   of   her                                                                    
understanding.                                                                                                                  
                                                                                                                                
Mr. Teal  replied in the  affirmative. He detailed  that not                                                                    
every  agency   or  allocation  in  the   agencies  received                                                                    
reductions and the reductions were  not always 50 percent or                                                                    
every fund code. He stated that it was a mix.                                                                                   
                                                                                                                                
1:58:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson  surmised the  governor could  have proposed                                                                    
the travel reduction to the legislature if he chose.                                                                            
                                                                                                                                
Mr. Teal agreed it was  possible; however, he noted that the                                                                    
governor's budget  had initially  included a  statement that                                                                    
the governor  had forwarded the legislature's  request as he                                                                    
had  received it  (the committee  had removed  the statement                                                                    
because it  was no longer  necessary). The governor  did not                                                                    
examine the budgets  of the legislature or  the Court System                                                                    
but was  required to  submit a  budget reflecting  all state                                                                    
expenditures.  The governor  did  not review  or reduce  the                                                                    
other branches of government budgets.                                                                                           
                                                                                                                                
Co-Chair  Wilson emphasized  that  the  governor could  have                                                                    
made the  reduction to  the legislature's  travel if  he had                                                                    
chosen  to  do so.  She  asked  for verification  there  was                                                                    
nothing preventing  the governor  from making  the reduction                                                                    
to the legislature as he had done with other agencies.                                                                          
                                                                                                                                
Mr. Teal agreed.                                                                                                                
                                                                                                                                
^DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT                                                                   
                                                                                                                                
1:59:36 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilson   reviewed  the  Department   of  Commerce,                                                                    
Community  and Economic  Development (DCCED)  budget with  a                                                                    
prepared narrative (copy on file):                                                                                              
                                                                                                                                
     Fund Source: (dollars are in thousands)                                                                                    
                                                                                                                                
     Unrestricted General Funds (UGF)  $7,357.1                                                                                 
     Designated General Funds (DGF)     $46,935.9                                                                               
     Other Funds                        $56,541.3                                                                               
     Federal Funds                      $21,438.3                                                                               
     Total                              $132,272.6                                                                              
                                                                                                                                
Co-Chair  Wilson reported  the subcommittee  recommendations                                                                    
represented a decrease of $1,505,900  UGF or 17 percent from                                                                    
the  FY  20 adjusted  base.  The  subcommittee accepted  the                                                                    
governor's  department-wide travel  reductions of  $807,100.                                                                    
She noted  the reduction was  not necessarily 50  percent of                                                                    
the particular agency.                                                                                                          
                                                                                                                                
Co-Chair  Wilson  highlighted   that  the  subcommittee  had                                                                    
denied  the  travel  reduction of  $209,000  to  the  Alaska                                                                    
Seafood Marketing  Institute (ASMI). She explained  that the                                                                    
ASMI travel  funds were  statutory designated  receipts. The                                                                    
administration  had told  the  subcommittee  that the  funds                                                                    
would be left  in a savings account for  ASMI. She explained                                                                    
that the companies  taxed themselves and there  was no state                                                                    
funding going in. The funds  were to develop the marketplace                                                                    
and  the  subcommittee  saw no  reason  to  restrict  ASMI's                                                                    
travel.                                                                                                                         
                                                                                                                                
Co-Chair Wilson reported that  the subcommittee had accepted                                                                    
the  governor's $1  million  reduction  in local  government                                                                    
assistance,  returning   to  the  actuals  of   FY  18.  The                                                                    
subcommittee  had   accepted  the  governor's   increase  of                                                                    
$1,574,400  to  restore  marijuana regulation  funding;  the                                                                    
fund source was from business  license receipts and not UGF.                                                                    
The  subcommittee   accepted  the  governor's   deletion  of                                                                    
funding   of  two   development   specialists  in   economic                                                                    
development.   The   subcommittee  denied   the   governor's                                                                    
transfer of  economic function from DCCED  to the governor's                                                                    
office and had deleted the  three positions and funding from                                                                    
the economic  development of $713,200 UGF  and $106,000 from                                                                    
vehicle rental  tax. The economic development  process would                                                                    
go  to the  governor;  the subcommittee  had determined  the                                                                    
governor  could had  a large  staff and  plenty of  existing                                                                    
money for the functions.                                                                                                        
                                                                                                                                
Co-Chair   Wilson    continued   to    review   subcommittee                                                                    
recommendations for  DCCED. The subcommittee had  denied the                                                                    
governor's  request  to  replace   $381,800  of  Power  Cost                                                                    
Equalization (PCE)  endowment funds with UGF.  Although, PCE                                                                    
was included in  the language section of the  budget and not                                                                    
under DCCED,  the subcommittee hoped the  co-chair [Co-Chair                                                                    
Foster] would  choose to keep  PCE funds as  endowment funds                                                                    
and not  UGF. She  reported the state  was receiving  over 6                                                                    
percent interest  in the PCE  fund versus  approximately 1.5                                                                    
percent if  it went  to the  General Fund.  The subcommittee                                                                    
had accepted  the governor's request to  delete $450,000 UGF                                                                    
for the Alaska Legal Services  grant; however, it had funded                                                                    
the  grant  of  $450,000  with  Alaska  Gasline  Development                                                                    
Corporation (AGDC)  LNG funds by reducing  personal services                                                                    
in  AGDC   by  $450,000.  She  reported   that  the  current                                                                    
executive  director  was  earning  $350,000,  not  $800,000,                                                                    
which had freed up $450,000.                                                                                                    
                                                                                                                                
Co-Chair Wilson  detailed that the subcommittee  had deleted                                                                    
language  allowing funding  to  be  transferred between  all                                                                    
appropriations;   the    responsibility   was    under   the                                                                    
legislature's purview, not the governor's.                                                                                      
                                                                                                                                
                                                                                                                                
2:03:06 PM                                                                                                                    
                                                                                                                                
Vice-Chair   Ortiz  asked   how  the   total  DCCED   budget                                                                    
recommended  by  the  subcommittee  compared to  the  FY  15                                                                    
level.                                                                                                                          
                                                                                                                                
Co-Chair    Wilson    replied    that    the    subcommittee                                                                    
recommendations reflected  a 27.2 percent decrease  from the                                                                    
FY 19 management plan and 17 percent from the FY 20 budget.                                                                     
                                                                                                                                
Mr. Carpenter  pointed to  page 2, column  6 of  the "Multi-                                                                    
Year  Agency  Totals -  Operating  Budget  - FY  2020  House                                                                    
Structure,"  provided by  the Legislative  Finance Division.                                                                    
He reported  that there was  a $23.5 million  reduction from                                                                    
the FY 15 management plan to the House subcommittee budget.                                                                     
                                                                                                                                
Vice-Chair Ortiz asked for the percentage reduction.                                                                            
                                                                                                                                
Mr. Carpenter  replied that the reduction  was approximately                                                                    
76 percent from the FY 15 management plan.                                                                                      
                                                                                                                                
^DEPARTMENT OF CORRECTIONS                                                                                                    
                                                                                                                                
2:05:12 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilson  reviewed  the  Department  of  Corrections                                                                    
(DOC) budget with a prepared narrative (copy on file):                                                                          
                                                                                                                                
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF)   $255,378.5                                                                              
     Designated General Funds (DGF)     $9,542.0                                                                                
     Other Funds                        $32,044.7                                                                               
     Federal Funds                      $1,587.0                                                                                
     Total                              $308,552.2                                                                              
                                                                                                                                
Co-Chair   Wilson    reported   the    subcommittee   budget                                                                    
represented a  decrease of $35,729,500  UGF or  12.3 percent                                                                    
from the  FY 20  adjusted base. One  of the  biggest debates                                                                    
the  subcommittee  had  undergone  was on  whether  to  send                                                                    
inmates  out  of   state  and  whether  it   would  be  more                                                                    
affordable than keeping them  in-state. The subcommittee had                                                                    
identified there  would be more savings  keeping inmates in-                                                                    
state and  doing a program  that started in  an institution,                                                                    
moved  to   a  community   residential  center   (CRC),  and                                                                    
electronic  monitoring  (if  mandated   by  the  courts)  on                                                                    
probation and parole.                                                                                                           
                                                                                                                                
Co-Chair  Wilson  explained   that  the  governor's  amended                                                                    
budget requested a $6 million  UGF reduction for the closure                                                                    
of the sentence portion of  the Wildwood facility, which had                                                                    
a  maximum  of  326 inmates.  Additionally,  the  governor's                                                                    
budget  included $30,600,000  UGF reduction  associated with                                                                    
cost  savings for  sending  500 inmates  out  of state.  The                                                                    
total reduction  of $36,600,000 was offset  by a $17,800,000                                                                    
increase for out  of state contract beds,  which resulted in                                                                    
a  net  savings of  $18,800,000.  She  underscored that  the                                                                    
subcommittee had never  been shown where the  inmates may go                                                                    
and  had  not  seen  a  request  for  information.  She  was                                                                    
uncertain where  the numbers  had come  from. She  found the                                                                    
proposal to shut down a successful prison concerning.                                                                           
                                                                                                                                
Co-Chair   Wilson   highlighted    that   the   subcommittee                                                                    
discussion  had addressed  benefits of  keeping inmates  in-                                                                    
state,   close  to   their  families   and  treatment.   The                                                                    
subcommittee  had   also  considered  ways   to  potentially                                                                    
increase  treatment  availability  outside of  prisons.  The                                                                    
subcommittee   recommended   a  reduction   of   $36,900,000                                                                    
associated with  moving inmates out of  prisons, but keeping                                                                    
them in-state and placing 400  qualified inmates in CRCs and                                                                    
200  inmates  on  electronic  monitoring.  She  reported  an                                                                    
additional $10.5  million had been  added to the  budget for                                                                    
CRCs and  $2.4 million was added  for electronic monitoring.                                                                    
The actions resulted in a net  savings of $24 million - $5.2                                                                    
million UGF more than the governor's proposed budget.                                                                           
                                                                                                                                
Co-Chair   Wilson  relayed   the  subcommittee   had  denied                                                                    
videoconferencing  of $969,000,  which would  have added  10                                                                    
additional  individuals. She  reported the  subcommittee had                                                                    
not received an explanation for the proposal.                                                                                   
                                                                                                                                
2:08:28 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilson  underscored the  state  had  a process  in                                                                    
place that was  not being utilized. She  elaborated that the                                                                    
subcommittee was not  asking DOC to allow  any individual to                                                                    
go into  a CRC  without going  through the  current process.                                                                    
She explained that CRCs were  not currently utilized to help                                                                    
individuals  get jobs  or  treatment.  The subcommittee  was                                                                    
asking  the  commissioner  not to  merely  send  inmates  to                                                                    
halfway houses  [also called CRCs], but  to consider whether                                                                    
some of  the halfway houses  could be turned  into treatment                                                                    
centers. She  highlighted the  myriad behavioral  health and                                                                    
substance abuse  issues existing  in Alaska. The  CRCs could                                                                    
act  as a  step-down process.  For example,  for individuals                                                                    
who  had been  in jail  for many  years. She  discussed that                                                                    
when  individuals  were  released  from  prison,  they  were                                                                    
unable to  access treatment or  other resources  they needed                                                                    
and within three  years, two out of  three individuals ended                                                                    
up  back  in prison.  The  step-down  approach would  enable                                                                    
individuals to get necessary services.                                                                                          
                                                                                                                                
Co-Chair  Wilson discussed  that  electronic monitoring  was                                                                    
currently used for probation and  parole. She explained that                                                                    
some individuals  going to  a halfway house  may need  to be                                                                    
monitored   longer.  She   noted  that   at  one   time  400                                                                    
individuals had  been on  electronic monitoring;  the number                                                                    
was currently around  100. She emphasized the  items were in                                                                    
place.  She explained  the  proposal was  a  way to  conduct                                                                    
business differently.  She stressed that every  time someone                                                                    
reoffended  there  was a  new  victim.  She underscored  the                                                                    
importance  of  slowing  the  recidivism  rate  down,  while                                                                    
following the existing rules.                                                                                                   
                                                                                                                                
Vice-Chair  Johnston asked  if DOC  had done  a request  for                                                                    
proposal for the out of state [prison] facilities.                                                                              
                                                                                                                                
Co-Chair Wilson replied in the  negative. The department was                                                                    
still  working   on  it.   She  shared   the  subcommittee's                                                                    
frustration  that   DOC  could  have  done   a  request  for                                                                    
information  to  give  the  subcommittee   a  range  of  the                                                                    
possibilities  and  services.  The  subcommittee  had  heard                                                                    
rumor that because  of things taking place in  the Lower 48,                                                                    
there were no prison beds available.                                                                                            
                                                                                                                                
2:11:01 PM                                                                                                                    
                                                                                                                                
Representative   Josephson  referenced   the  subcommittee's                                                                    
proposed  reduction to  videoconferencing. He  asked if  the                                                                    
subcommittee had discussed whether  the reduction would meet                                                                    
due process.  He assumed  it meant  that defendants  in some                                                                    
circumstances   need    not   appear   as   part    of   the                                                                    
videoconferencing hearing.                                                                                                      
                                                                                                                                
Co-Chair Wilson  replied that the subcommittee  meetings had                                                                    
been  very  frustrating because  of  a  lack of  information                                                                    
[from the  department]. The specific  request had  asked for                                                                    
10 more individuals to  do videoconferencing. The department                                                                    
had  been   unable  to  tell  the   subcommittee  where  the                                                                    
individuals  would be.  Additionally,  DOC  had reported  it                                                                    
could  not  make inmates  participate.  She  noted that  DOC                                                                    
already  had videoconferencing  in Fairbanks  and Anchorage.                                                                    
She discussed  that DOC could  not make  inmates participate                                                                    
by  videoconference; individuals  had a  right to  appear in                                                                    
person  if  they chose.  The  subcommittee  did not  believe                                                                    
adding   ten   positions   was   justified   without   truly                                                                    
understanding what the  positions would be for  and how they                                                                    
would fill the positions.  She reported there were currently                                                                    
75 unfilled correctional officer  positions that resulted in                                                                    
the state  paying over $10  million in overtime  to existing                                                                    
officers.  Ultimately,  the   subcommittee  had  denied  the                                                                    
request  because of  a  lack of  knowledge  about where  the                                                                    
individuals would go and who would utilize it.                                                                                  
                                                                                                                                
2:12:52 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:14:35 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair   Wilson  thanked   Representative  Josephson   for                                                                    
bringing up electronic monitoring.  She noted there had been                                                                    
significant talk  about a specific case  involving pretrial,                                                                    
which the  committee would not  get into during  the current                                                                    
meeting.  She clarified  the electronic  monitoring she  had                                                                    
discussed was  not related to  pretrial. She added  that the                                                                    
subcommittee  had put  pretrial, electronic  monitoring, and                                                                    
halfway  houses into  their own  entities in  order to  know                                                                    
where  the money  was being  spent. She  detailed that  most                                                                    
individuals did not serve  their entire sentence (conditions                                                                    
were placed on a sentence).                                                                                                     
                                                                                                                                
Co-Chair  Wilson  explained  that  once a  person  had  been                                                                    
convicted,   served   their   jail  sentence,   and   proved                                                                    
themselves  (there  was  already regulation  specifying  who                                                                    
qualified  for   halfway  houses),   they  would   have  the                                                                    
opportunity  to go  into a  halfway house  (likely in  their                                                                    
last two  or three years)  to get assistance  with substance                                                                    
abuse,  mental  health  treatment,   jobs,  or  other  items                                                                    
required by the department.  The electronic monitoring would                                                                    
be for individuals on parole  or probation by a court order.                                                                    
The issue was not related to  a person's time served; it was                                                                    
specifically  to   ensure  a  person  would   abide  by  set                                                                    
conditions. She explained that if  a person did not abide by                                                                    
the terms  of their probation  and parole they would  be put                                                                    
back into prison. She reiterated  the item did not relate to                                                                    
pretrial,  but those  how had  already  been sentenced.  The                                                                    
option  would offer  a stepdown  for individuals  to reenter                                                                    
society productively.                                                                                                           
                                                                                                                                
2:16:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster shared that the  current meeting was to hear                                                                    
subcommittee closeouts  and the committee would  hold policy                                                                    
debates the following week in greater detail.                                                                                   
                                                                                                                                
Representative  Carpenter reported  that  the discussion  in                                                                    
subcommittee   had   revolved   around  the   concept   that                                                                    
videoconferencing was  not functioning  on all  cylinders at                                                                    
present. He noted that DOC was  not solely to blame for that                                                                    
issue. He explained  that the two departments  needed to get                                                                    
together  to  figure  out their  different  issues  to  make                                                                    
videoconferencing work  better. He reported that  DOC needed                                                                    
new personnel,  but it currently had  70 unfilled vacancies.                                                                    
Therefore, the subcommittee had  determined it made no sense                                                                    
to add  an additional 10  positions if  the 70 could  not be                                                                    
filled.  He stated  that if  the 70  positions were  filled,                                                                    
perhaps  there could  be a  conversation the  following year                                                                    
about increasing the number of positions if necessary.                                                                          
                                                                                                                                
Representative  Knopp referenced  a wordage  report document                                                                    
"2019 Legislature - Operating  Budget Wordage Report - House                                                                    
Structure,"  generated by  the Legislative  Finance Division                                                                    
(copy  on   file).  He  asked  for   verification  that  the                                                                    
subcommittee  did not  adopt conditional  language regarding                                                                    
appropriations [Conditional  language: at the  discretion of                                                                    
the  Office  of  Management  and   Budget,  funding  may  be                                                                    
transferred between all appropriations in the Department.].                                                                     
                                                                                                                                
Co-Chair Wilson  replied that  the subcommittee  had removed                                                                    
the  language allowing  the governor  to  transfer from  one                                                                    
area to another in DCCED and DOC.                                                                                               
                                                                                                                                
^DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT                                                                                
                                                                                                                                
2:19:25 PM                                                                                                                    
                                                                                                                                
CAROLINE  HAMP, STAFF,  REPRESENTATIVE  DAN ORTIZ,  provided                                                                    
highlights  of  the  action  taken   on  the  Department  of                                                                    
Education  and  Early  Development   (DEED)  budget  with  a                                                                    
prepared narrative (copy on file):                                                                                              
                                                                                                                                
     The   House  Finance   Budget   Subcommittee  for   the                                                                    
     Department   of   Education   and   Early   Development                                                                    
     recommends  that the  House  Finance Committee  accepts                                                                    
     the  FY2020  Amended  Base  budget  with  the  included                                                                    
     subcommittee amendments.                                                                                                   
                                                                                                                                
     The numbers-only budget with amendment recommendations                                                                     
     totals:                                                                                                                    
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF)   $45,699.9                                                                               
     Designated General Funds (DGF)     $25,058.9                                                                               
     Other Funds                        $63,772.4                                                                               
     Federal Funds                      $256,133.1                                                                              
     Total                              $390,664.3                                                                              
                                                                                                                                
Ms. Hamp elaborated that  the subcommittee's recommended UGF                                                                    
budget  was 19.9  percent less  than the  governor's amended                                                                    
budget where  UGF had equaled $57,880,000.  She detailed the                                                                    
difference was  due to the  subcommittee's decision  to fund                                                                    
programs  using the  same fund  sources  as previous  years,                                                                    
whereas,  the governor's  amended  budget switched  multiple                                                                    
programs to UGF that had  previously been funded through the                                                                    
Public   School  Trust   Fund  and   the  Higher   Education                                                                    
Investment Fund with  the intent to sweep the  latter of the                                                                    
two;  the subcommittee  did  not agree  to  the fund  source                                                                    
changes.                                                                                                                        
                                                                                                                                
Ms. Hamp  addressed action items  in the  governor's budget.                                                                    
She  reported  the  subcommittee   had  voted  in  favor  of                                                                    
multiple technical  changes (her  review would  only include                                                                    
UGF  changes).  The  budget  included  a  salary  adjustment                                                                    
increment  of   $24,000  for   the  Office   of  Information                                                                    
Technology; a decrement of $17,300  to the Special Education                                                                    
Service Agency to account for  fewer students than in FY 19;                                                                    
an increment of  $50,000 to reinstate lapsed  funds from the                                                                    
previous  year to  complete Regional  Educational Attendance                                                                    
Area   (REAA)  and   small  municipal   school  construction                                                                    
standards;  an  increment  of $320,000  for  a  Kindergarten                                                                    
through third  grade literacy project;  and an  increment of                                                                    
$215,100  for the  APK  museum  facilities maintenance.  The                                                                    
subcommittee  did not  approve  the  governor's proposal  to                                                                    
completely  cut  Pre-K  funding,  the  Washington,  Wyoming,                                                                    
Alaska,  Montana,  and  Idaho  (WWAMI)  program,  the  State                                                                    
Council on the Arts, live  homework help, or the Online With                                                                    
Libraries program.                                                                                                              
                                                                                                                                
Ms.  Hamp  detailed   that  subcommittee  member  amendments                                                                    
included  an increment  of $237,000  to Parents  As Teachers                                                                    
(an early  learning program); an $400,000  increment for the                                                                    
Dyslexia Taskforce; a reduction of  $47,400 to travel; and a                                                                    
decrement of  $1,093,900 to the Higher  Education Investment                                                                    
Fund  for broadband  access grants  (the figure  matched the                                                                    
number of  grant applicants).  The subcommittee's  UGF total                                                                    
was 1.6 percent  or $723,800 higher than the  FY 20 adjusted                                                                    
base.  To  help offset  the  increase  the subcommittee  had                                                                    
included  a decrement  of $457,600  for the  three positions                                                                    
for  the  education   curriculum  requirement  program.  She                                                                    
detailed  that  the  decrement went  hand-in-hand  with  the                                                                    
subcommittee's  language recommendation  to eliminate  $19.5                                                                    
million for the education curriculum requirement program.                                                                       
                                                                                                                                
2:23:21 PM                                                                                                                    
                                                                                                                                
Representative  Carpenter remarked  that the  subcommittee's                                                                    
budget for DEED was a  3.9 percent or $14.6 million increase                                                                    
over the governor's proposed balanced budget.                                                                                   
                                                                                                                                
Representative  Josephson addressed  language items  related                                                                    
to curriculum development grants. He  asked if the items had                                                                    
been funded through DEED. Alternatively,  he wondered if Ms.                                                                    
Hamp  had merely  highlighted the  grants  because of  their                                                                    
link to the three staff.                                                                                                        
                                                                                                                                
Ms.  Hamp  replied  that  she  had  highlighted  the  grants                                                                    
because they were linked to the three staff.                                                                                    
                                                                                                                                
^DEPARTMENT OF ENVIRONMENTAL CONSERVATION                                                                                     
                                                                                                                                
2:24:35 PM                                                                                                                    
                                                                                                                                
LIZ HARPOLD,  STAFF, REPRESENTATIVE DAN ORTIZ,  reviewed the                                                                    
subcommittee's  proposed   budget  for  the   Department  of                                                                    
Environmental Conservation  (DEC) with a  prepared narrative                                                                    
(copy on file).                                                                                                                 
                                                                                                                                
     The   House  Finance   Budget   Subcommittee  for   the                                                                    
     Department  of  Environmental  Conservation  recommends                                                                    
     that  the House  Finance Committee  accepts the  FY2020                                                                    
     Amended  Base  budget  with the  included  subcommittee                                                                    
     amendments.                                                                                                                
                                                                                                                                
     The numbers-only budget with amendment recommendations                                                                     
     totals:                                                                                                                    
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF)   $15,359.9                                                                               
     Designated General Funds (DGF)     $24,719.9                                                                               
     Other Funds                        $17,083.9                                                                               
     Federal Funds                      $23,506.3                                                                               
     Total                              $80,670.0                                                                               
                                                                                                                                
Ms. Harpold reported that the  UGF difference from the FY 20                                                                    
adjusted base  to the FY  20 House  subcommittee recommended                                                                    
budget  was   $31,900  or  0.2  percent.   The  subcommittee                                                                    
accepted 6 of the 17  budget action items. Five pertained to                                                                    
fund source  changes. The  sixth related  to an  increase in                                                                    
the Office  of Information  Technology for  salary increases                                                                    
that was  billed to the  department. The  subcommittee chose                                                                    
not to  eliminate the Ocean  Ranger Program,  Dairy Program,                                                                    
and an economist  III position as proposed  by the governor.                                                                    
The subcommittee  had rejected  across the board  50 percent                                                                    
travel reductions  but later an  amendment passed  to reduce                                                                    
UGF by 50 percent in the travel allocations.                                                                                    
                                                                                                                                
^DEPARTMENT OF FISH AND GAME                                                                                                  
                                                                                                                                
2:26:40 PM                                                                                                                    
                                                                                                                                
Ms. Harpold reviewed the  subcommittee's proposed budget for                                                                    
the  Department  of Fish  and  Game  (DFG) with  a  prepared                                                                    
narrative (copy on file).                                                                                                       
                                                                                                                                
     The   House  Finance   Budget   Subcommittee  for   the                                                                    
     Department of  Fish and Game recommends  that the House                                                                    
     Finance  Committee  accepts  the  FY2020  Amended  Base                                                                    
     budget with the included subcommittee amendments.                                                                          
                                                                                                                                
     The numbers-only budget with amendment recommendations                                                                     
     totals:                                                                                                                    
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF)   $52,603.4                                                                               
     Designated General Funds (DGF)     $14,186.2                                                                               
     Other Funds                        $66,892.5                                                                               
     Federal Funds                      $67,780.7                                                                               
     Total                              $201,462.8                                                                              
                                                                                                                                
Ms. Harpold reported that the  UGF difference from the FY 20                                                                    
adjusted base  to the FY  20 House  subcommittee recommended                                                                    
budget  was an  increase  of $1,026,200  or  2 percent.  The                                                                    
subcommittee accepted 10 of the  governor's 29 action items.                                                                    
Four  items  were  related  to  removing  the  now  depleted                                                                    
Charter Fishing  Revolving Loan Fund  as a fund  source from                                                                    
the  Division of  Commercial Fisheries.  She noted  that the                                                                    
previous year,  the DFG subcommittee had  added $997,000 UGF                                                                    
to  the budget  to  be  built into  the  base for  different                                                                    
management  projects around  the state.  She explained  that                                                                    
the Senate had  switched the UGF to a  one-time fund source,                                                                    
which  had now  been depleted;  therefore, the  subcommittee                                                                    
had voted  to remove  the item.  The subcommittee  had later                                                                    
passed an amendment to restore the $997,000 UGF.                                                                                
                                                                                                                                
Ms.  Harpold detailed  that  the  subcommittee accepted  the                                                                    
removal of the Charter Fishing  Revolving Loan Fund from the                                                                    
Saltwater Logbook Program and  had later passed an amendment                                                                    
to  add  $350,000  of  fish and  game  funding  to  continue                                                                    
funding the  program. The  subcommittee had  rejected budget                                                                    
action  items related  to the  elimination of  special areas                                                                    
management; travel  reductions across the board  (though the                                                                    
subcommittee had  passed an amendment  to reduce  funding in                                                                    
some  statewide  service areas);  and  the  transfer of  two                                                                    
director-level   PCNs  and   associated  funding   from  the                                                                    
Division  of   Habitat  and  the  Division   of  Subsistence                                                                    
Research.  The  subcommittee  had  adopted  intent  language                                                                    
directing  the  department  that  the  PCNs  and  associated                                                                    
funding  were  not  to  be  used  outside  their  respective                                                                    
allocations. Additional amendments  included adding $800,000                                                                    
of fish and game funds to match Pittman-Robertson funds.                                                                        
                                                                                                                                
2:29:03 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilson  queried  the amount  of  Pittman-Robertson                                                                    
funds that had not been used  the previous year and had been                                                                    
returned to the federal government.                                                                                             
                                                                                                                                
MORGAN   FOSS,   ANALYST,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
believed $1.9  million in  Pittman-Robertson funds  had been                                                                    
reverted  back to  the federal  government. She  would check                                                                    
the number and follow up.                                                                                                       
                                                                                                                                
Co-Chair  Wilson asked  how  much Pittman-Robertson  funding                                                                    
the state  had to utilize in  the current year and  how much                                                                    
the state was intending to use  before the end of the fiscal                                                                    
year.                                                                                                                           
                                                                                                                                
Ms. Foss  answered that in FY  20 the state would  be in the                                                                    
second year of  needing to obligate funds from  FY 19. There                                                                    
were roughly  $33.2 million that  needed to be  obligated in                                                                    
order to  not revert  funds. Another $27  million or  so had                                                                    
been appropriated  to the state  for FY 20, which  the state                                                                    
had 2 years to obligate.                                                                                                        
                                                                                                                                
Co-Chair Wilson  stated that  the legislature  had increased                                                                    
the  cost of  fishing and  hunting licenses  in order  to be                                                                    
able to  utilize the Pittman-Robertson  funds. She  found it                                                                    
disturbing to  hear that  funds would be  given back  to the                                                                    
federal  government.  She  requested a  report  showing  the                                                                    
current  status  and  what  projects  DFG  may  be  able  to                                                                    
complete before  the funds expired. Additionally,  she asked                                                                    
how much the state was  receiving from license fees compared                                                                    
to previous  years. She thought  the legislature had  made a                                                                    
promise to  Alaskans when it  had asked for more  money from                                                                    
them in  order to utilize  the federal funds, yet  the state                                                                    
was returning federal funds.                                                                                                    
                                                                                                                                
2:30:59 PM                                                                                                                    
                                                                                                                                
Representative Josephson believed  the administration wanted                                                                    
to put  critical habitat areas under  passive management. He                                                                    
asked  for  verification  that the  subcommittee  had  fully                                                                    
restored the funds.                                                                                                             
                                                                                                                                
Ms. Harpold replied in the affirmative.                                                                                         
                                                                                                                                
Co-Chair  Foster highlighted  an increase  of just  under $1                                                                    
million to  recapitalize the Charter Fishing  Revolving Loan                                                                    
Fund.  He asked  for verification  that the  money had  been                                                                    
added  because it  had  been removed  the  previous year  in                                                                    
conference committee.                                                                                                           
                                                                                                                                
Vice-Chair  Ortiz  answered that  the  House  had passed  an                                                                    
increment  totaling   $997,000  UGF  to  fund   projects  to                                                                    
increase   opportunity  for   fisherman.   The  Senate   had                                                                    
subsequently  switched  the  fund   source  to  the  Charter                                                                    
Fishing Revolving Loan Fund that  was a one-time source that                                                                    
was now  depleted. The subcommittee recommended  keeping the                                                                    
projects and funding them with UGF for FY 20.                                                                                   
                                                                                                                                
^DEPARTMENT OF NATURAL RESOURCES                                                                                              
                                                                                                                                
2:32:49 PM                                                                                                                    
                                                                                                                                
SHAY SIEGERT, STAFF, REPRESENTATIVE  GARY KNOPP, reported on                                                                    
the  Department of  Natural Resources  (DNR)  budget with  a                                                                    
prepared narrative (copy on file).                                                                                              
                                                                                                                                
The House Finance Budget Subcommittee  for the Department of                                                                    
Natural Resources submits  recommended operating budgets for                                                                    
FY 20 to the House Finance Committee:                                                                                           
                                                                                                                                
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF)   $66,953.5                                                                               
     Designated General Funds (DGF)     $31,949.3                                                                               
     Other Funds                        $35,944.6                                                                               
     Federal Funds                      $15,670.7                                                                               
     Total                              $150,518.1                                                                              
                                                                                                                                
Mr. Siegert reported  there was a decrease in  the number of                                                                    
permanent full-time positions from 622  to 615 (a total of 7                                                                    
positions) between  the FY  20 adjusted base  and the  FY 20                                                                    
subcommittee  budget.  There  was a  decrease  in  permanent                                                                    
part-time positions from 216 to  215 (a total of 1 position)                                                                    
between the FY  20 adjusted base and the  FY 20 subcommittee                                                                    
budget. Temporary positions  had been reduced from  63 to 60                                                                    
(a total  of 3  positions) between the  FY 20  adjusted base                                                                    
and the FY 20 subcommittee budget.                                                                                              
                                                                                                                                
Mr. Siegert relayed that the  DNR subcommittee had held five                                                                    
meetings  with  the   department  analyzing  the  governor's                                                                    
budget and accepted 32 out  of 37 proposed action items. The                                                                    
following  items   were  not  accepted:   recorder's  office                                                                    
consolidation  and  efficiencies;  agriculture  development,                                                                    
reducing  lower  priority  programs;  North  Latitude  Plant                                                                    
Material Center, reducing  lower priority programs; deleting                                                                    
the  Agriculture   Revolving  Loan   Fund;  and   Parks  and                                                                    
Management   reorganization  of   the  Recreational   Trails                                                                    
Program. He  detailed that the conversation  in subcommittee                                                                    
had revolved around  the impact the proposals  would have on                                                                    
communities and the  agricultural industry, which ultimately                                                                    
resulted  in  the  subcommittee's  decision  to  reject  the                                                                    
items.                                                                                                                          
                                                                                                                                
Mr.   Siegert   highlighted   the   subcommittee   amendment                                                                    
submitted to  the House Finance Committee  for consideration                                                                    
that  would remove  $210,800 UGF  and  delete two  permanent                                                                    
full-time positions including  a divisions specialist option                                                                    
B  (vacant  since  2017) and  the  state  veterinarian  (the                                                                    
position was never filled).                                                                                                     
                                                                                                                                
2:36:09 PM                                                                                                                    
                                                                                                                                
Representative   Josephson  asked   about  the   Agriculture                                                                    
Division.  He recalled  that  the administration's  proposal                                                                    
was  to delete  18 positions.  He thought  it came  close to                                                                    
decimating the division.  He asked if the  positions had all                                                                    
been restored in the subcommittee budget.                                                                                       
                                                                                                                                
Mr.  Siegert  answered  that  the   19  positions  had  been                                                                    
restored.                                                                                                                       
                                                                                                                                
ALEXEI  PAINTER,  ANALYST,   LEGISLATIVE  FINANCE  DIVISION,                                                                    
noted the exception was the  removal of the two agricultural                                                                    
veterinarian  positions  by  a  subcommittee  amendment.  He                                                                    
noted  the reductions  had been  included in  the governor's                                                                    
reduction, but it had been  taken as a separate subcommittee                                                                    
action.                                                                                                                         
                                                                                                                                
Co-Chair   Wilson  asked   if  there   was  still   a  state                                                                    
veterinarian.                                                                                                                   
                                                                                                                                
Mr. Painter  replied in the affirmative.  He elaborated that                                                                    
the regulatory  functions of the state  veterinarian were in                                                                    
DEC. He  explained that veterinarian position  under DNR had                                                                    
been added  the previous  year with the  goal of  helping to                                                                    
expand the  livestock industry in  Alaska; the  DNR position                                                                    
did not have regulatory functions.                                                                                              
                                                                                                                                
2:37:33 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilson asked  why the  veterinarian was  under DEC                                                                    
and not DNR.                                                                                                                    
                                                                                                                                
Mr.   Painter  replied   that  the   Office  of   the  State                                                                    
Veterinarian in DEC worked for  the Environmental Health Lab                                                                    
and  performed regulatory  functions  that  were similar  to                                                                    
other parts of environmental  health. The position under DNR                                                                    
had  been focused  on promoting  the agricultural  industry,                                                                    
which  was  closer  to  the   mission  of  the  Division  of                                                                    
Agriculture;   however,   the   program   had   never   been                                                                    
implemented by DNR and the  department was seeking to remove                                                                    
it in the current year.                                                                                                         
                                                                                                                                
^DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT                                                                                
                                                                                                                                
2:38:24 PM                                                                                                                    
                                                                                                                                
Mr. Siegert reviewed the proposed  budget for the Department                                                                    
of Labor  and Workforce  Development (DLWD) with  a prepared                                                                    
narrative (copy on file).                                                                                                       
                                                                                                                                
     The   House  Finance   Budget   Subcommittee  for   the                                                                    
     Department of  Labor and Workforce  Development submits                                                                    
     recommended operating  budgets for  FY 20 to  the House                                                                    
     Finance Committee:                                                                                                         
                                                                                                                                
     Fund Source: (dollars are in thousands)                                                                                    
     Unrestricted General Funds (UGF)   $20,413.0                                                                               
     Designated General Funds (DGF)     $36,110.1                                                                               
     Other Funds                        $16,961.4                                                                               
     Federal Funds                      $74,971.1                                                                               
     Total                              $148,401.6                                                                              
                                                                                                                                
Mr. Siegert  reported there  was no  proposed change  to PCN                                                                    
numbers between FY  19 and FY 20.  The subcommittee accepted                                                                    
25 of the  28 items proposed by the  governor. The following                                                                    
three items were not accepted by the subcommittee:                                                                              
                                                                                                                                
   1. Labor Standards and Safety         Wage and Hour                                                                        
     Administration  Executive  Branch   50  percent  Travel                                                                    
     Reduction of $3,500.00 UGF.                                                                                                
   2. Labor Standards and Safety  Mechanical Inspection                                                                       
     Executive  Branch   50  percent  Travel   Reduction  of                                                                    
     $52,800.00 from  the Building Safe Fund,  and $3,800.00                                                                    
     from Interagency Receipts.                                                                                                 
   3. Labor Standards and Safety  Occupational Safety and                                                                     
     Health Executive Branch 50  percent Travel Reduction of                                                                    
     $26,500.00  in  Federal   Receipts,  $6,800.00  from  a                                                                    
     General  Fund Match,  and $21,100.00  from the  Workers                                                                    
     Safe Fund.                                                                                                                 
                                                                                                                                
2:41:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson  clarified her earlier answer  to Vice-Chair                                                                    
Ortiz  related  to DCCED.  She  had  looked into  Vice-Chair                                                                    
Ortiz's  question about  whether DCCED  had been  reduced by                                                                    
76.1 percent  [from the FY  15 management plan].  She stated                                                                    
that the  department's UGF budget  had been reduced  by 76.1                                                                    
percent, but DGF  had increased by 9.1  percent, other funds                                                                    
had  increased  by  14.4  percent,  and  federal  funds  had                                                                    
increased 27.1 percent (a total of 50.6 percent). There had                                                                     
been  a 26  percent decrease  in all  funds. She  elaborated                                                                    
that most  of the  grants to  communities provided  when the                                                                    
state  had  money   had  a  five-year  span   and  had  been                                                                    
reutilized  for  other  projects.   She  reasoned  that  the                                                                    
department would not  need as many personnel  because it had                                                                    
fewer grants.  She clarified that  accounting for  all funds                                                                    
there had  been a 26  percent reduction, not a  76.1 percent                                                                    
reduction. She noted that  economic development was included                                                                    
and had moved to the governor's office.                                                                                         
                                                                                                                                
Co-Chair  Foster  relayed  that  the  committee  would  hear                                                                    
public testimony later in the  day. He reviewed the schedule                                                                    
for  the following  meeting. He  provided information  about                                                                    
the public testimony process.                                                                                                   
                                                                                                                                
2:44:38 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:46:40 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Sullivan-Leonard  requested to  receive  the                                                                    
remaining  subcommittee reports  (via email)  that would  be                                                                    
heard the following day.                                                                                                        
                                                                                                                                
Co-Chair Wilson  replied that the subcommittee  reports were                                                                    
all on the Legislative Finance Division website.                                                                                
                                                                                                                                
Vice-Chair Ortiz made an inaudible remark.                                                                                      
                                                                                                                                
Co-Chair Foster  agreed to provide  the information  for the                                                                    
committee.                                                                                                                      
                                                                                                                                
Co-Chair Foster provided additional  specifics on the public                                                                    
testimony   times.  He   reminded   committee  members   the                                                                    
committee  would hold  a meeting  the  following morning  at                                                                    
9:00 a.m.                                                                                                                       
                                                                                                                                
HB  39  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  40  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
2:50:34 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:50 p.m.                                                                                          

Document Name Date/Time Subjects
LEG-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39
LEG-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39
LEG-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
LEG-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
LEG-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
LEG-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
GOV-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
GOV-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
GOV-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
GOV-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
GOV-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
GOV-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOT-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOT-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOT-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOT-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOT-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
FY20 DOT Close-out narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOC-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOC-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOC-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOC-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOC-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOC-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOE-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOE-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOE-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOE-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOE-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOE-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
DEC-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DEC-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DFG-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DFG-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DFG-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DFG-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DFG-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DFG-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DNR-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOL-AgencyTotals.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOL-Narrative.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOL-Spreadsheet.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOL-TransactionCompare1.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOL-TransactionCompare2.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports
DOL-Wordage.pdf HFIN 3/25/2019 1:30:00 PM
HB 39 Subcommittee Closeout Reports