Legislature(2019 - 2020)ADAMS ROOM 519
03/28/2019 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB39 || HB40 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 39 | TELECONFERENCED | |
| += | HB 40 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 28, 2019
1:33 p.m.
1:33:59 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:33 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 Cathy Tilton
MEMBERS ABSENT
Representative Colleen Sullivan-Leonard
ALSO PRESENT
Brodie Anderson, Staff, Representative Neal Foster; Amanda
Ryder, Analyst, Legislative Finance Division; David Teal,
Director, 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.
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."
1:34:39 PM
Co-Chair Foster relayed the committee substitute (CS)
included subcommittee changes. He reported his intent to
adopt the CS during the current meeting. He noted that
amendments would be considered the following week.
Co-Chair Wilson MOVED to ADOPT the proposed committee
substitute for HB 39, Work Draft 31-GH1905\R
(Caouette/Bruce, 3/28/19) (copy on file).
Representative Tilton OBJECTED for discussion.
Co-Chair Wilson clarified that the adoption of the CS would
give the committee a document to write amendments to.
Representative Tilton WITHDREW her OBJECTION.
Representative Josephson asked if the amendment deadline
was the following Monday at 3:00 p.m.
Co-Chair Wilson confirmed the amendment deadline was the
following Monday at 3:00 p.m. to Co-Chair Foster's office.
Vice-Chair Ortiz asked for verification the CS did not
reflect the recommendation language portion of subcommittee
reports. For example, he could think of one significant
recommendation that would amount to a cost reduction that
he had put forward. He asked for verification that the
recommendation was not a part of the CS.
1:37:42 PM
AT EASE
1:37:57 PM
RECONVENED
Co-Chair Foster clarified that the current motion was to
adopt the CS. He would invite staff to the table to review
what was included in the bill. He believed Vice-Chair
Ortiz's question had been answered.
There being NO further OBJECTION, Work Draft 31-GH1905\R
was ADOPTED.
1:39:04 PM
AT EASE
1:39:23 PM
RECONVENED
Co-Chair Wilson MOVED to ADOPT the proposed committee
substitute for HB 40, Work Draft 31-GH1901\S (Bruce,
3/28/19). There being NO OBJECTION, it was so ordered.
Co-Chair Foster asked his staff and the Legislative Finance
Division (LFD) to explain the two work drafts.
Representative Knopp asked for the work draft version for
HB 40.
1:40:43 PM
AT EASE
1:41:36 PM
RECONVENED
Co-Chair Foster clarified the work draft numbers were as
follows: Work Draft 31-GH1905\R for HB 39 and Work Draft
31-GH1901\S for HB 40.
Co-Chair Wilson restated her motion to adopt the CS for HB
40. There being NO OBJECTION, it was so ordered.
1:42:32 PM
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
addressed the changes in the bills that reflected all of
the subcommittee actions and changes made to the language
section compared to the governor's proposed budget
introduced on February 13. The House Finance Committee CS
reflected an agency operations budget of $7,581,400,400 as
shown in the Legislative Finance Division Agency Summary
labeled "N1" and dated March 28, 2019 (copy on file). The
budget included $2,671,870,800 in federal funds,
$1,508,227,800 in other funds, $758,683,600 in designated
general funds (DGF), and $2,642,618,200 in unrestricted
general funds (UGF).
Mr. Anderson reported that the UGF spend reflected a
reduction of $28,761,500 from the FY 20 adjusted base. The
only difference between the House subcommittee reports and
the CS were in the salary adjustments added to each agency,
which included the February 13th governor's request of
$45.1 million; the March 14th governor's amendments, which
included $11.2 million; and the Judiciary salary
adjustments to match cost of living adjustment (COLA)
increases received to match the General Government Unit
(GGU) of $1.7 million. The total difference was $12.9
million as shown in the Legislative Finance Division Agency
Summary labeled "SA1" and dated March 28, 2019 (copy on
file).
Mr. Anderson directed attention to the Legislative Finance
Division Agency Summary labeled "NL1" and dated March 28,
2019 (copy on file). He reported $10.45 billion in total
funds, which included $4.5 billion UGF. He turned to as
shown in the Legislative Finance Division Agency Summary
labeled "NL2" and dated March 28, 2019 (copy on file) and
detailed that general funds (both numbers and language)
totaled $5.4 billion.
1:46:17 PM
Mr. Anderson addressed a redlined comparison document for
HB 39 (copy on file). He reviewed the language section of
the bill beginning on page 2.
1:46:47 PM
AT EASE
1:47:12 PM
RECONVENED
Mr. Anderson addressed item 1 on page 2, Section 4 that
added intent to clarify the amounts appropriated were for
the full amounts that would be appropriated in FY 20.
Co-Chair Wilson asked to hear about the change on page 1 of
HB 39.
AMANDA RYDER, ANALYST, LEGISLATIVE FINANCE DIVISION,
answered that the change on the first page added the
Constitutional Budget Reserve (CBR) language to the bill
title; it was not included in the previous version of the
CS. She explained that the occurrence of CBR language later
in the bill required it to be added to the title.
Co-Chair Wilson asked if the language section of the bill
would take funding from the CBR.
Ms. Ryder replied there was a reverse sweep later in the
bill, which was standard language even if the legislature
did not draw any money from the CBR.
Co-Chair Wilson clarified she had been trying to determine
whether the bill took funds from the CBR. She thanked Ms.
Ryder for her explanation.
Co-Chair Foster explained the reverse sweep process for the
committee. He detailed there were myriad accounts that were
typically populated with funds. At the end of the year the
money needed to go back into the CBR, but then it was
necessary to repopulate the accounts. He elaborated that
the situation turned into an accounting nightmare if the
reverse sweep was not done. He expounded that at the end of
the fiscal year (midnight on June 30th) all of the money
went back into the CBR per statutory requirement. The funds
were then repopulated back into the other accounts just
after midnight on July 1.
1:49:52 PM
Ms. Ryder agreed with the explanation.
Co-Chair Foster remarked that the subject was confusing
every year.
Mr. Anderson continued with changes in the bill beginning
on page 3, item 2, Section 8 that deposited the
constitutionally required 25 percent of royalties to the
Permanent Fund. He explained that the governor's language
had appropriated an additional $71.3 million; the CS would
deposit the non-constitutionally required portion into the
General Fund. He moved to page 3, item 3a, Section 8(c)
that appropriated the percent of market value (POMV) payout
to the General Fund. The Permanent Fund Dividend (PFD)
would be appropriated from the General Fund in the same
manner as the preceding year. He explained that in item 3b
represented a deletion of the governor's language that had
appropriated the non-PFD amount of the POMV payout to the
General Fund.
Mr. Anderson moved to page 6, line 27, item 4, Section
10(f) that used Power Cost Equalization (PCE) endowment
funding for the PCE program. He explained that the
governor's request had funded the program with UGF.
1:51:48 PM
Co-Chair Wilson clarified that PCE stood for Power Cost
Equalization.
Mr. Anderson agreed.
Co-Chair Foster asked Mr. Anderson to describe the
governor's proposal for PCE compared to what the governor
had proposed to do with PCE versus the bill.
Mr. Anderson answered that the governor's proposal would
sweep the PCE endowment fund and would replace the use of
the funds with general funds. The change would allow the
funds to go elsewhere, essentially making them general
funds.
Co-Chair Foster agreed. He explained that the governor's
proposal would have transferred the $1 billion balance from
the PCE fund to the General Fund. The change would mean the
funds could be used for everything (e.g. education and
public safety); however, the payments for the PCE program
would still be made and would be funded with general funds.
Representative Josephson returned to page 3 of the CS. He
stated that the governor's February 13th version of the
bill had established a split to comply with the formula of
the PFD. He asked for verification that the CS would delete
that action pending some later disposition.
Ms. Ryder answered in the affirmative. The governor's
request included the entire POMV amount but directed almost
$2 billion to the PFD fund with the remainder going to the
General Fund. Whereas, the CS would deposit the entire POMV
payout to the General Fund, which would later be deposited
into the PFD fund.
1:54:28 PM
Mr. Anderson advanced to page 7, line 6, Section 10(h),
item 5 that would appropriate $309,090 from the Alaska
Legal Services Fund to the Department of Commerce,
Community and Economic Development for a grant to the
Alaska Legal Services Corporation. He noted the action was
consistent with statute.
Co-Chair Wilson thought the fund balance had been $10,000 a
couple of weeks earlier. She wondered where the additional
money had come from.
Ms. Ryder answered that the FY 20 appropriation would occur
on July 1. She detailed that regardless of the current fund
balance, there would be another $309,090 deposited into the
fund on July 1, 2019 to pay the grant in FY 20. She
explained the $309,090 was the total filing fees received
by the court system in FY 18.
Co-Chair Wilson surmised that the paid fees had gone into
the General Fund and based on statute the $309,090 went
"over here" [to the Alaska Legal Services fund]. She asked
if it shortchanged the court system in any way.
Ms. Ryder answered that the action would not shortchange
the court system. She explained that 10 percent of the
filing fees that went into the General Fund would be used
for the identified purpose. She stated that the court
system was funded through a different mechanism.
Co-Chair Wilson asked for verification that because the
fund currently held $10,000, the balance would be $319,090
[once the $309,090 was deposited on July 1].
Ms. Ryder replied that she did not know the current
balance. She explained that by June 30 the $10,000 may be
fully expended. She elaborated that even if the funding was
spent, $309,090 would be deposited into the fund at the
beginning of the new fiscal year.
Co-Chair Wilson asked how that $10,000 would be spent. She
reasoned that the grant had already been paid from the fund
to Alaska Legal Services [for the current fiscal year]. She
asked who else could use the fund.
Ms. Ryder answered that the funding could not be used
unless appropriated. She explained that the legislature
could increase the appropriation to $319,090 to fully
expend the fund balance.
Co-Chair Foster asked for verification that 10 percent of
the filing fees went towards Alaska Legal Services.
Ms. Ryder agreed.
1:58:03 PM
Representative Josephson recalled that Representative Matt
Claman had carried a standalone bill that would have put
the issue in statute; however, he did not believe the bill
had passed. He asked for verification that because the item
was not in statute it was funded annually through the
budget process.
Mr. Anderson was uncertain about previous legislation that
may not have passed. He reported that item 21 on page 21,
line 15 authorized the funding with 10 percent of filing
fees in accordance with AS 37.05.590.
Ms. Ryder added that a bill had passed the previous year
and the appropriation related to that bill.
Mr. Anderson moved to the next three changes shown on page
8 (shown in the right margin). Item 6 removed the
governor's request for a lapse extension for the Alaska
Psychiatric Institute appropriation that was approved in FY
18. Item 7 removed the governor's request for an open-ended
appropriation of federal receipts to the Medicaid program.
Item 8 removed the governor's FY 19 supplemental request
for $172.4 million from the Statutory Budget Reserve (SBR)
to pay for any shortfalls in Medicaid for FY 19, FY 20, and
FY 21.
Vice-Chair Ortiz referenced item 6 on page 8 and asked
about the impact of the deletion.
Ms. Ryder answered that LFD deemed the item to be more
appropriate in the supplemental budget as opposed to the
operating budget.
Representative Josephson asked for an explanation of items
7 and 8.
Ms. Ryder replied that item 7 provided open-ended federal
receipt authorization to the department for Medicaid
services. The decision had been made to remove the item so
the legislature had authority to approve additional federal
receipts that the department may need. She explained that
the legislature had the ability to approve additional
federal receipts through the Legislative Budget and Audit
(LB&A) Committee if needed. The legislature could also
request additional federal authority in the following
session. The removal of the language allowed the
legislature to see more clearly what was happening in the
Department of Health and Social Services (DHSS) budget. She
explained that if the department needed more federal
receipts, the legislature would understand why.
2:01:50 PM
Mr. Anderson responded to Representative Josephson's
question about item 8. He explained that the governor had
requested a multiyear appropriation from the SBR in the FY
19 supplemental. The CS removed the language and denied the
request to use the SBR.
Representative Josephson asked why the administration would
need a multiyear appropriation. It was his understanding
that if the waiver did not happen for phase II, the
entirety of the SBR would be needed.
Mr. Anderson declined to speak on behalf of the
administration.
Ms. Ryder replied that LFD believed there were more
transparent ways to fund Medicaid in FY 20. Based on
testimony from DHSS, the department had sufficient funding
for FY 19; the $15 million supplemental should be
sufficient for FY 19. She explained that under the
governor's proposal, $172 million appropriated in FY 19
would also be available in FY 20 and FY 21. She questioned
which year the funding would be spent in. She stated that
the method made it very difficult to see what was
appropriated and spent in a particular year. She reported
that LFD believed there were more transparent ways of
appropriating money to DHSS for Medicaid; money should be
appropriated in the year it was needed. The removal of the
governor's proposed language should not have an impact on
DHSS or Medicaid; it simply removed the funding. The idea
was to appropriate the amount needed for FY 20 in FY 20.
2:04:24 PM
Mr. Anderson turned to page 9, item 9 (shown in the right
margin). The CS removed the governor's request for up to
$100,000 of statutory designated program receipts in case
the Department of Military and Veterans Affairs (DMVA) was
short. He explained that Section 1 (the numbers section)
allowed DMVA to request additional authorization from LB&A
if it was short.
Mr. Anderson moved to item 10 on page 10, line 11, Section
18 that added $700 million from the bond proceeds to
purchase oil and gas tax credit certifications.
Co-Chair Wilson asked if the item assumed the court case
would be successful and asked if it was the new amount the
state would bond for.
Mr. Anderson replied in the affirmative. He elaborated that
the court case could be settled as early as October, which
would still give the department time to sell bonds.
Co-Chair Wilson observed that the increment seemed to be
about $300 million less than it had been when the bill
passed the previous year.
Mr. Anderson replied that he did not have the answer on
hand.
Co-Chair Foster believed the number reflected the balance
of the outstanding amount.
Ms. Ryder replied that she did not have the number. She
deferred to LFD Director David Teal.
Co-Chair Wilson explained she was pointing out that they
were in better shape than when the original legislation had
passed. She knew the amount had been much higher.
Mr. Anderson answered that the legislature had authorized
$797 million the preceding year in a similar section. The
legislature had authorized $100 million to be paid in
credits. He explained that the actions from the preceding
year factored into the decision on the $700 million.
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
believed the question had been answered; however, he
recalled the number was $737 million the previous year. He
explained that the amount was appropriated and never used
because the state did not issue bonds. The state had
purchased $100 million in credit certificates, which would
lower the outstanding amount to approximately $640 million.
He pointed out that more credits were earned as well. The
number in the bill was an approximation, but it should be
sufficient. He noted there was an additional $100 million
that Mr. Anderson would cover later in the bill.
Representative Josephson discussed that there had been some
dispute about a formula resulting in a smaller amount based
on actual production tax received versus the prior formula.
He stated that the new administration wanted to return to
the prior formula. He recalled that the governor's proposed
budget had included a separate line item of around $180
million. He wondered where the CS stood on the issue.
Mr. Anderson answered there would be an item under Section
23(h) that appropriated general funds for the purchase of
credits. The item would appropriate $70 million in general
funds to the oil and gas tax credit fund for individuals
who would not participate in the budget program. The CS
removed the governor's $170 million request for FY 20 and
$84 million for FY 19 from Alaska Industrial Development
and Export Authority (AIDEA) receipts. The CS would
appropriate $70 million in general funds to purchase
credits.
2:09:13 PM
Representative Josephson asked if the CS rejected the
concept of taking AIDEA receipts.
Mr. Anderson confirmed that the CS did not utilize any of
the governor's recommendations for AIDEA receipts.
Vice-Chair Ortiz addressed the bonds for taxpayer credit
concept. He stated that a positive decision was anticipated
perhaps by October. He asked if the benefits to the state
started declining as the issue was pushed farther down the
road.
Mr. Teal answered that the benefits to the state was a
difficult question. The state could pay and purchase the
credits anytime it wanted. There were different two
different views of the formula, which would determine how
fast the state purchased credits. The CS did not use the
maximum $181 million in the original interpretation or the
minimum of approximately $50 million; it used a number in
between the two amounts that would be used to purchase the
credits.
2:11:15 PM
Vice-Chair Ortiz stated his question pertained to the
original idea of advancing the Alaska tax credit
certificate bonds. He recalled the discussion the previous
year and why it seemed reasonable - companies would be paid
off earlier, they had access to money, and took a 10
percent cut for financing costs. He observed there had been
benefits for companies and the state. He asked if the
benefits [to the state] diminished as time went on.
Mr. Teal answered that the certificate holders would get a
discounted rate; it was less advantageous to companies at
present (compared to the previous year) because interest
rates had increased. He explained that if the certificates
were purchased by the state according to the statutory
formula, they were purchased at an undiscounted, full face
value. Under the bond program, whatever interest rate the
state paid on the bonds, theoretically the state would
discount the face value of the certificates in order to be
neutral. It was a choice for certificate holders to
participate in the program and get their cash immediately
at a discounted rate or to get full face value by waiting
two to four years. Theoretically all parties would be
neutral, except the state paid interest to bondholders,
which was offset by the lower face value of the
certificates. He stated that if it worked out right, all
parties should be neutral if the discount matched the
interest rate. The only real advantage to the state was not
having to address the issue on an annual basis.
2:13:50 PM
Representative Knopp assumed the $700 million bond
appropriation was the balance of what the state owed in tax
credits. He asked if the additional $70 million
appropriation that occurred later in the bill would go to
pay the statutory minimum requirement if the bond was not
sold.
Mr. Anderson replied that when the bond package had been
authorized via legislation the previous year, there had
been an ongoing conversation that a company may not want to
use a bond. He explained there had always been UGF
designated for nonparticipants - the $70 million was
roughly 10 percent of the outstanding bonds estimated to be
$700 million. He clarified that an estimated 10 percent of
participants may not participate in a bond; therefore,
money had been set aside.
Representative Knopp asked if the CS included sufficient
funds to pay the minimum statutory retirement if the
lawsuit was not settled and the bonds were not sold.
Mr. Anderson replied that another committee member had
highlighted that the net calculation was less than the
governor's statutory calculation of $181 million in the
current year. He stated it would be a discussion for the
committee to determine whether the $70 million was
sufficient.
2:16:24 PM
Mr. Anderson moved to item 11, Section 19(b) on page 10,
which added $1 million of UGF to the Office of the Governor
for redistricting costs for FY 20 through FY 23. He moved
to page 11, line 25, Section 21(e), item 12, which added
$4,517,365 UGF for debt service payments for University of
Alaska port and harbor and electrical association projects.
He noted the projects were often referred to as 528
projects. He turned to page 15, line 24, Section 21(j)(1)
and (3), item 13, which incorporated the governor's revised
estimates for the international airport bonds.
Co-Chair Foster asked for the page number Mr. Anderson was
addressing.
Mr. Anderson replied that he was referencing page 15, lines
21 through 23 and lines 29 through 31.
Co-Chair Wilson asked for verification the bonds were paid
through revenue generated by the international airports.
Ms. Ryder replied affirmatively.
Mr. Anderson moved to page 16, line 24, Section 21(n), item
14 that would appropriate $99,820,500 for school debt
reimbursement. Item 15 began on line 30 under Section 21(o)
and incorporated a governor's amendment adding an estimated
$750,000 of general obligation bond funding for expenses
for the sale and issuance of 2012 transportation bonds. He
moved to page 18, line 21, Section 23(h), item 16 that
would appropriate up to $70 million in general funds to the
Oil and Gas Tax Credit Fund for individuals who did not
participate in bond purchase program. The CS removed the
governor's requested $170 million in FY 20 and an
additional $84 million in FY 19 from AIDEA receipts.
Representative Josephson asked for verification that the CS
used general funds instead of AIDEA receipts [for
individuals who did not participate in the bond purchase
program].
Mr. Anderson agreed. He moved to page 18, line 28, Section
23(i), item 17 that replaced the governor's requested $30
million in general funds to the Community Assistance Fund
with PCE endowment funding to the Community Assistance
Fund. He reported that use of the funding source was
traditional and consistent with statute. Item 18, line 30,
Section 23(j) and (k) included funds for FY 21 for K-12 and
pupil transportation with a delayed effective date of July
1 FY 21. The change removed the governor's section on
prorated FY 20 K-12 formula funding.
2:21:38 PM
Representative Josephson referenced past committee
discussion about the amounts (in HB 287) of the Base
Student Allocation (BSA) and the $30 million in one-time
funds were not vetoable. He detailed that the request had
been for repeal of the forward funded amounts. He asked for
verification that the amounts in item 18 were not forward
funded.
Mr. Anderson replied that the current language in the CS
would carry forward the idea presented the past year with
forward funding the FY 21 education budget.
Representative Josephson remarked that pupil transportation
had also been part of the legislative effort to forward
fund education.
Mr. Anderson answered that FY 19 and FY 20 were approved
for funding under HB 287. The CS removed the portion of the
governor's bill that prorated the FY 20 K-12 funding
formula. The CS reflected the forward funding of the FY 20
education formula.
Co-Chair Foster explained that the previous year the
legislature had forward funded education. He detailed that
if the legislature did not insert the education language
into the into the current budget it would not be subject to
a veto. He elucidated that funding for the current year
should be protected and the idea was to do the same thing
for the following year (forward fund the following year's
education budget).
Vice-Chair Ortiz asked if forward funding for FY 20
included the $30 million from the previous year.
Co-Chair Foster answered that the $30 million had been an
extra appropriation. He deferred to staff or LFD for
further detail.
Ms. Ryder answered that several things impacting FY 20 had
occurred the preceding year, which the governor had
attempted to address in his proposed budget. The items
included the forward funding of the K-12 formula, a one-
time $30 million appropriation for FY 20, and a $19.5
million capitalization for curriculum improvement and best
practices. The governor's proposed budget would repeal all
three items and replaced the K-12 funding with a prorated
funding of about 23 percent less. The governor's budget
would repeal the $30 million and the $19.5 million. She
explained that the CS did not impact FY 20 funding other
than a section that repealed the curriculum funding, which
had been accepted by the governor; all other FY 20
education funding was held harmless and was not addressed
in the CS. She clarified that item 18 would forward fund K-
12 education and pupil transportation formula for FY 21.
2:26:16 PM
Mr. Anderson moved to page 19, line 5, Section 23(l), item
19 that appropriated $39,389,000 UGF to the Regional
Educational Attendance Area (REAA) School Fund. He relayed
that with the addition of the school debt reimbursement in
Section 21(n), the REAA funding was needed to ensure
equity.
Co-Chair Wilson asked if the school construction increment
of $99,820,500 on page 16, item 14 was primarily for
maintenance; whereas, item 19 related to construction.
Ms. Ryder answered that item 14 paid the statutory amount
of the school debt reimbursement that communities bond for.
She clarified that item 19 was the amount that statutorily
went to REAAs. There was a statutory formula specifying
that if a given amount was paid for school debt
reimbursement for municipalities, the state was required to
pay another percentage for the REAAs. She explained that
because the CS included school debt reimbursement, the REAA
needed to be included in order to be consistent with
statute.
Mr. Anderson moved to page 21, item 20 (shown in the right
margin). He detailed that the governor's proposal would
transfer $60 million from the Community Assistance Fund to
the General Fund. The CS removed the language and specified
that community assistance would be funded via PCE endowment
funds (referenced earlier in the bill).
Co-Chair Foster noted it was part of the PCE program that
had been written in by statute several years earlier. He
observed that the funding method was not new.
Mr. Anderson agreed. He moved to item 21 (shown on page 21
in the right margin). He detailed that per statute Section
24(c) appropriated the amount equal to 10 percent of the
filing fee received by the Alaska Court System, estimated
to be $309,090 to the Civil Legal Services Fund to be used
for grants to organizations that provide civil legal
services to low income individuals. He noted the increment
was the appropriation component that had been discussed
earlier.
2:30:18 PM
Mr. Anderson turned to page 22, line 7, Section 24(f), item
22. He detailed that consistent with statute the item would
appropriate any remaining PCE endowment funding (after
appropriations were made to the PCE program and the
Community Assistance Fund) to the Renewable Energy Grant
Fund. He noted there was not expected to be much or
anything remaining after the payouts. He moved to item 23,
page 23 (shown in the right margin) that removed the
governor's requested $10.8 million from the Passenger
Vessel Gaming and Gambling Tax Account to the Alaska
Capital Income Fund.
Co-Chair Wilson asked for a description of the purpose of
the Alaska Capital Income Fund.
Mr. Anderson answered that the fund primarily funded
deferred maintenance projects throughout the state.
Mr. Anderson advanced to page 24, line 20, item 24 (shown
in the right margin). He explained that Section 26 was
updated to reflect the approval of the Alaska Correctional
Officers Association collective bargaining agreement.
Co-Chair Wilson asked for detail on what the agreement.
Mr. Anderson responded that he would follow up.
Co-Chair Wilson stated that the contract negotiation had
been in mediation the last she had heard. She wanted to
know what the state was agreeing to.
Ms. Ryder did not know the answer and would follow up.
Co-Chair Wilson wanted to put the information on the record
in order for the public to know how the contracts were
being negotiated.
Representative Josephson asked if the item reflected that
since February 13th the contract for the correctional
officers had been finalized.
Mr. Anderson replied in the affirmative. He explained that
the Alaska Correctional Officers Association contract
negotiation had been agreed upon and settled after the
March 14th amendments from the governor.
Co-Chair Wilson requested detail for all seven new
bargaining agreements (page 24). She clarified she was not
picking on anyone; she was merely interested in knowing the
details of the agreements.
Representative Josephson believed that as long as a
contract had been entered into, regardless of the
administration, it had to be included in the budget.
Ms. Ryder agreed. She detailed that Section 1 included the
appropriations for the bargaining unit contracts. Those
appropriations were valid unless the bargaining unit
members did not ratify the contracts. In the past there had
been some bargaining units that had not ratified the
contracts and the appropriations had been removed from
Section 1. Item 24 specified the appropriations were made
in Section 1 and if the agreements were not ratified by the
collective bargaining unit, the money would be removed.
2:35:06 PM
Mr. Anderson moved to page 25, Section 27(a), item 25
(shown in the right margin), that added payments of $21.7
million to communities for fisheries business tax and $6.7
million for fisheries resource landing tax.
Vice-Chair Ortiz asked for verification the increments
indicated that the tax payments made to communities would
continue as they had in the past.
Mr. Anderson responded affirmatively.
Co-Chair Foster clarified that currently 50 percent of the
taxes went to the state and 50 percent went to
municipalities where the tax was applied. He explained that
the governor's proposal would shift the money from
municipalities to the state treasury. He asked for
verification that the CS would keep the funds with local
municipalities.
Mr. Anderson agreed. He moved to page 25, line 26, Section
27(b), item 26 (shown in the right margin) that reverted to
traditional language for refunding aviation fuel tax or
surcharges to local governments. He advanced to page 26,
line 13, Section 29, item 27 that added reverse sweep
language for FY 20 and FY 21. Items 28(a) and (b) (shown in
the right margin) removed the governor's repeal of FY 20 K-
12 appropriations, which would have repealed the $30
million of outside the formula funding (the entire K-12
foundation formula funding for FY 20); however, the CS did
accept the repeal of the governor's FY 19 $19.5 million to
the curriculum improvement and best practices fund.
Mr. Anderson moved to page 26, Section 30, item 29 that
extended the lapse date for the FY 19 $27 million
appropriation to pay for oil and gas tax credit bonds for
debt service. He shared that the information concluded the
major changes throughout the language section (excluding
retroactivity clauses and effective dates).
2:38:12 PM
Ms. Ryder clarified that HB 40 (the mental health bill) was
part of the reports, despite the two bills. She explained
that all amendments would go to HB 39. It was not necessary
to amend HB 40 unless a committee member wanted to add a
capital mental health project. She reported that LFD would
have all of the bill information on its website. She
cautioned not to be alarmed if the governor's numbers
changed because as the governor submitted amendments, LFD
added them to the "20GovAmd+" column in its agency summary
sheets. She detailed that the governor had submitted new
amendments the previous evening, which had yet to be
incorporated in the LFD summary sheets.
Co-Chair Wilson asked why they would not wait to see if the
amendments were passed by the committee before adding them
to the budget. She wanted to know why they would be added
before being vetted.
Ms. Ryder clarified that LFD added all governor's requested
items to his request, which were reflected in the
"20GovAmd+" column in order to keep track of all of the
governor's amendments. The method enabled LFD and others to
make accurate comparisons between the governor's request
and what the legislature decided to approve.
Co-Chair Wilson stated that although the CS was currently
$914,057,300 above the governor's proposal, the number
could go up or down depending on the amendments.
Ms. Ryder agreed.
Vice-Chair Ortiz asked if LFD would provide the committee
with the governor's amendments.
Ms. Ryder replied that the amendments would be on the LFD
website. Additionally, the amendments had been provided by
the governor's office to the committee co-chairs.
2:41:20 PM
Co-Chair Foster clarified that the numbers section had not
been provided during the current meeting because they had
been reviewed during the Monday and Tuesday meetings
earlier in the week during subcommittee reports. He
reported that amendments to the bills would be due the
following Monday by 3:00 p.m. He explained the budget
amendment process.
HB 39 was HEARD and HELD in committee for further
consideration.
HB 40 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster provided the schedule for the following
day.
ADJOURNMENT
2:43:11 PM
The meeting was adjourned at 2:43 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 39 CS FIN WORKDRAFT v.R .pdf |
HFIN 3/28/2019 1:30:00 PM |
HB 39 |
| HB 39 Agency Summaries House Structure LFD various.pdf |
HFIN 3/28/2019 1:30:00 PM |
HB 39 |
| HB 39 CS FIN Workdraft COMPARE.pdf |
HFIN 3/28/2019 1:30:00 PM |
HB 39 |
| HB 40 CS FIN WORKDRAFT v.S.pdf |
HFIN 3/28/2019 1:30:00 PM |
HB 40 |
| Packet 5 Public Testimony HF39 OP Budget March 28 Emails.pdf |
HFIN 3/28/2019 1:30:00 PM |
HB 39 |