Legislature(2019 - 2020)ADAMS ROOM 519

02/20/2020 01:30 PM FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

Audio Topic
01:33:10 PM Start
01:34:31 PM HB205 || HB206
01:34:34 PM Governor's Fy 21 Operating Budget Amendments
02:09:12 PM HB234
02:09:13 PM Governor's Fy 20 Supplemental Budget Amendments
02:17:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 205 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 206 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
Governor's FY 21 Operating Budget Amendments
Overview by Office of Management & Budget
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 234 APPROP:SUPP; REAPPROP; CAP; AMEND; CBR TELECONFERENCED
Heard & Held
Governor's FY 20 Supplemental Budget Amendments
Overview by Office of Management & Budget
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 20, 2020                                                                                          
                         1:33 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:33:10 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 Jennifer Johnston, Co-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 Adam Wool                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Cathy Tilton                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Neil Steininger, Director, Office of Management and Budget,                                                                     
Office of the Governor.                                                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
NONE                                                                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 205    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          HB 205 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 206    APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          HB 206 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
                                                                                                                                
HB 234    APPROP:SUPP; REAPPROP; CAP; AMEND; CBR                                                                                
                                                                                                                                
          HB 234 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
GOVERNOR'S FY 21 OPERATING BUDGET AMENDMENTS                                                                                    
                                                                                                                                
GOVERNOR'S FY 20 SUPPLEMENTAL BUDGET AMENDMENTS                                                                                 
                                                                                                                                
Co-Chair  Foster reviewed  the  agenda for  the meeting.  He                                                                    
invited Mr. Steininger to the table.                                                                                            
                                                                                                                                
HOUSE BILL NO. 205                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    capitalizing   funds;    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. 206                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:34:31 PM                                                                                                                    
                                                                                                                                
^GOVERNOR'S FY 21 OPERATING BUDGET AMENDMENTS                                                                                 
                                                                                                                                
1:34:34 PM                                                                                                                    
                                                                                                                                
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE   OF   THE   GOVERNOR,  introduced   the   PowerPoint                                                                    
Presentation:  FY2021 Governor's  Amended Budget  Overview."                                                                    
He  began with  the  chart  on slide  2  showing an  updated                                                                    
Office of  Management and Budget  (OMB) fiscal  summary that                                                                    
included   the   supplemental,    capital,   and   operating                                                                    
amendments. He indicated the total  difference was not noted                                                                    
on the  slide. The  amendments offered  by the  governor for                                                                    
FY 21 totaled  $45.3 million  in unrestricted  general funds                                                                    
(UGF) and $42.5  million in all funds. He  reported that the                                                                    
total for the FY 21  capital budget equaled $4.6 million UGF                                                                    
and   $2.8  million   all  funds.   He   relayed  that   the                                                                    
supplemental budget for FY 20  totaled $30.5 million UGF and                                                                    
$815.9  million  from  the   Permanent  Fund  (PF)  Earnings                                                                    
Reserve Account (ERA).                                                                                                          
                                                                                                                                
Mr.  Steininger continued  to slide  3  listing the  amended                                                                    
statewide items.  The first item dealt  with the calculation                                                                    
for  the  FY  21  salary adjustments  which  were  initially                                                                    
calculated in the prior  November and inadvertently included                                                                    
some other  factors in the  base. The salary  adjustment was                                                                    
misstated  higher  than  it should  have  been.  There  were                                                                    
several minor  changes to the salary  adjustments totaling a                                                                    
reduction  of $300,300  in UGF  and other  fund sources.  He                                                                    
indicated  it  had  been  a  clerical error  by  OMB  as  it                                                                    
calculated the impacts of bargaining agreements.                                                                                
                                                                                                                                
Co-Chair Foster recognized the committee  had been joined by                                                                    
Representative Carpenter.                                                                                                       
                                                                                                                                
Mr. Steininger  explained that in the  fund transfer section                                                                    
of the  bill, OMB included  an amendment that  would deposit                                                                    
the remaining  balance of the  Alaska Fish and  Game Revenue                                                                    
Bond Fund  into the Fish  and Game  Fund. The amount  in the                                                                    
redemption fund was  enough to pay off  the outstanding debt                                                                    
on the  bonds with  a residual  amount left  in the  fund of                                                                    
between $4  million to  $6 million. The  funds needed  to be                                                                    
spent  on other  sport fish  related activities.  Therefore,                                                                    
OMB planned to deposit the  remaining balance into the Sport                                                                    
Fish Enterprise Account within the Fish and Game Fund.                                                                          
                                                                                                                                
Co-Chair Johnston  asked Mr. Steininger  to share  the terms                                                                    
of the paper  being paid off. Mr. Steininger  did not recall                                                                    
all  of  the details.  However,  he  offered that  once  the                                                                    
balance  of the  redemption fund  was enough  to payoff  the                                                                    
bonds,  the state  would do  so. The  balance would  be high                                                                    
enough in FY 21 to pay off the outstanding principle.                                                                           
                                                                                                                                
Mr.  Steininger conveyed  that in  the debt  service section                                                                    
OMB included  $55 million  to pay financing  on oil  and gas                                                                    
tax credit  bonds assuming that  the outcome of  the pending                                                                    
legislation  was  in  the  state's  favor.  Included  was  a                                                                    
transfer of  $815.9 million  from the  ERA to  the Permanent                                                                    
Fund Dividend  (PFD) Fund for  the PFD payment equal  to the                                                                    
shortfall amount in calendar year 2019.                                                                                         
                                                                                                                                
1:38:36 PM                                                                                                                    
                                                                                                                                
Representative Knopp  asked about  the debt service  for the                                                                    
oil and gas tax credits and  how the state would be affected                                                                    
if the  sale did  not occur.  Mr. Steininger  responded that                                                                    
should  the judgement  not fall  in the  state's favor,  the                                                                    
legislature would have to come  back to appropriate funds to                                                                    
cover the statutory obligation to pay down the tax credits.                                                                     
                                                                                                                                
Representative  Knopp asked  if the  outcome would  be known                                                                    
before the budget cycle was  completed. Mr. Steininger could                                                                    
not speculate when a decision would be made.                                                                                    
                                                                                                                                
Co-Chair Johnston  referred to the transfer  of $816 million                                                                    
on  slide 2.  She clarified  that the  Percentage of  Market                                                                    
Value  (POMV) draw  from the  ERA to  the general  fund (GF)                                                                    
included  the $816  million. Mr.  Steininger responded  that                                                                    
the fiscal  summary was  collapsed to fit  on the  slide. He                                                                    
indicated  that  behind the  detail  to  the POMV  draw  was                                                                    
detail on the  ERA draw as set out in  statute   the portion                                                                    
that  went to  the  dividend. The  slide  showed the  amount                                                                    
available for state operations.                                                                                                 
                                                                                                                                
Co-Chair  Johnston  referred  to the  $510  million  deficit                                                                    
reflected on  the slide. She  wondered if there would  be an                                                                    
additional deficit  without the  draw from  the ERA  (a draw                                                                    
beyond the  structured draw). Mr. Steininger  explained that                                                                    
the  slide only  showed the  amount available  for statewide                                                                    
operations.  It  did not  include  the  dividend within  the                                                                    
fiscal summary.                                                                                                                 
                                                                                                                                
Co-Chair Johnston  referred back  to slide  3. She  asked if                                                                    
Mr.  Steiniger  was  referring to  an  ad-hoc  draw  without                                                                    
operations. Mr. Steininger responded, "Correct."                                                                                
                                                                                                                                
Representative Merrick  believed the  administration offered                                                                    
legislation, HCR 13 [Legislation  introduced in 2020   Short                                                                    
Title:  Support  Future  of  Permanent  Fund/Dividend].  She                                                                    
wondered  if   the  bill  had   the  same   PF  distribution                                                                    
information as reflected on the slide.                                                                                          
                                                                                                                                
Mr. Steininger  assumed she was speaking  of the substantive                                                                    
bill that  would determine the  eligibility for  the payment                                                                    
of  the back-pay  portion  of the  dividend  in the  current                                                                    
year. He  wondered if that  was what the  representative was                                                                    
referring to.                                                                                                                   
                                                                                                                                
Representative Merrick asked if the  figure was for the back                                                                    
pay for  the dividend  from the  prior year.  Mr. Steininger                                                                    
responded in the affirmative. He  confirmed that there was a                                                                    
bill in play that would  set the eligibility for individuals                                                                    
who  would  receive  the  back-pay   if  they  received  the                                                                    
dividend in 2019 and were eligible in 2020.                                                                                     
                                                                                                                                
Representative Merrick clarified  that whoever was eligible,                                                                    
per  the  bill,  would  receive a  portion.  Mr.  Steininger                                                                    
responded,  "Correct."  Representative Merrick  queried  the                                                                    
amount. Mr. Steininger responded that it was about $1042.                                                                       
                                                                                                                                
1:42:39 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  referred to  the oil tax  and an  amount of                                                                    
$55 million. He suggested that  if the court struck down the                                                                    
bond  program,  one   of  the  options  would   be  for  the                                                                    
legislature to pay  the statutory minimum. He  asked for the                                                                    
statutory  minimum   amount.  He  thought  the   figure  was                                                                    
approximately $166 million.                                                                                                     
                                                                                                                                
Mr. Steininger agreed with the  number suggested by Co-Chair                                                                    
Foster.                                                                                                                         
                                                                                                                                
Representative  Josephson referred  to oil  tax credits.  He                                                                    
provided a  brief history  of the oil  tax changes  since he                                                                    
had been  in the  legislature. He suggested  that if  he had                                                                    
been asked  in the  prior year  why the  state had  not paid                                                                    
anything, he would have responded  that there was litigation                                                                    
pending  and the  payment was  subject to  appropriation. He                                                                    
wanted to pay what was owed.  He wondered how to explain why                                                                    
the legislature  would be paying  if the state were  to lose                                                                    
the litigation. He pondered how  to explain the situation to                                                                    
his constituents.                                                                                                               
                                                                                                                                
Mr. Steininger  suggested responding that the  state did not                                                                    
pay oil  tax credits  because it did  not have  certainty in                                                                    
the  outcome   of  the  litigation.   The  outcome   of  the                                                                    
litigation would dictate the state's path into the future.                                                                      
                                                                                                                                
Representative  Knopp  commented  that   the  PFD  draw  was                                                                    
obviously a way of complying  with a perceived statute or to                                                                    
fulfill a campaign promise. He  suggested that following the                                                                    
old statutory  formula for calculating the  dividend clearly                                                                    
violated  the provisions  of SB  26  [Legislation passed  in                                                                    
2018 establishing a  Percent of Markey Value  draw for state                                                                    
operating  expenditures]. He  suggested  that the  budgeting                                                                    
process was  flawed because of the  conflicting statutes. He                                                                    
thought  the  legislature  should really  be  talking  about                                                                    
actual  revenues and  expenditures. He  asserted the  waters                                                                    
were being muddied.                                                                                                             
                                                                                                                                
1:46:39 PM                                                                                                                    
                                                                                                                                
Co-Chair  Johnston  asked  what the  state's  responsibility                                                                    
would be if it lost  the lawsuit. Mr. Steininger thought the                                                                    
obligation would  be about $166  million. He could  get back                                                                    
to  the committee  with an  exact amount.  Co-Chair Johnston                                                                    
clarified  that  the  amount  was  over  $160  million.  Mr.                                                                    
Steininger responded in the affirmative.                                                                                        
                                                                                                                                
Mr. Steininger  reviewed the changes  for the  Department of                                                                    
Administration (DOA) on slide 4.  There was an amendment for                                                                    
an additional  $1 million in  other funds for  a third-party                                                                    
claims'  administrator  contract   within  the  Division  of                                                                    
Retirement  and  Benefits.  He   reported  $169,000  of  UGF                                                                    
related  to  mandatory  patient-centered  outcomes  research                                                                    
institute dues that  must be paid under  the Affordable Care                                                                    
Act.  In the  Office  of  Public Advocacy  there  was a  new                                                                    
Alaska   Mental  Health   Trust   Authority  (AMHTA)   item.                                                                    
Throughout  the presentation  there  were a  handful of  new                                                                    
recommendations  received   from  AMHTA  after   the  budget                                                                    
release in December.  There was a request for  funding for a                                                                    
public guardian  position. He also  noted there  was program                                                                    
receipt  authority  for  increased collection  activity  and                                                                    
vendor  fee  revenue  within   the  Shared  Services  Alaska                                                                    
Initiative. He pointed to the  $500,000 DGF which would help                                                                    
offset costs that would otherwise  be billed out to agencies                                                                    
throughout  the   state.  In   the  Office   of  Information                                                                    
Technology there  was a  transfer of  a position  related to                                                                    
the State  of Alaska  Telecommunications System  (SATS). The                                                                    
position  was   being  transferred  to  the   Department  of                                                                    
Military and Veterans Affairs.                                                                                                  
                                                                                                                                
Co-Chair Johnston referenced the  AMHTA funds. She was aware                                                                    
of a number  of positions that were not  match-funded in the                                                                    
Department of Health  and Social Services (DHSS)  and in the                                                                    
Department of  Administration (DOA). She thought  the amount                                                                    
was close to  $4 million. She asked if the  $91,000 UGF were                                                                    
matching  funds  for AMHTA.  She  asked  Mr. Steininger  for                                                                    
further clarification.                                                                                                          
                                                                                                                                
Mr.  Steininger replied  that the  $91.5  million was  AMHTA                                                                    
receipt  authority. He  indicated there  were several  other                                                                    
areas within the  budget in which the  AMHTA had recommended                                                                    
use of its money.                                                                                                               
                                                                                                                                
Co-Chair  Johnston  asked  if the  money  was  matching  UGF                                                                    
dollars to AMHTA funds. Mr.  Steininger responded, "No it is                                                                    
not."                                                                                                                           
                                                                                                                                
1:49:43 PM                                                                                                                    
                                                                                                                                
Mr. Steininger moved to slide  5 showing the changes for the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
(DCCED).   He  explained   that   there   was  a   technical                                                                    
correction. He  indicated that when  the Alaska Oil  and Gas                                                                    
Conservation Commission  (AOGCC) was transferred to  DCCED a                                                                    
couple  of  technical items  got  lost  in the  shuffle.  He                                                                    
relayed that  $224.8 million DGF  were transferred  from the                                                                    
Department of  Law to AOGCC  for support to and  payment for                                                                    
services the  commission provided.  He continued  that there                                                                    
was also  carry-forward language  in the numbers  section of                                                                    
the bill in  which OMB had added an  amendment. The language                                                                    
previously  existed  but  was  not  carried  over  when  the                                                                    
appropriation was moved into the department.                                                                                    
                                                                                                                                
Representative  Merrick clarified  that she  had incorrectly                                                                    
stated the  bill regarding the supplemental  payments of the                                                                    
PFD.  She  indicated the  correct  bill  number was  SB  205                                                                    
[Legislation introduced  in 2019 - regarding  a supplemental                                                                    
PFD for 2019 recipients].                                                                                                       
                                                                                                                                
Co-Chair Foster  asked if further clarification  was needed.                                                                    
Mr. Steininger responded  that he thought the  intent of the                                                                    
bill had been addressed previously in the meeting.                                                                              
                                                                                                                                
1:51:15 PM                                                                                                                    
                                                                                                                                
Mr. Steininger  reviewed the changes  for the  Department of                                                                    
Corrections (DOC)  on slide 6.  He reported a  net reduction                                                                    
in the department  of $13.4 million. The  change reflected a                                                                    
reduction of the out-of-state  contract appropriation in the                                                                    
amount of  $17.8 million  associated with  sending prisoners                                                                    
out of state. The amount had  been offset by some fixed cost                                                                    
increases  by the  department that  would be  experienced in                                                                    
FY 21. He continued  that $3.2 million was  listed under the                                                                    
Health  and  Rehabilitation  Office   and  related  to  risk                                                                    
management   cost  increases.   The   department  had   seen                                                                    
insurance   claim  increases   which   increased  the   risk                                                                    
management allocation amount.                                                                                                   
                                                                                                                                
Representative Josephson  thought the  reduction was  a wise                                                                    
move. He thought  it reflected the need to house  and feed a                                                                    
certain number of prisoners out  of state. He wondered where                                                                    
the  costs were  reflected since  prisoners would  remain in                                                                    
the  state.  He asked  if  the  costs  were covered  in  the                                                                    
existing bill and were adequate.                                                                                                
                                                                                                                                
Mr.  Steininger  responded  that   it  was  covered  in  the                                                                    
term-year  extension of  the  appropriation  to re-open  the                                                                    
Palmer  Correctional Facility.  He explained  that extending                                                                    
the  term-year  and  spending  the   money  to  re-open  the                                                                    
facility,  the department  did not  have to  find the  money                                                                    
elsewhere  in its  budget. There  was also  additional money                                                                    
within the institution director's  office that would be used                                                                    
to cover the cost of  housing inmates. The department looked                                                                    
at its projections for the  number of inmates it expected in                                                                    
FY  21  and  did  not need  further  adjustment  within  the                                                                    
institutions. As  long as the  department was able  to cover                                                                    
the  fixed cost  increases it  would  not have  to bill  the                                                                    
institution for the costs.                                                                                                      
                                                                                                                                
Mr. Steininger  discussed the changes for  the Department of                                                                    
Education  and Early  Development (DEED)  on slide  7. There                                                                    
was an adjustment to the  amount of technical and vocational                                                                    
education funding that the department  received. There was a                                                                    
handful  of  other  transactions throughout  the  amendments                                                                    
that  were  adjustments   related  to  Technical  Vocational                                                                    
Education Program  (TVEP) funding.  The number  was adjusted                                                                    
after  the December  release. He  also noted  a new  federal                                                                    
grant that  the department received for  $211,000. The grant                                                                    
was designed  to help the  Libraries, Archives,  and Museums                                                                    
division address emergency events  for preservation of state                                                                    
historical artifacts.                                                                                                           
                                                                                                                                
1:54:22 PM                                                                                                                    
                                                                                                                                
Representative  Sullivan-Leonard   asked  if  there   was  a                                                                    
required state  match for the  federal grant related  to the                                                                    
state  libraries,  archives,  and  museums.  Mr.  Steininger                                                                    
responded  that there  was  not a  dollar  value match,  but                                                                    
existing staff in the division would help manage the grant.                                                                     
                                                                                                                                
Representative  Sullivan-Leonard  asked   if  the  item  was                                                                    
urgent. Mr.  Steininger responded that  it was in the  FY 21                                                                    
operating budget. It was not an urgent matter.                                                                                  
                                                                                                                                
Mr.  Steininger  continued  to  slide  8  which  showed  the                                                                    
changes made  to Department of  Environmental Conservation's                                                                    
(DEC) budget. The administration  restored the dairy program                                                                    
at $164,600  UGF and anticipated  $15,000 in receipts  to be                                                                    
collected from the industry.                                                                                                    
                                                                                                                                
Vice-Chair Ortiz asked  if the amount was already  a part of                                                                    
the   operating   budget   the   committee   was   currently                                                                    
addressing. He thought  the item had been dealt  with at the                                                                    
finance  subcommittee level.  Mr. Steininger  explained that                                                                    
when  OMB  was  submitting   budget  amendments,  they  were                                                                    
submitted based on the budget  submitted in December [2019].                                                                    
The  amendment  was an  acknowledgement  of  support of  the                                                                    
action taken by the subcommittee.                                                                                               
                                                                                                                                
Representative  Merrick asked  if there  were three  dairies                                                                    
that would  be contributing  to the receipts  Mr. Steininger                                                                    
had mentioned. Mr.  Steininger believed so but  did not know                                                                    
the exact number of dairies.                                                                                                    
                                                                                                                                
Representative Merrick  asked if the dairies  were consulted                                                                    
about the receipt amount.                                                                                                       
                                                                                                                                
Mr.  Steininger  was  aware  that  the  department  had  had                                                                    
conversations with  the industry and discussed  the level of                                                                    
state support and the level of receipts needed.                                                                                 
                                                                                                                                
Representative Merrick  commented that  in the past  she had                                                                    
supported  companies  paying  for   their  own  testing  and                                                                    
regulations. She thought  it was a good faith  effort by the                                                                    
industry.                                                                                                                       
                                                                                                                                
Mr. Steininger advanced to slide  9 which listed changes for                                                                    
the  Department of  Health and  Social Services  (DHSS). The                                                                    
first  item   removed  $7  million  of   federal  authority.                                                                    
Unfortunately, a  grant the  department anticipated  did not                                                                    
go through and  the federal authority was  no longer needed.                                                                    
He  reported  there was  an  addition  of $700,000  UGF  and                                                                    
$700,000   of  federal   receipts  for   the  Family   First                                                                    
Prevention  Services  Act  for   the  Office  of  Children's                                                                    
Services (OCS).  The funding would  target families  at risk                                                                    
of entering the  OCS system to help  prevent taking children                                                                    
out  of their  homes. There  had  been a  growing number  of                                                                    
children   in    subsidized   adoption    and   guardianship                                                                    
arrangements.  The administration  had added  $1 million  in                                                                    
UGF and a  small amount of additional  federal authority. He                                                                    
noted  that the  $1 million  was not  representative of  the                                                                    
actual  amount of  federal matching  dollars. It  was enough                                                                    
federal  authority to  collect  the  amount OCS  anticipated                                                                    
leveraging with the $1 million.                                                                                                 
                                                                                                                                
Mr.  Steiniger  discussed  changes within  the  Division  of                                                                    
Senior and  Disabilities Services. The Alaska  Mental Health                                                                    
Trust  Authority  recommended  adding  an  Adult  Protective                                                                    
Services  III  position at  a  cost  of $75,000  from  trust                                                                    
receipts and $75,000 from federal  revenue. He conveyed that                                                                    
AMTHC recommended adding a Research  Analyst III position in                                                                    
the Division of Behavioral Health  at a cost of $96,000 from                                                                    
trust receipts.                                                                                                                 
                                                                                                                                
1:58:47 PM                                                                                                                    
                                                                                                                                
Mr.  Steininger continued  to discuss  changes  to the  DHSS                                                                    
budget  on   slide  10.  The  Alaska   Mental  Health  Trust                                                                    
Authority recommended  professional off-site  evaluations at                                                                    
a  cost  of  $300,000  in trust  receipts.  The  Trust  also                                                                    
recommended a  Partner Access LinePediatric   Alaska Program                                                                    
at a cost  of $89,000 and a peer  support certification with                                                                    
the Behavioral Health Administration  at a cost of $125,000.                                                                    
He reported that within the  commissioner's office the Trust                                                                    
recommended   the  Statewide   Designation  Evaluation   and                                                                    
Stabilization/Designation    Evaluation     and    Treatment                                                                    
Coordinator position at a cost  of $75,000 in trust receipts                                                                    
and $50,000 in federal revenues.                                                                                                
                                                                                                                                
Mr.  Steininger continued  to review  slide 10.  He reported                                                                    
that within  the Division  of Behavioral  Health OMB  made a                                                                    
transfer of  $400,000 from  the administrative  component to                                                                    
the Suicide Prevention Council to  cover grant funding for a                                                                    
Suicide Prevention Council Grant    a grant that went to the                                                                    
Department of Education and Early Development (DEED).                                                                           
                                                                                                                                
Representative Josephson  asked for  clarification regarding                                                                    
the Suicide Prevention Council Grant  and the grants related                                                                    
to  behavioral health.  Mr. Steininger  responded that  they                                                                    
were   related  to   an   administrative  component   within                                                                    
behavioral  health.  The  Office of  Management  and  Budget                                                                    
looked  at historical  trends of  lapsed amounts  within the                                                                    
component  and found  that the  full amount  of UGF  had not                                                                    
been  used  each year.  The  department  thought the  lapsed                                                                    
amount  could  be  used to  support  a  much-needed  program                                                                    
within the Suicide Prevention Council.                                                                                          
                                                                                                                                
Representative  Josephson suggested  that  the $400,000  was                                                                    
not   reaching  beneficiaries   in   need.  Mr.   Steininger                                                                    
responded that it  was not that the dollars  were not making                                                                    
their  way  to  beneficiaries.  Rather, the  money  was  not                                                                    
assigned to  specific grants but to  the administration side                                                                    
of behavioral health. The dollars  were being reallocated to                                                                    
pay for the suicide prevention grants.                                                                                          
                                                                                                                                
Co-Chair Johnston summarized that  the mental health add-ins                                                                    
were additional AMHTA  receipts. She asked if  the Trust was                                                                    
expecting a  UGF match from  the legislature for any  of the                                                                    
grants. Mr. Steininger responded in the negative.                                                                               
                                                                                                                                
Mr. Steininger addressed  the changes to the  budget for the                                                                    
Department  of  Labor  and Workforce  Development  (DOL)  on                                                                    
slide 11. There  were two items adjusting  the TVEP funding.                                                                    
There  was an  addition  of $457,900  UGF  to the  Workforce                                                                    
Investment  Board  and  $227,500  in TVEP  funding  for  the                                                                    
Alaska Vocational  and Education  Center (AVTEC).  There was                                                                    
also  an  increased  salary and  benefit  adjustment  within                                                                    
AVTEC of $48,000 UGF and $10,600 in other funding.                                                                              
                                                                                                                                
2:02:45 PM                                                                                                                    
                                                                                                                                
Mr. Steininger  reported changes  made to the  Department of                                                                    
Law's budget on slide 12. The  amount noted on the slide was                                                                    
the other half of the  technical adjustment he had mentioned                                                                    
within DCCED. The amount would  correct a coordination issue                                                                    
at the release of the  December budget and noticed after the                                                                    
release.  The  adjustment would  ensure  that  the money  to                                                                    
support AOGCC went to the right place.                                                                                          
                                                                                                                                
Mr.  Steininger advanced  to slide  13 which  showed changes                                                                    
made to the  budget for Department of  Military and Veterans                                                                    
Affairs (DMVA).  There was an  amount of $280,500  UGF added                                                                    
to support the management positions  for the State of Alaska                                                                    
Telecommunications  System.  He   explained  that  when  the                                                                    
program was  housed within the Department  of Administration                                                                    
(DOA),  the  positions were  funded  through  the Office  of                                                                    
Information Technology budget. Now,  because the program was                                                                    
housed within DMVA, it required  general funds. There was an                                                                    
additional technical correction, a  reduction of $35,500, to                                                                    
correct  a  calculation error  in  the  December budget.  He                                                                    
noted that  the other side  of the transfer of  the position                                                                    
could be found on the DOA slide.                                                                                                
                                                                                                                                
Mr. Steininger  reviewed slide 14  listing the  changes made                                                                    
to the Department of Natural  Resources' (DNR) budget. There                                                                    
was  an  addition  of  $204,000  for  the  servicing  of  an                                                                    
agricultural revolving loan program  support. There was also                                                                    
a federal grant  for a boating safety program  in the amount                                                                    
of $200,000.  There was  an addition of  a position  for the                                                                    
Citizens' Advisory Commission on Federal  Areas at a cost of                                                                    
$178,000  within  the  Office   of  Project  Management  and                                                                    
Permitting. He  mentioned that there  were several  items on                                                                    
the end  of the current  slide and the following  slide that                                                                    
addressed concerns the department  had with travel regarding                                                                    
activities  that required  employees to  conduct site  work.                                                                    
The change was  an adjustment to the  travel reductions that                                                                    
were implemented in  the current fiscal year  to ensure that                                                                    
critical needs travel was funded.                                                                                               
                                                                                                                                
Mr. Steininger  indicated that slide  15, a  continuation of                                                                    
the  changes made  to DNR's  budget, addressed  some of  the                                                                    
other  areas   in  which  the  critical   needs  travel  was                                                                    
occurring.                                                                                                                      
                                                                                                                                
Mr.  Steininger  moved  to  slide  16  which  indicated  the                                                                    
changes made to  the budget for Department  of Public Safety                                                                    
(DPS).  There  were two  other  AMHTA  items    one  in  the                                                                    
training academy  and one in  the Police  Standards Council.                                                                    
Both  items were  for a  crisis  intervention team  training                                                                    
course  and reflected  a  total cost  of  $160,000 in  trust                                                                    
receipt authority.                                                                                                              
                                                                                                                                
Mr.  Steininger advanced  to  the list  of  changes for  the                                                                    
Department  of  Revenue (DOR)  on  slide  17. There  was  an                                                                    
increase  across  two   different  change  records  totaling                                                                    
$346,600 UGF.  The changes  reversed efficiency  savings. He                                                                    
elaborated  that as  the department  looked  at its  overall                                                                    
budget for  the Tax Division  and the  need to move  the Tax                                                                    
Revenue Management  System into the operating  budget out of                                                                    
the  capital  budget,  it  realized   that  while  it  could                                                                    
eliminate the positions identified,  it needed the authority                                                                    
to fully  support the Tax  Revenue Management  System. There                                                                    
was also  a backlog  within the Unclaimed  Property Division                                                                    
at a cost of $150,000  DGF (funds collected by the Unclaimed                                                                    
Properties Section) to get through the claims backlog.                                                                          
                                                                                                                                
2:06:53 PM                                                                                                                    
                                                                                                                                
Mr. Steininger  discussed changes made to  the Department of                                                                    
Transportation  and  Public   Facilities'  (DOT)  budget  on                                                                    
slide 18.  He  reported  the need  for  $55,000  to  address                                                                    
equipment  calibration  and  certification  for  measurement                                                                    
standards.  There was  also  a  Vessel Construction  Manager                                                                    
position  to work  with the  Interisland Ferry  Authority on                                                                    
their annual  overhaul and construction  projects at  a cost                                                                    
of  $126,900. The  department determined  that the  position                                                                    
was needed to  help the authority to coordinate  with all of                                                                    
the various  requirements of the federal  monies it received                                                                    
for the overhaul and construction projects.                                                                                     
                                                                                                                                
Mr.  Steininger  turned  to  the  list  of  changes  to  the                                                                    
Judiciary (JUD) budget  on slide 19. There was  a handful of                                                                    
adjustments having to do with  the conversion to a bi-weekly                                                                    
payroll.  He  reported  that  as  Judiciary  looked  at  the                                                                    
management  of the  conversion to  a  bi-weekly payroll,  it                                                                    
realized the  conversion would have  a budgetary  impact for                                                                    
its personal  services costs. The  changes also  reflected a                                                                    
restoration of full funding for  the Appellate Court budget,                                                                    
a  reduction  of  $9,100 UGF  related  to  Executive  Branch                                                                    
Services,  and an  adjustment in  the number  that would  be                                                                    
required.                                                                                                                       
                                                                                                                                
Mr. Steininger reviewed  changes made to the  budget for the                                                                    
Office of the Governor on  slide 21. He reported an increase                                                                    
of $60,000  related to ensuring  that local  governments had                                                                    
access  to the  Alaska Administrative  Code. There  was also                                                                    
$236,500 related to election worker  pay. An update to their                                                                    
pay  level  was needed  requiring  an  additional amount  of                                                                    
money.                                                                                                                          
                                                                                                                                
Mr. Steininger  continued to slide  22 which  listed changes                                                                    
made to the University of  Alaska's (US) budget. He reported                                                                    
an  adjustment  of  $605,900 related  to  TVEP  funding.  He                                                                    
concluded his presentation of the FY 21 effective items.                                                                        
                                                                                                                                
HB  205  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  206  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 234                                                                                                            
                                                                                                                                
     "An    Act    making    supplemental    appropriations,                                                                    
     reappropriations,  and  other appropriations;  amending                                                                    
     appropriations;     capitalizing      funds;     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."                                                                         
                                                                                                                                
2:09:12 PM                                                                                                                    
                                                                                                                                
^GOVERNOR'S FY 20 SUPPLEMENTAL BUDGET AMENDMENTS                                                                              
                                                                                                                                
2:09:13 PM                                                                                                                    
                                                                                                                                
Mr.  Steininger   indicated  he  would  be   discussing  the                                                                    
proposed  supplemental amendments.  He began  with Judiciary                                                                    
on  slide 24.  The cost  of  the conversion  to a  bi-weekly                                                                    
payroll  was reflected  as well  as  funding for  additional                                                                    
costs related to the state's accounting system, IRIS.                                                                           
                                                                                                                                
Mr. Steininger reviewed  additional amendments for Judiciary                                                                    
on slide 25.  There was $75,800 related  to additional costs                                                                    
for Executive Branch Services.                                                                                                  
                                                                                                                                
Co-Chair Foster asked  Mr. Steininger to return  to page 25.                                                                    
He  asked for  further detail  regarding the  addition costs                                                                    
for Executive  Branch Services.  Mr. Steiniger  replied that                                                                    
the risk  management rate  for the  amount charged  based on                                                                    
employees in  the Judicial  Branch increased.  Judiciary did                                                                    
not have  the flexibility  in its budget  to respond  to the                                                                    
increase like other agencies might.                                                                                             
                                                                                                                                
Mr. Steininger indicated  that other supplemental amendments                                                                    
included  an  adjustment  to  the  Judgements,  Claims,  and                                                                    
Settlements  Section adding  two new  judgements as  well as                                                                    
place-holder language  related to pending  litigation. There                                                                    
was also a special appropriation,  a lapse extension for the                                                                    
authority  to buy  back tax  credits using  proceeds from  a                                                                    
bond sale. The  authority existed in FY 20 and  needed to be                                                                    
extended into  FY 21  in case  a bond  sale occurred  in the                                                                    
time period.                                                                                                                    
                                                                                                                                
Mr.  Steininger  reported  that within  the  capital  budget                                                                    
there was a  $24 million project to refresh  the Alaska Land                                                                    
Mobile  Radio   (ALMAR)  System.  He  elaborated   that  the                                                                    
repeaters that  were on  the towers  needed to  be replaced.                                                                    
The  item needed  to be  started relatively  soon to  ensure                                                                    
that  the  other  partners  within  the  system  could  stay                                                                    
onboard and keep the system functioning.                                                                                        
                                                                                                                                
Mr.  Steiniger   relayed  that  within  DPS   there  was  an                                                                    
adjustment to the project for  FAA-required equipment on DPS                                                                    
aircraft.  The  amount  OMB  included  in  the  supplemental                                                                    
budget  a couple  of weeks  prior  was lower  that what  was                                                                    
actually required  to address all  the aircraft  that needed                                                                    
the equipment.  The amount was  increased by $293,400  for a                                                                    
total of just under $400,000 for the equipment.                                                                                 
                                                                                                                                
Co-Chair  Foster asked  about  the lapsed  extension in  the                                                                    
special  appropriation.  He asked  if  it  was for  the  $27                                                                    
million that  was in FY 20  so that it could  roll over into                                                                    
FY  21. Mr.  Steininger indicated  that the  amount was  for                                                                    
several  hundred million  to spend  the proceeds  of a  bond                                                                    
sale to actually purchase tax credits.                                                                                          
                                                                                                                                
Co-Chair Foster  had heard  that if the  ALMR money  was not                                                                    
appropriated to update the system,  the other partners might                                                                    
pull  out. Mr.  Steiniger responded  in the  affirmative. He                                                                    
indicated he had finished his presentation.                                                                                     
                                                                                                                                
Co-Chair  Johnston  suggested  the committee  would  discuss                                                                    
spending  caps.  She  asked  how they  would  fit  into  the                                                                    
governor's proposed budget  and supplemental amendments. She                                                                    
referred to HJR 7  [Legislation introduced in 2019 regarding                                                                    
an  appropriation limit].  Mr.  Steininger  agreed it  would                                                                    
provide context.                                                                                                                
                                                                                                                                
Co-Chair Johnston requested that he  show how the budget fit                                                                    
into  last  year's proposed  spending  cap.  She thought  it                                                                    
would help in future conversations.                                                                                             
                                                                                                                                
2:14:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster summarized that  the amendments reflected an                                                                    
increase of  $45 million  UGF for  the operating  budget, $4                                                                    
million UGF for the capital  budget, and $30 million for the                                                                    
supplemental budget.  The total amount was  $80 million UGF.                                                                    
He  asked  if  his   figures  were  correct.  Mr.  Steiniger                                                                    
responded affirmatively.                                                                                                        
                                                                                                                                
Representative LeBon returned to  the ALMR program. He asked                                                                    
if the  request was to  fund the  program at $24  million to                                                                    
meet an  expectation of the  Department of  Defense partner.                                                                    
He  asked  if  there  was an  additional  $5  million  being                                                                    
proposed  in   the  capital  budget  for   the  system.  Mr.                                                                    
Steininger responded  positively that in the  amendments OMB                                                                    
reduced  an  existing  capital   request  that  was  in  the                                                                    
December  release  of  the  budget  in  the  range  of  $7.6                                                                    
million.  After further  conversation  with the  department,                                                                    
the funding request was reduced  to $5 million for both SATS                                                                    
and ALMR.                                                                                                                       
                                                                                                                                
Representative  LeBon asked  if  the total  funding for  the                                                                    
system  was $29  million.  Mr. Steininger  responded in  the                                                                    
affirmative in terms of capital projects.                                                                                       
                                                                                                                                
Co-Chair Foster  commented that  if the  state were  to lose                                                                    
the court  case having to do  with oil tax credits  the cost                                                                    
to the  state would  increase dramatically from  $55 million                                                                    
to $166  million   if  the committee followed  the statutory                                                                    
minimum. The total adjustments proposed  was $80 million but                                                                    
could  grow  by  over  $100   million  if  the  scenario  he                                                                    
suggested were to occur.                                                                                                        
                                                                                                                                
Co-Chair  Foster  reviewed  the  agenda  for  the  following                                                                    
meeting at 5:00 pm in the current day.                                                                                          
                                                                                                                                
HB  234  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
2:17:04 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:17 p.m.                                                                                          

Document Name Date/Time Subjects
HB 205 HB 234 FY21 Gov Amend Presentation 2-20-20.pdf HFIN 2/20/2020 1:30:00 PM
HB 205
HB 234
HB 205 Operating Amendment Spreadsheet021920.pdf HFIN 2/20/2020 1:30:00 PM
HB 205
HB205 and HB206 Operating Budget Amendments Letter 2.19.2020.pdf HFIN 2/20/2020 1:30:00 PM
HB 205
HB 206
HB 234 Sup Amendment Summary 021920.pdf HFIN 2/20/2020 1:30:00 PM
HB 234
HB234 Supplemental Budget Amendments Letter 2.19.2020.pdf HFIN 2/20/2020 1:30:00 PM
HB 234
HB 234 Supplemental Amend Spreadsheet 021920.pdf HFIN 2/20/2020 1:30:00 PM
HB 234
HB 234 OMB Response to HFC Questions 2-20-20022620.pdf HFIN 2/20/2020 1:30:00 PM
HB 234
HB 234 response OMB Appropriation Limit Analysis022620.pdf HFIN 2/20/2020 1:30:00 PM
HB 234