Legislature(2017 - 2018)ADAMS ROOM 519
05/09/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB142 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 142 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 9, 2018
6:23 p.m.
6:23:34 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 6:23 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Steve Thompson
Representative Cathy Tilton
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Paul Labolle, Staff, Representative Neal Foster; Pat
Pitney, Director, Office of Management and Budget, Office
of the Governor; Lacey Sanders, Analyst, Legislative
Finance Division; Rob Carpenter, Analyst, Legislative
Finance Division; Representative Lora Reinbold.
PRESENT VIA TELECONFERENCE
Shawnda O'Brien, Assistant Commissioner, Health and Social
Services.
SUMMARY
CSSB 142 (FIN) AM
APPROP: CAPITAL BUDGET
CSSB 142 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the meeting agenda.
CSSB 142(FIN) AM
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
6:24:29 PM
Co-Chair Foster explained that the committee had heard a
similar version of the bill the previous day [HB 284]. He
reviewed his intent for the meeting.
Co-Chair Seaton MOVED to ADOPT the proposed committee
substitute for CSSB 142(FIN) AM, Work Draft 30-GS2565\N
(Martin, 5/18/18).
Representative Pruitt OBJECTED for discussion.
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, explained
the changes in the CS. He began with Section 1 (the numbers
section), page 3, line 18 where $1 million undesignated
general funds (UGF) had been added to Alaska Travel
Industry Association (ATIA) for tourism marketing
development. The change brought the increment to the
governor's request of $3 million.
Representative Wilson asked if the increment was rental tax
money or other UGF.
Mr. Labolle answered that the funding was UGF. He noted
that rental receipts had been expended. He continued with
page 3, line 32 where $1 million UGF had been appropriated
from the Metlakatla Indian community for the Metlakatla
Ketchikan Intertie.
6:27:12 PM
Representative Pruitt asked Mr. Labolle to specify the fund
source going forward.
Co-Chair Foster recognized Representative Lora Reinbold in
the audience.
Mr. Labolle moved to page 4, line 4 that included $197,000
for the Prince William Sound Science and Technology
Institute for the Prince William Sound Science Center from
the Exxon Valdez Restoration Fund. Page 4, lines 9 through
15 included an additional $6 million UGF for the Village
Safe Water and Waste Water expansion upgrade and
replacement of existing services [see page reference
correction below].
Co-Chair Foster noted the committee's version of the bill
did not show the specified increment on page 4. He asked
about the page number and believed it should be page 5,
lines 9 through 15.
6:29:30 PM
AT EASE
6:29:53 PM
RECONVENED
Mr. Labolle clarified that page 5, lines 9 through 15,
included an additional $6 million UGF for the Village Safe
Water and Waste Water expansion upgrade and replacement of
existing services.
Representative Thompson asked about the breakdown in UGF or
other funds for the increment.
Mr. Labolle replied that the additional funding was all
UGF; there was no match component using another fund
source.
Representative Tilton looked at lines 6 through 8 [page 5]
pertaining to the Wrangell junkyard.
Mr. Labolle replied that page 5, line 7 applied to the
Wrangell junkyard contaminated site cleanup. The increment
included a fund source change replacing $2.5 million
General Fund (GF) with funds from the [Department of
Environmental Conservation (DEC)] emergency response
account. An additional $2.5 million had been added from the
same account to fully fund the project at the $5 million
level in the governor's request.
Representative Wilson stated it was her understanding the
emergency response fund was not meant for that type of
thing. She asked if the committee was going to ignore DEC's
testimony from the previous day that its practice had been
going to the lower cost provision. She asked if the
committee was going to go ahead with taking the funds out
anyway.
Co-Chair Foster replied the funds would come from the spill
response fund.
Representative Wilson stated it was the same fund the
legislature had already used $8 million from.
Co-Chair Foster agreed.
Representative Wilson surmised they were setting a new
precedent.
Co-Chair Foster believed Representative Wilson was correct.
He asked for comment from Mr. Labolle.
Mr. Labolle confirmed Representative Wilson was correct in
terms of the use of the funds. He could not speak to
whether it set a precedent and deferred to the Office of
Management and Budget (OMB) for further detail.
Representative Wilson responded that the committee had been
told by DEC the previous day that the funds were supposed
to be for the lower cost. She viewed the decision to use
the funds [for the Wrangell junkyard contaminated site
cleanup] was a policy change. She believed it opened the
door for the funds to be utilized "in this kind of fashion"
in a fund that "probably was supposed to be used for
refined in the first place."
Co-Chair Foster replied it was a policy call. The committee
would have the amendment process the following day.
6:33:16 PM
Mr. Labolle moved to page 5, line 28 where a total of $8
million had been added to a Department of Fish and Game
(DFG) wildlife management, research, and hunting access
project. The funding consisted of $1 million statutorily
designated program receipts and $7 million in federal
receipts. He advanced page 7, line 12 where $1 million UGF
had been added to Pioneer Home renovations and repair,
which increased funding to the governor's original request
of $2 million. Page 8, line 31 included $3.5 million UGF to
the Department of Public Safety (DPS) for the enhanced 911
project. The increment represented a portion of the $9.5
million requested by the governor and was intended to allow
DPS to phase the project.
Representative Wilson asked how the project would impact
the current contracts with Mat-Su and Kenai.
Mr. Labolle responded that as a phased project, the state
did not envision it would open for full operations in the
coming year. The contracts would continue until the
completion of the project.
6:35:14 PM
Mr. Labolle moved to page 10, line 16 where $1 million UGF
was included for public and community transportation state
match at the governor's original request. He moved to page
10, line 22 where $5 million UGF was added to the Municipal
Harbor Facility Grant Fund, which brought funding to the
governor's original request.
Representative Pruitt asked about the intent for the
additional $5 million. He asked if the funding was for a
specific project or to be used statewide.
Mr. Labolle replied that the funds spread around the state.
He offered to provide a report to members that included the
list of projects and funding.
Mr. Labolle advanced to a $2 million UGF increment for
Alaska Court System deferred maintenance on page 11, line
28. He reported that the governor had proposed $3 million.
6:37:29 PM
Mr. Labolle moved to Section 4 (supplemental section)
beginning on page 18. The University of Alaska Anchorage
long-acting contraception study had been removed from the
bill. He advanced to page 18, line 20 where an increment
for the Sultana New Ventures, LLC - Alaska Healthcare
Transformation Project had been increased by $250,000 UGF
for a total of $500,000.
Representative Wilson asked about backup pertaining to the
$500,000.
Mr. Labolle replied that he would provide the detail to the
committee. He moved to line 28, page 18 where $250,000 UGF
was appropriated to the Municipality of Anchorage for
Hillcrest subdivision drainage. He noted it was a separate
project from the Hillcrest clean water appropriation
discussed the preceding day.
Representative Wilson wanted to know if the $500,000
increment [for the Sultana New Ventures, LLC - Alaska
Healthcare Transformation Project] would open the state to
a lawsuit since it was taking blame. She referenced the
$250,000 drainage increment and asked if it was connected
to the Department of Transportation and Public Facilities
(DOT) project.
Mr. Labolle affirmed that the two causal links were the
same.
Representative Wilson asked if the drainage correction
could potentially impact the water well situation.
Mr. Labolle deferred to Legislative Legal Services or the
Department of Law (DOL).
6:40:00 PM
Representative Wilson stated that the issue discussed the
previous day was that a project done by DOT potentially
caused some type of contamination, which was the reason for
the $500,000. She wondered if the $250,000 drainage project
could correct the problem and save the homeowners $25,000 a
piece by eliminating their need to sign up for a water
program. She remarked it would be a substantial savings for
homeowners.
Co-Chair Foster flagged the item and would look into
getting someone from Legislative Legal Services or DOL to
address it.
6:40:54 PM
Mr. Labolle moved an increment of $18 million GF mental
health funds for substance use disorder service expansion
on page 19, line 7. He noted the increment was a governor's
supplemental request.
Representative Wilson asked for verification that the GF
mental health fund source was still general funds. Mr.
Labolle replied in the affirmative.
Vice-Chair Gara stated the funds were to be spent over four
or five years to do things Medicaid did not cover. The
funds would expand capacity. For example, the state did not
have very long-term alcoholism rehabilitation and was low
on detox centers. He noted that the funds would expand
capacity - Medicaid only covered treatment at an existing
facility.
Mr. Labolle answered in the affirmative. He noted there was
a drafting error later in the bill - the increment had been
included in the numbers and language sections. The language
section [incorrectly] showed a multi-year appropriation,
but as shown in the numbers section the increment was a
standard five-year capital lapse to allow for expenditure
during the five-year period.
Representative Pruitt spoke about what to expect in the
long-term. He thought it sounded like the funding may start
programs that would last longer than four to five years. He
asked if the legislature should expect it to transition
into an annual operating cost in the future.
Mr. Labolle believed the governor's plan was to determine
what the load would be, which would give an idea what the
operating component should be. He noted that to begin, it
was necessary to build capacity.
Representative Pruitt expected the component would lead to
a long-term operating cost. Mr. Labolle replied it was most
likely.
Vice-Chair Gara stated there had been a recognized lack of
treatment capacity for individuals with substance abuse
problems. He did not believe there was even six-month
inpatient alcoholism treatment in Alaska. If the state
expanded capacity the places would become Medicaid
eligible; currently the state did not have adequate
capacity. He agreed there would be more facilities being
used in the future, which he supported.
Representative Wilson asked if the $18 million would be for
people who were not eligible for Medicaid expansion and did
not have their own insurance.
Mr. Labolle answered it was his understanding. He stated it
was an OMB project and deferred to the department for
further detail.
6:44:54 PM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, asked to hear the question again.
Representative Wilson complied. She surmised the component
was directed at individuals who were ineligible for
Medicaid and Medicaid expansion. She assumed the
individuals did not have their own insurance. She asked
about the size of the group.
Ms. Pitney replied the increment went to grants for
bringing providers, largely nonprofits, up to speed to
serve individuals. The individuals served may or may not
have Medicaid. There was currently a lack of providers. The
program would get providers initial seed money to increase
access to more providers. There was a breakout between the
different kinds of programs including opioid abuse, alcohol
abuse, and a couple of other categories. She would provide
the document within the next 20 minutes.
Representative Wilson surmised it was not money for
treatment. She believed the component was an incentive
package for individuals to fill out the required paperwork
to become Medicaid eligible. She thought the grants would
also potentially be utilized to bring providers up from the
Lower 48 with encouragement to take Medicaid patients.
Ms. Pitney answered the administration was looking for
access to substance abuse treatment programs for
individuals in the state. There was currently a lack of
access. She did not believe the issue had anything to do
with the paperwork; it was about the need to have more
providers in the field.
6:47:49 PM
Representative Wilson understood there were not enough
providers. She thought it sounded like the administration
believed the providers were already in Alaska, but they
were not providing services to the specific group of
people. Alternatively, she wondered if Ms. Pitney was
saying there were not enough providers in the state and the
funds would be utilized to bring more providers into the
state in order to increase access to services.
Ms. Pitney replied the intent was to get more providers in
the state. She explained that there were not enough
services in the state. The component largely focused on
existing nonprofits expanding services. Each of the
nonprofits required nurses, psychiatrists, and other.
Representative Wilson provided a scenario where a nonprofit
currently did not provide the service addressed by the
component, but perhaps it offered something similar. She
asked for verification the grants would give funding for
nonprofits to seek out additional staff in order to provide
the expanded service. She surmised the grants would be
utilized to allow nonprofits to expand services versus
directing the grants to actual patients in need of service.
Ms. Pitney replied in the affirmative.
6:49:39 PM
Mr. Labolle moved to page 19, line 20 and reported that
$250,000 UGF had been added to the sexual assault kits
backlog analysis and storage equipment project for a new
total of $2,750,000 on page 19, line 20.
Representative Thompson asked Mr. Labolle to repeat the
amount.
Mr. Labolle replied $250,000 was the addition to the
existing appropriation that had come from the Senate.
6:50:40 PM
AT EASE
6:53:11 PM
RECONVENED
Mr. Labolle moved to an increment of $525,600 for the
Department of Military and Veterans Affairs (DMVA) for the
cost of air guard facilities maintenance on Section 7, page
23, line 28. The funds were associated with the cost of the
C-7 acquisition requested by the governor. The increment
included $131,400 UGF and $392,400 in federal funds [see
below for corrected amount].
Co-Chair Foster asked Rob Carpenter with the Legislative
Finance Division to put himself on the record.
ROB CARPENTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
introduced himself for the record.
Co-Chair Foster returned to page 18, line 28 pertaining to
the [Anchorage] Hillcrest issue. He reported DOL and
Legislative Legal Services were not available during the
current meeting. He noted that some backup documents were
being printed and would be disseminated to committee
members shortly.
Representative Wilson asked for the amount previously
listed by Mr. Labolle [pertaining to the DMVA C-7
acquisition]. She asked if the increment was $392,400 or
$394,200 [in federal funds].
Mr. Labolle clarified the increment was $394,200. He moved
to Section 12, page 27, line 24, subsection (b), which
included the governor's supplemental request for open-ended
federal authorization of FY 18 Medicaid.
Representative Wilson thought most Medicaid funds had to be
matched by GF. She asked if there was another section that
included unlimited GF matching funds.
Mr. Labolle replied in the negative. He explained that
additional General Fund authority would have to be granted
for open-ended GF spending. The increment was for federal
authority that may be granted that may not require a match
or may be met by an existing match.
Representative Wilson thought Medicaid services were all
matching funds. She asked if there were Medicaid services
the state currently received that did not require a match.
Mr. Labolle deferred the question to OMB.
6:57:03 PM
Ms. Pitney answered that the governor's supplemental was
for $47 million GF to provide the match for federal funds.
The federal funds had been secured through the Legislative
Budget and Audit Committee (LB&A) process; there were
enough federal funds for FY 18, but there were not
sufficient general funds to match. Although, the language
was open-ended for federal funds, the state was short the
match. Beginning later in the current week or early the
following week, the state would stop paying providers if
the GF supplemental request was not fulfilled. The
administration had requested a total of $98 million. The
fast track supplemental had only provided a portion and the
remainder was $47 million.
Representative Wilson stated the increment was not GF. She
wondered if the language got the state in trouble because
it had gone for more federal funds, which required coming
back with a supplemental for GF. She added that Ms. Pitney
had just testified that the state had been able to get
federal funds because of the language, but there had been a
matching requirement that the administration did not have
authority for. As a result, the state had a supplemental
asking for GF to match federal funds received through open-
ended language.
Ms. Pitney answered that the governor had not asked for
open-ended federal funds for Medicaid. The state had
sufficient federal funds for the Medicaid formula. The
formula covered services for eligible individuals -
providers providing services expected Medicaid to be paid.
Representative Wilson understood. She was trying to
determine why the language was in the bill. She had thought
someone had stated that it had been a governor's request.
She wanted to ensure there was not a request for open-ended
federal funds that would require a GF supplemental in the
future. She wondered who had included the language in the
bill and why.
Mr. Labolle deferred to the Legislative Finance Division.
Co-Chair Foster reported that he and Co-Chair Seaton had to
leave for a meeting. He handed the gavel to Vice-Chair
Gara.
7:00:27 PM
AT EASE
7:01:20 PM
RECONVENED
Representative Wilson continued discussing language on page
27, line 24. She pointed out that the language specified
that federal receipts [received during FY 18 for Medicaid
services] were estimated to be $0. She did not know why the
language would be included if it was estimated to be $0. It
was her understanding that most Medicaid services had a GF
match. She was concerned about giving authority for
unlimited federal receipts without going back to LB&A and
believed the state would end up with supplementals if it
received more federal funds.
LACEY SANDERS, ANALYST, LEGISLATIVE FINANCE DIVISION,
replied that the governor's operating budget did include an
open-ended, estimated to be $0 language appropriation as a
supplemental request for FY 18. Through the LB&A process a
$525 million federal authorization was approved based on
the department's [Department of Health and Social Services]
estimates for the remainder of FY 18. There was a match
component of $92 million, which was also requested. A
portion of the match ($45 million) had been approved in the
fast track supplemental, leaving approximately $48 million
needed to match the $525 million federal authority. The
open-ended language would allow the department to receive
any federal receipts above the $525 million request. She
confirmed a match component that would be needed, but the
department may have the ability to transfer it from other
areas. The number was estimated to be $0 because the
department believed the $525 million should be sufficient.
However, if a small amount was needed for a cleanup item,
the department would have the ability to collect the
receipts.
Representative Wilson asked why the legislature would use
the LB&A process instead. She reasoned that the Department
of Health and Social Services (DHSS) had not found the $92
million matching funds in the past year that had resulted
in a supplemental request.
Ms. Sanders answered that there may not be sufficient time
to get through an LB&A process by July 1 [2018] to approve
the funds. She did not want to speak for the LB&A
committee. She explained that the language [in the capital
budget] was a vehicle to allow the department to collect
the receipts if necessary.
7:04:09 PM
Representative Wilson wondered if DHSS could only accept
more federal funds if they were able to find matching UGF
in another place such as a contingency fund. Alternatively,
she wondered if they accepted federal funds it would mean
another supplemental budget in the future.
Ms. Sanders asked Representative Wilson to repeat her
question.
Representative Wilson complied. She was concerned that
federal funding all required matching funds. She noted that
Ms. Pitney had testified the $92 million supplemental was
already matching. She mentioned the $525 million in federal
funding the state had already accepted. She provided a
hypothetical scenario where the department was eligible for
$100 million in additional federal funds. She stated that
the language [in the capital budget] would allow DHSS to
accept the federal funding; however, it would require UGF
match. She asked if the language would require the governor
to find the matching funds prior to accepting the federal
funds. Alternatively, she wondered if the additional funds
would result in another supplemental.
Ms. Sanders replied there would be a required match the
department would have to find internally. The funds could
be UGF or there was a possibility of using tribal claiming
or other receipts to match the funding. There would not be
an opportunity to ask for another supplemental in FY 18.
The next opportunity for a supplemental would be in FY 19.
She explained putting the federal receipt authority in the
capital budget was the opportunity to allow the department
to collect any additional receipts. The department would be
required to find the matching funds. She believed the
federal government would not allow the expenditure of the
receipts without the match.
Representative Wilson asked if there was any language in
the bill associated with FY 19. She wondered if the
language [on page 27, lines 24 through 26] was the only
language in the bill that would allow the department to
accept as many federal receipts as were available.
Ms. Sanders answered there was no open-ended language in FY
19 that she could recall. She would double check and follow
up.
7:07:04 PM
Vice-Chair Gara did not recall seeing the "estimated to be
$0" language. He wondered if it was common. He provided a
scenario where $10 billion in federal funds became
available. He stated his understanding that the budget
would require state matching funds.
Ms. Sanders responded that there was similar language in
the prior year's supplemental bill, except that language
had been tied to UGF. The number had been estimated to be
$0, but it had come in higher than $0. The language relied
on the department's projections that the amount of federal
receipts it received through the LB&A process was
sufficient.
7:08:03 PM
Mr. Labolle continued to Page 27, line 27. The language was
a drafting error he had mentioned earlier - the
appropriation had been included in the language and numbers
sections of the bill.
Representative Wilson asked Mr. Labolle to clarify. She
wondered whether the language was or was not needed [on
page 27, lines 27 through 30]. Mr. Labolle answered that
the section would have to be deleted because it also
appeared in the numbers section.
7:08:40 PM
Mr. Labolle moved to page 27, line 31 through page 28, line
6. The appropriation of $1,736,000 UGF, $682,000
interagency receipts, and $682,000 in statutorily
designated program receipts would help alleviate the
nursing staff shortage at the Alaska Psychiatric Institute
(API).
Vice-Chair Gara relayed that the department was available
for any questions.
Representative Wilson asked what happened if the $682,000
in interagency receipts and designated program receipts did
not come to fruition. She asked if the funding would still
allow the intended work to be done.
Vice-Chair Gara asked to hear from the department. He asked
what would happen if the receipts did not come in.
Additionally, he asked if the receipts were payments from
clients.
SHAWNDA O'BRIEN, ASSISTANT COMMISSIONER, HEALTH AND SOCIAL
SERVICES (via teleconference), answered that if the
interagency receipts did not come in, DHSS would rely on
the available UGF to cover the cost of the staff and any of
their other expenses. Currently, the department monitored
interagency receipt activity throughout the year; if there
was a need to cut back on costs it was typically done by
maintaining the department's vacancy factors. The same
would be true of the statutory designated program receipt
authority.
Representative Wilson asked if the designated program
receipts category was made up of payment from the clients
or Medicaid insurance. She questioned who the interagency
receipts were coming from.
Ms. O'Brien answered that the statutory designated program
receipt authority included private pay insurance and
private pay from clients. The interagency authority was
Medicaid receipts - the department billed Medicaid for the
services not covered through insurance - received through a
Reimbursable Services Agreement (RSA).
Vice-Chair Gara asked if the component was comprised of
some hiring bonuses and methods for increasing pay to
attract staff to try to deal with the shortage at API.
Ms. O'Brien replied in the affirmative. She detailed the
increment was the department's best guess at what the
results of the salary review would be. The department was
trying to pursue having salaries increased for nursing
professionals to address recruitment and retention issues
and to bring the pay up to the market value of other
private hospitals and providers. The department had also
estimated what the costs would be if it was able to offer
hiring bonuses through an agreement with the unions. She
elaborated DHSS would have to go into an agreement with the
unions to establish the bonus system as a way to entice
people to work for the state.
7:13:18 PM
Mr. Labolle advanced to page 28, line 26 (Section 14,
subsection (c)) where $6.2 million UGF was used to
capitalize the disaster relief fund.
Representative Wilson thought the funding was already
included in the operating budget.
Mr. Labolle believed there were expenditures or authority
in the operating budget, whereas, the language in the
capital budget was a fund capitalization. He deferred to
LFD for further detail.
Representative Wilson wanted to make certain the
legislature was not double funding the increment.
ROB CARPENTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
answered the increment was a capitalization to bring the
disaster relief fund closer to the average spent annually.
The increment was an addition to bring the total in the
fund to the yearly average expenditure.
7:14:54 PM
Representative Wilson remarked that she would look the
information up. She thought the increment was in the
supplemental or elsewhere. She recalled amendments that had
talked about the specific portion of the funding. She asked
if a certain amount had been allocated in another bill and
the increment in the capital budget added to that figure.
Mr. Carpenter replied in the affirmative.
Representative Wilson asked for verification that the
increment in the capital budget was $6.2 million in
addition to the $3 million in the operating or supplemental
budgets.
Mr. Carpenter answered that the fast track supplemental
included $4 million and the capital budget included an
additional $6.2 million.
Representative Pruitt thought $10 million for a disaster
relief fund seemed like a lot of money. He asked about the
average disasters the state was spending $10 million on
annually.
Mr. Labolle recalled from the discussion on the fast track
supplemental that there was not an average annual
expenditure. There were huge years and relatively modest
years, which was the reason the fund was needed.
Representative Pruitt asked what the money had been used on
the past year that had drained the disaster relief fund
resulting in the need for a $10 million appropriation.
Ms. Pitney responded that she did not have an example, but
there was a list she could provide. The administration had
asked for a slightly lower amount with the anticipation
that it would come back for a supplemental if necessary.
The Legislative Finance Division appropriately recommended
planning for what the average was. She elaborated the $4
million in the fast track supplemental was to address the
depletion of the fund. She explained that over the past
three years, the state had been frugal about what was put
into the fund; therefore, over time the fund had been
depleted and had resulted in the need for a supplemental.
The legislature and LFD wanted to stay away from
supplementals; therefore, LFD had appropriately put forward
a fund balance in the program that made the need for a
supplemental unlikely.
7:18:44 PM
Representative Pruitt wanted to understand whether the fund
was truly used for disasters. He asked if it was a pool of
money that was potentially seen as a place to access if
there was a need for something. He stated the account was
called a disaster relief fund and he wondered if the funds
were always used for true disasters. He remarked that a
linguistic emergency had just been declared in Alaska- he
wondered if the funds could be used for something of that
nature.
Ms. Pitney answered there was a process the administration
went through that included DMVA, homeland security, DOA,
the Department of Commerce, Community and Economic
Development (DCCED), and the governor's office. After
homeland security assessed communities, the group reviewed
the information. For example, a recent wind storm had
ruined several houses in a community, which had been deemed
worthy of disaster relief funding. When funds were used, a
notification letter with backup information was sent to the
finance co-chairs. She detailed that the funds were used
for emergencies. She believed if the legislature saw
something come through on the language emergency [mentioned
by Representative Pruitt] out of the disaster relief fund
it would question the use.
Representative Wilson asked where the money resided. She
wondered the funds automatically transferred from the
Constitutional Budget Reserve (CBR) or earnings reserve
into another fund versus coming back for a supplemental.
Mr. Labolle replied that the funds in the disaster relief
fund could be spent by the administration without further
appropriation, but the purpose had to meet the statutory
requirement and the administration had to declare a
disaster in order to qualify for the funding. The
administration would not have the ability to spend directly
from the CBR in a similar situation.
Representative Wilson wondered what would happen if the
legislature did or did not approve the $6.2 million. She
assumed the $6.2 million would remain in the CBR or
earnings reserve if the legislature did not approve the
funds. Alternatively, if the legislature approved the $6.2
million she believed the money would be removed from one of
the funds and would be deposited into a fund [the disaster
relief fund] where it would earn nothing while waiting to
be utilized. She asked if her understanding was accurate.
Ms. Pitney replied that the funds were all managed by the
Department of Revenue Treasury Division. She explained that
even money in designated purpose funds was invested. She
clarified the funds did not earn 7 percent interest, but
they did earn money. The funds would be part of the managed
funds of the GF.
7:22:50 PM
Mr. Labolle turned to a $4.5 million appropriation to DOT
for the Knik Arm Crossing project that had been made on the
Senate floor (page 39, line 11).
Representative Wilson asked how much money would be
available for the project after the appropriation. She
wondered about the next step for utilizing the funds.
Mr. Labolle replied the appropriation would put $4.5
million towards the project. He had not received backup on
the next step.
Representative Wilson explained that she did not know
whether the fund had gone to zero. She noted some
reappropriations had been done in 2017. She did not know
whether there were additional funds still available for the
project and believed $4.5 million seemed like an odd
amount. Therefore, she assumed the appropriation had been
included to account for whatever the Senate believed was
the next step.
Mr. Labolle believed there was $2.5 million remaining in
the fund [for the Knik Arm Crossing project].
Vice-Chair Gara asked Ms. Pitney if it was accurate that
$2.5 million was sitting in the fund.
Ms. Pitney replied that she would follow up.
Mr. Carpenter corrected there was $2.9 million remaining
for the project. He believed the $4.5 million was intended
to replace the money that had been reappropriated from the
project in 2017.
Vice-Chair Gara asked for verification the $4.5 million did
not match any federal funds.
Ms. Pitney responded that because the appropriation was a
recent add to the budget and was not part of the governor's
request she did not know exactly how the project would
work. The project as it had existed did not qualify for a
Transportation Infrastructure Finance and Innovation Act
(TIFIA) loan and the loan had been sought. She detailed the
financing was complicated and the project would cost
several hundred million. She did not know the intent of
proposed appropriation.
7:26:02 PM
Representative Wilson stated it was her understanding there
was the possibility of a transportation stimulus package.
She speculated that perhaps more funding was anticipated.
She remarked that hopefully the backup would address some
of the questions.
Vice-Chair Gara stated that according to the radio [the
transportation stimulus package] was contingent on a
federal gas tax. He did not believe the tax would happen
any time soon.
Mr. Labolle moved back to Section 19, page 30, lines 22
through 27. The increment was a reappropriation requested
by the Department of Education and Early Development (DEED)
not to exceed $3.4 million, major maintenance from Pitkas
Point K-8 school renovation for DEED cleanup of the Pitkas
Point School site. He detailed that the school was no
longer open, and students were being bused to an adjoining
village in St. Mary's. The renovation was no longer needed,
but the school needed to be mothballed.
Representative Wilson remarked that Mr. Labolle had stated
the site required cleanup. She asked if the site was
contaminated.
Mr. Labolle believed there was some contamination, but the
school also needed to be closed up.
Representative Wilson referenced an earlier discussion on
the use of [DEC response] funds for the [Wrangell]
junkyard. She asked if the Pitkas Point contamination
cleanup would be eligible for funds through the same
process.
Mr. Labolle deferred the question to DEC. The DEED had
determined that because it had funds for renovation to the
school that was no longer needed, it could use a lesser
amount from that appropriation with the remaining amount
lapsing back to the major maintenance fund.
Representative Wilson reasoned if the [DEC response] fund
could be utilized for cleanup, more money would go back to
the maintenance program - many schools needed the funds.
She thought it would be a split amount given that
mothballing the school would not qualify for cleanup money.
She reasoned that if there was contamination it was exactly
what cleanup money ($5 million pulse an existing $8
million) was being used for in another community. She
requested a cost breakdown of the mothballing and
contamination. She wanted to hear from Kristin Ryan
[Director, Division of Spill Prevention and Response,
Department of Environmental Conservation] about whether the
cleanup would fall under the response fund guidelines. She
noted the committee had been told the response fund was
healthy at present.
7:29:24 PM
Representative Pruitt pointed to the $3.4 million that he
believed appeared substantial for mothballing only. He
wanted to understand what needed to be cleaned up. He
wondered if mothballing the school meant the intent was to
reopen the school at a later date.
Vice-Chair Gara requested Ms. Pitney to follow up with an
explanation the following morning.
Mr. Labolle added that DOT built the school and its
axillary facilities between the 1960s and mid-1980s. The
buildings had been in use until the site was closed and had
been put into cold storage by the Lower Yukon School
District. Additionally, there were four housing units
onsite that were over 30 years old.
Ms. Pitney elaborated that it was a land trust through DEC.
Mr. Labolle elaborated that a land trust through DEC had
obtained a DCCED brownfield assessment in 2015 to ascertain
the extent of contamination and deterioration of the site
and facilities. The remaining soil contamination was being
resolved by the Lower Yukon School District, DEED, and the
municipal land trust. The entities were attempting to
resolve repairs and actions needed to bring the premises to
a clean and neat presentable condition in order to
responsibly terminate the lease. He continued that DEED
anticipated transferring any remaining facilities to the
municipal land trust, specifically a 10,440 square foot
school facility, which would determine whether the
buildings were able to have continued use in the community.
Vice-Chair Gara reiterated a request for OMB to follow up
with information the following day.
Ms. Pitney nodded in affirmation.
Representative Wilson requested to hear what a municipal
land trust was and who the state was giving the property
to. She did not know if it was something specific to the
Pitkas Point community.
Vice-Chair Gara noted that Ms. Pitney was nodding yes.
7:32:48 PM
Mr. Labolle turned to page 39, line 18 where $8 million had
been added to the community assistance fund, bringing the
FY 19 amount to $38 million (the same amount distributed in
FY 17 and FY 18).
Representative Pruitt returned to community assistance. He
stated that the legislature had added $30 million to the
supplemental budget from the Alaska Comprehensive Health
Insurance Fund. He recapped that $38 million had been
funded in FY 17 and FY 18. He remarked that the legislature
had not funded community assistance in the FY 18 budget,
but the funding had been provided in the supplemental. He
thought the reason for the $30 million in the fast track
supplemental was to reach an average of $30 million in the
following year. He thought it was keeping stable. He asked
for verification community assistance had been funded at
$38 million in the last couple of years.
Mr. Labolle replied that Representative Pruitt was correct
about the flow of money. He detailed that $30 million had
been included in the supplemental to backfill the account
up to $90 million because in the previous year's
appropriation, the account had not been backfilled after
the money flowed out. He explained the backfilled funds
from the supplemental would flow out in FY 19. The FY 19
budget included $30 million to backfill the money flowing
out in FY 19. He relayed that supplementals would not be
required in the following year; however, in FY 17 $38
million that came out had been reduced in FY 18 through the
remaining portion of the fund, but an additional $8 million
had been paid in to maintain a level funding. The increment
in the capital budget did the same thing.
Vice-Chair Gara clarified the funds were a total of $38
million, not $38 million plus $30 million.
Representative Pruitt understood.
7:35:46 PM
Representative Wilson thought some of the money for
community revenue sharing had come in with the Power Cost
Equalization (PCE) due to interest. She did not believe the
fund source was supposed to be all GF. She believed all of
the funds had done well in the past year. She could
understand the reasoning for adding the money to the
capital budget if the stock market had performed poorly in
the past year; however, she thought there had been enough
funding to pay out the share out of the PCE Fund.
Mr. Labolle replied there were two issues. He explained
there was a normal appropriation from the fund where one-
third of the fund flowed to community assistance without
further appropriation. Whatever the fund size, one-third
went to community assistance. The size of the fund had been
approximately $90 million, but historic funding of the
community assistance fund had been greater than the $30
million that spun off as one-third. He explained that for
the last couple of years additional appropriations had been
made to bring the balance to the higher funding level that
was higher than the automatic spinoff.
Representative Wilson thought the point of the legislation
was that the state shared its revenue when it was
available. She remarked that the state did not currently
have the revenue. She believed the reason for the
legislation was because communities still needed the
funding. She asked if it was still the intent of the
legislature to fund at a certain level whether or not it
was generated off the PCE Fund.
Mr. Labolle added that the PCE Fund was not necessarily the
funding source for the community assistance fund - it could
vary. He elaborated that legislation had passed that
allowed excess earnings of the PCE Fund to be used for that
and the Renewable Energy Grant Fund. He explained the PCE
Fund had a couple of very good years that had resulted in
excess earnings, which had been used to backfill the spend
from the community assistance fund in the current year.
Representative Wilson spoke to her understanding of the
purpose of the legislation to find another source that
would provide some funding. She detailed that most
communities had gotten used to the assistance funds the
state had provided during years when revenue was strong.
She thought it sounded like the policy was to let some of
the funds spin off and if they were insufficient, the
legislature would automatically appropriate UGF. She stated
it was not the way she recalled the legislation. She
reasoned the legislature could always add more to it; she
was just trying to determine what the policy call had been
at the time.
7:39:25 PM
Vice-Chair Gara did not want community revenue sharing to
fall. In FY 15 roughly $60 million had been sent to
communities. The amount had fallen to $50 million in FY 15,
and in FY 17 a statute slated the funding to decline to $38
million. He added that the number was supposed to drop to
$30 million in FY 18 and FY 19. He believed the decreases
were substantial. He explained that the past year the
legislature had maintained the funding at $38 million and
the intent in the current version of the capital budget was
to maintain the level at $38 million. He confirmed that
Representative Wilson's recollection of the statute was
correct. The statute had revenue sharing falling to $30
million - one-third of the $90 million in the fund. He had
not supported the legislation.
Representative Wilson was trying to remember the intent.
She did not recall what the figures had been at the time,
but she believed the goal had been to stay fairly
consistent at the $38 million. She reasoned the amount
directed to community assistance was dependent on the stock
market and other requirements. She elaborated that the
first payout from the PCE Fund was directed to power cost
equalization and then energy projects. She remarked that
communities became dependent on funds and giving a certain
amount or following statute was a policy call. She wanted
to be consistent in the actions.
7:41:26 PM
Mr. Labolle moved to the final change located in Section
25, page 39, line 31 where $100,000 UGF was appropriated to
the Anchorage Coalition of Community Patrols, Inc. for the
purchase of gas cards, decals, radios, and safety
equipment.
Representative Wilson remarked that the increment was only
for Anchorage. She asked if every community received funds
for that purpose. She asked about the basis for how the
$100,000 would be given. She asked if a grant was issued
for safety equipment, whether the equipment would be
considered state-owned or patrol-owned.
Mr. Labolle answered that prior to the [Senate] floor
amendment the previous day he had been unaware there was an
Anchorage Coalition of Community Patrols.
Representative Wilson requested additional information.
Vice-Chair Gara stated the item had been added in the
Senate. He asked Ms. Pitney who to ask how the funds would
be distributed.
Ms. Pitney answered that the increment was a named
recipient grant. The DCCED would send the money to the
named recipient for distribution as the entity saw fit.
Vice-Chair Gara questioned whether Representative Wilson
was going to ask how the funding was competitive and how it
was determined.
Representative Wilson asked for verification that the
Anchorage Coalition of Community Patrols would receive the
$100,000 and it would determine what kind of setup each
neighborhood would need in order to get gas cards, decals,
radios, and safety equipment. She asked if the safety
equipment included guns.
Ms. Pitney answered that the increment was new to her since
the previous evening. She deferred to the maker of the
amendment. She explained that the process for DCCED on a
named recipient grant was to send the money to the entity
awarded with the grant.
Vice-Chair Gara asked Ms. Pitney to try to reach a DCCED
representative to testify on the topic.
7:45:07 PM
Mr. Carpenter added it [Anchorage Coalition of Community
Patrols, Inc.] was a legitimate organization that had
received grants in the past for community patrol. He
detailed that DCCED would administer the grant and the
entity would be required to sign a grant agreement and
adhere to the items listed. He stated that community patrol
officers were not allowed to carry guns.
Representative Wilson was surprised to hear community
patrol officers did not have guns. She clarified she was
not claiming the state should buy the individuals guns, but
she would not want to be in a position where someone else
had a gun, but she did not.
Mr. Carpenter expanded on the comments. He pointed to an
increment in Section 4, page 18, line 10 for community and
neighborhood watch grants. The increment was specifically
to address the statewide issue and was for named recipients
and municipalities statewide. The DCCED could work with
grantees on neighborhood watch. He explained the language
was intentionally broad in order to address statewide
issues. Whereas, the increment in the other section
[located in Section 25, page 39, line 31] was specific to
Anchorage because of problems facing the community.
Vice-Chair Gara clarified that he had not submitted the
amendment. He defended community patrols and relayed that
Anchorage had patrols in a number of its neighborhoods who
acted as volunteers living in the community. He would be
surprised if some of the individuals did not carry guns,
but he was not certain they were allowed to. He noted the
Fairview community had a patrol officer.
7:47:21 PM
Mr. Labolle relayed that he was finished outlining the
changes in the CS.
Representative Pruitt WITHDREW his OBJECTION to the
adoption of the CS. There being NO further OBJECTION, Work
Draft 30-GS2565\N was ADOPTED.
Representative Pruitt noted that he did not see seismic
money for Alaska National Wildlife Refuge (ANWR) in the
budget. He stated that the administration had been asking
for the funding and he wondered how vital the funds were
from the administration's perspective.
Ms. Pitney replied the state had a tremendous opportunity
and a limited time window. The administration had
introduced the idea, had paused it, and had reintroduced
it. She stated the difference it could make was not
quantifiable but could be orders of magnitude more than the
$10 million investment. The administration believed funding
was a smart policy call to take advantage of the
opportunity in [ANWR's] 1002 area; it was a high priority
for the administration.
Representative Pruitt observed the bill did not contain an
increment for the Port of Anchorage. He detailed there had
been a $40 million request. He believed it was something to
consider (somehow the port would be paid for) that a good
portion of the state would potentially see a rise in the
cost of goods. He asked the committee to consider whether
some funding was prudent.
7:51:02 PM
Vice-Chair Gara agreed. He believed the committee needed to
consider what the state could afford.
Representative Wilson asked to hear the total UGF, DGF, and
federal funds added in the CS compared to the version the
committee had discussed the previous day.
Mr. Labolle deferred the question to Mr. Carpenter.
Mr. Carpenter answered the change from the Senate version
of the bill was a total of $49.5 million, including $36.3
UGF.
Representative Wilson asked whether $37 million requested
for Medicaid was not included in the bill.
Mr. Carpenter replied that there was not the remainder $47
million for Medicaid in the bill.
Representative Wilson apologized to [Medicaid] providers.
Vice-Chair Gara agreed it was a debt if the state owed
funds to providers. He reasoned that it was not really a
savings to fail to pay Medicaid money owed by the state.
CSSB 142(FIN) was HEARD and HELD in committee for further
consideration.
Vice-Chair Gara reported amendments were due by noon the
following day.
Representative Grenn asked for verification the CS had been
adopted.
Vice-Chair Gara replied in the affirmative.
Vice-Chair Gara reviewed the schedule for the following
day. He recessed the meeting to a call of the chair [note:
the meeting never reconvened].
ADJOURNMENT
7:54:02 PM
The meeting was adjourned at 7:54 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 142 CS WORKDRAFT v.N.pdf |
HFIN 5/9/2018 1:30:00 PM |
SB 142 |
| SB 142 Substance Use Disorder Expansion Backup.pdf |
HFIN 5/9/2018 1:30:00 PM |
SB 142 |
| SB 142 Project Backup Muni Harbors Sultana Hillcrest.pdf |
HFIN 5/9/2018 1:30:00 PM |
SB 142 |