Legislature(2023 - 2024)ADAMS 519
03/28/2024 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 268 | TELECONFERENCED | |
| += | HB 270 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 28, 2024
1:37 p.m.
1:37:24 PM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 1:37 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Remond Henderson, Staff, Representative DeLena Johnson;
Zach Young, Staff, Representative Frank Tomaszewski; Alexei
Painter, Director, Legislative Finance Division;
Representative Mike Prax.
SUMMARY
HB 268 APPROP: OPERATING BUDGET; CAP; SUPP; AM
HB 268 was HEARD and HELD in committee for
further consideration.
HB 270 APPROP: MENTAL HEALTH BUDGET
HB 270 was HEARD and HELD in committee for
further consideration.
Co-Chair Johnson reviewed the meeting agenda. The committee
would consider amendments to the operating and mental
health budgets.
HOUSE BILL NO. 268
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making capital appropriations; making
supplemental appropriations; making reappropriations;
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. 270
"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."
^AMENDMENTS
1:37:32 PM
Co-Chair Johnson relayed that the amendment process would
continue from the morning meeting. The committee would
begin by continuing its discussion on Amendment L 12, which
had been moved and objected to [see the minutes for the
House Finance Committee meeting on 3/28/24 at 10:09 a.m.
for details].
Representative Galvin MOVED to ADOPT conceptual Amendment 1
to Amendment L 12. She explained that there would be three
elements to the conceptual amendment. The first would be
the Permanent Fund Dividend (PFD) amount, the second would
be the waterfall, and the third would be the budget excess
amount that would be integrated into the energy efficiency
payment. The conceptual amendment would retain lines 6
through 12 of Amendment L 12 and all other pieces of the
amendment would be deleted.
1:40:12 PM
Representative Cronk OBJECTED. He was confused about what
the amendment would do and asked for clarification.
Representative Stapp thought that he could add clarity. He
understood that Representative Galvin wanted to delete
"$1,100,000,000" on page 72, line 14, and insert
"746,746,100" in its place. He understood that
Representative Galvin also wanted to delete the amount of
"$2,557,263,378" and insert "$2,910,517,278" on page 72,
line 17.
Representative Galvin responded that Representative Stapp
was correct.
Representative Stapp noted that the conceptual amendment
would reduce the dividend by about $346 million and deposit
the excess into the general fund. He clarified that he
objected to the conceptual amendment.
Representative Galvin remarked that the description was
correct, but the decrement would be $353 million, not $346
million. She reiterated that the conceptual amendment would
delete all lines of Amendment L 12 apart from lines 6
through 12.
1:43:13 PM
Representative Ortiz asked for clarification on what the
specific dollar amount of the PFD would be if the
conceptual amendment were to pass.
Representative Galvin responded that if Amendment L 12
passed as amended, the dollar amount for the PFD would be
$1,100. According to the director of the Legislative
Finance Division (LFD), Mr. Alexei Painter, the waterfall
element for the energy relief check was expected to be
$624.
Representative Ortiz understood that the total check amount
would be $1,724.
Representative Galvin responded in the affirmative. She
noted that it would be down from $2,272, which was also
inclusive of the $624 energy check.
1:44:56 PM
Representative Stapp WITHDREW the OBJECTION to the
conceptual amendment. He explained that he was in
opposition to Amendment L 12, but wanted to withdraw his
objection to the conceptual amendment in order to allow the
maker to correct the amendment.
1:45:12 PM
AT EASE
1:46:12 PM
RECONVENED
Co-Chair Foster asked what the dollar amount of the PFD
would be if the conceptual amendment did not pass. He asked
which version would include a higher PFD.
Representative Galvin responded that the conceptual
amendment would include a higher PFD.
Representative Cronk commented that he trusted the
budgetary process and would be opposing all conceptual
amendments.
Representative Cronk MAINTAINED the OBJECTION.
1:47:41 PM
A roll call vote was taken on the motion to adopt
conceptual Amendment 1 to Amendment L 12.
IN FAVOR: Ortiz, Galvin
OPPOSED: Cronk, Tomaszewski, Hannan, Josephson, Coulombe,
Foster, Johnson, Stapp, Edgmon
The MOTION to adopt conceptual Amendment 1 to Amendment L
12 FAILED (2/9).
1:49:27 PM
Co-Chair Johnson noted that Amendment L 12 in its original
form was back before the committee.
Co-Chair Edgmon called the question to vote on the
amendment.
Representative Stapp MAINTAINED the OBJECTION.
1:49:56 PM
A roll call vote was taken on the motion to adopt Amendment
L 12.
IN FAVOR: Galvin, Hannan, Josephson, Ortiz
OPPOSED: Cronk, Tomaszewski, Stapp, Edgmon, Foster,
Coulombe, Johnson
The MOTION to adopt Amendment L 12 FAILED (4/7).
Co-Chair Johnson stated that she intended to go through the
remainder of the amendments in the language packet. She
noted there were three amendments that were included in the
numbers packet but belonged in the language packet. In
total, the committee would discuss seven more amendments
before ending its work for the day.
1:52:00 PM
Representative Hannan MOVED to ADOPT Amendment L 13 (copy
on file):
Agency: Permanent Fund
Appropriation: Permanent Fund Dividends
Allocation: Dividend Fund 1050
Transaction Details
Title: Establishing a 75%/25% POMV Split Between the
Deposit to the General Fund and the PFD
Section: Language
Type: Dec
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: -185,684.2
Miscellaneous: 0.0
-185,684.2
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1041 PF ERA -185,684.2
Explanation
This amendment will reduce the PFD to 25% of the POMV,
freeing up $185,684,200 in General Funds and resulting
in a dividend of approximately $1370 for eligible
Alaskans.
Page 72, line 14:
Delete "$1,100,000,000"
Insert "$914,315,800"
Page 72, line 17:
Delete "$2,557,263,378"
Insert "$2,742,947,578"
Representative Cronk OBJECTED for discussion.
Representative Hannan explained that the amendment would
set the FY 25 PFD at 25 percent of the percent of market
value (POMV) draw, resulting in an increase in available
funding for state programs and services of about $185
million. The amendment would result in a PFD of $1,370.
After the energy relief waterfall provision had been
incorporated, the PFD check would total $1,994 based on the
supplemental energy relief from the prior year and the 25
percent draw on the POMV. She argued that the legislature's
focus on paying out the biggest possible PFD was resulting
in problems throughout the budget, and until new revenues
to address the state's needs were established, the only
responsible recourse would be to ensure that an adequate
percentage of the POMV was allocated to the state's needs
while assuring Alaskans that there would still be a PFD.
Representative Stapp understood that the amendment would
reduce the PFD amount for FY 25 by around $300. He asked
how the additional $155 million would be spent.
Co-Chair Johnson noted that Representative Hannan could
respond to the questions once all members had an
opportunity to ask questions.
Representative Ortiz commented that he was in support of
the amendment. The legislature had heard that any PFD
amount higher than a 25 percent to 75 percent split in the
long term was not sustainable. He thought the amendment was
a return to a realistic number. He was most concerned about
the vulnerability of the PFD in the future and wanted all
Alaskans to have access to a PFD. He thought it was
important to think about the future.
Representative Cronk stressed that the budget represented
much hard work and he valued the budgetary process. He
would be amenable to a 25 percent to 75 percent split, but
he did not think there was a long term solution. He would
be in opposition to the amendment.
1:55:57 PM
Representative Galvin supported the amendment. She was not
part of the process of crafting the budget and thought it
was important for the committee to have the opportunity to
opine on the budget. The amendment was fiscally
responsible, and she was concerned about not having enough
headroom in the budget for all of the state's expenses.
There was a letter from the federal Department of Education
warning that if Alaska did not pay up within 30 days, the
state would be faced with a $353 million bill. She did not
know all of the details, but she wanted to use the letter
as an example. She thought funding the Alaska Marine
Highway System (AMHS) was another area of concern.
Co-Chair Johnson commented that she thought the budget
addressed AMHS. She noted that the letter to which
Representative Galvin was referring was involving a
potential lawsuit involving the administration and the
administration had indicated that it did not want the
legislature to address the lawsuit at the current moment.
She recognized that while every member was not involved in
all of the budget discussions, every member always had
access to the relevant numbers. She was confident that the
important numbers were included in the budget.
Representative Hannan recalled that Representative Stapp
had asked how the extra money would be spent. She relayed
that she would like to see the legislature build a budget
that would not anticipate significant supplementals every
year. She would like to see a much larger amount of money
set aside for wildfire suppression and disaster relief. She
would also like the legislature to improve its abilities to
anticipate the state's growing needs to ensure that it was
not annually requesting supplementals of around $90
million. She thought that more money should be allocated to
the capital budget as there were substantial needs for
additional investments in infrastructure, such as buildings
with leaky roofs and airports that needed upgrades. She
thought that the budget could be more sustainable and that
a 25 percent to 75 percent split would provide a solid PFD
while ensuring that the state's other needs were met as
well.
2:00:19 PM
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion to adopt Amendment
L 13.
IN FAVOR: Ortiz, Galvin, Hannan
OPPOSED: Cronk, Tomaszewski, Stapp, Edgmon, Foster,
Coulombe, Johnson, Josephson
The MOTION to adopt Amendment L 13 FAILED (3/8).
2:01:09 PM
Co-Chair Foster MOVED to RESCIND action on Amendment L 11
as amended [see the minutes for the House Finance Committee
meeting on 3/28/24 at 10:09 a.m. for details].
2:01:27 PM
AT EASE
2:02:15 PM
RECONVENED
2:02:20 PM
Co-Chair Foster explained that he wanted to rescind the
committee's action on Amendment L 11 because he wanted to
return to the original intent of the amendment to provide
Alaskans with a full PFD using funds from the Earnings
Reserve Account (ERA). He recalled that the committee
adopted conceptual Amendment 3 to Amendment L 11 which
switched the fund source from the ERA to the Constitutional
Budget Reserve (CBR) and would require a three-quarters
vote. He was hesitant to change the fund source because
drawing from the ERA required a simple majority vote. He
explained that he voted for the conceptual amendment
because he thought that it might encourage members to vote
for the underlying amendment, but it did not. He would not
have voted for the conceptual amendment had he known that
the maker of the amendment did not support it. He hoped
that anyone who supported the original amendment, which
would draw from the ERA to pay a full PFD, would support
the motion to rescind.
2:03:38 PM
Representative Stapp made a point of order. He thought that
if action was rescinded, the amendment would revert back to
Amendment L 11 as amended and the committee would need to
make another motion to amend the fund source.
Co-Chair Foster clarified that Representative Stapp had
correctly understood his intent.
Representative Stapp WITHDREW the point of order.
Representative Hannan OBJECTED to rescinding action on
Amendment L 11 as amended.
Representative Hannan asked if a majority vote was required
in order to rescind action.
Co-Chair Johnson responded in the affirmative.
Representative Hannan explained that she was objecting
because she thought that the subject had been thoroughly
discussed. She was in opposition to revisiting the topic
again and noted that every action taken in committee would
be revisited again on the House Floor.
Co-Chair Edgmon would not object to rescinding action, but
he urged the committee to act swiftly because the subject
had already been thoroughly discussed.
2:05:57 PM
Representative Hannan MAINTAINED the OBJECTION.
A roll call vote was taken on the motion to rescind action
on Amendment L 11 as amended.
IN FAVOR: Tomaszewski, Ortiz, Cronk, Stapp, Edgmon, Foster,
Johnson
OPPOSED: Galvin, Hannan, Josephson, Coulombe
The MOTION PASSED (7/4). There being NO further OBJECTION,
action on Amendment L 11 as amended was RESCINDED.
2:07:19 PM
Co-Chair Foster MOVED to ADOPT Amendment L 11 (copy on
file). He reiterated that the motion was to adopt the
amendment in its original form without the conceptual
amendment. He had originally thought that he needed to also
rescind action on the conceptual amendment, but he realized
that he could also simply reintroduce the amendment as
written.
Representative Josephson OBJECTED.
Representative Josephson thought that it was not uncommon
for legislators to change their positions on a matter after
having more time to think about it. He stood by his
previous comments on Amendment L 11 [during the House
Finance Committee meeting on 3/27/24 at 2:40 p.m.]. He did
not want the committee to move backwards and thought there
was a legal argument to be made in opposition to the
amendment. He wanted to adhere to the law and there was a
legal argument that SB 26 [passed by the Thirtieth Alaska
State Legislature in 2018] followed previous PFD law. There
was an argument that SB 26 was the "last statement" on the
matter. He thought that the passage of the amendment would
hurt the House Majority.
Co-Chair Edgmon called the question.
[Although not explicitly stated, the objection was
maintained.]
2:10:41 PM
A partial roll call vote was taken on the motion to adopt
Amendment L 11. Representative Hannan and Representative
Josephson voted in opposition to the motion.
Co-Chair Edgmon made a point of order. He thought that the
motion needed to be restated clearly. He understood that
the vote was whether to return to Amendment L 11, not
whether to adopt Amendment L 11.
Co-Chair Johnson relayed that Co-Chair Foster made a motion
to rescind action on Amendment L 11 as amended, but instead
of rescinding action on the conceptual amendment in order
to bring the original amendment back before the committee,
Co-Chair Foster had moved the original Amendment L 11 and
disregarded the conceptual amendment.
Co-Chair Foster stated that Co-Chair Johnson was correct.
Co-Chair Johnson noted that there were multiple ways to
revisit Amendment L 11 in its original form. The committee
had never voted on Amendment L 11 in its original form and
had only voted on the amendment as amended.
2:12:23 PM
AT EASE
2:19:12 PM
RECONVENED
Co-Chair Johnson thought that the committee could move
forward as long as the intention of the motion was clear
and that all members understood the significance of the
vote. She relayed that Amendment L 11 as amended had failed
with three yeas and eight nays and there was a motion to
rescind action in order to return to Amendment L 11 without
the conceptual amendment attached. The committee then voted
in favor of rescinding action and the original amendment
was now before the committee without any conceptual
amendments. The amendment was now before the committee as
if it were being voted on for the first time. She stressed
that it was important that all members understood what the
vote would be on and asked if there was any confusion.
2:22:13 PM
Representative Hannan made a point of order. She disagreed
with the ruling of the chair that the original amendment
could be before the committee without rescinding action on
the conceptual amendment. She understood that the committee
still needed to rescind action on the conceptual amendment
before it could vote on the underlying amendment in its
original form.
Co-Chair Johnson relayed that the ruling of the chair was
that Amendment L 11 in its original form was before the
committee. She indicated that the committee would vote on
whether to uphold the ruling of the chair.
Co-Chair Edgmon asked for confirmation that the committee
would be voting on the ruling of the chair.
Co-Chair Johnson responded in the affirmative.
Co-Chair Edgmon noted that the motion was debatable.
Co-Chair Johnson acknowledged that Co-Chair Edgmon was
correct and invited the committee to debate the motion.
Co-Chair Edgmon commented that he did not want to prolong
the discussion any further. He agreed with Representative
Hannan and the thought the fundamental principle behind a
reconsideration motion was to bring a motion back before
the body as it existed before any actions were taken.
2:23:44 PM
AT EASE
3:08:48 PM
RECONVENED
Co-Chair Johnson relayed that she had confirmed with
Legislative Legal Services that the proposed course of
action [to vote on the original version of Amendment L 11
without needing to rescind action on the conceptual
amendment] was proper; however, she wanted to ensure that
there was no procedural doubt.
Co-Chair Johnson WITHDREW the motion to uphold the ruling
of the chair. There being NO OBJECTION, the motion was
withdrawn.
Co-Chair Johnson explained that the motion made by Co-Chair
Foster [to move Amendment L 11 in its original form] was
back before the committee.
Co-Chair Foster WITHDREW the motion to move the original
Amendment L 11. There being NO OBJECTION, the motion was
withdrawn.
Co-Chair Johnson recalled that the committee had already
voted to rescind the action of adopting Amendment L 11 as
amended. She explained that Amendment L 11 as amended was
now before the committee.
3:10:55 PM
Co-Chair Foster MOVED to RESCIND action on conceptual
Amendment 3 to Amendment L 11. There being NO OBJECTION, it
was so ordered.
Co-Chair Johnson noted that the original Amendment L 11 was
now before the committee.
Co-Chair Foster reminded members that Amendment L 11 would
pay out a full statutory PFD by adding $801 million to the
ERA, which would require a simple majority vote. The PFD
would total the full statutory amount of $3,500.
Co-Chair Edgmon called the question.
Representative Stapp MAINTAINED the OBJECTION.
3:13:05 PM
A roll call vote was taken on the motion to adopt Amendment
L 11.
IN FAVOR: Cronk, Tomaszewski, Foster
OPPOSED: Hannan, Josephson, Coulombe, Stapp, Galvin, Ortiz,
Edgmon, Johnson
The MOTION to adopt Amendment L 11 FAILED (3/8).
3:14:35 PM
AT EASE
3:14:47 PM
RECONVENED
3:14:56 PM
Representative Josephson MOVED to ADOPT Amendment L 14
(copy on file):
Agency: Fund Transfers
Appropriation: General Fund (Revenue)
Allocation: General Fund (Revenue)
Transaction Details
Title: Transfer $172 million of AIDEA Receipts to the
General Fund
Section: Language
Type: Lang
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 172,000.0
172,000.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1102 AIDEA Rcpt 172,000.0
Explanation
This fund transfer to the general fund will allow for
future appropriation of this funding in the capital
budget to the Alaska Energy Authority as state match
for the Grid Resilience Infrastructure project. AIDEA
funding is to be used for energy producing projects
that benefit all Alaskans. By using their receipts to
fund the GRIP project, we can make sure that funding
is being used for that very purpose. GRIP projects are
meant to support activities that will modernize the
electric grid to reduce impacts due to extreme weather
and natural disasters.
This appropriation will allow AEA to leverage funding
effectively.
Page 91, following line 16:
Insert a new subsection to read:
"(p) The sum of $172,000,000 is appropriated from
receipts of the Alaska Industrial
Development and Export Authority to the general fund."
Page 96, line 18:
Delete "(f) - (o)"
Insert "(f) - (p)"
Representative Cronk OBJECTED for discussion.
Representative Josephson explained that the amendment would
provide some clarification that the $172 million funding
from the Alaska Industrial Development and Export Authority
(AIDEA) receipts was intended to complement the funds that
were already allocated towards Grid Resilience and
Innovation Partnerships (GRIP). He thought that Senator
Lisa Murkowski was rightfully adamant that the legislature
needed to fund GRIP. There had been discussion of only
funding part of GRIP for the time being and there had been
some debate about whether partial funding would be
acceptable. There was also concern that GRIP might not be
funded considering the state's fiscal situation and the
legislature's inability to advance fiscal reforms, and the
amendment offered a funding opportunity. He understood that
the AIDEA receipts were a cash or cash equivalent and were
eligible for appropriation. He added that it was incidental
to the amendment that he was not a "huge fan" of AIDEA. A
colleague of his had observed that the amendment would be
the best thing AIDEA had ever done with its money, and he
agreed with the assertion. The amendment would not imply
the legislature's intent without wordage intent language.
He concluded that the amendment would move funds to the
general fund for the purpose of funding GRIP.
3:17:35 PM
Representative Stapp expressed that he opposed the
amendment for a number of reasons. He understood that the
amendment would reduce the capitalization of AIDEA by 60
percent. He asked Representative Josephson if he knew what
AIDEA's debt service currently was, AIDEA's level of non-
payment of debts, and AIDEA's existing bonding authority.
He thought that the underlying effects on AIDEA's cash flow
should be considered. He wondered whether the
decapitalization of AIDEA would cause it to default on
existing debt service or render AIDEA unable to make its
own payment obligations. He did not know how much
outstanding debt and deferred debt was held by AIDEA. He
would not want to decapitalize AIDEA without knowing all of
the information.
3:18:52 PM
Representative Cronk agreed with Representative Stapp. He
thought that AIDEA provided revenue in the form of its
annual dividend and per statute, AIDEA's board determined
the amount of the dividend. He argued that an ad hoc draw
proposed by the amendment would establish a concerning
precedent. The amendment would also disrupt AIDEA's process
with its projects and the money that had already been
allocated. The amendment would most likely negatively
impact AIDEA's credit rating and cause a decrease in trust
from the private sector. He reiterated that he did not like
the amendment.
Co-Chair Johnson commented that she appreciated the attempt
to do something with the GRIP funding. She thought GRIP
funding was an important topic that should be taken up by
the committee, but she would like the topic to be taken up
in conjunction with capital budget amendments. The
committee might also be hearing bills in the near future
that would be relevant to the topic.
Representative Josephson explained that the monies that
would be allocated for GRIP were in the unrestricted
category. In calendar year 2019, the governor removed over
$200 million from the budget to fund a dividend program. He
remarked that the Fairbanks Chamber of Commerce supported
the GRIP funding and had identified it as a priority. He
was concerned that that AIDEA would continue to act on its
own, as it was authorized to, which was a process that he
had tried to reform. The agency had more control over its
fiefdom than the legislature had over the state's monies.
He noted that AIDEA had held the funds for a number of
years and the amendment offered a better purpose for the
funds.
Representative Cronk MAINTAINED the OBJECTION.
3:23:08 PM
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Hannan, Galvin, Ortiz
OPPOSED: Coulombe, Cronk, Stapp, Tomaszewski, Edgmon,
Foster, Johnson
The MOTION to adopt Amendment L 14 FAILED (4/7).
3:23:21 PM
Co-Chair Johnson MOVED to ADOPT Amendment L 15 (copy on
file):
DEPARTMENT: Fund Capitalization
APPROPRIATION: No Further Appropriation Required
ALLOCATION: Public Education Fund
DELETE: $2,072,000 UGF (1004)
EXPLANATION: According to the FY23 Alaska
Comprehensive Financial Report, the FY23 year-end
balance of the Public Education Fund was $5.3 million.
The current language is based on an early estimate of
$3.0 million, so this reduction reflects the actual
fund balance available.
Page 86, line 31:
Delete "$1,138,472,100"
Insert "$1,136,200,100"
Page 87, line 7:
Delete "$1,103,383,200"
Insert "$1,101,111,200"
Representative Cronk OBJECTED for discussion.
Co-Chair Johnson relayed that her staff would explain the
amendment.
3:23:43 PM
REMOND HENDERSON, STAFF, REPRESENTATIVE DELENA JOHNSON,
noted that the committee had adopted a budget CS that would
make a reduction from the Public Education Fund (PEF) based
on an estimated $3 million that was the available balance
in FY 23. The estimate was incorrect and the financial
statements on page 223 [of the FY 23 Alaska Comprehensive
Financial Report] indicated that the balance was
$5,273,000, which was shown on page 234 of the report. The
amendment would reduce the PEF by the remaining balance of
$2,273,000 in order to decrease the balance to zero. The
adjustment was made with the understanding that the
expected balance was $3 million, but the estimate was
incorrect.
Representative Ortiz noted that while he had a general idea
of what the fund was used for, he was curious to learn more
details about annual draws from PEF.
Mr. Henderson responded that he understood that the annual
draws were the amounts that were appropriated for the
foundation formula. The amounts that were appropriated were
sometimes higher than the amount that was actually needed,
which resulted in a remaining balance from FY 23.
Representative Ortiz asked for clarification that the
remaining balance would either be allocated to the
foundation formula or to the Base Student Allocation (BSA).
Mr. Henderson responded in the affirmative.
3:26:00 PM
Representative Galvin asked what the goal of reducing the
funds was and how the excess funds would be allocated.
Mr. Henderson replied that the funds would be deposited
into the general fund and the balance would increase.
Representative Galvin asked if the goal was to allocate the
funds towards another expense related to education or to
simply increase the general fund balance.
Mr. Henderson responded that the idea was not to direct
where the funds were going, but simply to remove the funds
because the funds were available but were not being
utilized.
Co-Chair Johnson asked if there was further discussion.
Representative Ortiz OBJECTED to the adoption of Amendment
L 15.
3:27:30 PM
Representative Stapp shared that his understanding was that
the amendment would true-up the fund balance. There were
excess monies in PEF that were not being utilized and the
amendment would move the monies to the general fund in
order to be utilized. He thought it was a technical cleanup
amendment and was not a cut to education funding.
Co-Chair Edgmon commented that he would also classify the
amendment as technical because PEF needed to be trued-up
when audits took place.
Representative Ortiz WITHDREW the OBJECTION.
[Although not explicitly stated, Amendment L 15 was
ADOPTED.]
Co-Chair Johnson reiterated that the committee would review
the three amendments that had accidentally been labeled as
numbers amendments, but belonged in the language section.
The amendments were Amendment 16, Amendment 17, and
Amendment 65, which were labeled incorrectly as numbers
amendments and should have been labeled as language
amendments [the amendments will be referred to as Amendment
L 16, Amendment L 17, and Amendment L 65].
3:29:45 PM
Representative Hannan MOVED to ADOPT Amendment L 16 (copy
on file):
Agency: Fund Capitalization
Appropriation: No Further Approp Required
Allocation: Community Assistance Fund
Transaction Details
Title: Make Community Assistance Fund Whole for FY26
Distribution
Section: Language
Type: Inc
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 20,000.0
20,000.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund 20,000.0
Explanation
This $20 million deposit into the Community Assistance
Fund (CAF), combined with an existing appropriation of
$30 million into the CAF from the PCE Endowment Fund,
will bring the CAF balance to $90 million, ensuring a
full $30 million distribution to communities in FY26.
Page 88, lines 29 - 30:
Delete all material and insert:
"(t) The sum of $50,000,000 is appropriated
to the community assistance fund
(AS 29.60.850) from the following sources:
(1) $20,000,000 from the general fund; and
(2) $30,000,000 from the power cost
equalization endowment fund
(AS 42.45.070)."
Representative Cronk OBJECTED for discussion.
Representative Hannan explained that the amendment would
deposit $20 million of general funds into the Community
Assistance Fund (CAF) along with the $30 million from the
Power Cost Equalization (PCE) fund that was already in the
budget. The appropriation would make CAF whole at $90
million and allow for a full distribution of $30 million to
Alaskan communities in FY 25. There would be no effect on
the $10 million that was currently in the budget for the
CAF for FY 25 distribution.
3:30:37 PM
AT EASE
3:36:17 PM
RECONVENED
Representative Cronk WITHDREW the OBJECTION. There being NO
further OBJECTION, Amendment L 16 was ADOPTED.
3:37:25 PM
Representative Hannan MOVED to ADOPT Amendment L 17 (copy
on file):
Agency: Fund Capitalization
Appropriation: No Further Approp Required
Allocation: Disaster Relief Fund
Transaction Details
Title: $15.5 Million in Additional Disaster Relief
Fund Capitalization to Reflect
Average Annual Spending
Section: Language
Type: Inc
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 15,500.0
15,500.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund 15,500.0
Explanation
FY16-FY23 average spending from the Disaster Relief
Fund is $20.5 million. In the current version of the
budget, the appropriation to the fund is just $5
million. Adding an additional $15.5 million to the
fund brings the annual appropriation to the average
annual spending level. Initiating annual
appropriations that better reflect average annual
spending will bring greater consistency in our
budgeting.
Page 86, line 19:
Delete "$5,000,000"
Insert "$20,500,000"
Representative Cronk OBJECTED for discussion.
Representative Hannan explained that the amendment would
capitalize the Disaster Relief Fund by adding $15.5 million
to the fund. The additional appropriation would bring the
annual appropriation of the fund to the average eight-year
spending level. The average spending level from FY 16 to FY
23 was $20.5 million. The current version of the operating
budget would appropriate $5 million to the fund. The
additional appropriation would better reflect the annual
spending level, transparently illustrate the actual needs
of the state, and bring the state closer to a consistent
budget and a sound fiscal plan.
Representative Cronk explained that he was not aware of any
situation in the past where millions of dollars had been
added to the budget for the purpose of reducing funding for
the PFD. He thought it was important to consider the
potential costs for the upcoming fire season as well and it
was possible that a large supplemental would be needed.
Representative Cronk MAINTAINED the OBJECTION.
Co-Chair Johnson noted that it was difficult to predict
natural disasters and fires and therefore difficult to
precisely appropriate the funds.
3:40:03 PM
AT EASE
3:40:56 PM
RECONVENED
Representative Cronk WITHDREW the OBJECTION. There being NO
further OBJECTION, Amendment L 17 was ADOPTED.
3:41:20 PM
Representative Tomaszewski MOVED to ADOPT Amendment L 65
(copy on file):
Agency: Labor & Workforce Dev
Appropriation: Vocational Rehabilitation
Allocation: Special Projects
Transaction Details
Title: Reappropriate Unobligated and Unexpended
Balance of the Assistive
Technology Loan Guarantee Fund
Section: Language
Type: Lang
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 0.0
0.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
Explanation
To transfer funds so that they may be more efficiently
used in their stated purpose.
Page 78, following line 16:
Insert a new subsection to read:
"(e) The unexpended and unobligated balance of
the assistive technology loan
guarantee fund (AS 23.15.125) on June 30, 2024,
estimated to be $446,802, is appropriated to
the Department of Labor and Workforce Development,
vocational rehabilitation, special
projects allocation, for improving access to assistive
technology for the fiscal year ending
June 30, 2025."
Page 96, line 20:
Delete "CONTINGENCY"
Insert "CONTINGENCIES"
Page 97, following line 1:
Insert a new subsection to read:
"(c) The appropriation made in sec. 32(e) of this
Act is contingent on passage by the
Thirty-Third Alaska State Legislature and enactment
into law of a version of House Bill 219
or a similar bill that repeals the assistive
technology loan guarantee fund (AS 23.15.125)."
Representative Josephson OBJECTED for discussion.
Representative Tomaszewski deferred to his staff to explain
the amendment.
3:42:20 PM
ZACH YOUNG, STAFF, REPRESENTATIVE FRANK TOMASZEWSKI,
explained that the amendment would appropriate the
unexpended, unobligated balance of the Assistive Technology
Loan Guarantee Fund (ATLGF). Approximately $446,802 would
be appropriated to the Department of Labor and Workforce
Development's vocational rehabilitation program and other
special projects. The purpose of the amendment was to work
in collaboration with HB 219, which would repeal the
Assistive Technology Loan Program. The money was made
available by the federal government in 1997 in order to
help individuals with disabilities obtain essential
hardware or other technological assistance items that would
allow the individuals to function in their current job or
obtain a new job.
Mr. Young explained that the allocation could be used
either to guarantee the principal of a loan that would be
issued by a private bank or to buy down the interest rate
on the loan; however, only ten loans had ever been utilized
due to several complications and the money had not been
utilized at all over the last ten years. The amendment
would allow the department to allocate the funding to
another organization such as the Alaska Society for
Technology in Education (ASTE) which worked with the
federal government and would "clean up" the bureaucratic
process. If the amendment were to pass but HB 219 did not
pass, the fund would stay the same. The amendment could
only function if HB 219 also passed; one could not exist
without the other.
Representative Stapp asked how much money was currently
capitalized to ATLGF and what was the function of the fund.
Mr. Young responded that the fund was capitalized at
$446,802 and currently the monies were sitting in an
account without a function and carrying minimal interest.
The amendment would allow for the fund to be granted to
organizations that worked with individuals with
disabilities and would allow for the fund to actually be
expended for its stated purpose as given by the federal
government in 1997.
3:45:24 PM
[Although not explicitly stated, Representative Josephson
WITHDREW the OBJECTION.]
There being NO further OBJECTION, Amendment L 65 was
ADOPTED.
Representative Josephson thought there was willingness
among committee members to revisit Amendment L 7, which had
been tabled for the purpose of research [during the House
Finance Committee meeting on 3/27/24 at 2:40 p.m.].
3:46:16 PM
AT EASE
3:47:15 PM
RECONVEND
Co-Chair Johnson reiterated that there was a request to
revisit Amendment L 7. The amendment had already been moved
and read as follows (copy on file):
Agency: Health
Appropriation: Medicaid Services
Allocation: Medicaid Services
Transaction Details
Title: Autism Services Inflation Adjustment
Section: Language
Type: Inc
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 446.6
Miscellaneous: 0.0
446.6
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1002 Fed Rcpts 223.3
1003 GF/Match 223.3
Explanation
Since 2018, Medicaid rates for behavioral health
service codes have been adjusted upward for inflation
by 12.76%, except for autism services. This would
bring inflationary rate parity to the average cost of
autism services.
We would like to add intent language which is as
follows: "It is the legislature's intent to increase
Medicaid reimbursement rates for autism services by
12.76% to bring payment parity with similar Medicaid
behavioral health service codes."
3:47:55 PM
Representative Stapp MOVED to remove Amendment L 7 from the
table and bring it before the committee. There being NO
OBJECTION, the amendment was removed from the table and
back before the committee.
Representative Josephson reminded members that he had
explained the need to fund autism services at a more
responsible rate and he noted that autism services had not
received the parity adjustment that other Medicaid
behavioral services had received. He had shared stories
from experts in working with children with autism who had
told him that 87 percent of kids with autism could be
impacted significantly by the increased resources. He had
offered statistics such as the projected overall lifespan
savings to the state of $1.6 million from early intensive
services. He recalled that Representative Stapp had
indicated interest in the topic but Representative Stapp
wanted to confirm some of the statistics provided,
including the 1115 waiver rebasement, the upper payment
level, and a Department of Motor Vehicles (DMV) funding
swap.
3:50:09 PM
Representative Stapp MOVED conceptual Amendment 1 to
Amendment L 7.
Representative Josephson OBJECTED.
Representative Stapp explained the conceptual amendment. He
was concerned that the math on which the underlying
amendment was based was wrong and he confirmed with DMV
that the math was indeed incorrect. The conceptual
amendment would true-up the general funds and the federal
seat authority to bring the amendment in line with the
other behavior health services rates that were rebased. He
acknowledged that the autism rate was not increased when
the other behavioral health services rates were increased.
He believed in trim budgeting and noted that there was a
double appropriation within the budget. In the governor's
FY 25 budget, there was a shift of $200,000 from the
university scholarship program to the National Guard Naval
Militia members. The funds were allocated to the Department
of Military and Veterans' Affairs (DMVA). There was now
$200,000 in two places in the budget at the same time and
the amendment would remove the $200,000 moved into DMVA in
order to fund the underlying amendment.
3:51:37 PM
AT EASE
3:54:50 PM
RECONVENED
Co-Chair Johnson expressed that she did not completely
understand the conceptual amendment and wanted to ensure
that Co-Chair Foster was comfortable with it because he was
the chair of the DMVA finance subcommittee.
Co-Chair Foster thought that it was a policy call and
suggested that members vote with their conscience. He
understood that the University of Alaska (UA) system had
been receiving the money to allow individuals to go through
the university system and use the funds for the military.
He explained that DMVA had expressed that it did not want
to be restricted to using the funding if there were
military members who wanted to take an online course that
was not through the university. The department had
requested the ability to use the funding in a variety of
ways, which the legislature had accepted. The conceptual
amendment would maintain the status quo. If the amendment
were to pass without the conceptual amendment, the
university would receive the same $200,000 and DMVA would
be receiving an additional amount.
Representative Hannan asked Co-Chair Foster if DMVA had
indicated what the expected demand would be for non-
university tuition courses. She was uncertain whether DMVA
had stated that it would need an additional $200,000 for
the courses.
Co-Chair Foster responded that he did not recall receiving
a firm answer from the department on the anticipated
demand. He thought it was an unknown.
3:58:04 PM
AT EASE
3:59:51 PM
RECONVENED
Co-Chair Johnson asked if there was an objection to the
conceptual amendment.
Representative Cronk OBJECTED.
Representative Stapp commented that no matter what happened
with the vote on the underlying amendment, the topic was a
significant priority for the House Majority Leader
Representative Dan Saddler. He would be supporting the
underlying amendment for many reasons, but mainly because
the issue was important to him and to Representative
Saddler.
Representative Cronk WITHDREW the OBJECTION. There being NO
further OBJECTION, conceptual Amendment 1 to Amendment L 7
was ADOPTED.
Co-Chair Edgmon relayed that he did not understand the
amendment and asked if other members understood.
4:01:35 PM
AT EASE
4:02:16 PM
RECONVENED
Co-Chair Johnson asked Representative Stapp if he could
explain the cost of the conceptual amendment, how much
money would be transferred, and which funds would be
impacted.
Representative Stapp replied that the funding source was
split between general fund Medicaid receipts and federal
match funding. The general fund matching portion of
Amendment L 7 as amended would be $223,300 plus $26,800. He
calculated that the total general fund amount required to
increase the autism rates was $270,233. The federal receipt
authority for the match would increase by $44,900, totaling
$223,300.
4:04:01 PM
AT EASE
4:05:30 PM
RECONVENED
Co-Chair Johnson asked the director of the Legislative
Finance Division (LFD) to speak on the amendment.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
relayed that he agreed with Representative Stapp's math.
The total general fund match was $250,100 and the total
federal receipt increase would be $268,200, and there would
be a decrement of $200,000 from DMVA.
Co-Chair Edgmon asked if Mr. Painter could explain what the
amendment would do in plain language.
Mr. Painter responded that the amendment would add funding
into Medicaid services to increase Medicaid rates for
autism services and behavioral health services by 12.76
percent. The other piece would be removing $200,000 for
tuition assistance within DMVA, which was also being funded
in the same amount in the university in the current
semester.
Co-Chair Edgmon understood that the amendment would
accomplish two separate tasks.
Mr. Painter responded in the affirmative.
Representative Stapp suggested that the question could be
divided.
4:07:01 PM
Co-Chair Foster understood that the underlying Amendment L
7 would add $223,000 in general funds and conceptual
Amendment 1 would add $26,800 for general funds and $44,000
for federal funds. He was concerned about the general fund,
which would be $250,000 for the purpose of increased autism
services. He understood that the $200,000 that appeared in
two separate places in the budget would be utilized to help
pay for the increase. He asked if his understanding was
correct.
Mr. Painter responded in the affirmative.
Co-Chair Edgmon asked if the $200,000 for DMVA provided for
different services than the $200,000 for the university.
Mr. Painter replied that the two were not related in terms
of function.
Co-Chair Edgmon explained that he was trying to understand
what the impact would be of the $200,000 decrement to DMVA.
Co-Chair Foster responded that previously, military members
could get tuition assistance if members went to the
university. The total funding for tuition assistance was
$200,000. The governor expressed that he did not want
military members to be restricted to the UA system and
wanted to broaden the eligibility of tuition assistance. If
the amendment as amended were to pass, members could use
tuition assistance monies for a variety of courses, such as
an online course or a technical course not offered by the
university. The governor had stated that he wanted to
allocate the $200,000 to DMVA and eliminate it from the
university. During the finance subcommittee process, the
$200,000 was allocated to DMVA. He noted that the
university had already been receiving the money for a
period of time. The policy call was whether to allocate the
funding to DMVA, to the university, or both. Allocating the
funding to both entities would be doubling the money.
Co-Chair Johnson noted that Representative Mike Prax was in
the audience.
4:10:58 PM
Co-Chair Johnson asked if there was an objection. She was
not certain if anyone had objected to the adoption of
Amendment L 7.
Representative Cronk WITHDREW the OBJECTION [although he
had not objected to the underlying Amendment L 7].
Co-Chair Johnson OBJECTED. She explained that she was
objecting because the discussion was surprising and she did
not think it was the sort of work that should be done at
the committee table.
Co-Chair Edgmon understood the importance of the amendment
process, but wondered if it would be fair to take up the
amendment again after the weekend. He suggested rolling the
amendment to Monday, April 1, 2024.
Co-Chair Johnson agreed and expressed that she would be
more comfortable voting on it after the weekend in order to
take more time to understand the issue.
There being NO OBJECTION, Amendment L 7 was rolled until
April 1, 2024.
4:12:15 PM
Co-Chair Johnson reviewed the agenda for Monday's meeting.
Representative Ortiz asked for confirmation that the
committee would be meeting in the morning on Monday.
Co-Chair Johnson responded in the affirmative and remarked
that the committee had extra work to attend to.
HB 268 was HEARD and HELD in committee for further
consideration.
HB 270 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
4:13:43 PM
The meeting was adjourned at 4:13 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Op Amendments ACTIONS thru 032824.pdf |
HFIN 3/28/2024 1:30:00 PM |
HB 268 HB 270 |
| Sup Packet Amendments 1-4 ACTIONS 032924.pdf |
HFIN 3/28/2024 1:30:00 PM |
HB 268 HB 270 |