Legislature(2019 - 2020)SENATE FINANCE 532
03/28/2020 11:00 AM House CONFERENCE COMMITTEE ON HB205
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| Audio | Topic |
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| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
| += | HB 205 | TELECONFERENCED | |
31ST ALASKA STATE LEGISLATURE
SECOND SESSION
CONFERENCE COMMITTEE ON HB 205
March 28, 2020
1:40 p.m.
1:40:30 PM
CALL TO ORDER
Chair Stedman called the Conference Committee meeting on
HB 205 to order at 1:40 p.m.
MEMBERS PRESENT:
House:
Representative Neal Foster, Vice-Chair
Representative Jennifer Johnston
Representative Cathy Tilton
Senate:
Senator Bert Stedman, Chair
Senator Natasha Von Imhof
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT:
Pat Pitney, Director, Legislative Finance Division; Pete
Ecklund, Staff, Senator Bert Stedman; Caroline Schultz,
Staff, Senator Natasha von Imhof.
SUMMARY
HB 205 APPROP: OPERATING BUDGET/LOANS/FUNDS
CCS HB 205 was REPORTED out of committee with a
"do pass" recommendation.
CS FOR HOUSE BILL NO. 205(FIN)(Corrected) am(brf sup maj
fld)
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; making
supplemental appropriations; and providing for an
effective date."
SENATE CS FOR CS FOR HOUSE BILL NO. 205(FIN) am S
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; making capital
appropriations, supplemental appropriations, and
reappropriations; making appropriations for the
operating and capital expenses of the state's
integrated comprehensive mental health program; 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."
1:41:11 PM
Chair Stedman stated that the committee would be addressing
open items in HB 205 based on the motion sheets distributed
to members and dated March 28th on the following:
Department of Corrections
Department of Education and Early Development
Department of Health and Social Services
Department of Law
Department of Public Safety
University of Alaska
Permanent Fund
Supplemental Items
Language Items
Capital Items
Fiscal Notes
Amendments and Other Items
Chair Stedman invited Pat Pitney, Director of the
Legislative Finance Division to join the committee at the
table.
1:41:57 PM
^DEPARTMENT OF CORRECTIONS:
Vice-Chair Foster MOVED to ADOPT the following in the
Department of Corrections' budget:
Item 1 Senate
Item 2 Senate
Item 3 Senate
Item 4 Senate
Item 5 House
Item 6 House
Item 7 Senate
Item 8 Senate
Item 9 Senate
Item 10 Senate
Item 11 House, modified, add two positions
Item 12 House
Item 13 Senate
Item 14 Senate
Item 15 Senate
Item 16 House
Item 17 House
Item 18 House
Item 19 House
Item 20 Senate
There being NO OBJECTION, it was so ordered. This action
CLOSED the conferenceable items in the Department of
Corrections' budget.
1:43:22 PM
^DEPARTMENT OF EDUCATION and EARLY DEVELOPMENT:
Vice-Chair Foster MOVED to ADOPT the following item in the
Department of Education:
Item 1 Senate
There being NO OBJECTION, it was so ordered. This action
CLOSED all conferenceable items in the Department of
Education and Early Development's budget.
1:43:56 PM
^DEPARTMENT OF HEALTH AND SOCIAL SERVICES:
Vice-Chair Foster MOVED to ADOPT the following item in the
Department of Health and Social Services budget:
Items 16 and 18 Senate
Vice-Chair Foster OBJECTED. He had no comment on his
objection.
Vice-Chair Foster MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Johnston, Tilton, Stedman, von Imhof, Olson
OPPOSED: Foster
The MOTION PASSED (5/1). This action CLOSED the
conferenceable items in the Department of Health and Social
Services' budget.
^DEPARTMENT OF LAW:
Vice-Chair Foster MOVED to ADOPT the following in the
Department of Law's budget:
Item 1 Senate
Item 2 House
Item 3 Senate
Item 4 Senate, modified, replace existing language
with "It is the intent of the legislature that when
managing caseload while making budget reductions, the
department use staff instead of outside contracts
whenever possible; and that the department should not
make reductions to contracts if the contract is a
possible revenue generator."
Item 5 Senate
Item 6 House
Item 7 Senate
Item 8 Senate
Item 9 House
Item 10 House
There being NO OBJECTION, it was so ordered. This action
CLOSED all conferenceable items in the Department of Law's
budget.
1:46:19 PM
^DEPARTMENT OF PUBLIC SAFETY:
Vice-Chair Foster MOVED to ADOPT the item in the Department
of Public Safety's budget:
Item 1 House, modified, delete existing language,
replace with "It is the intent of the legislature that
the Department of Public Safety prioritize the
deployment of law enforcement resources to non-
urbanized areas that lack organized governments, and
when placing additional trooper positions, prioritize
adding a second trooper to existing one-trooper
posts."
There being NO OBJECTION, it was so ordered. This action
CLOSED all conferenceable items in the Department of Public
Safety's budget.
1:47:11 PM
^UNIVERSITY OF ALASKA:
Vice-Chair Foster MOVED to ADOPT the following in the
University of Alaska's budget:
Item 1 Senate
Item 2 Senate
Item 3 Senate
Item 4 Senate
Item 5 Senate
Item 6 Senate
Representative Johnston OBJECTED to Item 4.
Representative Johnston spoke to her objection. In light of
the unusual times and the legislature not passing a capital
budget, she wanted to make clear that the funds above the
amount included in the compact were to be used for debt
service or deferred maintenance. She asserted that the
additional funds should not be used to fund operating costs
above the agreement in the compact.
Representative Johnston WITHDREW her OBJECTION. There being
NO further OBJECTION, it was so ordered. This action CLOSED
all conferenceable items in the University of Alaska's
budget.
1:48:39 PM
^PERMANENT FUND:
Vice-Chair Foster MOVED to ADOPT the following item in the
Permanent Fund:
Item 1 Senate
Representative Tilton OBJECTED to adoption of Item 1. She
spoke to her objection. She believed that the state should
follow the statutory dividend formula and believed that the
proposed $1,000 dividend to the people was not following
the law.
Senator Olson thought there was unprecedented financial
strain and health issues to consider and people from his
district had expressed that the largest possible dividend
would aid in filling income shortfalls.
Chair Stedman stated that the comments were related to a
proposed roughly $1,000 dividend to be paid in the fall. He
commented that there was a statute that was laid out to pay
a PFD on the books. He asserted that when the legislature
did an operating budget, the legislation overrode the
existing statute for the period of one year. He emphasized
that in doing so, the legislature as not breaking the law,
but was modifying it for a one-year period.
Representative Tilton WITHDREW her OBJECTION.
Representative Tilton could see that she would be outvoted
and wanted to get as much to the people as possible for a
dividend.
There being NO further OBJECTION, it was so ordered. This
action CLOSED all conferenceable items in the Permanent
Fund.
1:52:12 PM
^FISCAL YEAR 20 SUPPLEMENTAL ITEMS:
Vice-Chair Foster MOVED to ADOPT the following supplemental
item:
Item 7 House
Representative Tilton OBJECTED to the adoption of Item 7.
Representative Tilton spoke to her objection. She explained
that Item 7 would provide a supplemental payment of $1,000
that was voted on by the Senate body. She thought there was
a need for people to get cash as many people were losing
jobs. She acknowledged other stabilization items such as
unemployment but thought it did not fulfill the dollar
amount people needed on a weekly basis. She mentioned
stimulus money coming from the federal government.
Representative Tilton continued to speak to her objection.
She considered an average wage earner and thought the
additional payment of $1,000 would get people to a
comparable income level. She asserted that economists had
suggested that the best thing to do was to get money in the
hands of the people. She referenced a bipartisan group that
asserted the best thing to do was to get money into the
hands of the people as soon as possible.
Senator Olson thought it was a noble effort to try and help
people. He considered stimulus efforts being put forth by
the federal government. He thought many people in his
district were not eligible for unemployment. He thought
some people that slipped through the cracks were eligible
for the PFD and the extra payment would help with necessary
expenses.
Representative Tilton MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Stedman, Foster, von Imhof, Johnston
OPPOSED: Olson, Tilton
The MOTION PASSED (4/2). The action CLOSED all
conferencable items for the FY 20 Supplemental Items.
1:55:55 PM
^LANGUAGE ITEMS:
Vice-Chair Foster MOVED to ADOPT the following language
item:
Item 1 Senate
There being NO OBJECTION, it was so ordered. This action
CLOSED all conferenceable language items.
1:56:17 PM
^CAPITAL ITEMS:
Chair Stedman explained that the capital items were listed
on a separate motion sheet. The committee would be making
capital budget motions by page or group of items. He asked
that if there were objections for any items on the page or
group to set that item aside for discussion after
completing the motion for rest of the page.
Vice-Chair Foster MOVED to ADOPT the following capital
items:
Page one, items 1 8 Senate
Page two, items 9 15 Senate
Page three, items 16 22 Senate
Page three, item 23 House
Page three, item 24 Senate
Page four, items 25 32 Senate
Page five, items 33 39 Senate
Page six, items 40 46 Senate
Page seven, items 47 49 Senate
There being NO OBJECTION, it was so ordered. This action
CLOSED all FY 21 capital items.
1:59:10 PM
^Supplemental Capital Items.
Vice-Chair Foster MOVED to ADOPT the following supplemental
capital items:
Page eight, Item 1 Senate, modified, minus 500
thousand, change fund source from AHFC dividend (fund
code 1139) to the Constitutional Budget Reserve fund
(Fund code 1001), change to immediate effective date
Page eight, Items 2 4 Senate
Page eight, Item 5 Senate, modified, delete "and
development of economic opportunities for the state at
the state and federal level"
Page eight, Item 6 Senate, modified, delete "and
development of economic opportunities for the state at
the state and federal level"
Page nine, Items 7 10 Senate
Page ten, Items 11 14 Senate
Page ten, Item 15 Senate, modified, change to
immediate effective date
Page ten, Items 16 17 Senate
Page ten, Item 18 Senate, modified, reduce line one
by $3.2 million Constitutional Budget Reserve fund
(fund code 1001), increase line two by $3.2 million
AHFC dividend (fund code 1139)
Page 11, Items 19 - 20 Senate
There being NO OBJECTION, it was so ordered. These actions
CLOSED all conferenceable supplemental capital items in
House Bill 205.
2:03:10 PM
^FISCAL NOTES:
Chair Stedman stated the committee would address fiscal
notes that will be added to House Bill 205.
Vice-Chair Foster MOVED to ADOPT the fiscal note
appropriation packet for House Bill 205.
Chair Stedman OBJECTED for discussion.
Chair Stedman WITHDREW his OBJECTION.
Chair Stedman asked to back up and requested for Vice-Chair
Foster to discuss the fiscal note appropriation packet.
Vice-Chair Foster OBJECTED for discussion.
Vice-Chair Foster listed facts about the fiscal note
appropriation packet:
1. The packet makes appropriations associated with
the bills listed.
2. If a bill listed fails to pass, its substance
fails to be incorporated in some other measure, or is
vetoed by the Governor, the appropriations associated
with that bill are removed.
3. The attached reports prepared by the Legislative
Finance Division list the fund sources and agencies
associated with the bill.
Vice-Chair Foster WITHDREW his OJBECTION. There being NO
further OBJECTION, it was so ordered. The fiscal note
appropriation packet was ADOPTED.
2:05:54 PM
^AMENDMENTS:
Vice-Chair Foster MOVED that for all unrestricted general
fund appropriations in sections 1 4 of this bill,
excepting appropriations made to the Judiciary, 25 percent
of the unrestricted general funds be replaced by the
Constitutional Budget Reserve fund (fund code 1001).
Chair Stedman OBJECTED for discussion. He asked Pete
Ecklund, Operating Budget Coordinator to the table to
explain the motion to the committee.
2:06:46 PM
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, wanted to give a
general overview of the forthcoming two amendments. He
would review the motion made by Vice-Chair Foster and other
staff would speak to the second amendment.
Mr. Ecklund explained that the motion had been to reduce 25
percent of UGF appropriations made in Section 1 of the
bill. He referenced a report labeled "C1 and C2" (copy on
file). He noted that Section 1 through Section 4 of the
bill was the number section and the fiscal notes section.
He drew attention to the first column of the C1 document,
which showed the UGF reduction from the numbers section of
the bill to be $607,546,000. He cited a $84.6 million
reduction to state retirement payments; and noted there was
an additional reduction in funding (in the second
amendment) to the Public Employees' Retirement System
(PERS) and the Teachers' Retirement System for a total
reduction of $692.18 million.
Mr. Ecklund clarified that he would have to speak to
multiple amendments to give context to explanation.
2:09:34 PM
Mr. Ecklund stated that the amendment moved by Vice-Chair
Foster was made in part in the event that there was not a
three-quarter vote obtained to fill the deficit in FY 21
for the operating and capital budgets.
Mr. Ecklund stated that if the motion passed, as well as
the following amendment, the CBR vote clauses contained in
the bill were there for FY 20 and FY 21. He reminded that
the legislature had recently passed a supplemental budget
that had a three-quarter vote provision and a reverse-sweep
provision, both of which had failed. There had been $246
million in head room of UGF spending in the bill, and the
bill total of UGF was $360 million. The total had included
$142 million of Medicaid payments to match federal funds,
$110 million for fire suppression, and funds for a COVID-19
emergency response. He furthered that the action taken by
the legislature was not approved by the three-quarter vote
for deficit-filling language for the full appropriation of
$360 million.
Mr. Ecklund continued to address the forthcoming
amendments. The coming amendment would add the CBR deficit-
filling provisions for FY 20, as well as FY 21. In the
event that the votes were not obtained in either body of
the legislature, the proposed 25 percent UGF reduction
would switch to a fund source of the CBR. The $692 million
would be subtracted from HB 205 and there would be a budget
to fund eight to nine months of functioning government.
There was contingent language in the upcoming amendment
that specified it was the intent of the legislature that in
the case the three-quarter CBR vote fails, it was intended
that the eight to nine month budget to get through March
1st; and further that the legislature intended to pass a
supplemental budget by February 10, 2021 to fill in the gap
created by the lack of deficit-filling language to fund the
budget.
2:13:42 PM
Chair Stedman summarized that the proposed amendment in the
motion was a stop-gap measure in the event that the CBR
authorization (which took a three-quarter vote to access)
did not take place, and there was no ability to access $392
million of funds and the budget would be roughly reduced by
25 percent. The amount did not include education and the
courts.
Mr. Ecklund affirmed that the amount was $692 million when
the numbers section and statewide item of retirement were
added. He furthered that Chair Stedman was correct when he
stated that the judicial branch and K-12 foundation formula
funding was exempt from the proposed 25 percent reduction.
Chair Stedman WITHDREW his OBJECTION.
2:15:09 PM
AT EASE
2:18:47 PM
RECONVENED
Representative Tilton OBJECTED to the motion. She spoke to
her objection. She asserted that agencies did not
necessarily always bill in the same amount monthly, and
thought it was not necessarily true that the amount of
money discussed was enough to get the state through eight
months of budget in the way that was described.
Chair Stedman stated that the reason the provision was
proposed was in the event that there were not sufficient
votes to allow access to CBR funds under a severe time
restraint. He thought the legislature did not have the
luxury to continue in session for some time, and the
proposal would allow the legislature to adopt a functioning
budget before returning home to deal with community health
issues before reconvening sometime in the late fall to
finish the budget. He hoped the CBR vote requirement was
met and the proposal would be added language.
Representative Tilton MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: von Imhof, Johnston, Olson, Stedman, Foster
OPPOSED: Tilton
The MOTION PASSED (5/1).
2:21:29 PM
Vice-Chair Foster MOVED to ADOPT Amendment #1, 31-
GH2197\R.A.20 (Bruce, 3/28/20).
Chair Stedman OBJECTED for discussion.
CAROLINE SCHULTZ, STAFF, SENATOR NATASHA VON IMHOF,
discussed Amendment 1. She spoke to a Sectional Analysis of
the amendment labelled "A" (copy on file):
P1, lines 1 - 8
Partial fund source change of Permanent Fund
Dividend appropriation - UGF portion sufficient
to pay a $500 per person PFD, CBR portion pays
another $500 per person
P1, lines 10 - 12
Change fund source of $75 million FY20
supplemental appropriation for COVID-19 response
to DHSS Public Health Emergency Programs to CBR
P1, lines 14 - 16
Change fund soure of $5 million FY20 supplemental
appropriation to the Disaster Relief Fund to CBR
2:24:36 PM
Mr. Ecklund wanted to point out that in an earlier
amendment, the committee had adopted a language amendment
that established that legislation extending the emergency
must must pass for the two appropriations of $75 million
and $5 million to be valid.
Ms. Schultz noted that both appropriations were FY 20
supplmental items with an immediate effective date.
Ms. Schultz continued to address Document A:
P1, line 18 - P2 line 10
Change fund source of 25 percent of PERS/TRS
unfunded liability payment to CBR
P2, lines 13 - 18
Reverse sweep provision
Mr. Ecklund referenced a document labelled "B1 and B2"
(copy on file). He explained that that if the reverse sweep
was not obtained by a three-quarter vote of each body, it
would impact the budget in the magnitude of approximately
$650 million at different times.
2:27:02 PM
Ms. Schultz cotinued to reference Document A:
P2, line 19 - P3 line 1
FY20 CBR deficit-filling language for HB 234
(supplemental budget passed by both bodies but
underfunded) and supplmental appropriations in HB
205 (this bill)
P3 lines 5 - 7
FY21 CBR deficit-filling language for HB 205
(this bill)
P3 lines 9 - 11
FY21 CBR deficit-filling language for HB 206
(Mental Health budget, passed by both bodies)
Ms. Schultz noted that there was already existing deficit-
filling language for FY 21 contained in HB 205, and the
provision was not conferencable.
Senator Olson asked about the approximate amount of the
deficit-filling language.
Mr. Ecklund affirmed that the amount would be hundreds of
millions, depending on the price of oil. He noted that the
spring revenue forecast had not been released yet.
Ms. Schultz detailed that lines 5 through 11 on page 3 of
the amendment added a reference to HB 206 (the Mental
Health budget passed by both bodies and enacted). She
explained that the mental health portion of the budget was
included in the deficit-filling language. She clarified
that document "A" had an error on page 3, lines 5-7, should
reference HB 206 rather than HB 205.
Ms. Schultz continued to address document A:
P3 lines 13 - 17
All CBR appropriations are made under Article IX,
Sec. 17(c)(the 3/4 vote requirement) - these
include 25 percent of agency operations
(excluding courts), fiscal notes, retirement
funding, COVID-19 response items, and the PFD.
P3 lines 24-28
All CBR appropriations are contingent on
enactment of the reverse sweep
P3 line 29 - P4 line 5
If the 3/4 vote fails, the remaining
appropriations are made for the purposes of
funding state agency operations through the first
eight months of the fiscal year and this it is
the intent of the legislature to appropriate the
remaining amount necessary by February 10th,
2021.
2:30:40 PM
Chair Stedman WITHDREW his OBJECTION to the adoption of
Amendment 1.
Representative Tilton OBJECTED to the adoption of Amendment
1. She spoke to her objection. She acknowledged the urgency
to end the session with a budget so that the state
government could run. She considered that the amendment
tied many things to the CBR vote, including the PFD. She
thought the people of Alaska were in need. She was
concerned that small businesses were currently unable to
operate due to the COVID-19 pandemic despite being
innovative.
Representative Tilton WITHDREW her objection.
There being NO OBJECTION, it was so ordered. Amendment 1
was ADOPTED.
2:33:22 PM
Vice-Chair Foster MOVED to give Legislative Finance and
Legislative Legal Services the ability to make technical
and conforming changes to the Conference Committee
Substitute for House Bill 205. There being NO OBJECTION, it
was so ordered.
Chair Stedman relayed that the committee had taken care of
all conferenceable items in House Bill 205. He stated that
the committee would recess to the call of the chair to
ensure it was ready to report out the Conference Committee
report. He thanked the committee members for their work. He
made a special thanked for the committee aides in both
bodies that had put in many hours for many days to put a
budget together that would allow the administration to
function with funds to respond to the virus. He was
impressed with the quality of the work of the committee
aides. He hoped to have the bill to the governor's desk as
soon as possible to allow him to respond to the virus.
2:36:13 PM
RECESSED
7:00:19 PM
RECONVENED
Chair Stedman expressed his thanks to the new Legislative
Finance Director Pat Pitney; Legislative Finance Division
staff Kelly Cunningham and Alexei Painter; and bill
drafters Linda Bruce, Meera Couette, and Megan Wallace. He
noted that the bill drafters had been working excessively
long hours in the preceding weeks.
Vice-Chair Foster MOVED to report CCS HB 205 out of
Committee with individual recommendations.
7:02:38 PM
AT EASE
7:02:47 PM
RECONVENED
Chair Stedman asked Vice-Chair Foster to repeat the motion.
Vice-Chair Foster MOVED to report CCS HB 205 out of
Committee with individual recommendations.
Representative Tilton OBJECTED. She did not speak to her
objection.
Representative Tilton MAINTAINED her objection.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Stedman, Johnston, von Imhof
OPPOSED: Tilton, Olson
The MOTION PASSED (4/2).
CCS HB 205 was REPORTED out of committee with a "do pass"
recommendation.
7:04:07 PM
AT EASE
7:05:55 PM
RECONVENED
Chair Stedman thanked the members and the finance
committees and staff.
Vice-Chair Foster MOVED to ADJOURN this Conference
Committee. There being NO OBJECTION, it was so ordered.
ADJOURNMENT
7:06:21 PM
The meeting was adjourned at 7:06 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 205 CC Budget Impacts Without Three-Quarter Vote.pdf |
JHB205 3/28/2020 11:00:00 AM |
HB 205 |
| HB 205 CC Agency Summaries with Funding - CC Structure.pdf |
JHB205 3/28/2020 11:00:00 AM |
HB 205 |
| HB 205 CC CBR Replacment Funding.pdf |
JHB205 3/28/2020 11:00:00 AM |
HB 205 |
| HB 205 CC Fiscal Note Appropriation Packet.pdf |
JHB205 3/28/2020 11:00:00 AM |
HB 205 |