Legislature(2015 - 2016)

05/30/2016 09:19 PM HB256


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09:19:18 PM Start
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               29TH ALASKA STATE LEGISLATURE                                                                                    
                  FOURTH SPECIAL SESSION                                                                                        
         CONFERENCE COMMITTEE ON HB 256 and HB 257                                                                              
                       May 30, 2016                                                                                             
                         9:19 p.m.                                                                                              
                                                                                                                                
9:19:18 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Chair Kelly called the Conference Committee meeting on HB
256 and HB 257 to order at 9:19 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT:                                                                                                              
                                                                                                                                
Senate:                                                                                                                         
Senator Pete Kelly, Chair                                                                                                       
Senator Anna MacKinnon                                                                                                          
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
House:                                                                                                                          
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Steve Thompson                                                                                                   
Representative Les Gara                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT:                                                                                                                 
                                                                                                                                
David Teal,  Director, Legislative Finance  Division; fiscal                                                                    
analysts  with  the  Office of  Management  and  Budget  and                                                                    
Legislative  Finance   Division;  and  aides   to  committee                                                                    
members and other members of the Legislature.                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 256    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          CCS HB 256 was REPORTED out of committee with a                                                                       
          "do pass" recommendation.                                                                                             
                                                                                                                                
HB 257    APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          CCS HB 257 was REPORTED out of committee with a                                                                       
          "do pass" recommendation.                                                                                             
                                                                                                                                
DEPARTMENTS:                                                                                                                    
     FISH & GAME                                                                                                                
     HEALTH & SOCIAL SERVICES                                                                                                   
     TRANSPORTATION & PUBLIC FACILITIES                                                                                         
     UNIVERSITY OF ALASKA                                                                                                       
     FUND CAPITALIZATION                                                                                                        
     FY16 SUPPLEMENTALS                                                                                                         
     LANGUAGE                                                                                                                   
     FISCAL NOTES                                                                                                               
     EXECUTIVE BRANCH-WIDE UNALLOCATED APPROPRIATIONS                                                                           
                                                                                                                                
                                                                                                                                
CS FOR HOUSE BILL NO. 256(FIN)                                                                                                
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     supplemental  appropriations;  and   providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
SENATE CS FOR CS FOR HOUSE BILL NO. 256(FIN)                                                                                  
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     supplemental  appropriations;  and   providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
and                                                                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 257(FIN)                                                                                                
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive    mental    health    program;    making                                                                    
     supplemental  appropriations;  and   providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
SENATE CS FOR CS FOR HOUSE BILL NO. 257(FIN)                                                                                  
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
9:20:09 PM                                                                                                                    
                                                                                                                                
Chair Kelly  communicated that the  committee would  take up                                                                    
items  in HB  256 and  HB 257,  based on  the motion  sheets                                                                    
distributed to  members earlier  in the  day, dated  May 30,                                                                    
2016 (copy on file), for the following departments:                                                                             
                                                                                                                                
Fish & Game                                                                                                                     
Health & Social Services                                                                                                        
Transportation & Public Facilities                                                                                              
University of Alaska                                                                                                            
Fund Capitalization                                                                                                             
FY16 Supplementals                                                                                                              
Language                                                                                                                        
Fiscal Notes                                                                                                                    
Executive Branch-wide Unallocated Appropriations                                                                                
                                                                                                                                
9:20:44 PM                                                                                                                    
                                                                                                                                
DEPARTMENT OF FISH and GAME:                                                                                                  
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND  the motion  on adopting                                                                    
Item 8.                                                                                                                         
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. Item  8 was                                                                    
back before the committee for consideration.                                                                                    
                                                                                                                                
Vice-Chair Neuman MOVED to  ADOPT the Chair's recommendation                                                                    
on the following item for  the Department of Fish and Game's                                                                    
budget:                                                                                                                         
                                                                                                                                
     Item 8    House                                                                                                            
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. The  action                                                                    
reclosed all  conferencable items in the  Department of Fish                                                                    
& Game's budget.                                                                                                                
                                                                                                                                
9:21:17 PM                                                                                                                    
                                                                                                                                
DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                                                      
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND the  motions on adopting                                                                    
Item 9 and Item 19.                                                                                                             
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. Item  9 and                                                                    
Item 19 were back before the committee for consideration.                                                                       
                                                                                                                                
9:21:36 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:22:03 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Neuman MOVED to  ADOPT the Chair's recommendation                                                                    
on  the following  items for  the Department  of Health  and                                                                    
Social Service's budget:                                                                                                        
                                                                                                                                
     Item 9    House                                                                                                            
     Item 19  House                                                                                                             
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. The  action                                                                    
reclosed  all  conferencable  items  in  the  Department  of                                                                    
Health & Social Services' budget.                                                                                               
                                                                                                                                
9:22:33 PM                                                                                                                    
                                                                                                                                
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                                                                            
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND the  motions on adopting                                                                    
Item 19 and Item 20.                                                                                                            
                                                                                                                                
There being  NO OBJECTION,  it was so  ordered. Item  19 and                                                                    
Item 20 were back before the committee for consideration.                                                                       
                                                                                                                                
Vice-Chair Neuman MOVED to  ADOPT the Chair's recommendation                                                                    
on the following items for  the Department of Transportation                                                                    
and Public Facilities' budget:                                                                                                  
                                                                                                                                
     Item 19  House for both motions                                                                                            
     Item 20  House                                                                                                             
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. The  action                                                                    
reclosed  all  conferencable  items  in  the  Department  of                                                                    
Transportation & Public Facilities' budget.                                                                                     
                                                                                                                                
9:23:14 PM                                                                                                                    
                                                                                                                                
UNIVERSITY OF ALASKA                                                                                                          
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND  the motion  on adopting                                                                    
Item 10.                                                                                                                        
                                                                                                                                
There being  NO OBJECTION,  it was so  ordered. Item  10 was                                                                    
back before the committee for consideration.                                                                                    
                                                                                                                                
Vice-Chair Neuman MOVED to  ADOPT the Chair's recommendation                                                                    
on  the  following  item  for  the  University  of  Alaska's                                                                    
budget:                                                                                                                         
                                                                                                                                
     Item 10   Senate                                                                                                           
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. The  action                                                                    
reclosed  all  conferencable  items  in  the  University  of                                                                    
Alaska's budget.                                                                                                                
                                                                                                                                
9:23:46 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:24:07 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
FUND CAPITALIZATION                                                                                                           
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND  the motion  on adopting                                                                    
Item 1.                                                                                                                         
                                                                                                                                
Representative  Gara OBJECTED  for discussion.  He asked  if                                                                    
the  proposed  change  would restore  the  K-12  funding  to                                                                    
include the $50 Base Student Allocation (BSA) increase.                                                                         
                                                                                                                                
JAMES ARMSTRONG,  STAFF, SENATOR PETE KELLY  answered in the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
Representative Gara thought the  Senate had used a different                                                                    
source  of  funds  and  asked   Mr.  Armstrong  for  further                                                                    
explanation. He  wondered if the  increase was  fully funded                                                                    
through unrestricted general funds (UGF).                                                                                       
                                                                                                                                
Mr.  Armstrong  relayed  that the  Senate  had  adopted  the                                                                    
governor's budget as  it was presented, and  stated that all                                                                    
the funds were UGF.                                                                                                             
                                                                                                                                
Representative Gara WITHDREW his OJBECTION.                                                                                     
                                                                                                                                
There being NO further OBJECTION,  it was so ordered. Item 1                                                                    
was back before the committee for consideration.                                                                                
                                                                                                                                
                                                                                                                                
Vice-Chair Neuman MOVED to  ADOPT the Chair's recommendation                                                                    
on the following item for Fund Capitalization:                                                                                  
                                                                                                                                
     Item 1    Senate                                                                                                           
                                                                                                                                
Chair Kelly OBJECTED for purposes of explanation.                                                                               
                                                                                                                                
9:26:06 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:46 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair  Neuman explained  that  the action  appropriated                                                                    
the amount necessary to fully  fund the education foundation                                                                    
formula.                                                                                                                        
                                                                                                                                
Chair Kelly  REMOVED his OBJECTION.  There being  NO further                                                                    
OBJECTION, it was  so ordered. The action  reclosed the Fund                                                                    
Capitalization portion of the budget.                                                                                           
                                                                                                                                
9:27:07 PM                                                                                                                    
                                                                                                                                
FY16 SUPPLEMENTALS                                                                                                            
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND  the motion  on adopting                                                                    
Item 1.                                                                                                                         
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. Item  1 was                                                                    
back before the committee for consideration.                                                                                    
                                                                                                                                
                                                                                                                                
Vice-Chair Neuman MOVED to  ADOPT the Chair's recommendation                                                                    
on the following item for FY 16 Supplementals:                                                                                  
                                                                                                                                
     Item 1    House minus $19 million                                                                                          
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. The  action                                                                    
reclosed the FY 16 Supplementals portion of the budget.                                                                         
                                                                                                                                
9:27:35 PM                                                                                                                    
                                                                                                                                
LANGUAGE                                                                                                                      
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND  the motion  on adopting                                                                    
Item 4.                                                                                                                         
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. Item  4 was                                                                    
back before the committee for consideration.                                                                                    
                                                                                                                                
Vice-Chair Neuman MOVED to  ADOPT the Chair's recommendation                                                                    
on the following item for Language:                                                                                             
                                                                                                                                
     Item 4    House                                                                                                            
                                                                                                                                
Representative Gara  OBJECTED for  discussion. He  asked Mr.                                                                    
Armstrong if  the motion  would return  the funding  for the                                                                    
cruise  ship head  tax back  to  the first  seven ports  per                                                                    
statute.                                                                                                                        
                                                                                                                                
Mr. Armstrong  stated that the  House had all  the necessary                                                                    
language to accept the funding.  The Senate had not included                                                                    
the language,  and were therefore rescinding  and taking the                                                                    
House action  so that roughly  $15 million would flow  in to                                                                    
the communities.                                                                                                                
                                                                                                                                
Representative Gara  WITHDREW his OBJECTION. There  being NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
9:28:48 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:29:11 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair  Neuman MOVED  to ADOPT  Item  7, [Amendment  29-                                                                    
LS8006\A.31 (Wallace,  5/28/16)] to the Language  portion of                                                                    
the budget.                                                                                                                     
                                                                                                                                
Vice-Chair  Neuman  explained  that the  amendment  language                                                                    
appropriated  $11.7  million  of  FY 16  funding  and  $17.9                                                                    
million of FY 17 funding  to a variety of appropriations. It                                                                    
also  included  intent   language  that  the  appropriations                                                                    
remain in  the base operating  budget and were  not one-time                                                                    
increments.                                                                                                                     
                                                                                                                                
Representative  Gara OBJECTED.  He  asked  Mr. Armstrong  if                                                                    
everything was  in the  base, rather  than being  a one-time                                                                    
item.  [He   made  note  of   handwritten  changes   to  the                                                                    
amendment.]                                                                                                                     
                                                                                                                                
Mr. Armstrong specified that Section  A provided that it was                                                                    
the intent that  the funds remain in the base  for Section B                                                                    
and Section C in the amendment.                                                                                                 
                                                                                                                                
Representative Gara  asked if the $10  million appropriation                                                                    
to the  general fund for the  University on line 16  had the                                                                    
effect of putting  the $10 million in to the  base for FY 17                                                                    
(even though the text specified FY 16 and FY 17).                                                                               
                                                                                                                                
Mr.  Armstrong explained  that  the  amendment provided  $10                                                                    
million in  funding for FY 16,  so that on June  30 at 11:59                                                                    
p.m.; $10  million would be deposited  toward the University                                                                    
of  Alaska. Two  minutes later,  $325 million  for operating                                                                    
costs would  be deposited  for a total  of $335  million for                                                                    
the   University,  which   matched  the   governor's  budget                                                                    
request.                                                                                                                        
                                                                                                                                
Representative Gara asked if the  amount of funding would be                                                                    
in the base for FY 17.                                                                                                          
                                                                                                                                
Mr. Armstrong  stated that  the legislature  could recommend                                                                    
what would and what would not  be in the base each year, and                                                                    
the  governor had  the prerogative  when  he introduced  his                                                                    
budget on December 15.                                                                                                          
                                                                                                                                
Representative  Gara thought  the wording  of the  amendment                                                                    
suggested that the funds were in the base for FY 17.                                                                            
                                                                                                                                
Chair Kelly concurred that the funds were for FY 17.                                                                            
                                                                                                                                
Representative Gara WITHDREW his OBJECTION.                                                                                     
                                                                                                                                
9:32:03 PM                                                                                                                    
                                                                                                                                
Representative  Gara OBJECTED  for  discussion. He  inquired                                                                    
about  handwritten changes  on  page 2,  which pertained  to                                                                    
one-time K-12 grants in the amount of $4,727,200.                                                                               
                                                                                                                                
Mr. Armstrong confirmed  that the amount was  reduced to the                                                                    
level quoted and handwritten on the amendment.                                                                                  
                                                                                                                                
Representative  Gara   about  line  6  to   line  10,  which                                                                    
specified  (in handwriting)  the  return of  funds on  Pre-K                                                                    
grants:                                                                                                                         
                                                                                                                                
     1. $320,000 for the Best Beginnings program                                                                                
     2. $700,000 for the Parents as Teachers program                                                                            
     3. $200,000 for implementation of HB 44 Erin's Law Ch                                                                      
     2, SSSLA15                                                                                                                 
                                                                                                                                
Mr. Armstrong confirmed that the  handwritten changes were a                                                                    
conceptual  amendment  which  would   be  finalized  by  the                                                                    
legislative legal department later  in the evening and would                                                                    
be correctly reflected in the final version of the bill.                                                                        
                                                                                                                                
Chair Kelly asked  to let the record reflect that  on line 2                                                                    
of page  2, subsection (b),  the sum of  $4,727,200 replaced                                                                    
$5,752,900.  He  confirmed  the  additional  changes  listed                                                                    
above.  He added  that on  page 3,  line 1;  "State Troopers                                                                    
Detachments" replaced the words "wildlife troopers."                                                                            
                                                                                                                                
Mr.  Armstrong stated  that the  finalized changes  would be                                                                    
corrected and published on BASIS the following day.                                                                             
                                                                                                                                
Representative Gara  WITHDREW his OBJECTION. There  being NO                                                                    
further OBJECTION, it was so  ordered. Item 7 [Amendment 29-                                                                    
LS8006\A.31 (Wallace, 5/28/16)] was adopted.                                                                                    
                                                                                                                                
9:34:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:35:26 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Neuman MOVED to ADOPT Item 8 [Amendment 29-                                                                          
LS8006\A.30 (Wallace,  5/28/16)] to the Language  portion of                                                                    
the budget.                                                                                                                     
                                                                                                                                
Chair Kelly OBJECTED for discussion.                                                                                            
                                                                                                                                
Vice-Chair  Neuman  explained  that  the  amendment  was  an                                                                    
attempt to access the Constitutional  Budget Reserve Fund to                                                                    
balance  the  FY  17  budget.   Section  A(a)  reversed  the                                                                    
constitutionally mandated  sweep of  general funds  into the                                                                    
CBR at  the end of FY  16. Section A(b) provided  a CBR draw                                                                    
to cover appropriations made in  the FY 17 Operating, Mental                                                                    
Health  and   Capital  budgets.  Section  A(c)   allowed  an                                                                    
additional  draw up  to $100  million to  cover supplemental                                                                    
appropriations for FY 17.                                                                                                       
                                                                                                                                
Chair Kelly  WITHDREW his OBJECTION. There  being NO further                                                                    
OBJECTION, it was so ordered. Item 8 [Amendment 29-                                                                             
LS8006\A.30 (Wallace, 5/28/16)] was adopted.                                                                                    
                                                                                                                                
9:37:30 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman  MOVED to  ADOPT  Item  9 [Amendment  29-                                                                    
LS8010\A.50 (Martin,  5/29/16)] to  the Language  portion of                                                                    
the budget.                                                                                                                     
                                                                                                                                
Chair Kelly OBJECTED for discussion.                                                                                            
                                                                                                                                
Vice-Chair    Neuman    explained   that    the    amendment                                                                    
reapproriated  an amount  estimated to  be $904  thousand to                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development  for a  grant to  the Municipality  of Anchorage                                                                    
for the Alaska Domestic  Violence and Sexual Assault Program                                                                    
for   domestic   violence   and  sexual   assault   offender                                                                    
compliance checks and intervention for  FY 17, FY 18, and FY                                                                    
19.                                                                                                                             
                                                                                                                                
Chair Kelly  REMOVED his OBJECTION.  There being  NO further                                                                    
OBJECTION,  it  was  so ordered.  The  action  reclosed  the                                                                    
Language portion of the budget.                                                                                                 
                                                                                                                                
9:38:29 PM                                                                                                                    
                                                                                                                                
FISCAL NOTES                                                                                                                  
                                                                                                                                
Vice-Chair Neuman  MOVED to RESCIND  the motion  on adopting                                                                    
fiscal notes incorporated into HB 256 and HB 257.                                                                               
                                                                                                                                
Representative Gara OBJECTED for discussion.                                                                                    
                                                                                                                                
9:39:09 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:40:24 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Gara noted that a  number of the fiscal notes                                                                    
had been  adopted and thought the  committee was considering                                                                    
new fiscal  notes for HB  374 and HB 4002,  while everything                                                                    
else had been previously adopted as-is.                                                                                         
                                                                                                                                
DAVID   TEAL,   DIRECTOR,   LEGISLATIVE   FINANCE   DIVISION                                                                    
concurred with Representative Gara's statement.                                                                                 
                                                                                                                                
Representative Gara  WITHDREW his OBJECTION. There  being NO                                                                    
further OBJECTION, it was so  ordered. The fiscal notes were                                                                    
back before the committee for consideration.                                                                                    
                                                                                                                                
Vice-Chair  Neuman MOVED  to ADOPT  the  documents with  the                                                                    
following footers: "FY17  Fiscal Note Section to  HB 256" as                                                                    
section 2  of HB 256;  and "FY17  Fiscal Note Section  to HB
257" as section 2 of HB 257.                                                                                                    
                                                                                                                                
Chair Kelly OBJECTED for discussion.                                                                                            
                                                                                                                                
Vice-Chair Neuman explained that  changes to the fiscal note                                                                    
section included:                                                                                                               
                                                                                                                                
   1. Addition of the appropriation made by HB 374 of $55                                                                       
     million Designated General Funds to the Department of                                                                      
     Commerce, Community & Economic Development, Division                                                                       
     of Insurance.                                                                                                              
   2. Addition of the appropriation made by HB 4002 of $174                                                                     
     thousand   unrestricted   general    funds   to   State                                                                    
     Retirement Payments/PERS State Assistance.                                                                                 
                                                                                                                                
Vice-Chair  Neuman  continued  that   as  mentioned  in  the                                                                    
previous meeting:                                                                                                               
                                                                                                                                
   1. Section 2 makes appropriations associated with the                                                                        
     bills listed.                                                                                                              
   2. If a bill listed either 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 reduced.                                                                                                
                                                                                                                                
Chair Kelly  REMOVED his OBJECTION.  There being  NO further                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
9:43:33 PM                                                                                                                    
                                                                                                                                
EXECUTIVE BRANCH-WIDE UNALLOCATED APPROPRIATIONS                                                                              
                                                                                                                                
Vice-Chair Neuman  MOVED to ADOPT  the following  within the                                                                    
Executive Branch-wide Unallocated  Appropriations portion of                                                                    
the budget:                                                                                                                     
                                                                                                                                
     Item 1    House                                                                                                            
     Item 2    House                                                                                                            
                                                                                                                                
Representative Gara OBJECTED for  discussion. He thought the                                                                    
items would  resolve that there  would not be  any executive                                                                    
branch-wide unallocated cuts, and  the previous $100 million                                                                    
unallocated cut was no longer present in the budget.                                                                            
                                                                                                                                
Chair Kelly answered in the affirmative.                                                                                        
                                                                                                                                
Representative Gara WITHDREW is OBJECTION.                                                                                      
                                                                                                                                
9:44:21 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:44:32 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
There being  NO further  OBJECTION, it  was so  ordered. The                                                                    
action  reclosed   the  Executive   Branch-Wide  Unallocated                                                                    
Appropriations portion of the budget.                                                                                           
                                                                                                                                
Chair Kelly returned  to Item 7 in the  Language section for                                                                    
clarification.                                                                                                                  
                                                                                                                                
Vice-Chair  Neuman  restated  that Item  7,  [Amendment  29-                                                                    
LS8006\A.31 (Wallace,  5/28/16)] in the Language  portion of                                                                    
the budget  appropriated $11.7 million  of FY16  funding and                                                                    
$17.9   million   of   FY17   funding  to   a   variety   of                                                                    
appropriations. It  also included  intent language  that the                                                                    
appropriations remain  in the base operating  budget and are                                                                    
not one-time increments.                                                                                                        
                                                                                                                                
Chair Kelly  restated that  the motion to  adopt Item  7 had                                                                    
passed.                                                                                                                         
                                                                                                                                
Chair Kelly expressed thanks to staff.                                                                                          
                                                                                                                                
Representative  Gara thanked  his staff  and the  members of                                                                    
the legislature for working together.                                                                                           
                                                                                                                                
Chair Kelly thanked the members of the committee.                                                                               
                                                                                                                                
9:49:13 PM                                                                                                                    
                                                                                                                                
Chair Kelly asked Mr. Teal  to discuss an email addressed to                                                                    
committee  staff (authored  by  Mr. Teal)  with the  subject                                                                    
"Fiscal/operating  budget  update"  dated 5/26/16  (copy  on                                                                    
file):                                                                                                                          
                                                                                                                                
     As part of our "technical and conforming" powers, we                                                                       
     intend to modify the following estimated amounts in                                                                        
     the operating bill:                                                                                                        
                                                                                                                                
          1. from the ERA to the dividend fund: $1.362                                                                          
          billion (replacing $1.405 billion--no general                                                                         
          fund impact)                                                                                                          
                                                                                                                                
          2. from  the general fund  to the oil and  gas tax                                                                    
          credit   fund:   $30  million   (replacing   $73.4                                                                    
          million--this  reduces   the  FY17   UGF  budgeted                                                                    
          appropriations by $43.4 million).                                                                                     
                                                                                                                                
     No conferee action is required for these changes to                                                                        
     occur, but announcing the updated information at a                                                                         
     conference committee meeting would not be a bad idea.                                                                      
                                                                                                                                
     A short fiscal summary is also attached. The FY17                                                                          
     deficit of approximately $3.1 billion would drop to                                                                        
     $1.5 billion if the PFPA is adopted with a 5% payout.                                                                      
                                                                                                                                
Mr. Teal specified that the  appropriation from the earnings                                                                    
reserve account (ERA) to the  dividend fund was changed from                                                                    
early  estimates to  a reduced  amount based  on the  latest                                                                    
Permanent Fund  projections. He stated  that the  amount was                                                                    
necessary  to  fulfill  the statutory  formula,  and  was  a                                                                    
conforming  or  technical  change  to  reflect  the  current                                                                    
estimates. He  furthered that the  same adjustment  was made                                                                    
to the GF appropriation to the  oil and gas tax credit fund;                                                                    
the  fallen oil  prices and  subsequent spring  forecast had                                                                    
reduced the formula amount to  approximately $30 million. As                                                                    
the email stated,  no conferee action was  required, and the                                                                    
new revised estimates would appear in the bill.                                                                                 
                                                                                                                                
9:50:51 PM                                                                                                                    
                                                                                                                                
Senator MacKinnon  stated that the  final budget had  been a                                                                    
difficult  decision  for  all parties,  and  more  work  was                                                                    
needed.  She  referred  to working  with  the  minority  and                                                                    
majority in  the House  and Senate  to complete  the budget;                                                                    
which addressed  the need  to cut, the  need to  invest, and                                                                    
the need  to compromise.  She stated that  there had  been a                                                                    
bipartisan, bicameral effort to  ensure that state employees                                                                    
did not  face pink  slips the  following day.  She expressed                                                                    
appreciation for the compromise  that occurred. She referred                                                                    
to  the  removal of  a  $100  million unallocated  cut;  and                                                                    
stated that the committee  did so with bipartisan, bicameral                                                                    
cooperation. She continued that  recurring cost savings were                                                                    
found  in  various areas:  $30  million  from Medicaid,  $10                                                                    
million  from Department  of Corrections,  $17 million  from                                                                    
power  cost  equalization  reform,   and  $30  million  from                                                                    
community revenue  sharing. She  referred to  the previously                                                                    
mentioned  $30   million  that  would  statutorily   not  be                                                                    
required  in  the  budget  calculation,  and  hoped  for  $5                                                                    
million to $15 million more in  savings from the oil and gas                                                                    
tax credit bill.  She added that the committee  had passed a                                                                    
bill that  created $9  million in  new revenue.  She thanked                                                                    
the  members for  their work.  She  emphasized that  savings                                                                    
were happening due  to the reform package of  bills that had                                                                    
been passed and supported by both bodies.                                                                                       
                                                                                                                                
9:54:32 PM                                                                                                                    
                                                                                                                                
Chair   Kelly  thought   that  the   state  should   observe                                                                    
significant  savings through  Medicaid reform  bill and  the                                                                    
crime reform bill. He estimated  the savings over the next 5                                                                    
years could be as much as $479 million.                                                                                         
                                                                                                                                
Senator Hoffman thought the deficit  problem was ongoing and                                                                    
pointed out that with a  $400 million reduction, there would                                                                    
still   be   a   substantial  $3.7   billion   deficit.   He                                                                    
acknowledged that  there were plans  to reduce  the deficit,                                                                    
and  hoped  that  the  legislature   could  address  it.  He                                                                    
emphasized that  there was  work to be  done, and  the major                                                                    
portion of the  deficit would continue even  with the action                                                                    
being taken in the meeting.                                                                                                     
                                                                                                                                
Representative Gara thanked Chair  Kelly and referred to the                                                                    
bipartisan Medicaid  reform bill  and a  bipartisan criminal                                                                    
reform  bill.  He emphasized  the  need  for compromise.  He                                                                    
thought that the goal of  finding $100 million in savings to                                                                    
offset the  $100 million  unallocated cut  "placeholder" had                                                                    
been achieved.                                                                                                                  
                                                                                                                                
9:58:15 PM                                                                                                                    
                                                                                                                                
Senator  MacKinnon remarked  that the  budget the  committee                                                                    
had  considered   was  under  the  targeted   $4.5  billion,                                                                    
including the  capital budget. She stated  that the unfunded                                                                    
portion of the  budget that would need to  be withdrawn from                                                                    
savings was  approximately $3.2 billion. She  commented that                                                                    
despite  rumors about  the legislature  moving from  Juneau,                                                                    
she would  be in  Juneau the following  day to  work towards                                                                    
advancing bills to  the Senate floor. She was  ready to look                                                                    
at the Permanent Fund, and  thought it was important to take                                                                    
care of  those who provided  services for Alaskans  in need.                                                                    
She  emphasized the  further  budget  reductions that  would                                                                    
happen the following year.                                                                                                      
                                                                                                                                
Vice-Chair Neuman  commented that  there had been  a sizable                                                                    
goal,  which  had  been accomplished,  to  achieve  a  total                                                                    
budget below  $4.5 billion. He  referred to  Medicaid reform                                                                    
and  criminal  justice reform.  He  noted  that he  had  put                                                                    
intent language in the budget  four years previously to form                                                                    
the  recidivism reduction  group, which  had formulated  the                                                                    
basis for  criminal justice  reform. He  wanted to  show the                                                                    
public  that  there had  been  legislation  proposed and  in                                                                    
place to further  reduce the budget. He referred  to HB 247,                                                                    
which would affect the FY  18 budget, and would show further                                                                    
reductions  in the  operating  budget  after addressing  tax                                                                    
credits in Cook Inlet.                                                                                                          
                                                                                                                                
Vice-Chair  Neuman  continued to  discuss  the  work of  the                                                                    
legislature, pointing out that  it had worked on legislation                                                                    
pertaining  to reform  of the  Public Employees'  Retirement                                                                    
System (PERS) and the Teacher's  Retirement System (TRS). It                                                                    
was   his   intent  to   bring   the   legislation  to   the                                                                    
municipalities,  and  continue  the  discussion  during  the                                                                    
interim and beyond. He thought it had been a "reform year."                                                                     
                                                                                                                                
10:01:55 PM                                                                                                                   
                                                                                                                                
Chair Kelly  discussed the  time that  was necessary  to put                                                                    
the budget  together, and thought  the first  budget meeting                                                                    
the  Senate  had  was  in  July of  the  previous  year.  He                                                                    
discussed  the Senate  Finance  Committee's  passage of  the                                                                    
budget in March,  and thought it had helped  to provide more                                                                    
time to  consider Medicaid and  criminal justice  reform. He                                                                    
thought logistics demanded that  the committee have time and                                                                    
access  to the  committee  room in  order  to have  numerous                                                                    
lengthy  meetings  necessary  to   consider  the  bills.  He                                                                    
referred  to  the  goal  of cutting  $400  million  to  $500                                                                    
million  from  the  budget.  He  restated  that  the  budget                                                                    
reductions  would  continue  into  the future,  due  to  the                                                                    
reform bills.                                                                                                                   
                                                                                                                                
Representative  Thompson  commented   on  the  collaboration                                                                    
between the  Senate and the  House.  He  expressed enjoyment                                                                    
at  having  worked with  Senator  MacKinnon  on the  capital                                                                    
budget. He thanked legislators and staff.                                                                                       
                                                                                                                                
10:04:58 PM                                                                                                                   
                                                                                                                                
Vice-Chair Neuman MOVED to REPORT  CCS HB 256 as amended out                                                                    
of  committee   with  individual  recommendations   and  the                                                                    
authorization be  given to the Legislative  Finance Division                                                                    
and  Legislative  Legal  Services   to  make  any  necessary                                                                    
technical   and/or  conforming   changes.  There   being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CCS HB  256 was REPORTED out  of committee with a  "do pass"                                                                    
recommendation.                                                                                                                 
                                                                                                                                
Vice-Chair Neuman MOVED to REPORT  CCS HB 257 as amended out                                                                    
of  committee   with  individual  recommendations   and  the                                                                    
authorization be  given to the Legislative  Finance Division                                                                    
and  Legislative  Legal  Services   to  make  any  necessary                                                                    
technical   and/or  conforming   changes.  There   being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CCS HB  257 was REPORTED out  of committee with a  "do pass"                                                                    
recommendation.                                                                                                                 
                                                                                                                                
Representative  Gara  recognized Representative  Chris  Tuck                                                                    
and  Representative  Mike Chenault  for  their  work on  the                                                                    
budget.                                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:06:08 PM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:06 p.m.                                                                                         
                                                                                                                                
                                                                                                                                

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