Legislature(2019 - 2020)SENATE FINANCE 532
04/26/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB39 || HB40 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 39 | TELECONFERENCED | |
| += | HB 40 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 26, 2019
9:42 a.m.
9:42:37 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:42 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Peter Micciche
Senator Donny Olson
Senator Mike Shower
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Cathy Giessel; Senator Gary Stevens; Senator Mia
Costello; Senator Chris Birch; Representative George
Rauscher; Pete Ecklund, Staff, Senator Bert Stedman.
SUMMARY
CSSSHB 39(FIN) am(brf sup maj fld)
APPROP: OPERATING BUDGET/LOANS/FUNDS
SCS CSSSHB 39(FIN) was REPORTED out of committee
with three "do pass" recommendations, three "no
recommendation" recommendations, and two "amend"
recommendations.
CSSSHB 40(FIN)
APPROP: MENTAL HEALTH BUDGET
SCS CSSSHB 40(FIN) was REPORTED out of committee
with four "do pass" recommendations, two "no
recommendation" recommendations, and two "amend"
recommendations.
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 39(FIN) am(brf
sup maj fld)
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
and providing for an effective date."
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 40(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."
9:43:12 AM
Co-Chair Stedman relayed that the committee would consider
amendments to the operating budget. He noted that many of
the amendments were to clean up the new draft of the bill.
Co-Chair Stedman introduced his staff, Pete Ecklund.
9:44:55 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 1(copy on
file).
Co-Chair Stedman OBJECTED for discussion.
Mr. Ecklund explained that the amendment was at the request
of the governor and was in three parts:
Part 1
Department: Military and Veterans Affairs
Appropriation: Military and Veterans Affairs
Allocation: Alaska Military Youth Academy
Add: $18.8 Fed Rcpts
$1.2 GF/Match
$6.5 Gen Funds
Explanation: This 4/19 Governors Amendment reverses
this allocations portion of the Executive Branch 50
percent travel reduction.
Part 2
Department: Revenue
Appropriation: Taxation and Treasury
Allocation: Tax Division
Transfer In: $1,153.6 UGF, 8 PFT positions and 1 Temp
PCN
Appropriation: Administration and Support
Allocation: Commissioners Office
Transfer Out: $1,153.6 UGF, 8 PFT positions and 1 Temp
PCN
Explanation: The Governors 2/13 budget transferred
the Economic Research Group from the Tax Division to
the Commissioner's Office. This amendment returns the
Economic Research (and associated positions) to the
Tax Division.
Part 3
Department: Commerce, Community and Economic
Development
Appropriation: Alaska Seafood Marketing Institute
Allocation: Alaska Seafood Marketing Institute
Add a new FY20 Language Subsection as follows:
Sec 10. Department of Commerce, Community, and
Economic Development.
(xx)Federal receipts received for the United States
Department of Agriculture, Agricultural Trade
Promotion program, estimated to be $5,497,900, are
appropriated to the Department of Commerce, Community,
and Economic Development, Alaska Seafood Marketing
Institute, for the fiscal years ending June 30, 2020,
June 30, 2021, and June 30, 2022.
Explanation: This 3/27 Governors Amendment adds
%4,497.9 federal receipt authority to reflect
available funding from the USDA Agricultural Trade
Promotion Program to Counter Retaliatory Tariffs. This
is a multi-year appropriation for FY20-FY22.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
9:46:18 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 2(copy on
file).
Co-Chair Stedman OBJECTED for discussion.
Mr. Ecklund said that the amendment would replace crime
victims' compensations funds with restorative justice funds
within the Department of Law:
Part 1
Department: Law
Appropriation: Criminal Division
Replace: $953.3 Crime VCF with Restorative Justice
Funding in the following allocations
Allocations:
First Judicial District $74.2
Second Judicial District $132.2
Third Judicial District: Anchorage $249.1
Third Judicial District: Outside Anchorage $264.9
Fourth Judicial District: $200.3
Criminal Appeals/Special Litigation: $32.6
Part 2
Department: Law
Appropriation: Criminal Division
Allocation: Second Judicial District
Delete: $46.7 UGF
Add: $46.7 Restorative Justice
Part 3
Department: Law
Appropriation: Violent Crime Compensation Board
Allocation: Violent Crime Compensation Board
Delete: $1,000.0 Crime VCF, Grants and Benefits line
Explanation:
The Senate CS reduced the capitalization of the Crime
Victim Compensation Fund by $1 million in order to
fund existing Department of Law positions that provide
services to crime victims and witnesses. Two issues
occurred in the Senate CS that need to be
addressed.
1. The subcommittee used the Crime Victim
Compensation Fund rather than
accessing the Restorative Justice Fund directly
for these positions.
2. The appropriation from the Violent Crime
Compensation fund was not reduced in the Violent
Crimes Compensation Board to reflect the $1
million reduction in
available funding.
PARTS l AND 2 adjust the Department of Law's funding
to reflect the replacement of $1 million Crime Victim
Compensation funding with Restorative Justice Funding
(formerly known as PFD Felon funds).
PART 3 reduces the appropriation to the Violent Crimes
Compensation Board by $1 million (from $2,178.2 to
$1,178.2) to reflect the amount of available funding.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
9:46:59 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 3(copy on
file).
Co-Chair Stedman OBJECTED for discussion.
Mr. Ecklund said that the amendment fixed a technical error
in the mental health bill:
Department: Executive Branch-wide Appropriations
Appropriation: Salary and Benefits Adjustments
Allocations: Alaska State Employees Association
Public Employees Local 71
Alaska Public Employee Association
Delete: All $553.1 of funding included on page 6 lines
26-33 and page 7, lines 3-4.
Explanation: Funding for the Executive branch salary
and benefit adjustments was inadvertently left in HB40
(the Mental Health bill). This amendment removes the
funding from this portion of the bill.
Co-Chair Stedman WITHDREW his objection. There being NO
further OBJECTION, it was so ordered.
9:47:41 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 4 (copy on
file).
Co-Chair Stedman OBJECTED for discussion.
Mr. Ecklund explained that the amendment dealt with
supplemental items in the operating budget. Parts A, B, and
C addressed issues from the Governors office; the Senior
Benefits intent language had been added by Co-Chair von
Imhof.
Part A
Department: Public Safety
Appropriation: Alaska State Troopers
Allocation: Alaska State Trooper Detachments
Add: $1.5 million UGF to Section 4
Explanation: The Senate CS removed $1.5 million of UGF
from AST Detachments to account for vacant positions.
However, DPS has indicated that "AST has historically
relied on excess personal services funding to cover
non-personal services costs. If personal services
funding is fully spent, then other lines will run
red."
This amendment restores the funding and aligns the
funding level with the Governor's supplemental request
for this allocation.
Part B
Department: Public Safety
Delete Language: Section 15. Supplemental Salary and
Benefit Adjustments.
Explanation: The FY2019 supplemental for the
Department of Public Safety positions includes funding
needed for the classification change effective in
FY2019. Since the supplemental funding addresses only
the classification increase, the language is not
necessary and section 15 should be removed from the
bill.
Part C
Department: Administration
Appropriation: Legal and Advocacy Services
Allocation: Office of Public Advocacy
Add: $900.0 UGF to Section 4
Explanation: Fund Projections for criminal case
support
Department: Corrections
Appropriation: Population Management
Allocation: Institution Directors Office
Add: $150.0 Fed Rcpts to Section 4
Explanation: Increased authorization for the equitable
sharing program. This federal program allows the
proceeds of liquidated seized assets from asset
forfeiture to be shared between the state and federal
law enforcement authorities.
Department: Corrections
Appropriation: Recidivism Reduction Grants
Allocation: Recidivism Reduction Grants
Add Language: $1,000.0 Fed Rcpts
Explanation: Increased federal authorization is
requested to accept and expend funding from a Bureau
of Justice Assistance (BJA) FY2018 Second Change Act
Statewide Adult Recidivism Reduction Strategic Plan
Implementation Program grant.
Add new section as follows:
* Sec. x."'. DEPARTMENT OF CORRECTIONS. Federal
receipts received for the Second Chance Act Statewide
Adult Recidivism Reduction Strategic Plan
Implementation Program grant, estimated to be S
1,000,000, ate appropriated to the Department of
Corrections, Recidivism reduction grants, for the
fiscal years ending June 30, 2019 and June 30, 2020.
Part D
Department: Health and Social Services
Appropriation: Senior Benefits Payment Program
Page 53, following line 4 (supplemental section):
Add Intent (Appropriation Level):
It is the intent of the legislature that this
appropriation be used for Senior Benefit payments
suspended at the end of FY 19 due to insufficient
funding. It is further the intention of the
legislature that funding in this appropriation may not
be used for any purpose other than payment of benefits
for the Senior Benefit Payment Program.
Explanation: This intent language ensures that FY19
supplemental funding be used for Senior Benefit
payments suspended at the end of FY19 and that funding
may NOT be used for any purpose other than to fund
Senior Benefit payments.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
9:49:54 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 5, 31-
GH1905\I.7 (Bruce, 4/24/19) (copy on file).
Co-Chair Stedman OBJECTED for discussion.
Co-Chair Stedman addressed the amendment:
Page 61, following line 30:
Insert a new subsection to read:
(g) The amount authorized under AS 37.13.145(b)
for transfer by the Alaska Permanent Fund
Corporation on June 30, 2019, estimated to be
$1,944,000,000, is appropriated from the general
fund to the dividend fund (AS 43.23.045(a)) for
the payment of permanent fund dividends and for
administrative and associated costs for the
fiscal year ending June 20, 2020.
Reletter the following subsection accordingly.
Page 61, line 31:
Delete appropriation made in (f)
Insert appropriations made in (f) and (g)
Page 83, lines 19-20
Delete 19(a) (e) and (g)
Insert 19(a) (e), (g), and (h)
Co-Chair von Imhof commented that paying out a $3,000
dividend would put financial pressure on the state and
would require another $1.2 billion draw from unknown
reserves. She asserted that that state should live within
its means and pay a dividend it could afford, while
providing a reasonable level of state services. She
supported the amendment only under the premise that it
would be further discussed in conference committee on the
operating budget.
Senator Hoffman requested to be added as a co-sponsor.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
Senator Hoffman, Senator Wilson, Senator Olson, Senator
Wielechowski, and Senator Micciche asked to be shown as co-
sponsors of Amendment 5.
9:52:52 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 6, 31-
GH1905\I.8, (Bruce, 4/25/19) (copy on file).
Co-Chair Stedman OBJECTED for discussion.
Co-Chair Stedman spoke to the amendment:
Page 62, following line 4
Insert a new subsection to read:
"(h) After the appropriations made in (a) -(g) of this
section. the remaining balance of the earnings reserve
account (AS 37.13.145), not to exceed $14,000,000,000,
is appropriated from the earnings reserve account (AS
37.13.145) to the principal of the Alaska permanent
fund.
Page 83, lines 19-20:
Delete 19(a) (e) and (g)
Insert 19(a) (e), (g), and (h)
Senator Micciche expressed concern with the amendment. He
worried that a future downturn of oil could put the state
in the position where it could not provide for critical
constitutionally required services or pay out a dividend.
He thought that $14 billion was too high a number.
Co-Chair von Imhof supported the amendment. She relayed
that there was $18 billion currently in the earnings
reserve account (ERA), the $14 billion would go into the
corpus and protect it for future generations while allowing
for a POMV draw in 2020. She felt that the amendment could
protect against ad hoc draws on the ERA.
9:56:21 AM
Senator Olson was concerned that the amendment would put
such a large amount of money out of reach for spending on
day-to-day budgetary needs for state services.
9:56:54 AM
Senator Wielechowski wondered how much would be left in the
ERA after the POMV draw.
9:57:08 AM
AT EASE
9:58:16 AM
RECONVENED
Co-Chair Stedman explained that the ERA would still contain
approximately $1 billion after the $14 billion sweep and
the dividend payout and several other small clean-up
transactions. He noted that the permanent fund portfolio
was over $60 billion, with a targeted return of
approximately 6 percent per year. He felt that the
resources would be ample to cover state spending. He
relayed that further discussion would happen during the
conference committee on the operating budget.
9:59:32 AM
Senator Wielechowski thought that the amendment posed a
great risk. He noted that the $1 billion left in the ERA
would not be enough to pay a dividend in 2020 and that
there would be no money left to fund government. He
supported rolling the ERA into the corpus and adopting a
constitutional framework.
10:00:24 AM
Co-Chair Stedman asserted that the ERA had been near zero
before and dividends had been paid. He reiterated that the
portfolio was colossal and would not take long to
accumulate enough funds to fund government spending.
10:01:00 AM
Co-Chair von Imhof was pleased that Senator Wielechowski
was willing to roll the ERA into the corpus and putting it
in the constitution. She stressed that even with the move
of $14 billion from the ERA into the corpus, the state
would have money to pay out a 2020 dividend, and fund the
state budget, through the POMV draw. She stated that a
25/75 split would result in a $1,200 dividend, which was
more than the average amount paid out over the past 35
years.
10:02:03 AM
Senator Wielechowski had sponsored permanent fund
legislation in 2010. He recalled that the Alaska Permanent
Fund Corporation (APFC) had sold assets, at a reduced rate,
in order to pay out a dividend for 2011. He thought that
this action could force the corporation to sell assets at a
loss in order to pay a dividend, which did not benefit the
long-term health of the fund. He disagreed that money could
be taken from the corpus, money could only be taken out of
the ERA; taking money from the corpus required a change to
the constitution.
Co-Chair Stedman was concerned that the state had expended
billions from the constitutional budget reserve (CBR) in
the preceding years. He thought the amendment was a balance
between meeting obligations and protecting the permanent
fund.
10:04:08 AM
Senator Olson thought Co-Chair Stedman brought up a good
point in that in 2008 through 2010 there was a difficult
financial situation in the world and in the state. He
recalled the work that had been done then to assure that
residents received dividends. He expressed hesitation at
the idea of a constitutional amendment.
10:05:12 AM
Senator Micciche thought the reality was that the state was
dependent upon a single commodity. He remarked that if the
value of that commodity dropped substantially and there was
no revenue other than the POMV, and everything other that $
billion collapsed, the legislature would not have the
ability to draw from the corpus. He wondered whether
further analysis could be provided on the amendment.
Co-Chair Stedman reassured Senator Micciche that there was
enough financial room to deal with state obligations after
the transfer that was proposed in the amendment. He
reminded that the action of the committee was not the final
action on the bill. He asserted that the legislature needed
to take effective action to protect the fund. He emphasized
that the permanent fund was not for the current generation
to squander. He expressed full confidence in his
conversations with Co-Chair von Imhof concerning the
possible exposure the state could face. He did not believe
that the fund would be adversely affected.
10:08:30 AM
AT EASE
10:12:46 AM
RECONVENED
Senator Wilson expressed support for the amendment.
10:13:39 AM
Senator Micciche MOVED to AMEND Amendment 6 with a
conceptual amendment that would replace the number
"$14,000,000,000" with the number "$12,000,000,000" on line
4.
Co-Chair Stedman OBJECTED for discussion.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, the conceptual amendment to Amendment 6
was adopted.
10:14:53 AM
Senator Wielechowski supported the change in Amendment 6.
Senator Bishop thought the amendment addressed the topic of
solidifying and maintaining the operating budget as well as
a dividend.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 6 was ADOPTED as AMENDED.
10:15:59 AM
Senator Micciche MOVED to ADOPT Amendment 7(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Micciche spoke to the amendment:
Department: Health and Social Services
Appropriation: Senior Disabilities Svcs
Allocation: Governors Cncl/Disabilities
Transaction Details
Title: Restore 50 percent Travel Reduction
Section: Section 1
Type: Inc
Explanation: The Governor's Council on Disabilities
and Special Education holds three full council
meetings each year. Council members come from across
the state and include Alaskans with varying levels of
developmental and intellectual disabilities. The
Councils travel is not paid for with unrestricted
general funds.
Senator Micciche stated that the amendment would add $49
thousand for the Council to do business with a slight
restriction.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:16:50 AM
Senator Wilson MOVED to ADOPT Amendment 8(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Wilson spoke to the amendment:
Department: Corrections
Appropriation: Health and Rehab Services
Allocation: Physical Health Care
Transaction Details
Title: Fully Fund Governors Request for Increased
Medical Costs
Section: Section 1
Type: Inc
Explanation: Fully Fund Governor's Amendment
Requesting Funding for Increased Costs for Medical
Fees, Chronic Disease, Nursing Shortages, and
Pharmaceuticals. The department estimates that 80% of
this cost is related to a new national standard of
care for inmates who are Hepatitis C positive.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:17:39 AM
Senator Micciche MOVED to ADOPT Amendment 9(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Micciche spoke to the amendment:
Part 1
Department: Corrections
Appropriation: Population Management
Allocation: Institution Directors Office
Add: $18,017.2 UGF Services
Explanation: This action reduces the unallocated
reduction to a level that reflects the actual savings
achieved by moving inmates out of institutions and
into Community Residential Centers or onto Electronic
Monitoring is calculated using the marginal rate. With
the restoration of this unallocated reduction, the
department will not close any correctional
institutions.
Part 2
Department: Corrections
Appropriation: Population Management
Allocation: Out of State Contractual
Delete: $3557.5 UGF Services
Add Conditioning: Add the following conditional
wordage at the Population Management appropriation
level: "The amount appropriated by this appropriation
may not be used to send inmates to out-of-state
facilities unless medically necessary."
Explanation: Funding for Out-of-State Contractual
services is reduced to the FY19 level of $300.0 CCGF,
and conditional language is added to preclude
prisoners from being sent to out-of-state facilities
unless medically necessary.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
Senator Micciche asked to be shown as a co-sponsor of the
amendment.
10:18:43 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 10, 31-
GH1905\I.5, (Bruce, 4/24/19).
Co-Chair Stedman OBJECTED for discussion.
Co-Chair von Imhof spoke to the amendment:
Part 1
Department: Governor
Appropriation: Commissions/Special Offices
Allocation: Redistricting Board
Transaction Details
Title: Remove Multi-Year Redistricting Funding
Section: Language
Type: Lang
Explanation: Remove the multi-year appropriation for
redistricting costs associated with the 2020 Census.
Part 2
Page 67, line 18:
Delete (a)
Page 67, lines 22-25:
Delete all material.
Co-Chair von Imhof explained that the two-part amendment
would remove a language section appropriation in the bill
for 2020 census redistricting. She shared that the work
would begin in FY2021, after the first batch of census data
was released in October 2020. She believed that it was
prudent to wait to make the large, multi-year appropriation
for an issue that was not a pressing need.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:19:45 AM
Co-Chair Stedman MOVED to ADOPT Amendment 11(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Co-Chair von Imhof spoke to the amendment:
Department: Labor and Workforce Dev
Appropriation: Commissioner and Admin Svcs
Allocation: Labor Market Information
Transaction Details
Title: 2020 Census Complete Count Promotion
Section: Section 1
Type: IncOTI
Explanation: This one-time funding is for multi-agency
2020 Census promotion, outreach, and other efforts to
ensure a complete and accurate count for Alaska. This
funding may be used for address and response
verification, response promotion and outreach for
hard-to-count Alaska populations.
Co-Chair von Imhof explained that a complete and accurate
census count was critical to the state and Alaska received
$3.2 billion in census based federal funding each year. She
added that representative democracy required an accurate
census to assure that Alaskans were equally represented.
She said that the funding would support multi-agency
efforts for an accurate census count.
Co-Chair Stedman WITHDREW his OBJECTION.
Senator Bishop asked to be listed as a co-sponsor of the
amendment.
10:21:21 AM
Senator Wilson OBJECTED to the amendment.
Senator Wilson wanted to clarify which agency would receive
the funding.
Co-Chair von Imhof understood that the funding would go to
the Department of Labor and Workforce Development to
coordinate with other agencies as needed.
Senator Bishop thought that the funds would go to the
division of research analysis.
Senator Wilson WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:22:19 AM
AT EASE
10:22:51 AM
RECONVENED
Co-Chair Stedman OBJECTED to Amendment 11 for purposes of
discussion. He noted that Senator Shower was on the line
and was having sound difficulties.
Senator Shower asked for time to address the sound issue.
10:23:46 AM
AT EASE
10:24:20 AM
RECONVENED
Senator Shower did not have comments or concerns on
Amendment 11.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:24:45 AM
Senator Micciche MOVED to ADOPT Amendment 12(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Micciche explained the amendment:
Department: Environmental Conservation
Appropriation: Environmental Health
Allocation: Environmental Health
Transaction Details
Title: Dairy Inspection
Section: Section 1
Type: FndCng
Explanation: The currently operating dairy in Alaska
has expressed a willingness to pay to support
continuing the regulatory dairy program for FY2020.
This amendment would provide for a one-time
appropriation of statutory designated program receipt
authority in the Division of Environmental Health to
accept that payment to replace $15.0 of the $180.0 UGF
subsidy required to maintain the program. The
Department will be expected to put in place fees
related to the regulation of Grade A milk and milk
products by FY2021 to reduce the UGF subsidy of the
dairy program. The Alaska dairy industry is not
responsible for the non-dairy functions of the
inspector.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:26:56 AM
Co-Chair von Imhof MOVED to ADOPT Amendment 13(copy on
file).
Co-Chair Stedman OBJECTED for discussion.
Co-Chair von Imhof spoke to the amendment:
Department: Education and Early Dev
Appropriation: Alaska Postsecondary Education
Allocation: WWAMI Medical Education
Transaction Details
Title: Increase to Support WWAMI Contractual
Obligation
Section: Section 1
Type: Inc
Explanation: A $77.3 increment to WWAMI funding is
necessary to support the FY2020 increased WWAMI
contractual obligation amount with the University of
Washington to reserve seats for Alaskan students.
Co-Chair von Imhof explained that the committee had
conducted a hearing on the program in March 2019. She
relayed that it had been found that the program bolstered
homegrown Alaska primary care doctors, many of which served
in rural Alaska. She stated that the investment in the
program was more effective than building an in-state
medical school. She proposed fully funding the program and
related that she was working with the university and other
stakeholders to establish non-state financial support for
the program, and increased payback provisions from
graduates, to maintain the program and establish financial
independence form the state.
Co-Chair Stedman WITHDREW his OBJECTION.
Senator Wilson OBJECTED to the amendment. He spoke to his
objection. He thought that more pressure should be put on
the university and the program to offset costs.
10:29:38 AM
AT EASE
10:29:49 AM
RECONVENED
Senator Olson questioned whether the amendment would
adversely affect the ability of the higher education fund
to fund other programs.
Co-Chair von Imhof responded that the fund currently
totaled $340 million.
10:30:53 AM
AT EASE
10:31:40 AM
RECONVENED
Co-Chair von Imhof addressed Senator Olson's question, and
noted that analysis showed that the fund would be able to
cover its current obligations, in addition to providing
funds for WWAMI.
Senator Wilson MAINTAINED his OBJECTION.
A roll call vote was taken on the motion to adopt Amendment
13.
IN FAVOR: Olson, Wielechowski, Bishop, Hoffman, Micciche,
von Imhof, Stedman
OPPOSED: Shower, Wilson, Olson
The MOTION PASSED (7/2). There being NO further OBJECTION,
Amendment 13 was ADOPTED.
[NOTE: With the permission of the committee, Senator Olson
changed his vote from nay to yea.]
10:33:23 AM
Senator Wilson MOVED to ADOPT Amendment 14(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Shower spoke to the amendment:
Department: Natural Resources
Appropriation: Administration and Support
Allocation: Commissioners Office
Transaction Details
Title: Reconstitute the CACFA Executive Director
Section: Section 1
Type: Inc
Explanation: Reconstitute the Citizens' Advisory
Commission on Federal Areas (CACFA) Executive Director
position and fund CACFA to cover travel for Commission
meetings, ensure the Department of Interior properly
implements the SCOTUS Sturgeon ruling and applies
Sturgeon caselaw to navigable rivers statewide. SLM
and other federal land management plans continue to
systematically erode Alaskan's traditional access and
use rights on federal lands as promised under ANILCA.
The increment is required for an executive director to
monitor federal actions, coordinate CACFA meetings,
write a newsletter, and commission travel for at least
twice a year face to face public meetings. These
meetings regularly invite federal land managers to the
table for discussions as well as take testimony from
affected Alaskans.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:34:44 AM
Senator Bishop MOVED to ADOPT Amendment 15(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Bishop spoke to the amendment:
Department: Natural Resources
Appropriation: Agriculture
Allocation: N. Latitude Plant Material Ctr
Transaction Details
Title: Implementation of the Industrial Hemp Program
Section: Section 1
Type: Inc
Explanation: This will pay for a program authorized
last year by the legislature with the passage of
Senate Bill 6 to require the Department of Natural
Resources to regulate the production of industrial
hemp. The agency expects draft regulations to be ready
for public notice by May 15, 2019, and final
regulations to be in place by October 2019.
The $375,000 in General Fund/Program Receipts (DGF)
will come from fees to recoup costs associated with
the program such as handling applications, product
registrations, and laboratory tests.
The original budget request was for $500,000. Because
final regulations will not be in place until September
or October, the $375,000 in this amendment represents
a pro rata funding level for nine months of Fiscal
Year 2020.
Senator Bishop noted that the division had received more
public interest on the subject than any other in recent
history.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:35:48 AM
Co-Chair Bishop MOVED to ADOPT Amendment 16(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Bishop explained the amendment:
Department: Health and Social Services
Appropriation: Medicaid Services
Allocation: Medicaid Services
Transaction Details
Title: Exempt dual federal designation hospitals from
5 percent Medicaid rate reduction
Wordage Type: Intent
Linkage: Appropriation Medicaid Services
Wordage: It is the intent of the legislature to exempt
hospitals with the dual federal designation of Sole
Community Hospital and Rural Referral Center in
addition to Critical Access Hospitals from the 5%
Medicaid rate reduction.
Explanation: The Critical Access Hospital designation
is designed to reduce the financial vulnerability of
rural hospitals and improve access to healthcare by
keeping essential services in rural communities.
Similarly, the Sole Community Hospital and Rural
Referral Center federal designations play vital roles
in ensuring isolated communities have access to
hospital care.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:36:38 AM
Senator Olson MOVED to ADOPT Amendment 17(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Olson explained the amendment:
Department: Public Safety
Appropriation: Village Public Safety Officers
Allocation: Village Public Safety Officer Commissioner
Galvin
Transaction Detail
Title: VPSO intent
Wordage Type: Intent
Linkage: Appropriation Village Public Safety
Officers
Wordage: It is the intent of the legislature that the
Department of Public Safety collaborate with the
Village Public Safety Officer (VPSO) grantees to
develop a recruitment and retention plan to reverse
the trend of high turnover and recruitment challenges;
and report to the Finance Committee Co-Chairs on
January 31, 2020 as to the status of the development
of this plan and any steps taken to address this
issue.
Explanation: For several years there have been
problems with recruiting and retaining VPSOs, yet we
have heard nothing of actions proposed to reverse that
trend. We want the VPSO grantees to work with the
Department to develop a plan to turn that around.
Co-Chair Stedman WITHDREW his OBJECTION.
Senator Micciche OBJECTED for discussion. He asked to be
listed as a co-sponsor of the amendment.
Senator Micciche, Senator Bishop, and Senator Wielechowski
asked to be listed as co-sponsors of the amendment.
Senator Micciche WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:37:52 AM
Senator Micciche MOVED to ADOPT Amendment 18.
Co-Chair Stedman OBJECTED for discussion.
Senator Micciche spoke to the amendment:
Department: Public Safety
Appropriation: Statewide Support
Allocation: Civil Air Patrol
Transaction Details
Title: Partial Restoration of Funding for the Civil
Air Patrol
Section: Section 1
Type: IncM
Explanation: Partial restoration of funding for the
Civil Air Patrol. The FY19 funding level was $350.0
UGF. This increment provides a total of $250.0 UGF for
FY20.
Co-Chair Stedman WITHDREW his OBJECTION.
Senator Bishop OBJECTED for discussion.
Senator Bishop, Co-Chair von Imhof, Senator Wilson, Senator
Olson, Senator Micciche, Co-Chair Stedman, and Senator
Hoffman asked to be listed as co-sponsors on the amendment.
Senator Bishop WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
10:39:37 AM
Senator Hoffman MOVED to ADOPT Amendment 19(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Hoffman noted that the amendment was revenue
neutral. He spoke to the amendment:
Department: University
Appropriation: University of Alaska
Allocation: Fairbanks Campus
Add: $825,000 UGF
Positions:
Add: 1 PFT position
Department: University
Appropriation: University of Alaska
Allocation: Statewide Campus Additions and Reductions
Delete: $825,000 UGF
Explanation: Educators Rising, is a national
organization that helps steer high school students to
the teaching profession. Educators Rising Alaska,
managed at the University of Alaska, encourages
Alaskan high school students to consider and begin
preparation early for careers as educators in Alaska's
schools. Students participate in an education career
pathway that consists of four courses taken as
electives while in high school. Participating schools
schedule the courses and also offer activity
opportunities each for March. the students to compete
in the Career Technical Skills Organization (CTSO)
This amendment would broaden the existing program with
the goal of increasing the number of and support;
home-grown training; updated student Alaskan online
educators. Funds would be allocated towards: teacher
leader recruitment and training, student recruitment,
leadership training and student travel; school
coordinator support; updated online resources and
program data tracking; regional and community efforts
to increase program visibility, capacity, and
sustainability; administrative support for increased
program activities around the state; middle-school
curriculum development to complement the existing high
school career pathway.
Senator Hoffman asked for the support of the committee.
Co-Chair Stedman WITHDREW his OBJECTION.
Senator Micciche OBJECTED for the purpose of discussion.
Senator Micciche clarified that the amendment was not an
additional cost, but rather a shift of funds.
Senator Micciche WITHDREW his OBJECTION.
Co-Chair von Imhof OBJECTED for discussion. She reiterated
that these would not be additional funds but moving money
from one campus to another. She understood that the
amendment was at the request of the university president.
Senator Hoffman clarified that he had requested information
on how the teacher shortage could be addressed and the
president had communicated that the program could be funded
through this mechanism.
Co-Chair von Imhof restated that the funds were not new,
but receipt authority moving from one campus to another.
Co-Chair von Imhof WITHDREW her OBJECTION.
10:44:13 AM
Senator Bishop OBJECTED for discussion.
Senator Bishop and Senator Shower asked to be shown as co-
sponsors of the amendment.
Senator Bishop WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered. Amendment 19 was
adopted.
10:44:44 AM
Senator Wilson MOVED to WITHDRAW Amendment 20. There being
NO OBJECTION, it was so ordered.
10:45:04 AM
Senator Wielechowski MOVED to ADOPT Amendment 21.
Co-Chair Stedman OBJECTED for discussion.
Senator Wielechowski explained that the current budget
included a significant reduction to the Alaska Marine
Highway System (AMHS), and the amendment would add back
$19.528 million from the general fund and would include an
additional $5.6 million from AMHS receipts. He felt that
the cuts to the system had gone too far. He said under the
proposal there would be 4 runs to Dutch Harbor, 2 at the
beginning of the summer and 2 at the end of the summer.
Additionally, Prince William Sound would receive
consistent, but limited, services during the winter; and a
limited baseline of service would be restored to Southeast,
December through April, to move freight, passengers, and
commerce. He said that the investment would generate $5.7
million in AMHS revenue. He noted that the cut to the
system would still be 28 percent. He said that he would
withdraw the amendment with the hope that there would be
continued discussion on the matter.
Senator Wielechowski MOVED to WITHDRAW Amendment 21. There
being NO OBJECTION, it was so ordered.
10:47:10 AM
Senator Micciche MOVED to ADOPT Amendment 22.
Co-Chair Stedman OBJECTED for discussion.
Senator Micciche spoke to the amendment. He noted that the
house had added back in funding cut by the governor in his
budget proposal. The amendment would reduce the house
number by university by $5 million. He thought there was
room for the University to tighten up and prioritize
spending.
10:47:51 AM
Senator Hoffman requested an at ease.
10:47:53 AM
AT EASE
10:51:02 AM
RECONVENED
Co-Chair Stedman reminded that there was an objection to
Amendment 22.
Senator Micciche explained that the number considered in
the amendment meant the item would not be conferenceable.
He thought it was possible that the reduction could be
reduced further if the house number were maintained, and
the item was discussed during the conference committee on
the operating budget.
Senator Micciche MOVED to WITHDRAW Amendment 22. There
being NO OBJECTION, it was so ordered.
10:51:59 AM
Senator Micciche MOVED to ADOPT Amendment 23(copy on file).
Co-Chair Stedman OBJECTED for discussion.
Senator Micciche spoke to the amendment:
Page 20, following line 12:
Insert new material to read:
"It is the intent of the legislature to exempt from
the five percent Medicaid rate reduction proposed by
the Department of Health and Social Services skilled
nursing facilities and senior and disabilities
services providers (nursing homes, section 191 S{c) of
the Social Security Act and other waiver service
providers, and personal care attendant services) who
serve vulnerable Alaskans."
Co-Chair von Imhof OBJECTED for discussion.
Co-Chair von Imhof said that the amendment would cost $8
million in UGF for Medicaid. She said that the governors
proposed reduction in Medicaid Phase 1 Cost Containment had
been accepted when issue had been discussed in
subcommittee.
Senator Olson voiced his support for the amendment.
Co-Chair Stedman MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Wilson, Olson, Wielechowski, Hoffman, Micciche,
Shower, Bishop
OPPOSED: Stedman, von Imhof
The MOTION PASSED (7/2). There being NO OBJECTION,
Amendment 23 was ADOPTED.
10:54:41 AM
Senator Micciche MOVED to ADOPT Amendment 24.
Co-Chair Stedman OBJECTED for discussion.
Senator Micciche spoke to the amendment:
Department: Health and Social Services
Structural Change
New Structure Appropriation: Senior and Disabilities
Medicaid Services
Allocation: Senior Disabilities Medicaid Services
TRANSFER the following amounts:
$219,161.4 GF/Match
$292,961.3 Federal
$11,915.5 UGF
$473.3 Inter-agency receipts
$502.2 Statutory Designated Program Receipts
Total Funds $524,968.7
FROM the current Medicaid Service
appropriation/Medicaid Services allocation
TO the proposed new appropriation/allocation for
Senior Disabilities Medicaid Services.
Explanation: This amendment establishes Senior and
Disabilities Medicaid Services in a single
appropriation/allocation and reduces the amount by $50
million From the amount budgeted in the FY 19
Management Plan. The $50 million consists of$20.9 UGF
Match, $27.9 Fed, $1.1 UGF, $0.05 I/A and $0.05 SDPR
reductions.
Co-Chair von Imhof OBJECTED to the amendment. She asserted
that the Health and Social Services subcommittee had
combine three Medicaid allocations into a single allocation
in order to break down silos and streamline processes to
promote efficiencies and cost savings. She contended that
the administration estimated that the amendment would
increase administrative costs by adding 2000 hours of
additional processing time. She was concerned that money
could be added to the budget when there had been so much
discussion about trying to reduce spending. She argued that
the amendment would create more bureaucratic red tape and
would make no difference in the day-to-day operations of
health care providers or Medicaid beneficiaries.
Senator Wilson understood the difficulty of ensuring that
providers were paid. He thought there was an issue with
funds being swept into other areas to cover shortfalls.
Co-Chair Stedman MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Olson, Wielechowski, Micciche
OPPOSED: Bishop, Hoffman, Shower, Wilson, von Imhof,
Stedman
The MOTION to adopt Amendment 24 FAILED (3/6).
10:58:20 AM
Senator Micciche MOVED to ADOPT Amendment 25.
Co-Chair Stedman OBJECTED for discussion.
10:59:29 AM
Senator Micciche spoke to the amendment:
Page 74, lines 6 - 7:
Delete "amount necessary for state aid for costs
of school construction under AS 14.11.100,
estimated to be $99,820,500,"
Insert "sum of $74,865,375"
Page 74, line 8, following "Development"
Insert "for state aid for costs of school
construction under AS 14.11.100"
Page 74, lines 10-11:
Delete the amount necessary, after the
appropriation made in (l) of this subsection,
estimated to be $83,320,500,
Insert $58,365,375
Page 76, line 5:
Delete $39,389,000
Insert $29,541,750
Senator Micciche said that the amendment was meant to
highlight the fact that there are impacts to everybody
wanting everything. He thought that it was important for
the public to engage on what they want because nothing was
scott free.
Senator Micciche MOVED to WITHDRAW Amendment 25. There
being NO OBJECTION, it was so ordered.
11:00:03 AM
Senator Wilson MOVED to WITHDRAW Amendment 26. There being
NO OBJECTION, it was so ordered.
Co-Chair von Imhof MOVED that the committee direct the
Division of Legislative Finance and Legislative Legal to
make technical and conforming changes to the bill, as
necessary.
Co-Chair Stedman explained that the bill would be drafted,
as amended, and would be moved from committee later in the
day. The bill would then be released to the public and
would be before the committee on Monday, April 29, 2019.
11:01:46 AM
RECESSED
4:10:26 PM
RECONVENED
Co-Chair Stedman called the committee back to order. He
noted that a committee substitute had been written for the
two bills on agenda. //
Co-Chair von Imhof MOVED to ADOPT proposed committee
substitute for CSSSHB 40(FIN), Work Draft 31-GH1901\G
(Bruce, 4/26/19).
Co-Chair Stedman OBJECTED for discussion.
4:11:37 PM
Mr. Ecklund discussed the CS. He relayed that one change
had been made to correct an oversight in the previous
version. There was a section of the bill that had salary
adjustments confined to one portion of the bill, which were
intended to be spread throughout the agencies.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
Co-Chair von Imhof MOVED to report SCS CSSSHB 40(FIN) out
of Committee with individual recommendations. There being
NO OBJECTION, it was so ordered.
SCS CSSSHB 40(FIN) was REPORTED out of committee with four
"do pass" recommendations, two "no recommendation"
recommendations, and with two "amend" recommendations.
4:13:01 PM
Co-Chair von Imhof MOVED to ADOPT proposed committee
substitute for CSSSHB 39(FIN), Work Draft 31-GH1905\D
(Bruce, 4/26/19).
Co-Chair Stedman OBJECTED for discussion.
Co-Chair Stedman noted that there had been a series of
amendments adopted in the morning meeting.
Mr. Ecklund discussed the CS. He referenced a report from
the Legislative Finance Division (LFD) entitled
"Unrestricted General Funds," (copy on file). He summarized
that there was $3.8 billion in agency operations and $526
million in statewide operations, for a total of $4.3
billion, $1.700 less than the house in UGF for agency
operations. He said that when dividend spending was added
in the total UGF spend in the budget was $6.3 billion.
4:14:42 PM
Mr. Ecklund remarked that the cs reflected $11.5 billion in
all funds and stated that there would be reports on the LFD
website for the public to consider.
4:15:23 PM
Senator Wielechowski asked for an explanation of the PFD
payment. He asked whether the 5.35 percent had been taken
out to pay for the dividend and state operations or was an
additional amount taken out to pay for the deficit.
Mr. Ecklund explained that the way the appropriation was
structured, a 5.25 percent POMV payout went first to the
general fund, then whatever amount the legislature decided
upon was paid from the general fund to the dividend fund.
The conference committee on the operating budget would need
to decide, if there was going to be a deficit, how the
budget would be balanced.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered. The SCS for CSSSHB
39(FIN) was ADOPTED.
Co-Chair von Imhof MOVED to report SCS CSSSHB 39(FIN) out
of Committee with individual recommendations. There being
NO OBJECTION, it was so ordered.
SCS CSSSHB 39(FIN) was REPORTED out of committee with three
"do pass" recommendations, three "no recommendation"
recommendations, and with two "amend" recommendations.
Co-Chair Stedman thanked the committee for their work and
discussed housekeeping.
ADJOURNMENT
4:17:49 PM
The meeting was adjourned at 4:17 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 39 Operating Budget Amendment Packet.pdf |
SFIN 4/26/2019 9:00:00 AM |
HB 39 |
| HB 39-HB 40 Adopted Amendments 042619.pdf |
SFIN 4/26/2019 9:00:00 AM |
HB 39 HB 40 |
| HB 39 Work Draft Version D.pdf |
SFIN 4/26/2019 9:00:00 AM |
HB 39 |
| HB 40 Work Draft Version G.pdf |
SFIN 4/26/2019 9:00:00 AM |
HB 40 |