Legislature(2015 - 2016)
05/30/2016 09:19 PM Senate HB256
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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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