Legislature(2021 - 2022)
06/13/2021 09:00 AM Senate CONFERENCE COMMITTEE ON HB69 AND HB71
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| Audio | Topic |
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| Start | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
32nd ALASKA STATE LEGISLATURE
FIRST SESSION
SPEICAL SESSION
CONFERENCE COMMITTEE ON HB 69 and HB 71
June 13, 2021
11:42 a.m.
11:42:32 AM
CALL TO ORDER
Chair Foster called the Conference Committee meeting on HB
69 and HB 71 to order at 11:42 a.m.
MEMBERS PRESENT:
House:
Representative Neal Foster, Chair
Representative Kelly Merrick
Representative Bart LeBon
Senate:
Senator Bert Stedman, Vice-Chair
Senator Click Bishop
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT:
Alexei Painter, Director, Legislative Finance Division
SUMMARY
HB 69 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 69 was HEARD and HELD in committee for further
consideration.
HB 71 APPROP: MENTAL HEALTH BUDGET
HB 71 was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 69(FIN) am(brf sup maj fld)(efd fld)
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; and making capital appropriations,
supplemental appropriations, and reappropriations."
SCS CSHB 69(FIN) AM S
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making capital appropriations,
supplemental appropriations, and reappropriations; and
providing for an effective date."
and
CS FOR HOUSE BILL NO. 71(FIN) am
"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. 71(FIN)
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; making capital
appropriations and supplemental appropriations; and
providing for an effective date."
11:42:57 AM
Chair Foster invited Alexei Painter, Director of the
Legislative Finance Division to join the committee at the
table. He noted that the committee would be addressing open
items in HB 69 and HB 71 based on the motion sheets
distributed to members and dated June 13th (copy on file)
on the departments of:
FY 21 SUPPLEMENTAL OPERATING BUDGET
DEPARTMENT OF PUBLIC SAFETY
FUND TRANSFERS
FY 21 SUPPLEMENTAL CAPITAL BUDGET
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT
DEPARTMENT OF FISH AND GAME
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
DEPARTMENT OF NATURAL RESOURCES
DEPARTMENT OF REVENUE
EXECUTIVE BRANCH WIDE UNALLOCATED APPROPRIATIONS
FY 22 CAPITAL BUDGET
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT
DEPARTMENT OF NATURAL RESOURCES
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
FY 22 OPERATING BUDGET
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT
DEPARTMENT OF PUBLIC SAFETY
FUND CAPITALIZATION
PERMANENT FUND
FUND TRANSFERS
Chair Foster relayed that the committee would begin with FY
22 Operating Budget items for the Department of
Environmental Conservation, Department of Health and Social
Services, and Department of Public Safety.
FY 22 OPERATING BUDGET: DEPARTMENT OF ENVIRONMENTAL
CONSERVATION
11:43:36 AM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Environmental
Conservation budget:
Item 1 Senate All Items
Item 2 House
Representative LeBon OBJECTED. He spoke to item 2 regarding
detailed remediation plans for contaminated sites and site
identification. He discussed that there were commercial and
residential sites with contamination. He expected the focus
would be on commercial sites. He highlighted residential
properties that may have a heating oil tank leak that was
not considered material versus a former gas station
commercial property that would be material. He stated that
the number of potential sites totaled in the thousands. He
believed the effort should focus on commercial sites first.
He WITHDREW his OBJECTION.
There being NO further OBJECTION, items 1 and 2 within the
Department of Environmental Conservation FY 22 operating
budget were ADOPTED.
FY 22 OPERATING BUDGET: DEPARTMENT OF HEALTH AND SOCIAL
SERVICES:
11:45:17 AM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Health and Social
Services FY 22 operating budget:
Item 35 Senate
Item 36 Senate Modify, minus $10 million.
There being NO OBJECTION, items 35 and 36 within the
Department of Health and Social Services FY 22 operating
budget were ADOPTED.
11:45:44 AM
Representative LeBon MOVED that the Committee adopt the
following within the Department of Health and Social
Services FY 22 operating budget:
Item 46 House
Item 47 House
Vice-Chair Stedman OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Representative Merrick, Senator Olson,
Representative LeBon
OPPOSED: Senator Bishop, Senator Stedman, Representative
Foster
The MOTION to adopt items 46 and 47 - House- FAILED (3/3).
11:46:57 AM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Health and Social
Services FY 22 operating budget:
Item 46 Senate
Item 47 Senate
There being NO OBJECTION, items 46 and 47 - Senate - within
the Department of Health and Social Services FY 22
operating budget were ADOPTED.
11:47:17 AM
Representative Lebon MOVED that the Committee adopt the
following within the Department of Health and Social
Services FY 22 operating budget:
Item 44 House
Chair Foster OBJECTED. Chair Foster explained that the
proposal was to accept the House cut of $350,000 versus the
Senate cut of $163,000.
Senator Olson asked for the current location in the motion
sheets.
Chair Foster clarified that the committee was currently
considering item 44. He explained that the item was a
decrement to abortions and the proposal would accept the
larger cut of $350,000 passed by the House. He noted his
objection to the item.
11:49:00 AM
AT EASE
11:49:26 AM
RECONVENED
Chair Foster MAINTAINED his OBJECTION to item 44.
A roll call vote was taken on the motion.
IN FAVOR: Senator Stedman, Representative Merrick, Senator
Bishop, Representative LeBon, Senator Olson
OPPOSED: Representative Foster
The MOTION PASSED (5/1). There being NO further OBJECTION,
item 44 within the Department of Health and Social Services
FY 22 operating budget was ADOPTED.
11:50:17 AM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Health and Social
Services FY 22 operating budget:
Item 45 Senate
Chair Foster OBJECTED. He explained the item was
conditional language regarding abortions. He read the first
sentence of the conditional language passed by the Senate:
"No money appropriated in this appropriation may be
expended for an abortion that is not a mandatory
service..." He MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Senator Olson, Representative LeBon, Senator
Stedman, Senator Bishop, Representative Merrick
OPPOSED: Representative Foster
The MOTION PASSED (5/1). There being NO further OBJECTION,
item 45 within the Department of Health and Social Services
FY 22 operating budget was ADOPTED.
11:51:44 AM
FY 22 OPERATING BUDGET: DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT:
11:51:50 AM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Labor and Workforce
Development FY 22 operating budget:
Item 4 House
Item 5 House
There being NO OBJECTION, items 4 and 5 within the
Department of Labor and Workforce Development FY 22
operating budget were ADOPTED.
FY 22 OPERATING BUDGET: DEPARTMENT OF PUBLIC SAFETY:
11:52:15 AM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Public Safety FY 22
operating budget:
Item 9 Senate
Representative LeBon OBJECTED. He read the last sentence of
the intent language passed by the House:
"It is the intent of the legislature that the
Department of Public Safety submit a report detailing
options for boroughs with over 100,000 population and
sufficient tax base to assume financial responsibility
for the state-provided public safety services they
receive."
Representative LeBon supported the language passed by the
House. He believed the state needed to look at some method
within organized boroughs to assist in supporting public
safety with troopers or some other form. He relayed that
his district, House District 1, was located in the center
of Fairbanks within the city limits. He detailed that his
constituents paid for public safety provided by the
Fairbanks Police Department. He believed all organized
parts of the state should share in the responsibility. He
WITHDREW his OBJECTION.
There being NO further OBJECTION, item 9 within the
Department of Public Safety FY 22 budget was ADOPTED.
Chair Foster relayed his intent to recess the meeting until
a later time.
Vice-Chair Stedman asked if there would be time for lunch
during the recess.
Chair Foster agreed. He explained that the goal was to meet
again soon to give time for Legislative Legal Services to
draft the final bill, which would take between eight to ten
hours.
Vice-Chair Stedman requested a break of 45 minutes to an
hour.
Chair Foster agreed.
11:54:38 AM
RECESSED
5:10:39 PM
RECONVENED
Chair Foster shared that the committee would hear all
remaining budget items. He listed the departments and
appropriations. He relayed the committee would first hear
the FY 21 Supplemental Operating Budget items.
^FY 21 SUPPLEMENTAL OPERATING BUDGET: DEPARTMENT OF PUBLIC
SAFETY
5:12:01 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Public Safety FY 21
supplemental operating budget:
Item 2 Senate
There being NO OBJECTION, item 2 within the Department of
Public Safety FY 21 supplemental operating budget was
ADOPTED.
^FY 21 SUPPLEMENTAL OPERATING BUDGET: FUND TRANSFERS
5:12:24 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Fund Transfers FY 21 supplemental
operating budget:
Item 1 Senate Modify, estimate to $85.7 million.
Item 2 Senate
There being NO OBJECTION, items 1 and 2 within the Fund
Transfers FY 21 supplemental operating budget were ADOPTED.
Chair Foster relayed that the committee would next hear the
FY 21 Supplemental Capital Budget items.
^FY 21 SUPPLEMENTAL CAPITAL BUDGET: DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT
5:12:50 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Commerce, Community and
Economic Development FY 21 supplemental capital budget:
Item 1 Senate
Item 2 Senate Modify, minus $190 million.
Item 3 Senate
Item 4 Senate Modify, minus $30 million.
Item 5 House Modify, minus $10 million.
Item 6 Senate Modify, minus $3 million.
Item 7 House
Item 8 Senate
Item 9 Senate
Item 10 House Modify, fund source swap from 1269
(CSLFRF) to 1243 (SBR). Change
effective date to July 1, 2021.
There being NO OBJECTION, items 1 through 10 within the
Department of Commerce, Community and Economic Development
FY 21 supplemental capital budget were ADOPTED.
^FY 21 SUPPLEMENTAL CAPITAL BUDGET: DEPARTMENT OF FISH AND
GAME
5:14:13 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Fish and Game FY 21
supplemental capital budget:
Item 2 Senate Modify, minus $14 million.
There being NO OBJECTION, item 2 within the Department of
Fish and Game FY 21 supplemental capital budget was
ADOPTED.
^FY 21 SUPPLEMENTAL CAPITAL BUDGET: DEPARTMENT OF HEALTH
AND SOCIAL SERVICES
5:14:34 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Health and Social
Services FY 21 supplemental capital budget:
Item 1 Senate
There being NO OBJECTION, item 1 within the Department of
Health and Social Services FY 21 supplemental capital
budget was ADOPTED.
^FY 21 SUPPLEMENTAL CAPITAL BUDGET: DEPARTMENT OF NATURAL
RESOURCES
5:14:53 PM
Vice-Chair Stedman MOVED to ADOPT the following within the
Department of Natural Resources FY 21 supplemental capital
budget:
Item 1 Senate Both Items
Representative LeBon OBJECTED for discussion. He asked for
further clarification about where the Alaska landslide
hazards existed.
Mr. Painter replied that he did not have the information on
hand.
Representative LeBon wondered whether there were any
landslide hazards in his district that he was unaware of.
He did not believe there were. He WITHDREW his OBJECTION.
There being NO further OBJECTION, item 1 within the
Department of Natural Resources FY 21 supplemental capital
budget was ADOPTED.
^FY 21 SUPPLEMENTAL CAPITAL BUDGET: DEPARTMENT OF REVENUE
5:15:43 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Revenue FY 21
supplemental capital budget:
Item 1 Senate
There being NO OBJECTION, item 1 within Department of
Revenue the FY 21 supplemental capital budget was ADOPTED.
^FY 21 SUPPLEMENTAL CAPITAL BUDGET: EXECUTIVE BRANCH WIDE
UNALLOCATED APPROPRIATIONS
5:16:01 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Executive Branch Wide Unallocated
Appropriations FY 21 supplemental capital budget:
Item 1 House
There being NO OBJECTION, item 1 within Executive Branch
Wide Unallocated Appropriations the FY 21 supplemental
capital budget was ADOPTED.
Chair Foster relayed that the committee would next hear the
FY 22 Capital Budget items.
^FY 22 CAPITAL BUDGET: DEPARTMENT OF COMMERCE, COMMUNITY
AND ECONOMIC DEVELOPMENT
5:16:40 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Commerce, Community and
Economic Development FY 22 capital budget:
Item 12 Senate Modify, fund source swap from 1269
(CSLFRF) to 1004 (UGF).
Item 14 Senate Modify, fund source swap from 1269
(CSLFRF) to 1004 (UGF).
There being NO OBJECTION, items 12 and 14 within Department
of Commerce, Community and Economic Development FY 22
capital budget were ADOPTED.
^FY 22 CAPITAL BUDGET: DEPARTMENT OF NATURAL RESOURCES
5:17:30 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Natural Resources FY 22
capital budget related to the long trail project:
Items 27 - 36 Senate Modify, fund source swap
from 1269 (CSLFRF) to
1004 (UGF).
There being NO OBJECTION, items 27 through 36 within
Department of Natural Resources FY 22 capital budget were
ADOPTED.
^FY 22 CAPITAL BUDGET: DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES
5:18:13 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Transportation and
Public Facilities FY 22 capital budget:
Item 10 Senate
There being NO OBJECTION, item 10 within Department of
Transportation and Public Facilities FY 22 capital budget
was ADOPTED.
Senator Olson requested to return to the Department of
Natural Resources budget to ask questions related to the
long trail project [items 27 through 36]. He asked why the
project had been broken up into numerous segments.
Mr. Painter replied that the numerous segments reflected
the amendment structure that had passed in the Senate. He
did not have information on why the amendment had been
written the way it had.
Senator Olson asked if the governor would have the ability
to veto any segment of the trail.
Mr. Painter confirmed that the governor could veto one of
the segments because they were separate allocations within
one large project.
Chair Foster asked if Senator Olson was looking for
information on the fund source change.
Senator Olson stated his primary concern was the potential
veto of a specific section of the long trail. He wondered
how to maintain the full length of the trail. He stated his
understanding that the governor could veto a segment of the
trail.
Mr. Painter agreed. He clarified that the project would not
construct the entire trail. The funding was for
improvements within the future route. He explained that
several hundred miles of new trail would still be needed.
The project increments in the budget primarily reflected
connections between existing trails. He elaborated that
even if all of the items were funded, there would not be a
complete Fairbanks to Seward trail. He detailed that even
if there were only some aspects completed, it would not
necessarily defeat the purpose of the project.
Vice-Chair Stedman asked whether the breakout had been
included prior to the fund source change when the committee
had adopted the Department of Natural Resources budget.
Mr. Painter confirmed the breakout existed prior to the
fund source changes.
Vice-Chair Stedman asked what process the committee would
have had to undergo in order to consolidate the items into
one appropriation.
5:21:44 PM
Mr. Painter replied that he was not certain the conference
committee could take the action under limited powers of
free conference. He thought existing powers may be
required. He stated that the items would be within the same
appropriation; therefore, he believed the committee could
make a structure change. He advised that the action would
require making a motion to consolidate the items into a
single item. He noted that the governor would still have
the ability to veto an amount and specify that the veto was
directed at a particular part of the project.
Senator Olson stated that he did not believe it had been
the intent of the maker of the amendment to cut the project
up into segments that could be subject to veto. He reasoned
that the committee was dealing with what it had and would
continue on.
Vice-Chair Stedman agreed.
Chair Foster relayed that the committee would address the
FY 22 Operating Budget items.
^FY 22 OPERATING BUDGET: DEPARTMENT OF COMMERCE, COMMUNITY
AND ECONOMIC DEVELOPMENT
5:22:42 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Department of Commerce, Community and
Economic Development FY 22 operating budget:
Item 4 Senate Modify, minus $10 million.
There being NO OBJECTION, item 4 within the Department of
Commerce, Community and Economic Development FY 22
operating budget was ADOPTED.
5:23:09 PM
AT EASE
5:24:13 PM
RECONVENED
^FY 22 OPERATING BUDGET: FUND CAPITALIZATION
5:24:32 PM
Chair Foster relayed that item 1 in Fund Capitalization
would remain open and would be addressed in an amendment
later in the meeting.
^FY 22 OPERATING BUDGET: PERMANENT FUND
5:24:48 PM
Vice-Chair Stedman MOVED to ADOPT the following within the
Permanent Fund FY 22 operating budget:
Item 1 Senate Modify, per Amendment 1
Vice-Chair Stedman MOVED to ADOPT Amendment 1, 32-
GH1509\A.10 (Marx, 6/13/21) (copy on file) pertaining to
item 1.
Chair Foster OBJECTED for discussion.
5:25:23 PM
AT EASE
5:25:57 PM
RECONVENED
Vice-Chair Stedman explained Amendment 1. Amendment number
1 provided for an approximate $1,100 dollar dividend
without overdrawing the Permanent Fund Earnings Reserve
Account (ERA). The total cost of the amendment was $739
million: $371 million from the General Fund, $320 million
from the Statutory Budget Reserve (SBR) fund, and $48
million from the Constitutional Budget Reserve (CBR) fund.
5:26:49 PM
Chair Foster relayed that he would maintain his objection.
He reasoned that if there was ever a time to pay a full
PFD, it was the present. He supported the full Senate
number and would vote against the motion.
Senator Olson spoke in opposition to the amendment. He
stated there were a number of legislators representing
regions of Alaska where constituents were fully dependent
on the money from the PFD. He remarked that the idea that
the PFD was in statute made it difficult to see the
amendment go through with a lower amount. He thought the
reduced PFD would be a disservice to the state's economy.
Vice-Chair Stedman supported the amendment. He stated that
although an $1,100 PFD was substantially lower than the
statutory PFD of approximately $3,200 and the 50/50 PFD of
about $2,300 passed by the Senate, the $1,100 put the state
up against the maximum draw rate from the ERA. He furthered
that not overdrawing the Permanent Fund, including the PFD
and all other expenditures, took the state's cash balance
down to the minimum level of a little under $500 million in
the CBR.
Representative LeBon spoke in support of the $1,100 PFD in
the amendment. He emphasized the importance of protecting
of the Permanent Fund, which the amendment accomplished. He
stated that not overdrawing the ERA and respecting the 5
percent draw rate were additional considerations. He
believed the amendment reflected a reasonable effort to
achieve a good PFD amount. He highlighted that the average
PFD over time was around $1,100 give or take. He believed
it would require the legislature to develop a long-term PFD
formula. He believed it was time for the legislature to
take action on the formula. He noted that several different
bills had been proposed on the subject. He remarked that it
needed to be the legislature's intention to accomplish the
goal before the 32nd legislature completed its work.
Senator Olson congratulated the maker of the amendment on
what he characterized as an "ingenious" way of combining
the SBR, CBR, and general funds to try to make it happen.
Chair Foster MAINTAINED his OBJECTION. He clarified that
the amendment would take the Senate position for an $1,100
PFD.
A roll call vote was taken on the motion.
IN FAVOR: Senator Bishop, Representative Merrick,
Representative LeBon, Senator Stedman
OPPOSED: Senator Olson, Representative Foster
The MOTION PASSED (4/2). There being NO further OBJECTION,
item 1 and Amendment 1 within the Permanent Fund FY 22
operating budget were ADOPTED.
5:32:03 PM
AT EASE
5:32:24 PM
RECONVENED
Chair Foster clarified that the committee was continuing on
with items within the Permanent Fund section of the budget.
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Permanent Fund FY 22 operating budget:
Item 2 Senate
Item 3 House
Item 4 Senate
There being NO OBJECTION, items 2 through 4 within
Permanent Fund FY 22 operating budget were ADOPTED.
^FY 22 OPERATING BUDGET: FUND TRANSFERS
5:33:04 PM
Vice-Chair Stedman MOVED that the Committee adopt the
following within the Fund Transfers FY 22 operating budget:
Item 1 House
Item 2 House
Item 3 Senate Modify, minus $250 million.
There being NO OBJECTION, items 1 through 3 within Fund
Transfers FY 22 operating budget were ADOPTED.
5:33:32 PM
AT EASE
5:34:53 PM
RECONVENED
Vice-Chair Stedman made comments pertaining to the PFD. He
remarked that the committee had just discussed the PFD and
the state's other savings components being nearly
liquidated (with the exception of the Permanent Fund and
ERA). He shared that the House and Senate conference
committee members had collectively agreed to transfer $4
billion from the ERA to the constitutionally protected fund
principal in order to ensure the amount would be protected
in perpetuity for future generations no matter what the
legislature did moving forward. He explained that the
amount would be additive to the symbolic check [posted on
the wall of the Senate Finance Committee room] behind his
seat reflecting the transfer of $4.9 billion into the
Permanent Fund principal a couple of years earlier.
Vice-Chair Stedman elaborated that once the transfer was
complete, the current and previous legislatures would have
transferred almost 10 percent of the total value of the
Permanent Fund to the principal of the fund. He highlighted
that the contribution was significant and reflected
collective work by both bodies. He was looking forward to
similar discussion the next year with regard to making
another contribution moving forward through robust markets
to protect the principal for future Alaskans.
5:37:12 PM
Chair Foster stated there were amendments for the
committee's consideration. He noted that before the
amendments could be moved the committee needed to rescind
its action on a previous item.
5:37:37 PM
AT EASE
5:37:47 PM
RECONVENED
Vice-Chair Stedman MOVED to RESCIND action on Debt Service
Item 17 related to school bond debt reimbursement. There
being NO OBJECTION, it was so ordered.
Vice-Chair Stedman MOVED to ADOPT Amendment 2, 32-
GH1509\S.A.13 (Marx, 6/13/21) (copy on file).
Chair Foster OBJECTED for discussion.
Vice-Chair Stedman explained that the amendment made
several appropriations:
1. Lines 5 through 15 replaces Debt Service item 17.
As occurs in the Senate's budget, this amendment funds
School Debt Reimbursement at 100 percent of the
statutory formula
a. but replaces $54.74 million UGF with
i. $4.15 million from the Statutory Budget
Reserve
ii. $48 million 594 thousand and 460 dollars
($48,594,460) from the CBR
2. Page 1, Lines 16 through 23 appropriates $114
million from the CBR to the oil and gas tax credit
fund
3. CBR Language
a. Page 2 lines 4 through 24 contain the following
CBR language
i. Subsection (a) appropriates the CBR Reverse
Sweep
ii. Subsection b contains the CBR deficit
filling language
iii. Subsection (c) clarifies that subsections a
and b are appropriated per constitutional
restrictions.
Chair Foster WITHDREW his OBJECTION.
There being NO OBJECTION, it was so ordered.
Chair Foster stated that the action closed out reopened
item Debt Service 17 and Fund Capitalization item 1.
5:40:45 PM
Representative LeBon asked for verification that the oil
and gas tax credits were funded at $114 million from the
CBR.
Chair Foster responded affirmatively.
5:41:14 PM
Vice-Chair Stedman MOVED to ADOPT Amendment 3 (copy on
file).
Chair Foster OBJECTED for discussion.
Vice-Chair Stedman explained Amendment 3:
There are two fund source swapping reports in front of
you which make up amendment 3. The first packet deals
with capital projects and swaps out hollow federal
receipt authority and instead uses Unrestricted
General Funds (the Statutory Budget Reserve Fund).
Also included is swapping out Unrestricted General
Fund in a project and instead using Federal Highway
Administration (FHWA) Coronavirus Response and Relief
Supplemental Appropriation Act (CRRSA) federal
instead. There is a technical correction to adjust the
amount of the Alaska Housing Finance Corporation
(AHFC) dividend so that fund source is not overspent.
The second packet deals with the operating budget and
has 250 million of UGF revenue replacement using
American Rescue Plan Act (ARPA) funds. There is also
17.5 million of FHWA CRRSA used in place of
Unrestricted General Funds. 800 thousand of Statutory
Designated Program Receipt authority was also swapped
out for UGF.
Chair Foster WITHDREW his OBJECTION.
There being NO further OBJECTION, Amendment 3 was ADOPTED.
5:43:16 PM
Vice-Chair Stedman MOVED that the Committee adopt the
Senate effective dates for supplemental items.
There being NO OBJECTION, it was so ordered.
Chair Foster asked Mr. Painter to walk the committee
members through the implications of a CBR/reverse sweep.
5:44:09 PM
AT EASE
5:45:35 PM
RECONVENED
Mr. Painter referenced a document titled "Impact of CBR
Vote Failure on HB69/71," dated 6/13/21 distributed by LFD
(copy on file). He explained that the document outlined how
a failure of the CBR vote would impact the budget. He noted
there were several items that were linked beyond the normal
amounts. He detailed that without the reverse sweep vote
the Power Cost Equalization (PCE) program, the community
assistance program ($12.4 million in the budget went from
PCE to community assistance), the Alaska Performance
Scholarship, and the Alaska Education Grant would be
unfunded. There were other funds with smaller impacts that
would have partial underfunding including the Tobacco Use
and Education Program Fund, Alcohol and Other Substance
Abuse Fund, Spill Prevention and Response Fund, and some of
the appropriations from the Alaska Capital Income Fund
would be unable to occur.
Mr. Painter explained that fund source change actions taken
by the conference committee resulted in additional
consequences if the [reverse sweep] vote failed. He
detailed that school debt reimbursement was funded with a
mix of fund sources from Amendment 2. He elaborated that 37
percent was funded with the School Fund, a designated
general fund (DGF) that was not impacted by the sweep.
Additionally, $51.8 million came from the CBR and $0.9
million came from the SBR. He corrected that the numbers
were actually slightly higher.
Mr. Painter relayed that oil and gas tax credits in the
amount of $114 million would not flow out if the CBR direct
language in the amendment was not agreed to. He explained
that the $1,100 PFD was comprised of funding from the
General Fund, CBR, and SBR. He expounded that a failure to
pass the CBR direct amount and the SBR direct amount was
not achievable due to the failure of the reverse sweep, the
PFD would be approximately $525 per person (using the $371
million UGF appropriation).
Mr. Painter reported there were $86.5 million in capital
budget items funded with the SBR. He explained that because
the SBR was sweepable, the funds would not go out if the
reverse sweep failed. The list included, but was not
limited to, $10 million for the Alaska Travel Industry
Association, $9 million for the Houston Middle School, $8.5
million for West Susitna Access, and other projects in the
Department of Natural Resources, Department of Public
Safety, Pioneer Homes, and so forth.
Mr. Painter clarified that with or without the CBR vote,
the budget would be balanced because the direct items
equaled the deficit amount. He explained that the post
transfer surplus, with or without the CBR vote, was
estimated to be $700,000. With the CBR vote, an estimated
$453.9 million would remain in the CBR at the end of FY 22.
5:49:19 PM
Representative LeBon asked if there was a number for the
Alaska Performance Scholarship and Alaska Education Grant.
Mr. Painter believed the combined number was currently
about $19 million.
Vice-Chair Stedman asked how students would be notified if
they would not receive their scholarships.
Mr. Painter replied that the last time the legislature had
not agreed to the reverse sweep, letters to students and
PCE recipients had gone out in the first week of July
notifying them that until the reverse sweep was adopted,
the funds would not be distributed.
5:50:26 PM
Chair Foster stated there were backup documents for capital
projects funded by the American Rescue Plan Act in members'
packets. He relayed that after the closure of the meeting,
there was a letter for members to sign, clarifying that the
excluded salary adjustments were not rejected and would be
addressed in future budgets. He noted the item reflected a
late submission to the conference committee. He clarified
that the committee did not want anyone to perceive it as a
sign of a rejection of the salary adjustments.
Vice-Chair Stedman MOVED to REPORT CCSHB 69 and CCSHB 71
out of committee with individual recommendations and that
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, CCSHB 69 and CCSHB 71 were
REPORTED out of committee.
Chair Foster thanked the members and the finance committees
and staff.
Vice-Chair Stedman MOVED to ADJOURN. There being NO
OBJECTION, it was so ordered.
ADJOURNMENT
5:52:25 PM
The meeting was adjourned at 5:52 p.m.
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