CS FOR HOUSE BILL NO. 113(FIN) am(brf sup maj fld) "An Act making supplemental appropriations, capital appropriations, and other appropriations; amending appropriations; making appropriations to capitalize funds; and providing for an effective date." 9:09:11 AM DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION, presented the supplemental budget via spreadsheet dated April 9, 2009, titled "FY2009 Supplemental Requests" (Copy on File). He offered to review the spreadsheet with the committee. He noted that legislative items were absent in the bill, as every item was submitted by the governor. The cost of the bill is noted on Page 1 with the operating portion of the supplemental budget illustrating general funds down $59 million and federal funds up $53.6 million reflecting the substitution of federal Medicaid match for general funds in the Health and Social Services budget. He noted a net reduction of $12 million in the "other funds" category. 9:11:51 AM Mr. Teal addressed the capital items in the legislation illustrated on Page 1. He explained the $59 million in operating reductions with $11.6 million in unallocated reductions viewed as savings although excluded from the bill. The total reduction is $70.7 million including capital of $3.2 million creating a net reduction of $67.5 million. He explained that the process employed to create the bill included meetings between House and Senate staff with agency review when necessary. Changes were made by the four co- chairs leading to the color coded spread sheet presented to the committee. He explained that items coded green are included in the bill, while items coded orange are absent from the legislation. 9:14:05 AM Mr. Teal discussed unallocated operating reductions, which were all rejected because there was no reason to take legislative action for something that the executive branch had accomplished. He noted that the reductions were categorized as savings in the legislation allowing expectations that the allocated reductions will be achieved by the executive branch because they are included in the savings category of the fiscal summary. 9:15:36 AM Mr. Teal addressed operating lapse extensions, which were temporarily removed from the supplemental bill and put in front of the House Finance Committee. Lapse extensions typically evade the scrutiny that other extensions receive. Some lapse extensions were accepted and others rejected. Some extensions went back into the bill on Page 4, and color coded orange. Some extensions were incorporated in the operating budget. Mr. Teal addressed Page 6 and specific operating reductions. He explained the items not included in the bill. He noted page 11, item 61, illustrating five items excluded from the bill. Mr. Teal informed about operating requests, which are generally requests for additional funding including substitution of federal funds for general funds. 9:17:56 AM Mr. Teal noted capital items beginning on Page 34. He explained that most capital items were reappropriations. Rather than view a reappropriation as a single item, the choice was split and dead capital projects no longer in need of money are taken. 9:18:28 AM Mr. Teal explained that the funds were placed in the capital income fund, rather than directed immediately to another project. In some cases the capital income fund was used to fund supplemental requests. One project included in the dead projects, Number 218, Page 35, takes money from the capital project that was a legislative add on. He noted that an amendment will address this number in the upcoming committee substitute (CS). All capital projects identified as finished had money removed from them except for the projects where the Office of Management and Budget (OMB) submitted amendments reversing the original request, examples of which begin on Page 43-45. 9:20:41 AM Mr. Teal referred to Page 34 and the new capital projects with a number of items included as supplemental projects extending through Page 43 at which point a few projects are included that were unaccepted in the legislation. Many supplemental projects were later included in the capital budget. He stated that he did not know how many items were added from the governor's original request. Senator Huggins asked about Page 4, Item 26, and the federal requirement for Department of Transportation and Public Facilities (DOT). He opined that both the in-state gas pipeline and a larger pipeline are included in this appropriation language. Mr. Teal answered that the mentioned item is a lapse extension applying to gas line right of way applications. He explained that funds will lapse on June 30, 2009 without the lapse extension and the Department of Natural Resources (DNR) states that a need for the money exists. Either the lapse is extended or a new 2010 appropriation can be made. 9:23:28 AM HB 113 was HEARD and HELD in Committee for further consideration. 9:23:40 AM AT EASE 9:54:01 AM RECONVENED