Legislature(2023 - 2024)SENATE FINANCE 532
04/19/2023 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB39 | |
| HB41 | |
| SB107 | |
| SB53 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 53 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 39 | TELECONFERENCED | |
| += | HB 41 | TELECONFERENCED | |
| += | SB 22 | TELECONFERENCED | |
| += | SB 57 | TELECONFERENCED | |
| += | SB 107 | TELECONFERENCED | |
CS FOR HOUSE BILL NO. 39(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; repealing
appropriations; amending appropriations; making
reappropriations; and making supplemental
appropriations."
1:33:46 PM
Senator Merrick MOVED to ADOPT proposed committee
substitute for CSHB 39 (FIN), Work Draft 33-GH1347\R (Marx,
4/17/23).
Co-Chair Stedman OBJECTED for discussion.
1:34:23 PM
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, discussed the
proposed CS. He read from a document called Report A
(copy on file) and highlighted Column 4, "SCS 1". He noted
that Report A showed Unrestricted General Funds (UGF) for a
total of $4.257 billion including numbers and language for
agency operations, and another $401 million of statewide
items for a total of $4.65 billion UGF. He referenced
Report B (copy on file), which showed all funds for numbers
and language. He highlighted that Column 4 showed "SCS 1"
and indicated that there was just over $9.8 billion in
agency operations, and another $584 million in statewide
operations for a total of $10.44 billion in all funds.
Mr. Ecklund addressed a document entitled Report C (copy
on file) which showed supplemental items. The UGF and
operating budget supplementals combined for a total of
$102.79 million. He noted that there would also be
supplemental items in the capital budget.
Mr. Ecklund noted that there would be many additional
reports available on the LFD website after the committee
meeting.
Mr. Ecklund referenced a document that outlined the changes
from the governor's introduced operating budget to Version
R of HB 39, entitled "OPERATING BUDGET DIFFERENCES BETWEEN
THE GOVERNOR'S ORIGINAL OPERATING BUDGET AND THIS COMMITTEE
SUBSTITUTE" (copy on file).
1:37:12 PM
AT EASE
1:37:50 PM
RECONVENED
Mr. Ecklund addressed changes to the bill outined in the
document:
OPERATING BUDGET DIFFERENCES BETWEEN THE GOVERNOR'S
ORIGINAL OPERATING BUDGET AND THIS COMMITTEE
SUBSTITUTE
SB40 (VERSION A) TO SENATE CS FOR HB39 (VERSION R)
SUPPLEMENTAL NUMBERS SECTION
1. Sections 7-12 incorporated all of the Governor's
numbers section supplemental requests except for the
following.
• Replaced $44.9 of UGF with Higher Ed money for the
WWAMI program (Washington, Wyoming, Alaska, Montana,
Idaho)
• Replaced $904.2 GF/Program Receipts in the Department
of Public Safety's numbers section with a language
section that appropriates funding for criminal justice
information system updates and improvements for FY23
and FY24.
• $117.0 UGF was added to the legislature's budget to
fund a housing stipend increase, from $30 to $37.50
per day, for out-of-town legislative staff.
• $200.0 UGF for an Alaska Family Justice Center Model
Study in the FY23 budget was removed and replaced with
a multi-year language section (Sec 20(b)) for FY23 and
FY24, to allow for the completion of this project.
Mr. Ecklund shared that there had been quite a few
supplemental language sections and noted that the executive
branch had recently reviewed the supplmentals. He explained
that all the supplmentals were incorporated into the CS
with the exception of a Clean Air Fund appropriation that
he would address later. He continued to address the
document:
The Senate CS incorporates a number of SUPPLEMENTAL
APPROPRIATIONS in the following language sections.
2. Sec 13 extends the lapse date for the Alaska
Housing Finance Corporation's federal receipts for
various housing programs. This is a Governor's
request.
3. Sec 16 extends the lapse date for DCCED's
reinsurance appropriation. A total of $55 million of
UGF was appropriated in FY18 and this language extends
the appropriation through FY28. This was requested by
the Governor.
4. Sec. 15 is a NEW SECTION that appropriates the
balance of the Abandoned Motor Vehicle Fund on June
30, 2023 to DOA to reimburse municipalities for the
cost of removing abandoned vehicles for FY23 and FY24.
5. Sec. 17. Department of Education and Early
Development. There are several supplemental language
sections for the Department of Education and Early
Development.
o The following were requested by the Governor
o Sec 17(d) extends the lapse date for federal
receipts in the Department of Education and Early
Development to June 30, 2025.
o Sec 17(e) allows DEED to accept any available
FY23 federal funds and pass that funding through
to other educational entities.
o The following were added or revised in the Senate
CS:
o Sec 17(f) corrects the Governor's lapse
extension language for the proceeds from the sale
of state-owned Mt. Edgecumbe High School land.
The proceeds from the sale will be available for
Mt. Edgecumbe High School's maintenance and
operations for FY23-FY25.
1:41:48 PM
AT EASE
1:48:57 PM
RECONVENED
Co-Chair Stedman relayed that there had been a printing
malfunction and members were missing part of the written
explanation. He asked Mr. Ecklund to highlight larger
issues on each page and pause for discussion.
Mr. Ecklund continued to address the summary of differences
on the top of page 2:
o The following were added or revised in the Senate
CS:
o Sec 17(f) corrects the Governor's lapse
extension language for the proceeds from the sale
of state-owned Mt. Edgecumbe High School land.
The proceeds from the sale will be available for
Mt. Edgecumbe High School's maintenance and
operations for FY23-FY25.
Co-Chair Stedman asked Mr. Ecklund to address item 9.
Mr. Ecklund spoke to item 9:
9. Sec. 21. SUPPLEMENTAL FUND CAPITALIZATION
o Sec. 21a appropriates up to $10 million of SDPR
to the Alaska Gasline Development Corporation.
This subsection clarifies the FY23 effective date
that was requested by the Governor.
1:50:49 PM
Mr. Ecklund addressed page 3 of the summary of changes
document:
10. Sec. 22. Extends the lapse date for the
Redistricting Board operations through the end of
FY24. This was a legislative addition.
11. Sec. 23 adds SUPPLEMENTAL SALARY AND BENEFIT
ADJUSTMENTS language to ensure that salary adjustments
resulting from bargaining unit agreements that are
included in the supplemental numbers section are
funded. This is a Governor's request.
12. Sec. 24. Approves the Governor's requested
SUPPLEMENTAL RATIFICATIONS OF OVEREXPENDITURES for
several departments.
Mr. Ecklund discussed FY 24 Language Changes as listed on
the document:
FY24 LANGUAGE CHANGES
13. Sec. 27 is a legislative addition of up to $75.0
UGF to the Alaska Court System's Commission on
Judicial Conduct for special council costs related to
unanticipated investigations. This language was
recommended by the subcommittee.
14. DELETED SECTION: The AIDEA Dividend section
appropriating $17,904,000 from AIDEA to the general
fund was deleted. The Senate Finance Committee will
work with AIDEA to determine an appropriate amount for
the AIDEA Dividend.
15. Sec. 29. ALASKA PERMANENT FUND. The legislature
made the following changes from the Governor's
requested Permanent Fund language.
o To align with statute, subsection c
appropriates the entire Percent of Market Value
draw, totaling $3,526,087,852, to the general
fund.
(The Governor's language had appropriated funding from
the Earnings Reserve Account as follows:
• $2.47 billion to the dividend fund to pay a
full statutory dividend, and
• The remaining balance, estimated to be $1.055
billion, was appropriated to the general fund.)
o The Senate CS deletes the appropriation to the
dividend fund to pay for a dividend. The permanent
fund dividend discussion will need to be decided by
the full Finance Committee.
o The Senate CS revises the Permanent Fund inflation
proofing appropriation (subsection e) by capping the
amount appropriated for inflation proofing at $1.413
billion. The Governor's language was an open-ended
appropriation.
16. Sec. 30 incorporated the Governor's amendment to
appropriate funding from the ALASKA TECHNICAL AND
VOCATIONAL EDUCATION PROGRAM ACCOUNT to various
departments as prescribed by statute. Because the
amount available varies annually, the Governor
submitted an amendment replacing the funding in the
numbers section of the budget with this language.
1:54:17 PM
Mr. Ecklund continued to address the document:
17. Sec. 31 and Sec 55. As occurred in last year's
operating budget bill, the legislature added a section
to clarify that funding included in the budget for
BONUSES FOR CERTAIN EMPLOYEES OF THE EXECUTIVE BRANCH
is contingent upon
o the state and the applicable bargaining unit of
the employee entering into a letter of agreement
for the bonus AND
o the Department of Administration providing a
copy of the letter of agreement to the
legislative finance division in electronic form
not later than 30 days after the department
enters into the letter of agreement.
18. Sec 32(g). DEPARTMENT OF ADMINISTRATION. The
Senate CS amended the open-ended appropriation to the
Department of Administration for actuarial costs
associated with bills by adding a requirement that the
appropriation is valid only for actuarial costs of
bills in the finance committee of each house.
19. Sec 33g corrects the fiscal years in the language
for the Division of Insurance's reinsurance program by
replacing "June 30, 2023 and June 30, 2024," with
"June 30, 2024 and June 30, 2025."
1:55:43 PM
Senator Merrick asked about Section 29 subsection e, which
capped the amount of inflation-proofing of the Permanent
Fund at $1.413 billion. She asked about the source of the
number.
Mr. Ecklund relayed that in the original bill the estimate
for inflation-proofing was $1.4 billion, which he thought
used Callan's projected inflation rate of 2 percent or 2.25
percent. He referenced presentations by both LFD and the
Alaska Permanent Fund Corporation (APFC) that mentioned the
danger of the Earnings Reserve Account (ERA) becoming low,
and explained that the CS proposed to cap the amount
appropriated for inflation-proofing.
Co-Chair Stedman recalled that inflation-proofing could be
as high as $4.2 billion. He relayed that the committee had
thought that it would be nice to have some inflation-
proofing.
1:57:25 PM
Mr. Ecklund item 20 on the document:
20. DELETED SUBSECTION. The Senate Finance CS deleted
an open-ended federal appropriation to the Alaska
Broadband Office.
21. Sec. 35(f). The Senate Finance CS incorporates the
Governor's amendment for $17.8 million, of which $8.9
million is UGF, to the Department of Health, to
redetermine Medicaid eligibility for enrolled
Alaskans. This appropriation is valid for FY24 and
FY25.
1:57:59 PM
Mr. Ecklund addressed page 5 of the document:
22. DEPARTMENT OF LAW
• Sec 37(a) appropriates $5 million UGF to the for
litigation relating to STATEHOOD DEFENSE for FY24-
FY26.
• Subsection 37(b) adds intent that the funding is not
used for any action that may erode existing federal
or state subsistence rights.
This section is intended to replace a $10 million
capital appropriation that was requested by the
Governor.
23. Sec 40(b) revises the Governor's Alaska Marine
Highway System backstop language to mirror last year's
language. If federal receipts received by the AMHS
fall short of the amount appropriated in the numbers
section,
o The Governor's backstop language appropriates
Alaska Marine Highway System funds for any
federal revenue shortfall. This could lead to an
inadequate AMHS Fund balance.
o Instead, the Senate CS backstop language
appropriates up to $20 million of UGF to cover
any federal revenue shortfall.
1:59:19 PM
Mr. Ecklund continued to address page 5 of the document:
24. Sec 41(b) through (e) adds Fuel Trigger language.
At the Spring Forecast for FY24, this language
estimate is $1 million.
Mr. Ecklund shared an aside that the committee was
expecting the Office of Management and Budget (OMB) to
provide some additional language to replace the current
language in the bill.
Mr. Ecklund continued to address the document:
25. Sec 43g incorporates the Governor's Debt Service
amendment. This amendment replaces 2012A and 2013B
bonds with 2023A bonds for a net savings of $603.0.
26. Sec 44(e) was added to prevent the Alaska Gasline
Development Corporation (AGDC) from being able to
receive and expend federal or statutory designated
program receipts through the Legislative Budget and
Audit's RPL process.
27. Like the Governor's request, Sec. 45(s) fully pays
off any remaining Oil and Gas Tax Credits. However,
due to the price of oil, the estimate has been revised
from $42.7 million to $55.7 million.
28. Sec 45(t) incorporates a Governor's amendment
adding a total of $1.2 million to the election fund.
$1 million is federal receipts and $200.0 of general
funds.
29. DELETED SUBSECTIONS FROM FUND CAPITALIZATION. The
Senate Finance CS deleted the following two
subsections relating to the Alaska Gasline Development
Corporation.
o Open-ended statutory designated program
receipts received by AGDC in FY23, and
o Open-ended federal authority for funding
received by AGDC in FY23.
30. Subsection 45(u) is a NEW SUBSECTION adding $30
million of general funds to the Community Assistance
Fund. This maintains the current level of funding for
communities in FY25. Without this addition, the FY25
distribution to communities would be reduced from $30
million to $20 million.
31. Sec 46(o) incorporates the Governor's $7.5 million
UGF appropriation to the Renewable Energy Grant Fund.
32. Sec. 46(p) is a legal services change. Legal
Services moved the appropriation of $100,000 of
general fund program receipts to the Abandoned Motor
Vehicle Fund from the Fund Capitalization section to
the Fund Transfers section. This change was made to
clarify that expenditures from the fund require
further appropriation.
33. Sec. 48(a) (9) and (10) adds two bargaining units,
the Teachers' Association of Mt. Edgecumbe and the
Inlandboatmen's Union of the Pacific, Alaska Region,
to the SALARY AND BENEFIT ADJUSTMENTS language. It
also deleted the Governor's blanket approval language
for monetary terms of letters of agreement.
34. Sec 52 repeals a $1.65 million appropriation for
the WWAMI program (Washington, Wyoming, Alaska,
Montana, and Idaho). Between the other funding
appropriated in FY23 and FY24, the WWAMI program's
funding is sufficient to fund all existing, and the
proposed expanded number of program recipients.
2:03:02 PM
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered. The CS for CSHB
39(FIN) was ADOPTED.
CSHB 39(FIN) was HEARD and HELD in committee for further
consideration.
Co-Chair Stedman set the bill aside for further review. He
asked members to review the document and set an amendment
deadline of 2 o'clock p.m. for Friday, April 21. He asked
the committee staff to work with Mr. Ecklund. He mentioned
subcommittee issues and reminded members to keep a close
eye on budget growth during the current time of fiscal
constraints.