Legislature(2021 - 2022)ADAMS 519
05/17/2021 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB202 | |
| HB70 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 70 | TELECONFERENCED | |
| + | HB 202 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 70
"An Act making appropriations, including capital
appropriations, reappropriations, and other
appropriations; making supplemental appropriations;
making appropriations to capitalize funds; and
providing for an effective date."
4:01:58 PM
Co-Chair Merrick relayed that the committee heard an
overview of HB 70 on May 4, 2021. She shared that she had
been working closely with Senator Click Bishop's office to
craft the capital budget.
Co-Chair Foster MOVED to ADOPT the proposed committee
substitute for HB 70, Work Draft 32-GH1507\G (Dunmire,
5/17/21).
Co-Chair Merrick OBJECTED for discussion.
Co-Chair Merrick explained that the budget was
significantly different than the governor's proposed FY 22
capital budget.
Representative Josephson asked if the changes included the
governor's amendments.
4:03:23 PM
TALLY TEAL, STAFF, REPRESENTATIVE KELLY MERRICK, answered
that she would point out when she was comparing the
Committee Substitute (CS) to the governors amended or
original budget.
Co-Chair Merrick relayed that the meeting was a general
overview and would not focus on individual projects.
Ms. Teal pointed to four reports from the Legislative
Finance Division in members' packets (copy on file). The
reports were labeled 1 through 4. She began with the first
report [report 1] showing the unrestricted general fund
(UGF) expenditures by capital budget agency summary
governor structure compared to the CS. She indicated that
the CS spent roughly $325 million in UGF compared to $120
million in the governors original budget. She explained
that the governor had used 2 non-traditional funding
sources in the original budget that the legislature
rejected. The governor proposed using $86 million of Alaska
Housing Finance Corporation (AHFC) bonds for aviation and
highway matching funds for the Department of Transportation
and Public Facilities. In addition, he proposed using
approximately $18 million of the Village Safe Water
matching funds from the Department of Environmental
Conservation (DEC) totaling $104 million in AHFC bonds. She
furthered that there had been $10.5 million appropriated
from the rural Power Cost Equalization (PCE) funds for
rural fuel projects. Without the non-traditional sources,
the governors proposed UGF spend was about $224 million.
She indicated that the governor proposed a $350 million
general obligation (GO) bond package in HB 93 [HB 93-G.O.
Bonds: State Infrastructure Projects] for capital projects.
Many projects in the GO bond bill had been moved to the
capital budget.
4:06:11 PM
Ms. Teal turned to report 2 showing the capital budget
agency summary governor structure all funding sources.
She pointed to column 4 comparing the governors amended
budget to the House CS and reported that $101 million of
the GO bond funding was removed and $620 million was an
increase in federal receipt authority but was not new
funding. She explained that the committee had heard a
presentation on the Statewide Transportation Improvement
Program (STIP) and reminded the committee of the two
methods the state could provide funding for STIP projects.
She elaborated that one option was to give one lump sum
appropriation; it did not provide legislative oversite of
how the funding was spent. The other option was to break
the appropriations into allocations to show what projects
the department planned on funding with the STIP. Prior STIP
funding had been done both ways and the CS version chose to
use allocations with some modifications. The method added
two accounts: a project acceleration fund and a project
contingency fund. They were separate pots of money that
allowed for administrative flexibility while setting a
more realistic amount for each of the appropriations. She
stressed that the funding was structured differently and
was not an increase for the Department of Transportation
and Public Facilities (DOT).
Vice-Chair Ortiz asked about the project acceleration fund.
Ms. Teal answered that it was in the numbers section. She
restated that the reason the federal authority total was
higher was due to the new funding structure.
Representative Thompson asked if there was a listing
showing which items were different than the original bill.
Ms. Teal replied in the affirmative and noted that the
information was in report 3. She turned to report 3
containing the Capital Budget project detail by agency
governor structure. She noted that the documents were
available online. She explained that column 1 showed the
governor's amended budget, column 2 was the Senate version
CS, column 3 reflected the House CS, column 4 compared the
governors budget to the House CS, and column 5 compared
the House CS to the Senate CS. She highlighted a few
projects. She pointed to the West Susitna Road Access
Project on page 1, that was originally in the GO bond bill
and was funded at the governor's request in the amount of
$8.5 million. She moved to page 2 and reported that the
Alaska Travel Industry Association (ATIA) was originally
funded at $5 million but the funding was eliminated in the
CS because of funding from the American Rescue Plan Act
(ARPA) dedicated to tourism. She referred to the $1 million
appropriation for the Matanuska-Susitna Arctic Winter Games
and noted that it was not in the governors request but was
included in the CS.
4:11:12 PM
Representative Wool asked if the Voice of the Arctic
appropriation on page 2 was in the governors original
request. Ms. Teal replied that the increment had been in
the governor's amended budget.
Ms. Teal turned to page 6 and cited two Department of Fish
and Game (DFG) projects that had not been funded in the
capital budget process the previous year. The projects had
been included in HB 69 [HB 69-Approp: Operating
Budget/Loans/Funds] [the operating budget] and were not
included in the current CS.
Vice-Chair Ortiz asked what specific projects she was
referring to that were not included. Ms. Teal answered that
the projects were the Pacific Salmon Treaty Chinook Fishery
Mitigation and the Wildlife Management, Research and
Hunting Access projects.
Representative Josephson cited the Wildlife Management,
Research and Hunting Access project on page 6. He asked
whether it had been included in the current years
operating budget. Ms. Teal answered in the affirmative and
reminded the committee that supplemental capital items were
included in the operating budget.
4:13:27 PM
Ms. Teal turned to page 8 and pointed to the Statewide
Deferred Maintenance, Renovation, and Repair project and
noted that the appropriation was slightly lower than the
governor's request due to the amount available in the
Alaska Capital Income Fund. She moved to page 9,
referencing the Fairbanks Youth Facility that had been a GO
bond project. She noted the facility was not funded by UGF.
She thought that LFD would be best to speak to the
specifics. She understood that through a bond refinancing
$18 million became available for a capital project,
therefore, the governor chose to appropriate the funds for
the youth facility.
Representative Rasmussen looked at the 1167 fund source and
asked what fund it was.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that tobacco bonds had originally been sold from
the proceeds of a lawsuit two decades earlier, which
capitalized the Northern Tobacco Security Corporation, a
subsidiary of the Alaska Housing Finance Corporation
(AHFC). The tobacco corporation needed to refinance its
debt, or it could become insolvent in the coming years due
to the decline in tobacco sales. He elucidated that to
obtain a better rate on the refinancing of the tax exempt
bond the proceeds could be appropriated to a qualified
capital project under Internal Revenue Service (IRS) rules.
The proceeds were estimated to be $18 million. The
governor had selected the youth facility because it cost
$18 million, which was a criterion for obtaining the
refinancing.
4:16:01 PM
Representative Josephson had further questions about the
wildlife access research and hunting project on page 6. He
asked about the $10 million. Mr. Painter deferred to the
Office of Management and Budget (OMB) for the answer.
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, stated his understanding of the
question related to the project for $10 million on page 6.
He replied that the funding was either the Dingle Johnson
or Pittman Robertson federal funding for wildlife and
hunting access projects. He reported that the project was
not related to the navigability or statehood defense
project. The project was the annual recurring capital
program through DFG that built out hunting access projects.
Due to a truncated session in the prior year, the
department had not received the funds and it was included
in the supplemental. The administration moved some of the
wildlife management activity funds into the operating
budget because of the characteristics of the appropriation.
4:18:31 PM
Representative Josephson reasoned that the transaction
appeared typical and perfunctory and was not unique.
Representative Wool asked about the Fairbanks Youth
Facility capital upgrade to an existing facility. He asked
which youth facility it was. Mr. Steininger answered that
it was the Juvenile Justice facility in Fairbanks.
Vice-Chair Ortiz asked about the $10 million for wildlife
hunting access. He asked if there was a breakdown of the
$10 million expenditure. Mr. Steininger answered that DFG
posted the solicitations for the spending after the
appropriation was made. He relayed that currently
historical allocations were available.
Representative Rasmussen stated it was her understanding
that the project funding utilized federal receipts and not
UGF. Mr. Steininger answered in the affirmative and added
that receipts from hunting licenses (Fish and Game Fund)
were used as matching funds.
4:20:42 PM
Ms. Teal moved to page 9, under the Department of Health
and Social Services and cited the Palmer Pioneer Home and
Veteran's Home roof replacement increment. She indicated
that the project was originally in the GO Bond bill and was
included in the CS. She moved to page 11 and directed
attention to the $12.5 million line item for the Alaska
Vocational Technical Center (AVTEC), which was originally
in the GO Bond legislation. She communicated that the
appropriation was originally $19.5 million but it was
discovered that the reduced amount was sufficient. She
advanced to page 12 and referenced the Prosecutor
Recruitment and Housing to Address Sexual Assault and
Sexual Abuse of a Minor Case Backlog project. The project
had originally been a supplemental request and was included
in the CS. She moved to the Department of Natural Resources
(DNR) on page 15. She listed the following 4 projects:
Wildland Firefighting Aircraft Replacement, Wildland Fire
Engine Replacement, Statewide Firebreak Construction
Program, and the Statewide Park Sanitation and Facility
Upgrades. She relayed that they were all initially in the
GO Bond package. She pointed to one new project; the
Snowmobile Trail Development Program and Grants, which was
not included in the governor's original request but was
included in the CS.
Co-Chair Merrick believed that it was called the Snow
Tracks Program. Ms. Teal affirmed the statement.
Ms. Teal referenced the last two DNR projects; Alaska
Wildlife Troopers Marine Enforcement Repair and Replacement
and Boating Upgrades, Haul Outs, and Vessel Replacement and
noted that they were originally GO Bond projects.
4:22:58 PM
Ms. Teal turned the Department of Transportation and Public
Facilities (DOT) projects, which accounted for the bulk of
the numbers section.
Co-Chair Merrick asked members to contact her office with
specific questions regarding DOT.
Representative Josephson looked at page 15 and asked about
the Arctic Strategic Transportation and Resource Project
(ASTAR) project. He wondered whether it was a permanent
appropriation item.
Mr. Steininger answered that the ASTAR project had been
appropriated in phases over recent years. It was not
permanent but was a recurring project requiring additional
distinct funding.
Representative Edgmon asked about projects that were not
included. He asked why the Alaska Travel Industry
Association (ATIA) project had been removed. He understood
that the ARPA funding was different than the original
appropriation for marketing. Ms. Teal stated it was her
understanding that the ARPA funds would cover the same
expenses. She added that the original funding was the
vehicle rental tax and with the tourism downturn the
receipts were likely insufficient.
4:25:29 PM
Mr. Painter interjected that the administration directed $5
million in Coronavirus Aid, Relief, and Economic Security
(CARES) Act funding to ATIA for marketing Alaska as a COVID
safe tourism destination. The House added $10 million to
ATIA from ARPA funding as well. The funding may not be for
traditional tourism marketing but $15 million had been
directed to ATIA.
Ms. Teal pointed to page 38 related to two University of
Alaska (UA) projects and noted that they were originally GO
bond projects [UAA Building Energy Performance Upgrades and
Bartlett and Moore Hall Modernization: Restrooms and
Sanitation Infrastructure]. She underlined that the Courts
Statewide Deferred Maintenance item on page 39 was also a
GO bond project. She commented that her remarks on the
numbers section, Section 1 of the CS was complete. She
briefly described Section 2 as a summary of funding in
Section 1 by agency and Section 3 as listing statewide
funding by fund source.
4:26:44 PM
Ms. Teal reported that the language section of the budget
began in Section 4, on page 33 of the CS. She highlighted
that Sections 7 through Section 10 were reappropriations
from agencies to the Alaska Capital Income Fund.
4:28:22 PM
AT EASE
4:29:12 PM
RECONVENED
4:29:51 PM
AT EASE
4:30:33 PM
RECONVENED
Mr. Painter clarified that in Section 4 the typical revised
program receipt language [Revised Program Legislative
(RPL)] referencing AS 37.05.146(a), (b), and (c) was
typical. He noted that in subsection (e) on page 33 the
language was unusual. He explained that it prohibited
increasing receipts received by the Alaska Gasline
Development Corporation (AGDC) and was included in the
Senate version of the bill. He elaborated that (e) (1) on
page 33, the Coronavirus Response and Relief Supplemental
Appropriations Act (CRRSAA) funds for DOT were excluded
from the RPL process. He turned to page 34, Section 2 that
listed the Coronavirus State and Local Fiscal Recovery
Funds, in ARPA as excluded from the RPL process. In
addition, he read the following that was excluded from the
RPL process:
th
(3)funds appropriated by the 117 Congress
(A) for infrastructure, jobs, or part of the
American Jobs Plan, as proposed by the
President of the United States, or a similar
bill or plan;
(B) related to novel coronavirus disease (Covid-
19) or economic recovery; or
(C) for natural gas pipeline expenditures.
Mr. Painter noted that subsection (f) stated that the
exclusions did not apply to prior authorizations made in
January 2021.
Representative Josephson asked if any federal funding
received after session ended and before the coming special
session on August 2, 2021, could not be expended until
August 2. Mr. Painter answered that the funds could also be
appropriated in the coming special session beginning on May
20, 2021.
4:33:20 PM
Ms. Teal turned to Section 5, on page 34 of the bill. She
offered that the language was standard language that was
omitted in the prior year. Section 6 was standard language
related to the Natural Petroleum Reserve-Alaska (NPRA)
impact grants. She reiterated the prior information
regarding Section 7 through Section 10. She moved to
Section 11 and commented that the item had been an
operating item that was moved to the capital budget. She
pointed out that Section 12 through Section 14 returned to
reappropriations to the Capital Income Fund. She
communicated that Section 15 through Section 23 on pages 42
through page 46 included reappropriations within districts
from lapsing grant funds from the Department of Commerce,
Community and Economic Development (DCCED). She turned to
page 46, Sections 24 through Section 26 and noted they
contained lapsing language and effective dates.
Co-Chair Merrick asked if there was anything to highlight
on report 4.
Ms. Teal identified report 4 that included the
reappropriations within district [Section 15 through
Section 23] and noted they matched the language in the
Senate CS version.
Representative Josephson cited report 1 that showed a UGF
spend of $324.6 million. He asked what it did to the
surplus of a similar amount. Mr. Painter answered that the
House's operating budget included some fund changes using
ARPA dollars for debt service that was discovered to be
unallowable. The surplus had included fund changes that
could not occur. However, the same amount of revenue
replacement might be applied to other areas of the budget.
He remembered that the amount of surplus was enough for a
$500 PFD assuming the capital budget was closer to the
governors version. The CS version was $150 million higher
so the surplus would be that much less. However, how the
ARPA funds could be spent was a moving target therefore, it
was difficult to compare the Houses budget to a surplus.
Co-Chair Merrick reminded the committee that unique funding
sources were used originally in the capital budget that
once removed, inflated the House CS.
Representative Wool deduced that the House CS compared to
the Senate CS and was $155 million higher. In addition, the
House CS versus governors version was $200 million higher
and the ARPA funding added $200 million to the House
budget. He noted that the Senate operating budget numbers
were currently unknown, therefore the residual amount was
unknown. Mr. Painter was not prepared to speak about a
fiscal summary on the fly.
4:38:45 PM
Vice-Chair Ortiz referenced Mr. Painter's mention of the
recently released ARPA guidelines. He asked if the
committee would hear a summary about how the guidelines
changed in relation to the budgeting process. Mr. Painter
answered that the new information was improved, and he
believed the committee would hear from Mr. Steininger on
the updates.
Co-Chair Merrick WITHDREW her OBJECTION to the adoption of
the CS.
There being NO OBJECTION, Work Draft 32-GH1507|G was
ADOPTED.
HB 70 was HEARD and HELD in committee for further
consideration.
Co-Chair Merrick reviewed the schedule for the following
morning.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 202 Fiscal Model Output REVISED (002).pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 202 |
| HB 202 Public Testimony by 051621.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 202 |
| HB 202 Flowchart.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 202 |
| HB 202 Sectional Analysis 5.5.2021.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 202 |
| HB 202 Sponsor Statement 5.5.2021.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 202 |
| HB 70 Agency Summary HSC1 All Funds.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 70 |
| HB 70 AgencySummary HCS1 UGF Only.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 70 |
| HB 70 HCS WorkDraft vG.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 70 |
| HB 70 ProjectDetailByAgency HCS1 Supplemental Items Compare to Senate SCS1.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 70 |
| HB 70 ProjectDetailByAgency HCS1 Compare to Gov Amend Total.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 70 |
| HB 70 Public Testimony by 051921.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 70 |
| HB 202 Public Testimony by 051921.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 202 |
| HB 202 Public Testimony by 052121.pdf |
HFIN 5/17/2021 1:30:00 PM |
HB 202 |