02/20/2020 01:30 PM House FINANCE

HOUSE BILL NO. 234                                                                                                            
                                                                                                                                
     "An    Act    making    supplemental    appropriations,                                                                    
     reappropriations,  and  other appropriations;  amending                                                                    
     appropriations;     capitalizing      funds;     making                                                                    
     appropriations under art.  IX, sec. 17(c), Constitution                                                                    
     of the State of  Alaska, from the constitutional budget                                                                    
    reserve fund; and providing for an effective date."                                                                         
                                                                                                                                
2:09:12 PM                                                                                                                    
                                                                                                                                
^GOVERNOR'S FY 20 SUPPLEMENTAL BUDGET AMENDMENTS                                                                              
                                                                                                                                
2:09:13 PM                                                                                                                    
                                                                                                                                
Mr.  Steininger   indicated  he  would  be   discussing  the                                                                    
proposed  supplemental amendments.  He began  with Judiciary                                                                    
on  slide 24.  The cost  of  the conversion  to a  bi-weekly                                                                    
payroll  was reflected  as well  as  funding for  additional                                                                    
costs related to the state's accounting system, IRIS.                                                                           
                                                                                                                                
Mr. Steininger reviewed  additional amendments for Judiciary                                                                    
on slide 25.  There was $75,800 related  to additional costs                                                                    
for Executive Branch Services.                                                                                                  
                                                                                                                                
Co-Chair Foster asked  Mr. Steininger to return  to page 25.                                                                    
He  asked for  further detail  regarding the  addition costs                                                                    
for Executive  Branch Services.  Mr. Steiniger  replied that                                                                    
the risk  management rate  for the  amount charged  based on                                                                    
employees in  the Judicial  Branch increased.  Judiciary did                                                                    
not have  the flexibility  in its budget  to respond  to the                                                                    
increase like other agencies might.                                                                                             
                                                                                                                                
Mr. Steininger indicated  that other supplemental amendments                                                                    
included  an  adjustment  to  the  Judgements,  Claims,  and                                                                    
Settlements  Section adding  two new  judgements as  well as                                                                    
place-holder language  related to pending  litigation. There                                                                    
was also a special appropriation,  a lapse extension for the                                                                    
authority  to buy  back tax  credits using  proceeds from  a                                                                    
bond sale. The  authority existed in FY 20 and  needed to be                                                                    
extended into  FY 21  in case  a bond  sale occurred  in the                                                                    
time period.                                                                                                                    
                                                                                                                                
Mr.  Steininger  reported  that within  the  capital  budget                                                                    
there was a  $24 million project to refresh  the Alaska Land                                                                    
Mobile  Radio   (ALMAR)  System.  He  elaborated   that  the                                                                    
repeaters that  were on  the towers  needed to  be replaced.                                                                    
The  item needed  to be  started relatively  soon to  ensure                                                                    
that  the  other  partners  within  the  system  could  stay                                                                    
onboard and keep the system functioning.                                                                                        
                                                                                                                                
Mr.  Steiniger   relayed  that  within  DPS   there  was  an                                                                    
adjustment to the project for  FAA-required equipment on DPS                                                                    
aircraft.  The  amount  OMB  included  in  the  supplemental                                                                    
budget  a couple  of weeks  prior  was lower  that what  was                                                                    
actually required  to address all  the aircraft  that needed                                                                    
the equipment.  The amount was  increased by $293,400  for a                                                                    
total of just under $400,000 for the equipment.                                                                                 
                                                                                                                                
Co-Chair  Foster asked  about  the lapsed  extension in  the                                                                    
special  appropriation.  He asked  if  it  was for  the  $27                                                                    
million that  was in FY 20  so that it could  roll over into                                                                    
FY  21. Mr.  Steininger indicated  that the  amount was  for                                                                    
several  hundred million  to spend  the proceeds  of a  bond                                                                    
sale to actually purchase tax credits.                                                                                          
                                                                                                                                
Co-Chair Foster  had heard  that if the  ALMR money  was not                                                                    
appropriated to update the system,  the other partners might                                                                    
pull  out. Mr.  Steiniger responded  in the  affirmative. He                                                                    
indicated he had finished his presentation.                                                                                     
                                                                                                                                
Co-Chair  Johnston  suggested  the committee  would  discuss                                                                    
spending  caps.  She  asked  how they  would  fit  into  the                                                                    
governor's proposed budget  and supplemental amendments. She                                                                    
referred to HJR 7  [Legislation introduced in 2019 regarding                                                                    
an  appropriation limit].  Mr.  Steininger  agreed it  would                                                                    
provide context.                                                                                                                
                                                                                                                                
Co-Chair Johnston requested that he  show how the budget fit                                                                    
into  last  year's proposed  spending  cap.  She thought  it                                                                    
would help in future conversations.                                                                                             
                                                                                                                                
2:14:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster summarized that  the amendments reflected an                                                                    
increase of  $45 million  UGF for  the operating  budget, $4                                                                    
million UGF for the capital  budget, and $30 million for the                                                                    
supplemental budget.  The total amount was  $80 million UGF.                                                                    
He  asked  if  his   figures  were  correct.  Mr.  Steiniger                                                                    
responded affirmatively.                                                                                                        
                                                                                                                                
Representative LeBon returned to  the ALMR program. He asked                                                                    
if the  request was to  fund the  program at $24  million to                                                                    
meet an  expectation of the  Department of  Defense partner.                                                                    
He  asked  if  there  was an  additional  $5  million  being                                                                    
proposed  in   the  capital  budget  for   the  system.  Mr.                                                                    
Steininger responded  positively that in the  amendments OMB                                                                    
reduced  an  existing  capital   request  that  was  in  the                                                                    
December  release  of  the  budget  in  the  range  of  $7.6                                                                    
million.  After further  conversation  with the  department,                                                                    
the funding request was reduced  to $5 million for both SATS                                                                    
and ALMR.                                                                                                                       
                                                                                                                                
Representative  LeBon asked  if  the total  funding for  the                                                                    
system  was $29  million.  Mr. Steininger  responded in  the                                                                    
affirmative in terms of capital projects.                                                                                       
                                                                                                                                
Co-Chair Foster  commented that  if the  state were  to lose                                                                    
the court  case having to do  with oil tax credits  the cost                                                                    
to the  state would  increase dramatically from  $55 million                                                                    
to $166  million   if  the committee followed  the statutory                                                                    
minimum. The total adjustments proposed  was $80 million but                                                                    
could  grow  by  over  $100   million  if  the  scenario  he                                                                    
suggested were to occur.                                                                                                        
                                                                                                                                
Co-Chair  Foster  reviewed  the  agenda  for  the  following                                                                    
meeting at 5:00 pm in the current day.                                                                                          
                                                                                                                                
HB  234  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.