Legislature(2017 - 2018)ADAMS ROOM 519
04/30/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB284 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 284 | TELECONFERENCED | |
HOUSE BILL NO. 284
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
1:40:37 PM
AT EASE
1:41:02 PM
RECONVENED
Co-Chair Seaton MOVED to ADOPT the proposed committee
substitute for HB 284, Work Draft 30-GH2565\D (Martin,
4/25/18).
Representative Wilson and Representative Guttenberg
OBJECTED for discussion.
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, explained
the changes in the work draft. He shared that the work
draft mirrored the recent changes by the Senate Finance
Committee [to SB 142, the Senate's version of the capital
budget]. He began with Section 1, pages 2 through 10 that
included the agency capital appropriations proposed by the
governor and amended by the Senate Finance Committee. He
spoke to changes and highlights in the section beginning on
page 2, line 19 pertaining to bulk fuel upgrades. The bill
used nearly $5 million in Alaska Industrial Development and
Export Authority (AIDEA) dividends to replace undesignated
general funds (UGF).
Representative Wilson remarked that the original budget
distinguished between other and federal funds. She asked
why the current version did not.
Mr. Labolle answered that it was a change made by the
Senate Finance Committee that moved an appropriation from
the contingency budget to the capital budget.
Representative Wilson asked for a copy showing a breakout
of general, other, and federal funds. She explained that
version A of the legislation had broken out the
information.
Mr. Labolle asked to have someone from the Legislative
Finance Division (LFD) join the meeting.
ROB CARPENTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
replied that the Office of Management and Budget (OMB)
landscape format included general, federal, and other
funds, but the legislative bills had never broken out
federal funds; the categories had always been general and
other. He noted that federal funds fell under the "other"
category.
1:44:21 PM
Representative Wilson referenced version A of the bill,
which had come from the governor and included the three
categories. She asked if it was possible to see the funds
broken out in the three categories. She reasoned that other
funds could be anything.
Mr. Carpenter asked if she was speaking about reports or
the legislation itself.
Representative Wilson was referencing the bill itself.
Mr. Carpenter answered that LFD was not currently programed
to provide the breakout. He was not saying it was
impossible, it had merely never been done by LFD.
Representative Wilson asked where version A of the bill had
come from. Mr. Carpenter answered OMB.
Representative Wilson asked for verification that LFD had
compiled the work draft currently before the committee
[version D]. Mr. Carpenter replied in the affirmative.
Representative Wilson suggested help from Pat Pitney,
Director, Office of Management and Budget, Office of the
Governor in order to have a better understanding of where
the money was coming from.
Mr. Labolle advised that the breakout of the funding for
all projects in Section 1 was included in Section 2, pages
11 through 13. The information enumerated the various fund
sources.
Representative Wilson used the Alaska Energy Authority
(AEA) as an example and observed that the bill broke the
funding down by department but not project.
Mr. Labolle answered that the financial reports broke the
funding detail down by project.
Vice-Chair Gara asked for verification there was an LFD
report for the current bill version.
Mr. Carpenter answered that all of the LFD reports were on
its website; members should also have a copy. The reports
broke the information out into detail.
1:46:55 PM
Representative Ortiz asked if Mr. Labolle was addressing
the bill or reports.
Mr. Labolle replied he was speaking to the bill. He moved
to page 3, lines 18 through 20. He detailed that the Senate
had added the cruise ship tender dock reconstruction for
$1.1 million using cruise vessel passenger funds. Also, on
page 3, lines 31 through 32, the Senate added the Ketchikan
cruise ship dock berth 4 expansion for $3 million in cruise
vessel passenger funds. He moved to page 4, lines 5 through
9; the Senate had funded the first five projects on the
school major maintenance list for $24.2 million. Page 5,
lines 14 and 15 pertained to Pittman Robertson funds
received from the federal government. The Senate had been
concerned with over spending the Fish and Game Fund and had
replaced the $2 million in Department of Fish and Game
(DFG) funds with $2 million in statutory designated
receipts and $2 million in the Charter Revolving Loan Fund.
Co-Chair Foster asked for a repeat of the information.
Mr. Labolle complied. There had been concern on the Senate
side that the state was overspending DFG funds to match
Pittman Robertson funds; therefore, the Senate Finance
Committee had elected to use $2 million in statutorily
designated receipts and $2 million from the Charter
Revolving Loan Fund.
Representative Neuman asked if all of the Pittman Robertson
funds had all been used and did not get any back on the
three-to-one match. He assumed it was the reason it had
been necessary to replace the funding with statutorily
designated receipts. Mr. Labolle answered it was his
understanding.
Representative Neuman asked about the source of the
designated receipts. He wondered if the source was fishing
license [fees]. Mr. Labolle replied that he did not know
the specific source.
Co-Chair Foster asked staff to follow up with the
information. Mr. Labolle agreed.
Representative Wilson asked if the $2 million under general
funds was from the Charter Revolving Loan Fund.
Mr. Carpenter asked for a repeat of the question.
Representative Wilson pointed to [page 5] line 14 showing
$2 million in general funds and $10 million other funds.
She asked if the $2 million in general funds came from the
Charter Revolving Loan Fund. She assumed the $10 million
was Pittman Robertson funding.
1:51:05 PM
Mr. Carter answered that the $2 million from the Charter
Revolving Loan Fund was designated general funds (DGF).
Representative Wilson she asked for verification that the
$10 million was Pittman Robertson funding.
Mr. Carter answered there was $6 million in federal Pittman
Robertson funding. The total project was $12 million,
comprised of $6 million federal funds, $2 million from the
Fish and Game Fund, $2 million statutory designated program
receipts, and $2 million from the Charter Revolving Loan
Fund.
Representative Guttenberg stated that the legislature had
dealt with the issue in the Department of Natural Resources
(DNR) and DFG operating budgets. He asked how the increment
under discussion meshed with that.
Mr. Labolle would follow up.
Representative Guttenberg stated there had been other funds
used in order to access Pittman Robertson funds. He was
trying to determine how they meshed or conflicted.
Co-Chair Foster asked staff to follow up with the
information.
Mr. Labolle continued with page 5, lines 21 through 27. The
Senate had included $20 million to address deferred
maintenance needs with state agencies and had included
intent language that the Office of the Governor prioritize
deferred maintenance needs and distribute the funds to
address the highest priority issues.
Co-Chair Foster asked if the figure was the total amount
carried over from the contingency capital budget or part of
the amount. Mr. Labolle answered that $40 million had been
included in the contingency budget; only half had been
moved over.
Representative Wilson believed the legislature had
allocated $20 million the prior year with the same
language. She wondered how much of that amount had been
spent.
Mr. Labolle deferred the question to OMB.
1:53:54 PM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, responded that all but just under
$300,000 of the $20 million had been distributed to
priority projects to several different agencies. She would
have to pull a report to determine the precise amount
spent. The funds had been distributed and the projects were
being worked on.
Representative Wilson asked to receive the project priority
list attached to the money as well. She wanted to see how
far down the [project] list they had gotten.
Ms. Pitney responded affirmatively.
Vice-Chair Gara remarked that some of the state's lowest
capital budgets had been in the past few years. He
referenced the $20 million increment under discussion. He
detailed that the University of Alaska had roughly $1
billion in deferred maintenance. He asked for the remainder
of the state's deferred maintenance cost.
Ms. Pitney answered the remainder was approximately an
additional $1 billion.
Vice-Chair Gara asked if the $20 million increment [page 5,
lines 21 through 27] was meant to go towards the total $2
billion in deferred maintenance. Mr. Labolle answered that
the $20 million did not include the University.
Representative Tilton asked about an increment for the
Office of the Governor for modernization and replacement of
the electronic voting system (lines 19 and 20). She asked
if the increment had been added in the new work draft.
Mr. Labolle believed the item was addressed later in the
presentation.
1:56:24 PM
Mr. Labolle moved to page 5, line 28 through page 6, line
21 showing information technology (IT) projects for state
agencies to modernize systems and upgrades in order to
remain compliant with federal requirements. He believed the
item would address Representative Tilton's question.
Representative Tilton clarified her question was about page
5, lines 19 and 20. She believed Mr. Labolle may have
inadvertently missed the item.
Mr. Labolle replied that page 5, lines 19 through 20 was
the governor's project to modernize and replace the
existing election voting system. He detailed that $3.8
million was funded using $3 million in federal funds and
$800,000 in reappropriations located in Section 14, with $1
million currently in the election fund.
Representative Wilson asked why $800,000. She thought only
$150,000 was necessary to match the $3 million. Mr. Labolle
answered that the changes had been made by the Senate.
Representative Wilson asked if the reason for the Senate's
change was unknown to the committee.
Mr. Carpenter replied that the total project cost requested
by the governor was $4.8 million. The Senate organized the
funding differently - instead of having two
reappropriations and a scope change on an existing project,
the Senate had reappropriated the money into the election
fund and had taken all of the money out of the election
fund. The project was identical to the governor's proposal
other than the structure of the appropriations.
Representative Wilson believed the money was coming from
left over money from the FY 18 budget. Alternatively, she
asked if the money was from previous years.
Mr. Carpenter affirmed and deferred to OMB for further
detail on the need for the $800,000.
Ms. Pitney answered that the project scope and expectation
of what it would entail was the reason the amount was $4.8
million. She stated it was not necessarily the match. The
state was fortunate to have $3 million in federal grant
funds for the project, but the additional request was to
pay for the remaining anticipated cost.
1:59:31 PM
Representative Wilson asked if the money would go back into
the General Fund if the cost happened to be lower.
Ms. Pitney replied the election fund did not lapse back -
the funds would remain in the election fund and could be
reappropriated if that was the will of the legislature.
Mr. Labolle turned to page 6, lines 25 and 26 and addressed
funding for the emergency medical services for Code Blue at
the FY 18 level of $500,000. Page 6, lines 29 and 30
included funding for Pioneer Home renovations and repairs
at the FY 18 level in the amount of $1 million. Page 7,
lines 15 through 20 included projects approved by the Exxon
Valdez Oil Spill Trustee Council using Exxon Valdez Oil
Spill (EVOS) funds. He turned to page 7, lines 30 to 31 and
detailed that the Senate had reduced the National Mineral
Security Program funding based on anticipated reduced
funding from the federal government from $15 million down
to $5 million.
Mr. Labolle moved to page 8, lines 24 through 25, which
included funding for Alaska Housing Finance Corporation
(AHFC) deferred maintenance for $3 million in federal funds
and $3 million AHCC [Alaska Housing Capital Corporation]
funds. The increment was in addition to $3 million in AHFC
funds and $1 million in federal funds included in the
operating budget for ongoing maintenance.
2:01:33 PM
Mr. Labolle continued on page 9, lines 4 through 5 that
funded senior citizen housing at the FY 18 level of $1
million. Page 9, lines 6 and 7 included funding for the
Supplemental Housing Development Program at the FY 18 level
of $3 million. Page 9, lines 13 through 17 included intent
language in response to an accident that had closed the
Glenn Highway and rerouted traffic for multiple days. The
Senate had added language directing the development of a
temporary traffic control plan as well as emergency traffic
control guidelines for the Glenn Highway, milepost 0 to 35.
Page 9, lines 26 through 28 included funding by the Senate
for the Municipal Harbor Facility Grant Fund at $5 million
in UGF and reappropriations found in Section 22 of the
bill.
Representative Ortiz asked where the $5 million was
located. He only saw $3,031,000 on page 9.
Mr. Labolle answered that the remainder of the funding was
from reappropriations and was located in Section 22.
Mr. Labolle turned to page 10, lines 6 through 10, which
included $51 million UGF funding for the federal aid
highway match; an additional $14 million in
reappropriations was located in Section 21. Additional
federal aid funding was also found in Section 21 for
aviation.
Mr. Labolle addressed items that had been removed from the
governor's request. Funding of $40 million for the Port of
Anchorage had been removed. The correctional security
upgrade project had been moved from the numbers section to
the language section and was funded with reappropriations
located in Section 18. Fish and Game vessel and aircraft
maintenance and repair upgrades had been moved from the
numbers section to the language section and was funded with
reappropriations located in Section 20. The Senate did not
include an amendment from the governor requesting legal and
financial due diligence related to AKLNG in the amount of
$750,000 for DNR and $750,000 for the Department of Revenue
(DOR).
Mr. Labolle relayed that the Senate did not include an
amendment from the governor related to enhanced 911, which
would have been about $8.5 million. The Senate had removed
funding for the Adak airport operations because the item
was currently in conference committee on the operating
budget. The Senate had removed $1 million for public and
community transportation state match. Lastly, the Senate
had removed the governor's project for a commuter rail
concept at a total of $4.5 million.
Co-Chair Foster asked Mr. Labolle to provide the
information to committee members.
2:05:20 PM
Vice-Chair Gara asked if the $8.5 million for enhanced 911
was to develop a statewide system for areas without 911
service.
Ms. Pitney answered in the affirmative. She clarified that
the requested funding had been $8.5 million with an
additional $1 million reappropriation. The funding was for
a consolidated 911 system and providing access to all
communities. She explained that some communities still had
to use an 800 number [to access 911]. Most communities had
911, but it was routed through the telephone system, so the
caller's location was not known, making emergency
situations very difficult. Enhanced 911 showed location
based on the phone call. She relayed there were only a few
communities with enhanced 911.
Vice-Chair Gara supported the project. He asked if the $9.5
million would fully or only partially cover the enhanced
911 project.
Ms. Pitney answered that enhanced 911 would provide a
caller's location. She detailed there was a newer version
of 911 that allowed a person to send a picture and data.
2:07:53 PM
Co-Chair Seaton asked if the enhanced 911 involved the
construction of a facility and removal of two contract
facilities.
Ms. Pitney replied there was space in the old crime lab
that would be built out for enhanced 911. The idea was to
bring contracts currently with Wasilla and Kenai back in-
house.
Co-Chair Seaton clarified that the increment did not
pertain to the 911 and new telephone systems that had been
discussed by the legislature in the past.
Representative Neuman asked about the consolidation. He
stated that state troopers currently had to go through
contract services like MatCom in Mat-Su. He asked for
verification the consolidation would mean the contracts
with dispatch organizations would not be necessary and the
service would all be in-house. He believed the change would
imbed the funding into the Department of Public Safety's
(DPS) operating budget. He asked about the cost difference
between contracting the services out versus doing the work
in-house by DPS. He believed troopers liked the idea
because it would increase safety by reducing the number of
people the call had to go through. He communicated that
troopers were supportive of their own trooper dispatch. He
wondered if the shift would bring a savings.
Ms. Pitney responded that the administration believed that
the operating funds currently in the form of contracts and
some personnel (the contract was slightly different between
communities) would remain the same if the services were
brought in-house. The administration did not project a
particular savings or expense beyond getting the project up
and running.
Representative Neuman observed there were trends that
seemed to go back and forth (e.g. in IT and human
resources) between contracting services out and bringing
services back in-house. He did not know the reason for
going out to contract in the first place. He elaborated
that the troopers wanted to see the service in-house and
had been discussing the issue for several years. He had
concern about how it prepared other communities who needed
the money as part of their budgets. For example, if
communities had contracts going out for several million
dollars for dispatch, the change would include their
dispatch at the same time. He asked if there was something
that would help communities that were already using the
funds for their dispatch at the same time to create
economies of scale. He reasoned it would impact the
communities and he wondered how it would be dealt with.
2:11:49 PM
Representative Ortiz addressed the $1.5 million reduction
to AKLNG (two items of $750,000 each). He asked how much
the reduction set back the project.
Ms. Pitney replied that the funds were for DNR and DOR to
conduct a state best interest finding. The reduction would
slow the response time for answers to many questions about
the project. She stated it was a priority project. She
mentioned legal questions, and the Black and Veatch
contract that was instrumental in helping to move the
project. The project was at the point where the evaluation
of state royalties, revenue, oil and gas impacts was
important. They had taken a year off, which had been
reasonable to wait for the market and gas supply contracts.
However, the time had come to put money back into the due
diligence.
2:13:37 PM
Representative Wilson stated there that she had spoken with
the commissioner of DPS and had learned there would be
another $500,000 required in addition to more employees for
the enhanced 911 system. She clarified that it was not a
cost neutral program.
Vice-Chair Gara thought there were two changes pertaining
to the Department of Health and Social Services (DHSS)
budget. He referenced a $2 million appropriation for
Pioneer Home renovation and repairs to help add space for
individuals dealing with dementia. He only saw $1 million
included and wondered if it had been reduced from $2
million. He asked about the governor's position.
Ms. Pitney answered that the increment had been $2 million.
The administration believed $2 million was the required
cost.
Vice-Chair Gara asked for detail about the Code Blue
project. He did not believe the amount included in the
current bill was the amount requested by the governor.
Ms. Pitney answered that the governor had proposed the Code
Blue project in the contingency capital budget to be paid
for with a tax. The governor's budget had included $1
million, $500,000 had been the traditional base capital
amount.
Vice-Chair Gara asked how the funds would be used for the
Code Blue project.
Ms. Pitney answered that the Code Blue project was
equipment related and primarily included safety equipment
for community emergency medical services. She added that
myriad items were funded through it.
Mr. Labolle relayed that he had a breakdown from the Code
Blue organization showing what would be funded if the
funding was $1 million or $750,000. He would provide the
information to committee members.
2:16:21 PM
Co-Chair Foster stated the purpose of the meeting had been
to highlight the changes made by the Senate to the capital
budget.
Representative Wilson observed there were additional
changes in the bill that had not been reviewed. She pointed
to page 17 and remarked it was her understanding there was
a bill for the University of Alaska for the UAA long-acting
contraception study. She thought it was typical to wait
until the bill passed before providing funding for a
project in the capital budget.
Mr. Labolle answered it was later in the presentation. He
moved to Section 2, pages 11 through 13 that included a
breakout of funding by agency for the appropriations made
in Section 1. Section 3 on pages 14 and 15 was the breakout
of statewide funding for appropriations made in Section 1.
Section 4, page 16 included supplemental capital projects
and grants. Lines 10 and 11 included projects that moved
the barracks from JBER [Joint Base Elmendorf-Richardson] to
Mertarvik in order to help relocate the residents of the
village of Newtok. He detailed that $960,000 leveraged $3.8
million in federal funds through the Denali Commission.
Lines 15 and 17 increased the appropriation to an EVOS
project that had been funded in FY 18 by $3 million due to
an update in the land appraisal.
Co-Chair Foster asked if a total of $3 million had been
moved over. He asked Mr. Labolle to identify whether full
or partial amounts were carried over.
Mr. Labolle asked if Co-Chair Foster was speaking about the
EVOS project or the JBER barracks.
Co-Chair Foster requested to hear the amount detail on
items going forward. He wanted members to know whether a
total or partial appropriation had been moved forward.
Representative Wilson asked why the Newtok increment
included House Districts 1 through 40. She stated the
project was very specific.
Mr. Labolle deferred the question to LFD.
Mr. Carpenter answered that he believed it was a drafting
error.
Representative Wilson stated that the reappropriation of
$960,000 for the Newtok project came from the Susitna
Watana [Hydroelectric Project]. She elaborated that the
project involved moving a community. She asked if the
community would match or pay the funds back. She was trying
to determine why the state was paying to move an entire
community.
Mr. Labolle believed the fund source had changed in the
Senate and it was not the Susitna Watana reappropriation as
requested by the governor. He did not believe there was a
local match. He deferred to OMB for further detail.
Ms. Pitney replied that she was uncertain there was a local
contribution. She detailed it was the top priority
community that had been impacted by coastal erosion.
Kivalina was high on the priority list as well, but Newtok
moving to Mertarvik was further in the planning process.
Part of the priority was to address eroding coastal
communities where residents are displaced.
2:21:20 PM
Representative Wilson asked if the appropriation set a
precedent of using state funds to move communities. As the
state looked at possible payroll or other taxes because it
did not have enough money, she wondered how to justify
allocating $960,000 in general funds going to Newtok. She
reasoned that disasters happened everywhere (e.g. Galena)
and new builds had to occur. She wondered if the state
would have to pay for the next community that experienced a
problem like Newtok. She asked what would happen if there
was no funding from the Denali Commission at that point to
foot some of the bill.
Ms. Pitney replied that the planning process to move Newtok
and other villages had been ongoing. The communities were
moving as fast as possible with available funds. In the
future, when match funding was available, the state would
do everything possible to help communities in their
relocation efforts.
Representative Wilson asked if the next community would be
expected to receive the same amount of state assistance.
She wondered if it would be a potential lawsuit if the
state did not provide the funding because the current
appropriation started down a road of providing state
assistance.
Ms. Pitney responded it was a policy call. The village
[Newtok] was ready and it was policy to do what the state
could to help it relocate.
Mr. Labolle addressed a $2.5 million increment for the
processing and storage of untested sexual assault kits
statewide page (16, lines 21 through 26). The Senate had
added intent language to guide the department in the
process.
Co-Chair Foster asked for verification that there had been
zero funds for the item previously. He believed the
increment was a total of $2.5 million. Mr. Labolle agreed
and relayed the increment was an "add" to the budget.
Representative Pruitt asked how close the funds would get
to eliminating the backlog [in untested sexual assault
kits]. Ms. Pitney replied that she would follow up.
Co-Chair Foster answered that based on his conversations
with Senate members, $6 million was needed to get caught
up.
Representative Pruitt stated the item was something
everyone felt was important to move forward on.
2:24:45 PM
Mr. Labolle moved to page 17, line 5 where the Senate had
included the Klutina Lake road survey project for $350,000.
The item had been requested by the governor.
Representative Wilson asked why the increment pertained to
House district 1 through 40. She remarked on the specific
area of the project. She asked how long the survey was for
$350,000. She believed the road was six miles long.
Mr. Labolle replied that the increment was a part of a
settlement with Ahtna. He deferred to LFD regarding the
remainder of the question.
Representative Wilson commented that the Flint Hills
settlement went all to district 3 and it was a lawsuit
settlement. She wanted to know the difference between the
two.
Mr. Carpenter answered that the bill version before the
committee was the first draft by the Senate and there would
be drafting errors. He appreciated members pointing them
out.
Representative Wilson replied that she was just trying to
make things equal.
Representative Guttenberg observed that the last two
increments were judgements. He wondered if that could be
the reason for the particular coding.
Mr. Carpenter replied that generally a more precise House
district was specified if possible (unless the project
impacted more than one district, which would require a
statewide or regional specification).
Representative Guttenberg asked for clarification that the
increment pertained to the Ahtna situation out in
Glenallen.
Ms. Pitney answered it was a survey in that area. She
detailed there was a right-of-way that had not yet been
surveyed. It was the state's best interest to survey the
area. She elaborated it was not a judgement or settlement.
2:27:49 PM
Co-Chair Foster relayed that he and Co-Chair Seaton had a
meeting at 2:30 p.m. and Co-Chair Seaton had made the
motion to adopt the CS. Prior to leaving Co-Chair Seaton
needed to withdraw his motion. He asked another member to
move to adopt the bill.
Co-Chair Seaton WITHDREW his motion to adopt the CS. There
being NO OBJECTION, it was so ordered.
Representative Grenn MOVED to ADOPT the proposed committee
substitute for HB 284, Work Draft 30-GH2565\D (Martin,
4/25/18).
Representative Wilson OBJECTED for discussion.
Co-Chair Foster handed the gavel to Vice-Chair Gara.
Mr. Labolle continued on page 17, lines 9 through 12 that
included $500,000 for the University of Alaska to conduct a
study for long-acting contraception and for the University
to provide interim reports to the legislature.
2:29:36 PM
Representative Wilson stated it was her understanding the
topic was included in separate legislation. She believed
the normal process was to pass legislation with a fiscal
note versus putting the funding in the capital budget.
Mr. Labolle replied that the increment had been added by
the Senate.
Representative Wilson responded that there would be an
amendment offered on the topic. She brought attention to
another increment pertaining to the Alaska Marine Highway
System (AMHS) that included House districts 1 through 40.
She believed it should be corrected to reflect the accurate
districts.
2:30:21 PM
Mr. Carpenter clarified that that the appropriation to AMHS
affected a great deal of the state including Southeast and
Southwest Alaska, out to the Aleutian Chain. He stated it
was difficult to pinpoint a location, so the increment had
traditionally been statewide.
Representative Wilson indicated that House district 3 had
no ferries.
Vice-Chair Gara asked for verification that traditionally
if an increment impacted multiple districts it was
reflected as House districts 1 through 40. Mr. Carpenter
responded that a region was identified when possible, but
otherwise an increment was listed as statewide.
Representative Ortiz referred back to line 9 on page 17. He
asked if there was paperwork detailing what the UA long-
acting contraception study was. Mr. Labolle replied that he
did not have backup pertaining to the particular project.
Representative Wilson assumed the allocation in the current
version of the capital budget included the fiscal note
amount from a separate Senate bill on the same topic.
2:32:11 PM
Mr. Labolle continued to Section 5 on page 18 that included
funding by agency for the appropriations made in Section 4.
Vice-Chair Gara asked if they were changes from the
original governor's bill.
Mr. Labolle responded in the negative. Section 5 included
the funding breakdown for Section 4. Section 6 was the
statewide breakdown of funding [for Section 4].
Mr. Labolle moved to Section 7, page 20. He relayed the
Senate had included some supplemental operating items
proposed by the governor. There were still several
outstanding supplemental items that had not been agreed to
by both bodies.
Vice-Chair Gara asked for clarification. He surmised there
were supplemental items proposed by the governor that were
not included in the current version of the capital budget.
He asked if the items [in Section 7] were in the governor's
supplemental and represented no change from the governor's
and Senate's proposals.
Mr. Labolle responded in the negative. He elaborated that
there was a separate supplemental budget and the operating
and capital budgets also included their own supplemental
items. The fast-track supplemental bill had been passed and
included supplementals from all three budgets that had been
agreed upon. Supplemental items that had not been included
in the fast track bill had been removed from the operating
budget. The remaining supplemental items from all three
budgets were in limbo and the only place to catch them was
the capital budget.
Vice-Chair Gara surmised the supplemental items in the
current version of the capital budget were some, but not
all of the supplemental items in the governor's budget. He
asked if the supplemental items included in the capital
budget before the committee reflected the same numbers as
the governor's proposal.
Mr. Labolle responded in the affirmative. He listed one
exception pertaining to Medicaid. He explained that a
portion of the Medicaid supplemental had been funded in the
supplemental budget. However, the item was not included in
the bill currently under consideration.
2:35:07 PM
Representative Guttenberg referred to page 20, lines 28
through 31 pertaining to DNR, OPMP [Office of Project
Management and Permitting]. He stated that typically OPMP
was in the operating budget. He asked for further detail on
the reduction [of $100,000].
Ms. Pitney responded that OPMP had agreed the money would
not be used in the coming fiscal year. The funds had been
reduced in the budget rather than lapsing at the end of the
year.
Mr. Labolle advanced to Section 8, which included funding
by agency for the appropriations made in Section 7. Section
9 was the statewide funding breakdown for appropriations
made in Section 7. Sections 10 through 19 were the language
section and primarily the governor's supplemental requests.
Section 10, page 23, subsection (c), lines 1 through 7
included the Department of Administration (DOA) labor
contracts and negotiations and arbitration support for
$792,000. The subsection extended the lapse date through FY
19.
Representative Wilson asked about the average arbitration
negotiation cost.
Ms. Pitney replied that she would follow up with specifics.
There was an operating budget and the increment [on page
23] was a multi-year amount given the number of
negotiations (some of which were contracted out). She
relayed it was more than $792,000 in a year.
Representative Wilson asked for verification it cost almost
$800,000 merely to negotiate the contracts. She believed
the amount did not include the cost of the contracts
themselves.
Ms. Pitney answered that the increment included funding
over and above the operating for labor and personnel. Labor
and personnel [DOA Personnel and Labor Relations]
negotiated the contract, but occasionally the division
needed contractual help. A small amount of contractual help
had been used over the last two years; there was still
money remaining in the $792,000 that the administration
wanted to extend in order to access contractual help in the
coming year.
Representative Wilson surmised the increment was an
operating cost in the capital budget.
Ms. Pitney answered it was the supplemental section of the
bill. She explained that the last section and much of the
current section included supplementals that had not made it
into the fast track supplemental bill.
Representative Wilson observed it was still an operating
cost. Ms. Pitney answered in the affirmative.
Vice-Chair Gara remarked that the supplemental portion of
the bill included operating budget items. He elaborated
that the section was a combination of the capital budget
and the parts inserted by the Senate on the supplemental,
which included operating and possibly some capital items.
Representative Neuman remarked it was standard practice. He
asked if the $792,000 was typical or a new add-in to enable
labor negotiations. He thought it was a new expenditure
line. He asked if additional money for contract
negotiations had been in the budget in the past.
Ms. Pitney responded the money had been included in the
budget the first year of significant operating budget cuts;
personnel had taken a substantial hit. She stated the
funding had been included because labor negotiations had
been underway at the time, which would have been difficult
with the cut that had been taken. The funding had been a
way to ensure the administration would be successful in the
labor negotiations even though the base operating budget
had been cut.
Mr. Labolle pointed to line 1 [page 23], which included
language that was similar to a reappropriation. He detailed
the increment to DOA was funded in SLA 2015, 2016 and 2017.
The Senate had added the underlined language [on line 7] to
the previous appropriation; it was a budget amendment
rather than a reappropriation of a previous appropriation.
Representative Neuman asked if the legislature could expect
the item to be embedded in the [DOA] budget going forward.
He assumed the DOA budget would continue to have contract
and labor negotiations in the future. Alternatively, he
wondered if there would be a different appropriation for
settling labor relations.
2:41:50 PM
Mr. Labolle answered the increment [page 23, line 4] was a
one-time appropriation that would not appear in the base of
the operating budget.
Mr. Labolle moved to Section 11, page 23, lines 8 through
18 for the Department of Education and Early Development
(DEED). There was $400,000 from the Municipal Capital
Project Matching Grant Fund for the maintenance and
operation of the Mt. Edgecumbe aquatic center. Subsection
(b) included 1 percent for art funds for the aquatic center
were estimated to be $200,000 and were appropriated to DEED
for equipment, capital improvements, or maintenance of the
aquatic facility.
Representative Wilson asked what Municipal Capital Project
Matching Grant funds were typically used for.
Mr. Carpenter answered that it was an old program that had
not been used in 10 to 12 years. He explained that at the
time there had been municipal match and incorporated
community matching grant funds that the state capitalized
with around $20 million; each community had received a
portion based on a formula (approximately $25,000 per
year). Communities had been able to stockpile the funds
over multiple years to fund a future project.
Representative Wilson asked if the increment would drain
the fund to zero. Mr. Carpenter answered that the specific
appropriation did not. The fund contained roughly $253,000
after the appropriation. The programs were still on the
books but had not been funded in many years.
Representative Wilson asked for the annual maintenance cost
of the pool, once the additional $600,000 was allocated in
the current budget.
Mr. Carpenter deferred the question to OMB.
Ms. Pitney answered the annual anticipated cost [of the Mt.
Edgecumbe aquatic center] was between $550,000 and
$600,000. She noted that part of the cost could be paid
with receipts.
Representative Wilson asked how much the state would pay
annually for the aquatic center. Ms. Pitney estimated
$300,000.
Vice-Chair Gara asked for verification that the increments
in the language section were governor's supplemental
requests that had been included in the Senate's capital
budget unamended. He understood that some of the items the
governor had proposed were not included.
Mr. Labolle answered in the affirmative.
Mr. Carpenter added that subsection (b) [Section 11, page
23] had been added by the Senate and had not been included
in the governor's budget.
2:45:38 PM
Mr. Labolle clarified that subsection (b) included 1
percent funding for arts; subsection (a) was the amount
that had been in the supplemental.
Vice-Chair Gara surmised that the 1 percent funds in
subsection (b) would have gone to arts, but instead they
were going to the project listed under Section 11
[maintenance an operation of the Mt. Edgecumbe Aquatic
Center].
Mr. Labolle answered in the affirmative.
Mr. Labolle moved to Section 12, page 23, lines 19 through
23 for the Department of Health and Social Services (DHSS).
The increment was $5 million to the Alaska Temporary
Assistance Program to satisfy federal maintenance of effort
requirements for FY 18 and FY 19. He added that the
original supplemental request (the FY 18 portion) had been
$2 million and the Senate had added the $3 million for FY
19.
Representative Wilson believed the $3 million was currently
included in the operating budget. She asked if it would go
away.
Mr. Labolle believed the increment was conferencable and
would come out of the capital budget.
Vice-Chair Gara asked if the $5 million increment would
fully satisfy the maintenance of effort requirement.
Ms. Pitney deferred to DHSS.
SHAWNDA O'BRIEN, ASSISTANT COMMISSIONER, FINANCE MANAGEMENT
SERVICES. DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
answered that the department was on track to meet
maintenance of effort with the request. As written, the
appropriation would occur in multiple years. She believed
any amount not used in FY 18 could be used in FY 19, which
the department projected would be necessary.
Vice-Chair Gara mentioned maintenance of effort for the
Alaska Temporary Assistance Program. He asked if they were
missing maintenance of effort funds for any other programs.
Ms. O'Brien replied in the negative.
Mr. Labolle moved to Section 13, page 23, lines 24 through
27 for the Department of Law (DOL). The increment was $3.4
million for the Civil Division for judgements and
settlements in FY 18.
Representative Wilson mentioned the Flint Hills settlement
of $14.3 million on page 4 of the legislation. She asked
why it was listed under [House] district 3, Department of
Environmental Conservation (DEC) and not under DOL. She
stated that the funding had all come from a law suit.
Mr. Labolle answered that the appropriation for Flint Hills
was being handled by DEC, whereas, the language pertained
to DOL.
Representative Wilson remarked that DOL made the settlement
and she understood that many times settlements went through
departments. She stated that the increment to DEC made it
look like her district was getting something special, while
all they got was contaminated. She stated that part of the
settlement had come through DOL. She asked if the bill
specified the funding came from the lawsuit.
2:50:19 PM
Mr. Carpenter answered that DEC was contributing a
substantial portion, as the increment was a large project
to replace the water system - from the settlement itself.
He explained the funding was going to a construction
project versus paying out the settlement, which DOL was
doing.
Representative Wilson stated that DEC was not using its own
money. She believed it was funding from the General Fund.
She assumed Flint Hills had also given money. She wondered
if budget details were included in a budget book she had on
hand.
Mr. Carpenter agreed. He detailed there was a multi-party
contribution for the expensive project, including
contribution from the state through DEC.
Representative Wilson stated it was a reason she got
frustrated over the statewide portions. She detailed that
the project looked like it was a special project for a
district, but in reality, it had been bargained in a
lawsuit. She would work with LFD to determine if there was
a better way to distinguish the information.
Vice-Chair Gara stated that the district had been
contaminated and everyone appreciated the need to address
the issue, but the project had also received substantial
tax credits to help pay for the refinery.
Representative Wilson corrected that Flint Hills had gone
out of business before any of the tax credits came; the
company received no tax credits and the contamination had
been left.
2:52:17 PM
Representative Neuman asked about the $3.37 million paid
out on behalf of the DOL Civil Division [Section 13, page
23]. He asked if a large portion of the funds were going to
a settlement. Alternatively, he wondered if the funding
would go to numerous small settlements the division had
agreed upon.
Mr. Labolle deferred to OMB.
Ms. Pitney answered she would follow up with detail. She
believed one settlement was over $1 million and the others
were smaller.
Representative Neuman stated it was his concern. He
believed there were one or two lawsuits in the Civil
Division - he thought the $3.37 million was for one or two
settlements as opposed to numerous settlements. He
requested detail.
Mr. Labolle turned to Section 14, page 23, line 28 through
page 24, line 11. The increment was $3 million in
reappropriations for the election fund capitalization. He
remarked the increment was the reappropriation he had
referenced earlier in the numbers section. Section 15, page
24, lines 12 through 20 included standard receipt authority
language for agencies to receive federal and other receipt
authority from Legislative Budget and Audit. Section 16,
page 24 included standard language referring to insurance
claims; the item specified the amounts to be received in
settlement of insurance claims would be appropriated from
the General Fund to the State Insurance Catastrophe Reserve
Account or to the appropriate state agency to mitigate the
loss. Section 17 pertained to the National Petroleum
Reserve and included $11.6 million in impact aid grants
appropriated to the Department of Commerce, Community and
Economic Development (DCCED) for capital project grants.
Section 18, page 26, lines 1 through 5 included a
Department of Corrections (DOC) reappropriation of $1.6
million for security upgrades at correctional facilities.
2:55:14 PM
Vice-Chair Gara asked if Sections 19 and 20 were the same
as governor's proposals.
Mr. Labolle affirmed the sections included governor's
proposals, but noted they were funded differently. Section
19, page 26, lines 6 through 22 included the governor's
request for a reappropriation not to exceed $200,000 to DEC
for project administration of water quality enhancement,
water supply, sewage, and solid waste facilities grants to
municipalities. Section 20, page 26, line 23 through page
27, line 11 pertained to the Department of Fish and Game
and included reappropriations estimated at $309,000 for
maintenance, repair, and upgrades to vessels and aircraft.
Section 21, page 27, lines 12 through 24 included $12.1
million in reappropriations to the Department of
Transportation and Public Facilities (DOT) for federal aid
aviation match and other nonfederal aid highway program
match.
Vice-Chair Gara pointed to lines 12 through 24 and asked
for verification the difference from the governor's
proposal was the reappropriation of AHFC energy rebate
program funds.
Mr. Labolle answered in the affirmative. He noted it made
up for the difference in the reduction in the numbers
section.
2:57:00 PM
Representative Neuman stated that the increment took money
from the Home Energy Rebate Program. He asked if use of the
funds left the program with no remaining funding. Mr.
Labolle believed the increment would zero out the program.
He deferred to LFD for verification.
Mr. Carpenter added there would be funding remaining to
complete closing out and wrapping up the program. The
increment [page 27, lines 12 through 24] would take the
remaining money that was unobligated.
Representative Neuman asked for verification that there was
money sequestered for applicants who were expected to be
approved. He believed the remaining balance would go
towards closing out the program. He stated that the
language for the program remained in the budget. He asked
for verification that the program would be left unfunded
for the time being. Alternatively, he wondered if the plan
was to eliminate the program entirely.
Ms. Pitney replied that the rebate program had been closed
to new applicants over one year back and any remaining
funding had been moved towards weatherization. The program
would remain in statute, but there was no activity.
2:59:26 PM
Vice-Chair Gara asked Mr. Labolle to only review items that
differed from the governor's proposal. He added that Mr.
Labolle would provide the committee with the parts of the
governor's proposal that had been left out of the bill.
Mr. Labolle moved to page 33, line 27 through page 34, line
14. The item was an amendment requested by the governor but
was not in the governor's amended version of the budget. He
detailed it was a reappropriation not to exceed $10 million
to DOT for the international airport runway and taxiway
rehabilitation. Section 22 included a reappropriation
mentioned earlier for harbors and grants.
Representative Wilson asked why the money would not return
to AEA.
Mr. Labolle answered that the Senate had chosen, in moving
the funding from the contingency budget to the capital
budget, to come up with a new fund source because the fund
source in the contingency budget was not available. The
increment was part of the items chosen by the Senate to
make up the $5 million.
Representative Wilson stated that typically AEA projects
were energy related. She aske if it had been the norm for
funding to go back into other AEA projects when projects
were completed.
Mr. Labolle answered that in previous years it had been the
norm for reappropriations to stay within agencies and for
legislative appropriations to remain within district. He
explained that the past year was the first time that
practice had begun to change.
3:02:11 PM
Mr. Labolle moved to a fund transfer from the Large
Passenger Vessel Gaming and Gambling Tax Account to the
Alaska Marine Highway System (AMHS) Fund on Section 23,
page 34, lines 20 through 22.
Representative Pruitt asked if it was legal to use the
funds for AMHS. He asked for verification it was not
something directly impacting cruise ships. Mr. Labolle
replied in the affirmative. An appropriation had to be made
from that account to another account or it could not be
spent.
Mr. Carpenter added that the gambling proceeds were
different from the head tax. The head tax had restrictions,
whereas there were no restrictions on the use of the gaming
and gambling tax on vessels.
3:03:17 PM
Mr. Labolle moved to Section 24, page 34, lines 23 through
28, which reflected an add by the Senate. The appropriated
fees collected from the NRA license plate (estimated at
$6,000) to DCCED to distribute as a grant for the Alaska
Scholastic Clay Target Program for youth shotgun sports
programs. He moved to a reappropriation of $98,782 to the
City of Kodiak for the engineering of a new fire hall in
Section 25, page 34. He noted the old fire hall sustained
structural damage caused by an earthquake in 2017. Section
26 included standard reappropriation language for
renovation and repair of technology improvements. Section
27 was the lapse section.
Representative Wilson asked about Section 26. She spoke to
the practice of overfunding in the operating budget. She
asked if it had been the practice of the legislature to put
lapsed operating budget funds into the capital budget
instead of back in the General Fund.
Mr. Labolle replied in the affirmative.
Representative Wilson asked for a list of items the
[lapsed] funding would go to. Mr. Labolle would follow up
with the information.
Representative Wilson wanted to show that all lapsing funds
did not go back to the General Fund as some may have
thought.
Representative Pruitt referenced the Kodiak reappropriation
in Section 25. He observed the funds were for the design.
He wondered how the project would be paid for later. He
asked if the legislature should expect a funding request
for the project in the future.
Mr. Labolle deferred the question to OMB.
Ms. Pitney responded that the community was looking at all
options because it had to get out of the old fire hall. She
relayed it would be necessary to talk to the community
about its financial plan.
3:06:04 PM
Mr. Labolle continued that Section 27 was the lapse
section. Sections 28 through 30 were the effective date
sections.
Vice-Chair Gara stated that Mr. Labolle would provide
committee members with a memorandum on governor's proposed
items that were not included in the current version of the
bill. He mentioned items he would like to see addressed at
a future meeting. He highlighted the missing money for the
Medicaid supplemental. He reasoned that if the state owed
the money, it owed the money. Additionally, there had been
$18 million originally in the governor's operating budget
for a four-year alcohol and substance abuse treatment
program to expand capacity. He believed it should be in the
capital budget, but he did not believe it was anywhere in
any of the budgets.
Representative Wilson highlighted the $960,00 Newtok
increment and requested follow up on whether the state had
funded relocation of communities in the past. Separately,
she clarified that the state was involved in the Flint
Hills settlement because the state had owned the property
with Williams that sold to Flint Hills. When the
contamination had started on the property, the state had
been one of the defendants. She elucidated it was not like
other projects where state money had been going into it.
She elaborated that a lawsuit had occurred, and she
believed another lawsuit was ongoing. She wanted an
explanation about why the increment was showing up for DEC.
She understood DEC would be doing the work, but it was a
settlement and most of the time it stayed there [in DOL].
Vice-Chair Gara requested to hear from DEC at a future
time. Ms. Pitney agreed.
Representative Grenn WITHDREW his motion to adopt the CS.
There being NO OBJECTION, it was so ordered.
HB 284 was HEARD and HELD in committee for further
consideration.
Vice-Chair Gara recessed the meeting to a call of the chair
[note: the meeting never reconvened].
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 284 CS WORKDRAFT vD.pdf |
HFIN 4/30/2018 1:30:00 PM |
HB 284 |
| HB 284 v D AgencySummary.pdf |
HFIN 4/30/2018 1:30:00 PM |
HB 284 |
| HB 284 CS vDStatewideTotals.pdf |
HFIN 4/30/2018 1:30:00 PM |
HB 284 |
| HB 284 CS vD ProjectDetailByAgency.pdf |
HFIN 4/30/2018 1:30:00 PM |
HB 284 |
| HB 284 FY2019 Capital Budget, ACoA Comment.pdf |
HFIN 4/30/2018 1:30:00 PM |
HB 284 |
| HB 284 House Finance Committee Question 4-30-18.pdf |
HFIN 4/30/2018 1:30:00 PM |
HB 284 |
| HB 284 OMB CAP Response to 4.30.18 HFIN Meeting.pdf |
HFIN 4/30/2018 1:30:00 PM |
HB 284 |