03/14/2006 01:30 PM House FINANCE

HOUSE BILL NO. 365                                                                                                            
                                                                                                                                
     "An  Act making  appropriations  for  the operating  and                                                                   
     loan program  expenses of state government,  for certain                                                                   
     programs,    and    to    capitalize    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."                                                                         
                                                                                                                                
Co-Chair  Meyer MOVED  to ADOPT  the work draft  for HB  365,                                                                   
labeled 24-GH2033\I,  Bailey, 3/13/06, as the  version of the                                                                   
bill before the committee.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
HOUSE BILL NO. 366                                                                                                            
                                                                                                                                
     "An  Act making  appropriations  for  the operating  and                                                                   
     capital    expenses    of   the    state's    integrated                                                                   
     comprehensive mental  health program; and  providing for                                                                   
     an effective date."                                                                                                        
                                                                                                                                
Co-Chair  Meyer MOVED  to ADOPT  the work draft  for HB  366,                                                                   
labeled 24-GH2035\G,  Bailey, 3/13/06, as the  version of the                                                                   
bill before the committee.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
1:43:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  summarized  the committee substitutes  for                                                                   
the budget  bills.   He  related that the total  general fund                                                                   
reductions  by House  Committees  to the  operating bill  are                                                                   
$82,341.7  million from  the  numbers section  and  $32,758.4                                                                   
million from  the language  sections, which total  $115,100.1                                                                   
million  in  general  funds.   This  comparison  assumes  the                                                                   
committee will  eventually appropriate  $90 million  more for                                                                   
K-12 education.   Language making  that appropriation  is not                                                                   
currently  in the committee  substitute,  but is expected  to                                                                   
appear as  a fiscal  note attached to  a bill increasing  the                                                                   
base student allocation.  Agency  summary reports dated March                                                                   
14  show a  reduction  of $205  million  from the  governor's                                                                   
request.   Those  reports,  while technically  more  accurate                                                                   
than  the  $115  million  reduction shown  in  the  March  13                                                                   
reports, distort the expected  outcome of the budget process.                                                                   
                                                                                                                                
SHARON KELLY,  STAFF, CO-CHAIR  CHENAULT, shared  the process                                                                   
used to arrive  at the new committee substitutes.   The House                                                                   
Finance subcommittees  were appointed  and they reviewed  the                                                                   
                                                            th                                                                  
governor's bill plus  all operation amendments up  to the 45                                                                    
                                                 th                                                                             
included:  one was  a  reduction of  $2.3  million to  Marine                                                                   
Transportation  for a  reduction of fast  ferry service,  and                                                                   
another was  a reduction of $1.3  million to the  Senior Care                                                                   
Fund.  Two  amendments that were received last  week relating                                                                   
to Corrections  salary and benefits are not  included because                                                                   
they would have delayed drafting of the bill.                                                                                   
                                                                                                                                
Ms.  Kelly reported  that the  subcommittees  closed out  and                                                                   
made  recommendations to  the full  House Finance  Committee.                                                                   
These  recommendations   were  rolled  into   this  committee                                                                   
substitute along with some adjustments  made by the co-chair.                                                                   
Some  of  those  adjustments  include:  fuel  increases  were                                                                   
deleted  for consistency  with the  rest of  the budget;  new                                                                   
programs not requested  in the governor's bill  were removed,                                                                   
but may  be considered later  through the amendment  process;                                                                   
technical  adjustments  recommended  by  Legislative  Finance                                                                   
were  made  to  adjust the  position  count  correctly;  some                                                                   
funding  changes were  made to allow  for sustainability  and                                                                   
full utilization of funding sources  such as business license                                                                   
receipts,  Commercial  Fisheries   Entry  Commission  (CFEC),                                                                   
vehicle rental  tax, criminal fines, and the  commercial loan                                                                   
fund.                                                                                                                           
                                                                                                                                
Ms.  Kelly  addressed  some  additions  of  general  fund  to                                                                   
correct  some   modified  adjusted   base  problems   in  the                                                                   
Department  of  Fish  and  Game  and  in  the  Department  of                                                                   
Military and Veterans  Affairs.  There were  also other small                                                                   
reductions.    The Health,  Education,  and  Social  Services                                                                   
subcommittee cut  $10 million more  than is reflected  on the                                                                   
CS.    The  co-chair moved  this  amount  from  the  language                                                                   
section of the Senior Care Fund  over to the numbers section.                                                                   
The Senior  Care Fund  will lapse  next year.   Federal  fund                                                                   
authority  was reestablished  in the Department  of Fish  and                                                                   
Game and in the Department of  Public Safety.  If those funds                                                                   
do become available those departments  will not have to go to                                                                   
Legislative Budget and Audit for approval.                                                                                      
                                                                                                                                
1:47:55 PM                                                                                                                    
                                                                                                                                
Ms. Kelly related that in the  language section of the budget                                                                   
some reordering changes were made.   Senior Care was moved to                                                                   
the numbers  section and  some deletions  were taken.   Power                                                                   
Cost  Equalization was  funded at  FY 06  levels.   Education                                                                   
funding is  included in the  language section,  excluding the                                                                   
$656,000,000  of FY  06 funds  the governor  is proposing  to                                                                   
use.  The $90 million amount for  education will be addressed                                                                   
in another  vehicle.  There  are also  $565 million of  FY 06                                                                   
funds that  the governor is proposing  to use to fund  the FY                                                                   
07 education budget.                                                                                                            
                                                                                                                                
Ms. Kelly  pointed out that  there are two agency  summaries,                                                                   
one  dated   March  13,  which   show  the  actions   of  the                                                                   
subcommittee  and co-chairs,  and one  dated March 14,  which                                                                   
also shows the  $90 million for education reduction  since it                                                                   
is not included in the bill.                                                                                                    
                                                                                                                                
1:48:33 PM                                                                                                                    
                                                                                                                                
Ms. Kelly  addressed one  change to  the Mental Health  bill.                                                                   
The item removed  was $550,000 for the Department  of Natural                                                                   
Resources' Mental Health Land  Trust Development, which comes                                                                   
from  Mental Health  Trust Receipts.   Information  regarding                                                                   
these bills will be on the Legislative Finance web site.                                                                        
                                                                                                                                
Co-Chair  Chenault explained  that  the process  would be  to                                                                   
accept the committee  substitutes today and  then take public                                                                   
testimony  on Thursday  through Saturday.   The deadline  for                                                                   
amendments will  be on Monday  at 5:00.   He stated  that the                                                                   
committee would  take up amendments on Tuesday  and Wednesday                                                                   
with the  intention  of passing  the bill out  no later  than                                                                   
Thursday.  He  requested that those proposing  amendments for                                                                   
more money  should stipulate where  the money will  come from                                                                   
in the budget.                                                                                                                  
                                                                                                                                
CHB 365 and  CS HB 366 were  heard and HELD in  Committee for                                                                   
further consideration.                                                                                                          
                                                                                                                                
Co-Chair Meyer took over as chair of the committee.                                                                             
                                                                                                                                
1:51:15 PM