Legislature(2005 - 2006)HOUSE FINANCE 519
03/21/2006 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB232 | |
| HB365 || HB366 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 365 | TELECONFERENCED | |
| += | HB 366 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 232 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 232(FIN)
"An Act making appropriations, supplemental
appropriations, and capital appropriations; amending
appropriations and funding sources; making
appropriations to capitalize funds; and providing for
an effective date."
Co-Chair Meyer MOVED to ADOPT work draft 24-GS2068\C,
Bailey, 3/20/06, as the version of the bill before the
committee. There being NO OBJECTION, it was so ordered.
1:44:10 PM
SHARON KELLY, STAFF, CO-CHAIR CHENAULT, highlighted the
differences between CSSB 232 the new House CS. She referred
to a document called "Multi-year Agency Summary" (copy on
file), which lists changes by department. She noted that
the final "Total" column on the right lists an addition of
$1 million to the Department of Administration for the
telephone system replacement and stabilization, phase one.
Under the Department of Commerce, Community and Economic
Development, $250,000 has been added to the Arctic Winter
Games. There have been no changes to the Department of
Corrections. The Department of Education and Early
Development had funds removed for Susitna Valley High School
repairs, pending further discussion by the committee. There
have been no changes to Department of Fish and Game or to
the Office of the Governor. In the Department of Law there
is a $700 change due to a typing error.
Ms. Kelly related that there were no changes to the
Department of Military and Veterans Affairs, the Department
of Natural Resources, the Department of Transportation and
Public Facilities, or to the Department of Revenue. Under
Fund Capitalization, $301 million has been added, of which
$300 million is to go to Alaska Housing Finance Corporation
and $1 million is for the fund capitalization for the
telephone system. Under the Public Education Fund, $350
million has been added with $300 million going to the Public
Education Fund and about $50 million for a sweep from the
general fund into the Public Education Fund at the end of
the year.
Ms. Kelly referred to two other documents for further
detail, the "Transaction Comparison - FY 2007 Operating
Budget - Senate Structure" and the "Project Detail by Agency
- FY 2007 Capital Budget" (copies on file.)
Ms. Kelly noted two other technical Fund Source Changes
(Section 11) in HCS CSSB 232. Commercial Fisheries Entry
Commission Receipts are substituted for the generic RSS code
in the Department of Fish and Game, and Special Vehicle
Registration Receipts are substituted for RSS in a DNR
capital project.
Ms. Kelly addressed several tracking changes regarding
Vehicle Rental Tax Receipts, a new fund code, which are
replacing certain General Funds.
Co-Chair Meyer reported that half of the savings have been
taken "off the table": $300 million has been put toward the
Alaska Housing Fund (AHFC), and $300 million to the Public
Education Fund, with the remaining $50-$80 million to be
swept into the Public Education Fund.
1:48:33 PM
Co-Chair Chenault spoke of the intent of taking $600 million
off the table as savings for future budgets and capital
projects. He emphasized the responsibility the legislature
has to the citizens of Alaska if oil revenue decreases in
future years.
Representative Joule asked about the $300 million going into
AHFC rather than into the Constitutional Budget Reserve
(CBR). Co-Chair Meyer replied that the CBR was discussed as
an option, but AHFC allows for more flexibility. The
interest rates earned are about the same in AHFC as in the
CBR. AHFC proposes to get a higher rate. The hope is to
save money.
1:52:21 PM
Representative Joule asked how the legislature could access
those funds at a future date. Co-Chair Meyer replied it is
set up as a sub-corporation within AHFC and, like any other
fund, can be accessed. Representative Joule pointed out
that funds drawn from the CBR allow for a discussion by the
whole legislature about how the money gets spent.
1:54:05 PM
Representative Stoltze MOVED to ADOPT Amendment A, 24-
GS2068\S.1, Bailey, 3/20/06:
Page 9, following line 13:
Insert a new subsection to read:
"(d) The sum of $3,850,000 is appropriated
from the general fund to the major maintenance grant
fund (AS 14.11.007) for payment as a grant under AS
14.11.015 for Susitna Valley High School roof
replacement and structural and safety repairs."
Co-Chair Meyer OBJECTED.
Representative Stoltze explained that Amendment A is for
$3.85 million for a roof replacement for Susitna Valley High
School. He termed it a safety issue. The requested amount
is 70 percent of the amount originally requested.
1:55:45 PM
REPRESENTATIVE MARK NEWMAN, discussed the
architect/engineer's report regarding the roof of Susitna
Valley High School, which showed violations of code
requirements, and ventilation and asbestos problems. The
dollar amount requested is a reduction from the original
$5.5 million proposed in the governor's budget. The matter
is urgent and the work needs to start the day school is out,
due to the short building season. He reported strong
community support for this project. He spoke of the high
expense to shovel the roof of the school. He termed it a
savings to the state in the long run.
Co-Chair Chenault noted that it costs about $3,000 a time to
shovel the roof. Co-Chair Meyer added that it is closer to
$3,600, each time, to shovel the roof. He did the math to
show savings by not replacing the roof. He spoke of the
70/30 split on maintenance projects. He said he feels more
apt to support this request now that this project is at 70
percent of the original amount requested. Representative
Newman spoke of the damage heavy snows or an earthquake
could cause.
Co-Chair Meyer asked for assurance that the original
architect or engineer not be used on this project.
Representative Newman assured the co-chair that would not
happen.
Representative Foster spoke of his experience shoveling the
roof of his school. Representative Newman described the
slope of the roof and its bad design. He reiterated it is a
time issue with the short construction season.
2:04:53 PM
Representative Hawker said he would have been against the
amendment if it had asked for 100 percent funding. He asked
for assurance that the community would come up with the 30
percent still needed. Representative Newman spoke to the
commitment made by his community. He noted problems with
past bond proposals. He addressed up-coming ballot
proposals.
Representative Hawker asked for assurance for evidence of a
public commitment before the bill reaches the House Floor.
Representative Newman said he would try to get that
information from the Mat-Su Assembly.
2:07:40 PM
Representative Weyhrauch asked about the bond issues
mentioned by Representative Newman. Representative Newman
responded that last fall there were many proposals and that
was overwhelming to voters.
Representative Joule wondered if the project was on the
Department of Education and Early Development's major
maintenance list. Representative Newman replied that he
contacted Department of Education and Early Development to
see if it could be included. It did not meet the standards
for emergency funding. They did approve 70 percent funding.
Co-Chair Meyer said he was assured by comments made during
the discussion and was convinced by Representative Newman's
arguments. He WITHDREW his OBJECTION to adopt Amendment A.
There being NO further OBJECTION, it was so ordered.
2:12:03 PM
Co-Chair Chenault MOVED to ADOPT Amendment B, 24-GS2068\C.1,
Bailey, 3/21/06:
Page 7, line 22, following "appropriated":
Insert "from the general fund"
Page 7, line 25, following "appropriate":
Insert "from the general fund"
Representative Stoltze OBJECTED. Co-Chair Chenault stated
that the amendment corrects a drafting error.
Representative Stoltze WITHDREW his OBJECTION. There being
NO further OBJECTION, it was so ordered.
2:12:30 PM
Co-Chair Chenault MOVED to ADOPT Amendment C, 24-GS2068\C.2,
Bailey, 3/21/06:
Page 12, line 8, following "projects":
Insert ",including financing expenses"
Page 12, following line 22:
Insert a new subsection to read:
"(c) The appropriation made by sec. 12 of this Act
lapses on June 30, 2016."
Representative Stoltze OBJECTED.
Ms. Kelly described the two changes in Amendment C. The
first broadens a clause on page five to include financing
expenses, which is the money that is being transferred to
AHFC. The second change is to insert a lapse date on page
12.
Representative Joule asked for a definition of lapse date.
Ms. Kelly said that Department of Law recommended the
change. Representative Joule asked what the affect would
be. Ms. Kelly replied that the money would go back to the
general fund on the lapse date. Representative Joule
summarized that if these funds are not used, they would
transfer back to the general fund in ten years.
Representative Stoltze WITHDREW his objection. There being
NO further OBJECTION, it was so ordered.
2:14:39 PM
Representative Joule MOVED to ADOPT Amendment 1, which would
add a new section:
POWER COST EQUALIZATION. (a) The sum of %5,459,900 is
appropriated from the general fund to the power cost
equalization and rural electric capitalization fund (AS
42.45.100).
(b) The sum of $5,817,900 is appropriated from the
power cost equalization and rural electric
capitalization fund (AS 42.45.100) to the Department of
Commerce, Community, and Economic Development, Alaska
Energy Authority power cost equalization, for full
payment of power cost equalization under AS 42.45.110
for the fiscal year ending June 30, 2006.
Representative Joule noted that rural Alaska is struggling
with high fuel costs. He requested that this amount be
restored and power cost equalization be fully funded.
Co-Chair Chenault agreed that fuel costs have increased
throughout Alaska, not just in rural Alaska. He brought up
equity issues. He spoke against Amendment 1 and suggested
that other methods would better address this issue.
2:19:27 PM
Representative Hawker stated that he would vote against any
amendment that deals with dedicating money for energy needs.
He emphasized that he wants pressure to stay on the
legislative body to put into place a community dividend or
revenue sharing program to deal with this issue. He
requested programs that would provide the maximum possible
local control dominion over how the money might be spent.
He spoke against Amendment 1 and in favor of "sharing of our
vast resource wealth with communities".
2:21:04 PM
Representative Kelly spoke as a former utility
representative. He agreed that there is a problem and a
need for energy assistance. He voiced concern that the
supplemental budgets now look like budgets and are out of
control. He related that funding for PCE was set last
session with an awareness to high costs. This year's
unsustainable supplemental makes last year's budgeting
process meaningless. He spoke against Amendment 1.
Representative Joule commented on the high kilowatt rates
and low employment opportunities in rural areas. He
maintained that Amendment 1 is needed until that changes.
A roll call vote was taken on the motion to Adopt Amendment
1.
IN FAVOR: Kerttula, Moses, Foster, Joule
OPPOSED: Kelly, Stoltze, Weyhrauch, Hawker, Holm, Meyer,
Chenault
The MOTION FAILED (4-7).
2:25:03 PM
Representative Joule MOVED to ADOPT Amendment 2, which would
add a new section:
The sum of $250.0 is appropriated from the general fund
to the Department of Commerce, Community and Economic
Development for payment as a grant under AS 37.05.315
to the City of Kaktovik for the participation of the
city in support of the education efforts and promotion
of opening the coastal plain of the Arctic National
Wildlife Refuge (ANWR) for oil and gas exploration and
development.
Representative Stoltze OBJECTED.
Representative Joule MOVED to AMEND Amendment 2 to change
$250,000 to $40,000. There being NO OBJECTION, it was so
ordered.
Representative Joule spoke to Amendment 2. He noted that
the city of Kaktovik serves as the gateway to ANWR and is
critical in assuring policy makers that local residents
support the opening of ANWR to responsible oil and gas
development. The community has requested this amount for
reimbursement for expenses.
2:27:32 PM
Co-Chair Meyer asked how much was budgeted for this last
year. Representative Joule responded about $100,000 split
between Kaktovik city and native village.
Representative Kelly commented in favor of Amendment 2. He
stated appreciation for Kaktovik's support.
Representative Foster spoke in favor of Amendment 2. He
thanked Representative Joule for bringing forth the
amendment to help this village.
Co-Chair Chenault WITHDREW his OBJECTION to adopting
Amendment 2. There being NO further OBJECTION, it was so
ordered.
2:30:07 PM
Representative Joule MOVED to ADOPT Amendment 3, which would
add a new section:
The sum of $8,800.0 general funds is appropriated to
the Department of Health and Social Services, Division
of Public Assistance, Energy Assistance Program for the
fiscal years ending June 30, 2006 and June 30, 2007.
Representative Chenault OBJECTED.
Representative Joule explained that Amendment 3 would
provide funds to low-income households throughout Alaska to
offset the high costs of home heating. He presented
statistics regarding the elderly and the poor. He shared
that 26 states are providing this type of aid. He related
how the increase in fuel costs and the decrease in buying
power have changed significantly. He shared information
about high costs in Kotzebue. He urged support for
Amendment 3.
Co-Chair Chenault MAINTAINED his OBJECTION.
A roll call vote was taken on the motion to adopt Amendment
3.
IN FAVOR: Joule, Kerttula, Moses, Foster
OPPOSED: Kelly, Stoltze, Weyhrauch, Hawker, Holm, Chenault,
Meyer
The MOTION FAILED (4-7).
2:35:40 PM
Representative Joule MOVED to ADOPT Amendment 4, which would
add a new section:
*Sec.___. BULK FUEL LOANS. The sum of $500,000 is
appropriated from the general fund to the Department of
Commerce, community and Economic Development, community
advocacy, for emergency bulk fuel loans to small
communities for the fiscal year ending June 30, 2006.
Representative Stoltze OBJECTED.
Representative Joule explained how the money would provide
emergency bulk fuel loans to small communities. He shared
statistics about the high costs of fuel in rural areas. He
maintained that this is not a "give away", but rather a
loan. He urged the committee to adopt the amendment.
Representative Stoltze MAINTAINED his OBJECTION to the
motion to adopt Amendment 3.
Representative Joule spoke of revenue sharing for this year,
not next year. He emphasized that this amendment is needed
for FY 06.
A roll call vote was taken on the motion.
IN FAVOR: Kerttula, Moses, Foster, Joule
OPPOSED: Stoltze, Weyhrauch, Hawker, Holm, Kelly, Chenault,
Meyer
The MOTION FAILED (4-7).
2:41:19 PM
Representative Joule MOVED to ADOPT Amendment #5, which
would add a new section:
SMALL MUNICIPALITY ENERGY ASSISTANCE PROGRAM. The sum
of $6,405,208.55 is appropriated from the general fund
to the Department of Commerce, community, and Economic
Development, Division of Community Advocacy, for grants
under the small municipality energy assistance program,
for the fiscal years ending June 30, 2006 and June 30,
2007, to the following cities and boroughs, for the
repayment of any indebtedness of the city or borough to
the bulk fuel revolving loan fund (AS 43.25) and for
the purchase of fuel; the grants are to be in the
amounts stated, based upon 2004 population, with cities
and boroughs with up to 99 residents to receive
$22,395,83, cities and boroughs with 100-600 residents
to receive $44,791.67 and cities and boroughs with 601-
2,499 residents to receive $67,187.50.
Representative Stoltze OBJECTED.
Representative Joule explained that the amendment is a small
municipal energy assistance program that provides grants for
the repayment of any indebtedness to the bulk fuel revolving
loan fund, and for purchasing fuel.
Responding to a question by Co-Chair Chenault,
Representative Joule clarified that these communities cannot
apply for the bulk fuel program. Co-Chair Chenault asked
how they then could have a debt to the bulk fuel revolving
loan fund.
MIKE BLACK, DIRECTOR, DIVISION OF COMMUNITY ADVOCACY,
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, explained
that the small municipality energy assistance program
pertained only to municipalities and is a grant program.
Amendment 4 applies to both municipalities and
unincorporated communities and is a loan program.
2:45:10 PM
Co-Chair Chenault still sought clarification about whether a
municipality could borrow from one loan program and repay
with the grant.
Mr. Black noted that part of the conditions of the grant
program last year were that outstanding loan balances would
be retired to the Alaska Energy Authority revolving fuel oil
loan. That condition is still in this proposal. He pointed
out that that the revolving fuel loan is separate from the
bulk fuel bridge loan program, and only applicable for
communities not eligible for the other program.
2:46:33 PM
A Roll Call Vote was taken on Amendment 5:
Favor: Moses, Foster, Joule, Kerttula
Opposed: Stoltze, Weyhrauch, Hawker, Holm, Kelly, Meyer,
Chenault
The MOTION FAILED (4-7).
HCS SB 232 was heard and HELD in Committee for further
consideration.
2:48:11 PM
AT EASE.
3:08:57 PM
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