Legislature(2017 - 2018)SENATE FINANCE 532

06/20/2017 03:00 PM CONFERENCE COMMITTEE ON HB57 AND HB59

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Audio Topic
03:03:10 PM Start
03:23:12 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 57 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
- Dept. of Transportation & Public Facilities
- State Retirement Payments
- Fund Capitalization
- Supplemental Items
- Fiscal Notes for HB 57
CS FOR HOUSE BILL NO. 57(FIN) am(brf sup maj fld)(efd fld)                                                                    
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;   capitalizing   funds;   repealing                                                                    
     appropriations; and  making supplemental appropriations                                                                    
     and reappropriations."                                                                                                     
                                                                                                                                
and                                                                                                                             
                                                                                                                                
SENATE CS FOR CS FOR HOUSE BILL NO. 57(FIN) am S                                                                              
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;   capitalizing   funds;   repealing                                                                    
     appropriations; making  supplemental appropriations and                                                                    
     reappropriations; 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."                                                                                                    
                                                                                                                                
3:03:42 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton invited  Lacey Sanders  of the  Legislative                                                                    
Finance  Division  to  join legislators  at  the  table.  He                                                                    
reported that  the conference committee would  be addressing                                                                    
open items in  HB 57 based on the  motion sheets distributed                                                                    
to  members  earlier in  the  day  dated  June 20th  on  the                                                                    
following:                                                                                                                      
                                                                                                                                
     · Department of Transportation and Public Facilities                                                                       
     · State Retirement Payments                                                                                                
     · Fund Capitalization                                                                                                      
     · Supplemental Items                                                                                                       
     · Fiscal Notes for HB 57                                                                                                   
                                                                                                                                
Senator Hoffman MOVED to ADOPT the following in the                                                                             
Department of Transportation and Public Facilities budget:                                                                      
                                                                                                                                
     Item 1    House                                                                                                            
     Item 2    Senate for both lines                                                                                            
     Item 3    House                                                                                                            
     Item 4    House for both lines                                                                                             
     Item 5    Senate                                                                                                           
     Item 6    House                                                                                                            
     Item 7    Senate                                                                                                           
                                                                                                                                
     Item 8    Line 1 House minus $6,000 for a total of                                                                         
               minus $780,700 of Fund Code 1004                                                                                 
                                                                                                                                
               Line 2 House plus $6,000 for a total of                                                                          
               $780,700 of Fund Code 1249                                                                                       
                                                                                                                                
     Item 9    Senate                                                                                                           
     Item 10   Senate                                                                                                           
     Item 11   Senate                                                                                                           
                                                                                                                                
Senator Olson OBJECTED.                                                                                                         
                                                                                                                                
Co-Chair  Hoffman  WITHDREW  Item  11 from  his  motion.  He                                                                    
continued with the remaining DOT items:                                                                                         
                                                                                                                                
     Item 12   House for both lines                                                                                             
     Item 13   Senate                                                                                                           
     Item 14   Senate                                                                                                           
     Item 15   House                                                                                                            
     Item 16   House                                                                                                            
     Item 17   House for both lines                                                                                             
     Item 18   Senate                                                                                                           
     Item 19   Senate                                                                                                           
     Item 20   House                                                                                                            
     Item 21   Senate for both lines                                                                                            
     Item 22   Senate for both lines                                                                                            
                                                                                                                                
Co-Chair  Seaton  indicated  that   the  action  closed  all                                                                    
conference-able  items, with  the exception  of Item  11, in                                                                    
the  Department  of  Transportation  and  Public  Facilities                                                                    
budget.                                                                                                                         
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
3:06:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman MOVED to ADOPT Item 11 - Senate.                                                                               
                                                                                                                                
Senator Olson OBJECTED.                                                                                                         
                                                                                                                                
Senator Olson  wanted more  information. The  item indicated                                                                    
rural airports  after hour services.  He wanted to  know the                                                                    
specific airports affected. The  item indicated the Northern                                                                    
region would  be affected. He  was certain that  airports in                                                                    
the region needed to be  kept open for medivac activities as                                                                    
well as to address the area's transportation issues.                                                                            
                                                                                                                                
Co-Chair Seaton  asked Ms. Sanders  from LFD to  address the                                                                    
question.                                                                                                                       
                                                                                                                                
3:07:07 PM                                                                                                                    
AT EASE                                                                                                                         
3:07:40 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
ROB  CARPENTER,   ANALYST,  LEGISLATIVE   FINANCE  DIVISION,                                                                    
explained that the provision  applied to certified airports,                                                                    
the larger airports  in the Northern region.  Users would be                                                                    
billed  for additional  costs associated  with operating  an                                                                    
airport  outside  of  normal   hours  of  operation.  As  an                                                                    
example, if an airport closed at  6:00 p.m. and a user had a                                                                    
delayed flight  until 6:30 p.m.  the user would  be required                                                                    
to pay  an additional cost. If  a user flew into  an airport                                                                    
at 7:00 p.m.  and had scheduled a landing, they  could do so                                                                    
but would have to pay a fee.                                                                                                    
                                                                                                                                
3:08:25 PM                                                                                                                    
                                                                                                                                
Senator Olson  assumed additional  costs would be  passed on                                                                    
to  passengers   using  the  available  121   operators.  He                                                                    
wondered  if he  was accurate.  He suggested  that a  common                                                                    
practice  of  businesses  was  to pass  on  costs  to  their                                                                    
customers.                                                                                                                      
                                                                                                                                
Mr.  Carpenter assumed  businesses would  pass on  costs but                                                                    
was uncertain to what extent.                                                                                                   
                                                                                                                                
Senator  Olson  asked  about   charges  related  to  medivac                                                                    
services. He  wondered who would  be charged. He  provided a                                                                    
personal example. He  had flow with the  North Slope Borough                                                                    
Medivac. He was flying a leer  jet at night. If two medivacs                                                                    
were  necessary  and one  had  to  come from  Anchorage,  he                                                                    
wondered who would be responsible for the charges.                                                                              
                                                                                                                                
Mr. Carpenter  indicated the senator's question  was outside                                                                    
of his  area of  expertise. He  assumed the  additional cost                                                                    
would  be  passed on  to  the  consumer or  their  insurance                                                                    
company.                                                                                                                        
                                                                                                                                
Senator Olson MAINTAINED his OBJECTION.                                                                                         
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Senator    MacKinnon,    Representative    Foster,                                                                    
Representative  Pruitt,   Senator  Hoffmann,  Representative                                                                    
Seaton                                                                                                                          
OPPOSED: Senator Olson                                                                                                          
                                                                                                                                
The MOTION TO  ADOPT Item 11 - Senate PASSED  (Senate: 2/1 -                                                                    
House: 3/0).                                                                                                                    
                                                                                                                                
3:10:55 PM                                                                                                                    
                                                                                                                                
Senator  Hoffman  MOVED  to ADOPT  the  following  in  State                                                                    
Retirement Payments:                                                                                                            
                                                                                                                                
     Item 1    Line 1 Senate plus $29,287.0                                                                                     
               Line 2 Senate minus $29,287.0                                                                                    
     Item 2    Senate for both lines                                                                                            
                                                                                                                                
               And add  intent language per  amendment M.A.9                                                                    
               that  reads:   It  is   the  intent   of  the                                                                    
               legislature that the  fiscal year 2019 budget                                                                    
               for state  retirement assistance  not contain                                                                    
               funding  from  the  Alaska  higher  education                                                                    
              investment fund (AS 37.14.750).                                                                                   
                                                                                                                                
Co-Chair  Hoffman  relayed  that   the  net  effect  of  the                                                                    
transactions was that $29 million  from the Higher Education                                                                    
Investment  Fund  was  used  for  retirement  assistance  in                                                                    
FY 18.                                                                                                                          
                                                                                                                                
Representative  Pruitt OBJECTED.  He wanted  Ms. Sanders  to                                                                    
speak to the effect on  the Higher Education Investment Fund                                                                    
with the changes.                                                                                                               
                                                                                                                                
LACEY  SANDERS,   ANALYST,  LEGISLATIVE   FINANCE  DIVISION,                                                                    
responded  that LFD  had conducted  a Higher  Education Fund                                                                    
balance  and  projection  on the  fund.  There  were  higher                                                                    
investment earnings  reported at  the end  of May  2017 than                                                                    
projected.  Utilizing  $29  million  for  Public  Employees'                                                                    
Retirement  System (PERS)  and  Teachers' Retirement  System                                                                    
there  was a  slight decline  of  about $1  million to  $1.5                                                                    
million  to  the  fund  in future  years.  It  would  remain                                                                    
sustainable.  She added  that it  would  take a  significant                                                                    
period to deplete the fund.                                                                                                     
                                                                                                                                
Representative Pruitt  WITHDREW his OBJECTION. He  wanted to                                                                    
have the impact  of the item on record.  He wanted assurance                                                                    
that the fund's sustainability would not be harmed.                                                                             
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Co-Chair  Seaton  indicated  that   the  action  closed  the                                                                    
conference-able items in State Retirement Payments.                                                                             
                                                                                                                                
3:13:28 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  MOVED to  ADOPT the  following in  the Fund                                                                    
Capitalization budget:                                                                                                          
                                                                                                                                
     Item 1    OPEN                                                                                                             
     Item 2    OPEN                                                                                                             
     Item 3    Senate                                                                                                           
     Item 4    Senate                                                                                                           
     Item 5    Senate                                                                                                           
     Item 6    House                                                                                                            
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Co-Chair  Seaton  indicated  that   the  action  closed  the                                                                    
conference-able Items  3 through  6, leaving  Items 1  and 2                                                                    
OPEN in Fund Capitalization.                                                                                                    
                                                                                                                                
3:14:02 PM                                                                                                                    
                                                                                                                                
Senator   Hoffman   MOVED   to  ADOPT   the   following   in                                                                    
Supplemental Items:                                                                                                             
                                                                                                                                
     Item 1    Senate                                                                                                           
     Item 2    Senate                                                                                                           
     Item 3    Senate                                                                                                           
     Item 4    OPEN                                                                                                             
     Item 5    Senate                                                                                                           
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Co-Chair  Seaton  indicated  that   the  action  closed  the                                                                    
conference-able Items 1, 2, 3, and  5 leaving Item 4 OPEN in                                                                    
Supplemental Items.                                                                                                             
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  new  Item  6,  Amendment                                                                    
M.A.8.                                                                                                                          
                                                                                                                                
Co-Chair Seaton OBJECTED for discussion.                                                                                        
                                                                                                                                
Co-Chair   Hoffman   explained   that  the   amendment   re-                                                                    
appropriated  the  balance  of the  Community  Quota  Entity                                                                    
Revolving Loan Fund, estimated to  be $9.4 million, into the                                                                    
Alaska Marine  Highway System Fund,  as the loan  fund would                                                                    
lapse on  June 30,  2017. The  re-appropriation was  part of                                                                    
the $40 million fund source  change that was just adopted in                                                                    
DOT Item 21.                                                                                                                    
                                                                                                                                
Co-Chair Seaton WITHDREW his OBJECTION.                                                                                         
                                                                                                                                
Representative Pruitt OBJECTED.                                                                                                 
                                                                                                                                
Representative Pruitt  spoke to  his objection  by providing                                                                    
background about the fund. He  did not think anyone had been                                                                    
aware of the fund until the  previous week. He gave kudos to                                                                    
Representative Tilton  who had  spent a  considerable amount                                                                    
of  time  trying  to understand  the  available  funds.  She                                                                    
identified that  the particular  fund being  discussed would                                                                    
be lapsing.  He was  frustrated that in  the prior  week the                                                                    
fund was  offered as a way  of satisfying the concerns  of 2                                                                    
different groups of individuals. A  portion would be used to                                                                    
offset the  North Juneau Access  Road Project and  leave the                                                                    
Kivalina School  project alone. The  remainder of  the funds                                                                    
were  going  to be  placed  in  the  general fund  (GF).  He                                                                    
reported  that  some  minority   members  opposed  the  idea                                                                    
because they wanted to see  the entire amount of $10 million                                                                    
go into the GF. The  minority caucus had identified the fund                                                                    
and  suggested that  it  be used  to meet  both  sides of  a                                                                    
concern. He  was frustrated  because the  amendment proposed                                                                    
to  use a  portion  of  those funds  for  the Alaska  Marine                                                                    
Highway System  (AMHS) rather than  placing them in  the GF.                                                                    
He reiterated  his frustration. He thought  the proposal was                                                                    
disrespectful  and that  the  committee  had not  considered                                                                    
that the  fund would  not have  been identified  without the                                                                    
help  of  one  of  his   caucus  members.  He  restated  his                                                                    
objection having just found out  about where the money would                                                                    
be allocated.                                                                                                                   
                                                                                                                                
Representative Pruitt MAINTAINED his OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Senator  Olson,   Representative  Foster,  Senator                                                                    
MacKinnon, Representative Seaton, Senator Hoffmann.                                                                             
OPPOSED: Pruitt                                                                                                                 
                                                                                                                                
The  MOTION to  ADOPT Item  6  PASSED (House:  2/1 -  Senate                                                                    
3/0).                                                                                                                           
                                                                                                                                
Co-Chair  Seaton  indicated  that   the  action  closed  the                                                                    
conference-able Items 1, 2, 3, 5,  and 6 leaving Item 4 OPEN                                                                    
in Supplemental Items.                                                                                                          
                                                                                                                                
Co-Chair  Seaton relayed  that the  committee would  address                                                                    
fiscal notes that would be incorporated in HB 57.                                                                               
                                                                                                                                
3:19:15 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  remarked that  although the  committee had                                                                    
adopted Item 6  he wanted to have further  discussion on the                                                                    
item prior to closing out the Supplemental Items.                                                                               
                                                                                                                                
Co-Chair Seaton asked about the item for clarification.                                                                         
                                                                                                                                
Co-Chair  Hoffman  responded,  "On  the last  item  that  we                                                                    
passed."                                                                                                                        
                                                                                                                                
Co-Chair Seaton clarified that it was a Supplemental item.                                                                      
                                                                                                                                
Co-Chair Hoffman responded affirmatively.                                                                                       
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  document  with  the                                                                    
footer  "FY18  Fiscal  Note  Section to  HB57,  Sec.  2"  as                                                                    
section 2 of  HB 57. [Co-Chair Hoffman referred to  HB 57 as                                                                    
HB 27 correcting himself below].                                                                                                
                                                                                                                                
Co-Chair Seaton OBJECTED for discussion.                                                                                        
                                                                                                                                
Co-Chair Hoffman read the explanation:                                                                                          
                                                                                                                                
   1. Section 2 makes appropriations associated with the                                                                        
     bills listed.                                                                                                              
                                                                                                                                
   2. If a bill listed either fails to pass, its substance                                                                      
     fails to be incorporated in some other measure, or is                                                                      
     vetoed by the Governor, the appropriations associated                                                                      
     with that bill are reduced.                                                                                                
                                                                                                                                
Co-Chair Seaton WITHDREW his OBJECTION.                                                                                         
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
3:20:34 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  expected the Conference Committee  would be                                                                    
meeting again  later in  the current  week on  the remaining                                                                    
open  items. Once  the date  and time  were determined,  the                                                                    
meeting would be posted on BASIS.                                                                                               
                                                                                                                                
3:20:56 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:22:19 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Hoffman restated the previous motion [He had                                                                           
referred to HB 57 as HB 27 above]:                                                                                              
                                                                                                                                
Co-Chair Hoffman MOVED to ADOPT the document with the                                                                           
footer "FY18 Fiscal Note Section to HB57, Sec. 2" as                                                                            
section 2 of HB 57.                                                                                                             
                                                                                                                                
Co-Chair Seaton OBJECTED for discussion.                                                                                        
                                                                                                                                
Co-Chair Hoffman read the explanation:                                                                                          
                                                                                                                                
   3. Section 2 makes appropriations associated with the                                                                        
     bills listed.                                                                                                              
                                                                                                                                
   4. If a bill listed either fails to pass, its substance                                                                      
     fails to be incorporated in some other measure, or is                                                                      
     vetoed by the Governor, the appropriations associated                                                                      
     with that bill are reduced.                                                                                                
                                                                                                                                
Co-Chair Seaton WITHDREW his OBJECTION.                                                                                         
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Co-Chair Seaton adjourned the meeting.                                                                                          
                                                                                                                                

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