Legislature(2017 - 2018)SENATE FINANCE 532
07/27/2017 01:00 PM House FREE CONFERENCE COMMITTEE ON SB23
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| Audio | Topic |
|---|---|
| Start | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 23 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 23(FIN) am
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
HCS CSSB23(FIN)AMH(BRFSUPMAJFLDH)(EFDFLDH)
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; and making appropriations to
capitalize funds."
1:04:33 PM
Chair MacKinnon announced the Senate committee members
present at the meeting.
Chair Foster announced the House committee members present
at the meeting.
Chair MacKinnon announced that the goal of the free
conference committee was to agree on a committee
substitute, and recommend it to the representative bodies
for approval. She stated that there would be no public
testimony. She announced that, pursuant to Uniform Rule 42,
the free conference was appointed the current day by the
Senate at 11:23am and by the House at 12:25pm. She shared
that adoption of the conference committee report required
an affirmative vote by a majority of members from each
body.
Chair Foster MOVED to ADOPT the proposed free committee
substitute for CSSB 23(FIN)am, Work Draft 30-GS1854\Y
(Martin, 7/19/17).
Chair MacKinnon OBJECTED for discussion.
1:05:39 PM
LAURA CRAMER, STAFF, SENATOR ANNA MACKINNON, discussed the
Summary of Changes (copy on file):
Does not include the following:
o Supplemental Items that were approved in HB 57
- Operating Budget
o Reappropriation of Alaska Gasline Development
Corporation Funds
o Additional appropriation for the Permanent Fund
Dividend
o FY 18 Operating Budget
Addition:
Section 11 Reappropriation of $55,000 from SB 74
(2016 Medicaid Reform) for the Health Care
Authority efforts (page 16, lines 20-28)
Changes:
Fund source for the capital budget, unless
otherwise noted, is the Statutory Budget Reserve
Section 6 Oil and gas tax credit fund
appropriation of $20 million to pay tax credit
liabilities - brings FY18 funding to the
statutory calculation of $77 million (including
the operating budget appropriation) (page 15,
lines 12-14)
Section 20 Revised fiscal note funding for the
implementation of HB 111 to $1.35 million from
$1.2 million (page 23, lines 3-5)
Inclusions:
Section 1 Fully fund Alaska Housing Finance
Corporation programs at requested FY18 level
(page 7, lines 19-22)
Section 1 Intent language relating to the
replacement of the F/V Tustumena (page 7, lines
31-33 through page 8, lines 3-7)
Section 1 $1 million for Public and Community
Transportation State Match (page 8, line
12)
Section 11 Fiscal note for implementation of Real
ID $1.5 million (page 16, lines 15-19)
Section 14 Reappropriation of $4.43 million of
the Juneau Access project for the Kivalina K-12
replacement school (page 19, lines 24-31 through
page 20, lines 1-7)
Section 14 Reappropriation of $2.18 of various
Department of Military and Veterans' Affairs
projects for the Kivalina K-12 replacement school
(page 20, lines 8-17)
Section 14 Reappropriation of $500,000 of the
Knik Arm Bridge and Toll Authority (KABATA)
Funding for the Kivalina K-12 replacement school
(page 20, lines 18-27)
Section 14 Backstop language: If KABATA
reappropriations are short for the Kivalina K-12
replacement school, general funds would be used
to fully fund (page 20, lines 28-31 through page
21, lines 1-2)
Section 18 Land purchase for Interior Veterans'
Cemetery (page 22, lines 11-14)
Section 19 Reappropriations of $7.3 million from
DOT, DNR, and ARRC for the Arctic Strategic
Transportation and Resources (ASTAR) project
(page 22, lines 21-31 through page 23, lines 1-2)
Section 21 Reappropriation of $21,285,000 million
of the Juneau Access project to remain with the
Juneau Access project (page 23, lines 23-26)
Section 21 Reappropriation of $21,285,000 million
of the Juneau Access project for capital projects
in the greater Lynn Canal area (page 23, lines
27-31 through page 24, lines 1-10)
Section 21 Reappropriation of $1 million of
KABATA funding for Alaska Marine Highway Vessel
Overhaul (page 24, lines 14-23)
Section 21 Reappropriation of $1 million of the
KABATA funding for Federal Highway Match (page
24, lines 24-31 through page 25, lines 1-2)
Section 21 Reappropriation of $1.2 million from
Art on Alaska Class ferries to the Alaska Class
Ferries for Equipment (page 41, lines 20-27)
Section 21 Backstop language: If reappropriations
are short for Federal-aid highway match, general
funds would be used to fully fund (page 41 lines
28-31 through page 42, line 1)
Section 22 $8 million to fully fund the Community
Assistance Program (page 42, lines 5-8)
1:14:25 PM
Ms. Cramer stated that there was retroactivity language
added on page 45, line 18, which stated that any
reappropriations or projects that were scheduled to lapse
at the end of FY 17 would not lapse. Instead, they would be
directed in the CS as such.
Senator Hoffman wondered whether there was a revised fiscal
note for HB 111. Ms. Cramer replied that there was a
revised fiscal note, FN 4, which was an implementation by
the Department of Revenue (DOR) for HB 111 for $1.35
million. She stated that it was an increase from $1.2
million in the House fiscal note.
Senator Olson looked at page 45, and wondered whether the
lapsed retroactivity would be a large amount. Ms. Cramer
wondered whether the question was regarding the total
reappropriation amount in the budget.
Senator Olson clarified that he queried the amount that
would have lapsed, and would have been in danger of losing
without the language. Ms. Cramer replied that the total
reappropriations were approximately $20 million to $25
million, but she did not have the exact number.
Chair MacKinnon REMOVED her OBJECTION. There being NO
further OBJECTION, the proposed committee substitute was
adopted.
Representative Pruitt MOVED to adopt Conceptual Amendment
1. He apologized that the amendments were not in writing.
He stated that the amendment would be to Section 6, page
15, line 12. He moved that $20 million be substituted for
$40 million.
Chair MacKinnon OBJECTED.
1:17:46 PM
Representative Pruitt explained the amendment. He stated
that the amendment referred to the Oil and Gas Tax Credit
Fund. He stated that was a strong possibility that some
financial institutions could foreclose on some of the
companies that were expecting the tax credits, if the state
did not provide the $95 million range. He felt that it was
prudent to be cognizant of the legislature's word. He
remarked that part of the downgrade was related to the
decision making and process for how to fund government. He
also asserted that the downgrade was related to the
legislature's willingness and ability to pay for certain
commitments. He wanted to prevent the foreclosure of
certain assets. He understood that the $40 million would
suffice in assuring the avoidance of foreclosure.
Senator Olson wondered where the additional $20 million
would come from. Representative Pruitt believed that it
would come from the Statutory Budget Reserve (SBR) as an
additional amount.
Chair Foster commented that the House Majority Caucus
wanted the oil tax credit number to be zero. He furthered
that the House added $57 million into the Operating Budget
and another $20 million into the Capital Budget. He did not
support the amendment.
Representative Seaton remarked that current amount was the
statutorily calculated amount, so companies should be aware
of statutes and the potential obligations of the state. The
change would increase above the statutory limit. He opposed
the amendment.
Chair MacKinnon wanted to support the amendment, but stated
that the bill was a compromise between the two bodies. He
stated that the Senate had proposed $288 million to pay
one-third of the state's obligation, and shared with the
House the risk of not funding at the higher level. She
stated that the House had made other compromises. She felt
that the CS was not ideal, but she supported the
compromise.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt
OPPOSED: Hoffman, Seaton, MacKinnon, Foster, Olson
The MOTION to adopt Conceptual Amendment 1 FAILED (5/1).
1:21:59 PM
Representative Pruitt MOVED to ADOPT Conceptual Amendment
2. He stated that the amendment was on Section 21, page 23,
lines 23-26, which reappropriated $21.285 million to Juneau
Access. He stated that the number would be changed to
$42.57 million. The amendment would strike the
reappropriation language, "to the greater Lynn Canal area."
Chair MacKinnon surmised that the amendment would not use
any reappropriation from the Juneau Access Project.
Representative Pruitt clarified that the Kivalina School
money would not be addressed. He only was referring to
money that was reappropriated to the Lynn Canal.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt
OPPOSED: Hoffman, Seaton, MacKinnon, Foster, Olson
The MOTION to adopt Conceptual Amendment 2 FAILED (5/1).
Representative Pruitt MOVED to ADOPT Conceptual Amendment
3. The amendment was for Section 21, page 24, lines 14 to
23. He remarked that there was reference to reappropriating
$1 million from the Knik Arm Bridge and Toll Authority
(KABATA) to the Marine Highway Fund. He furthered that
there was also a reappropriation of $1 million for KABATA
for federal highway match. The amendment would leave the $2
million with KABATA.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt
OPPOSED: Hoffman, Seaton, MacKinnon, Foster, Olson
The MOTION to adopt Conceptual Amendment 3 FAILED (5/1).
1:25:32 PM
Representative Pruitt MOVED to ADOPT Conceptual Amendment
4. He explained that the amendment would be to Section 45
of HB 57. He announced that it would replace the Budget
Reserve language with Earnings Reserve to the amount of
$1.7 billion. He wanted Legislative Legal to apply
conforming language.
Chair MacKinnon OBJECTED. She queried the page number.
Representative Pruitt announced that there was no page
number. He explained that it was in reference to the
already passed budget. The amendment would substitute $1.7
billion from the Earnings Reserve to pay for state
government operations. He stressed that the state had been
downgraded because it had not been able to address its
current budget challenges. He remarked that many people
were able to attend the Anchorage Economic Development
luncheon, and spoke to the legislature not addressing some
of the challenges. The amendment would replace language
that had already passed with the utilization of Earnings
Reserve money in place of the Constitutional Budget Reserve
(CBR) money as indicated in the budget.
Senator Olson queried the impact of the amendment on the
state's credit rating.
Representative Pruitt felt that the willingness for the
state to use all of its assets with the fortitude and
strength to make the decisions would speak volumes to the
creditors. He stated that Alaska was third in the country
in terms of credit ratings. He shared that he had recently
visited New Jersey, which was in a much greater budget
deficit. He felt that the budget situation was because of
political willpower and an unwillingness to pay certain
commitments, resulting in a downgraded credit rating.
Senator Olson understood that the reason for the downgraded
credit rating was not because of where the funds came from
for funding government, rather it was because there was no
plan for new revenue.
Representative Pruitt agreed with Senator Olson. He felt
that showing that Alaska could make a huge statement, would
"speak volumes to those credit agency ratings."
Chair MacKinnon remarked that the Permanent Fund Earnings
Reserve account was drawing 16 percent interest and the CBR
was drawing between 2 and 3 percent. She felt that the
amendment would be an unwise move. She remarked that there
was a conversation about moving a large amount from the
Earnings Reserve with a potential loss of $4 million of
interest. She opposed the amendment. She announced to
credit raters that the legislature knew that all of its
assets were available. She stressed that the Earnings
Reserve was spent with a simple majority, and a court
ruling had supported that function. She shared that the
reserve had historically not been accessed, rather, it was
protected for payments to Alaskans for the dividend
program.
Representative Seaton remarked that the House and Senate
had been working toward a comprehensive fiscal plan, and
the amendment was an unstructured draw from the account. He
felt that it would circumvent the process that the
legislature was attempting to get its fiscal house in
order. He opposed the amendment.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt
OPPOSED: Hoffman, Seaton, MacKinnon, Foster, Olson
The MOTION to adopt Conceptual Amendment 4 FAILED (5/1).
Chair Foster MOVED that the House and Senate adopt the FCCS
SB 23 from the Free Conference Committee, and that
Legislative Finance and Legislative Legal be directed to
make appropriate conforming and technical changes.
There being NO OBJECTION, it was so ordered.
FCC SB 23 was REPORTED out of committee with a "do pass"
recommendation.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 23 Cap Budget_CC Spreadsheet.pdf |
JSB23 7/27/2017 1:00:00 PM |
SB 23 |
| SB 23 CSSB 23 v. Y Summary of Changes by Section.pdf |
JSB23 7/27/2017 1:00:00 PM |
SB 23 |
| SB 23 work draft version Y.pdf |
JSB23 7/27/2017 1:00:00 PM |
SB 23 |