Legislature(2017 - 2018)SENATE FINANCE 532

04/05/2018 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Meeting Postponed to 2:30 p.m. --
+ HB 286 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= HB 287 APPROP: PUPIL TRANSPORTATION; EDUCATION TELECONFERENCED
Heard & Held
+ HB 285 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
CS FOR HOUSE BILL NO. 286(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;   amending                                                                    
     appropriations;      and       making      supplemental                                                                    
     appropriations."                                                                                                           
                                                                                                                                
2:59:48 PM                                                                                                                    
                                                                                                                                
Vice-Chair   Bishop  MOVED   to  ADOPT   proposed  committee                                                                    
substitute for  CSHB 286,  Work Draft  30-GH2564\N (Wallace,                                                                    
4/4/18).                                                                                                                        
                                                                                                                                
Co-Chair Hoffman OBJECTED for discussion.                                                                                       
                                                                                                                                
Mr.  Ecklund  listed  documents   that  were  available  for                                                                    
reference. He  drew attention to  a booklet entitled  "FY 19                                                                    
Operating  Budget Subcommittee  Closeout Narratives,"  which                                                                    
showed  a  synopsis  of  what  happened  in  Senate  Finance                                                                    
Subcommittees  (copy  on  file).  He  stated  he  would  not                                                                    
address the  booklet, but would address  language changes to                                                                    
the bill. He stated there  was a report from the Legislative                                                                    
Finance   Division  (LFD)   entitled  "2018   Legislature  -                                                                    
Operating Budget,  Agency Summary - Senate  Structure" (copy                                                                    
on file).                                                                                                                       
                                                                                                                                
Mr. Ecklund informed that the  committee had removed funding                                                                    
items for  K-12 education and pupil  transportation from the                                                                    
bill and  placed them in HB  287. He stated that  the change                                                                    
was  reflected  in  the  reports in  order  to  compare  the                                                                    
Senate's proposed total budget to  that of the House and the                                                                    
governor.                                                                                                                       
                                                                                                                                
Co-Chair Hoffman  pointed out  that subcommittee  chairs had                                                                    
been having hearings  and had closed out  reports earlier in                                                                    
the week,  which were incorporated in  the booklet mentioned                                                                    
by Mr. Ecklund.                                                                                                                 
                                                                                                                                
Mr.  Ecklund  furthered  that once  the  proposed  Committee                                                                    
Substitute (CS) was  adopted, LFD would provide  a myriad of                                                                    
reports  for members  and the  public to  compare the  CS to                                                                    
earlier versions of  the bill. He stated he  would address a                                                                    
4-page  document   that  listed  all  the   changes  from  a                                                                    
previously adopted  CS [which he  referred to as  "CS Zero"]                                                                    
from the Senate version of  the bill [CSSB 144(FIN), adopted                                                                    
February  9,  2018].  The  bill  rearranged  the  governor's                                                                    
budget into  the format  that was preferred  by LFD  and the                                                                    
Legislative Legal Department.                                                                                                   
                                                                                                                                
Mr. Ecklund detailed  that the CS contained  $5.5 billion of                                                                    
UGF, which included  a dividend. He remarked  that there was                                                                    
$868 million  of DGF; $1.428  million of other  state funds;                                                                    
$2.45  billion   of  federal  funds;  which   totaled  $10.2                                                                    
billion.                                                                                                                        
                                                                                                                                
Co-Chair Hoffman asked  for Mr. Ecklund to  state the amount                                                                    
for the amount of the dividend in the bill.                                                                                     
                                                                                                                                
Mr. Ecklund  replied that the individual  dividend was $1600                                                                    
per individual.                                                                                                                 
                                                                                                                                
3:04:28 PM                                                                                                                    
                                                                                                                                
Mr. Ecklund read from the  document "Summary of Changes from                                                                    
the CS SB 144(FIN) and SCS CSHB 286(FIN)" (copy on file):                                                                       
                                                                                                                                
     Sections 1-3:                                                                                                              
     Incorporate all  changes adopted by the  Senate Finance                                                                    
     Subcommittees, with the exception  that all funding for                                                                    
     the Department of Education  and Early Development that                                                                    
     is  included in  SCS HB287  has been  removed from  the                                                                    
     committee substitute.                                                                                                      
                                                                                                                                
     Section 4(a),  page 53,  lines 1-3:  Discourages future                                                                    
     supplemental  requests  by  adding  legislative  intent                                                                    
     stating that  the amounts appropriated in  the bill are                                                                    
     the full amounts that will be appropriated for FY19.                                                                       
                                                                                                                                
     Section  7,  page  54, lines  16-24:  Revises  language                                                                    
     submitted by the Governor  regarding the declaration of                                                                    
     the  FY19  Alaska  Industrial  Development  and  Export                                                                    
     Authority  dividend. Similar  language  was adopted  by                                                                    
     the legislature last year.                                                                                                 
                                                                                                                                
     Section 8 (Permanent Fund), pages 54-55:                                                                                   
     Subsections (a)  and (b) regarding royalty  deposits to                                                                    
     fund  corpus  and  earnings  deposits  to  the  capital                                                                    
     income fund remain as proposed.                                                                                            
     Subsection  (c) retains  the Governor's  proposed 5.25%                                                                    
     payout  from  the  Earnings   Reserve  Account  to  the                                                                    
     general  fund but  corrects the  amount  of the  payout                                                                    
     ($2,722,842,518).                                                                                                          
     Subsection   (d)  modifies   the  Governor's   proposed                                                                    
     appropriation  to the  dividend  fundwas  $819  million                                                                    
     for an  estimated dividend  of $1,216,  and is  now the                                                                    
     amount necessary  to pay  a $1,600  dividend (estimated                                                                    
     to be $1,023,847,200).                                                                                                     
     The committee substitute also                                                                                              
     1.   Eliminates   the  Governor's   request  of   $1.45                                                                    
     billion  from  the  Earnings  Reserve  Account  to  the                                                                    
     Alaska  Permanent   fund  for   FY16,  FY17   and  FY18                                                                    
     inflation proofing.                                                                                                        
     2.   Eliminates  the Governor's  appropriation of  $943                                                                    
     million  from  the  Earnings  Reserve  Account  to  the                                                                    
    Alaska Permanent fund for FY19 inflation proofing.                                                                          
     3.   Moves  the Governor's  request  to fund  operating                                                                    
     costs  of  the  Alaska Permanent  Fund  Corporation  to                                                                    
     section 1.                                                                                                                 
                                                                                                                                
     Section 9(f) and (g), page  56, lines 19-26: replaces a                                                                    
     Governor's Department  of Administration request  for a                                                                    
     single  open-ended  appropriation   with  two  distinct                                                                    
     sections.                                                                                                                  
     1.   Appropriates  an amount  necessary, not  to exceed                                                                    
     $500,000,  from the  general fund  for retirement  plan                                                                    
     sponsor costs (settlor costs).                                                                                             
     2.   Appropriates  the amount  necessary, estimated  to                                                                    
     be  zero, to  cover retirement  system actuarial  costs                                                                    
     associated with bills introduced by the legislature.                                                                       
                                                                                                                                
     The  committee  substitute   eliminates  the  following                                                                    
     Governor's requests:                                                                                                       
     1.   Page    56,    lines    27-29:    Department    of                                                                    
     Administration,     Public     Defender     AgencyFY18                                                                     
     Supplemental  request   of  $453,500  UGF   for  public                                                                    
     defenders.                                                                                                                 
     2.   Page  58,   line  31  and   page  59,   line  1-3:                                                                    
     Department   of  Corrections,   Institution  Director's                                                                    
     Office    FY18 Supplemental request of  $10,447,600 UGF                                                                    
     for facility operations.                                                                                                   
     3.   Page  59, lines  4-6:  Department of  Corrections,                                                                    
     Inmate  Health  Care    FY18  Supplemental  request  of                                                                    
     $10,341,500 UGF for inmate health care costs.                                                                              
     4.   Page 59,  lines 7-11: Department of  Education and                                                                    
     Early  Development,  Mt.  Edgecumbe Boarding  School                                                                       
     Supplemental  multi-year  (FY18  and FY19)  request  of                                                                    
     $400,000 Municipal Capital  Project Matching grant fund                                                                    
     for  maintenance and  operation  of  the Mt.  Edgecumbe                                                                    
     Aquatic Center.                                                                                                            
     5.   Page 59,  lines 12-19:  Department of  Education &                                                                    
     Early    Development,   Executive    Administration                                                                        
     Supplemental  lapse date  extension from  FY18 to  FY19                                                                    
     for funding associated with  the Every Student Succeeds                                                                    
     Act.                                                                                                                       
     6.   Page  59,  lines 30-31  and  page  60, lines  1-4:                                                                    
     Department  of  Health   &  Social  Services,  Medicaid                                                                    
     Services    open-ended FY19 general  fund appropriation                                                                    
     language.                                                                                                                  
     7.   Page 60, lines 5-9:  Department of Health & Social                                                                    
     Services, Medicaid  Services   open-ended  FY19 federal                                                                    
     appropriation language.                                                                                                    
     8.   Page  60,  lines  10-15: Department  of  Health  &                                                                    
     Social  Services, Medicaid  Services    open-ended FY18                                                                    
     Supplemental UGF appropriation language.                                                                                   
     9.   Page  60,  lines  16-21: Department  of  Health  &                                                                    
     Social Services,  Medicaid Services   FY18 Supplemental                                                                    
     request   of  $7,014.0   UGF   for  Children's   Health                                                                    
     Insurance Program.                                                                                                         
     10.  Page  60,  lines  22-24: Department  of  Health  &                                                                    
     Social  Services, Medicaid  Services    open-ended FY18                                                                    
     federal appropriation language.                                                                                            
     11.  Page  60,  lines  25-28: Department  of  Health  &                                                                    
     Social   Services,   Behavioral  Health    Supplemental                                                                    
     multi-year  (FY18-FY21) request  of  $18,000.0 UGF  for                                                                    
     Substance Use Disorder Grants.                                                                                             
     12.  Page 61, lines 23-26  Department of Law, Judgments                                                                    
     & Settlements    FY18 Supplemental request  of $322,000                                                                    
     UGF for payment of judgments and settlements.                                                                              
     13.  Page   61,  lines   27-31:   Department  of   Law,                                                                    
     Judgments   open-ended  FY19 general fund appropriation                                                                    
     language.                                                                                                                  
     14.  Page  62, lines  7-10:  Department  of Military  &                                                                    
     Veterans' Affairs,  Office of  the Commissioner    FY18                                                                    
     Supplemental  request   of  $94,100  UGF  for   a  Base                                                                    
     Realignment and Closure position.                                                                                          
     15.  Page  62, lines  11-15: Department  of Military  &                                                                    
     Veterans' Affairs,  Air Guard Facilities  Maintenance                                                                      
     FY18 Supplemental request of  $221,000 UGF and $663,000                                                                    
     Federal  Receipts  for  maintenance  and  operation  of                                                                    
     eight C-17 aircraft.                                                                                                       
     16.  Page 63, lines  8-11: Department of Transportation                                                                    
     &  Public Facilities     FY18  Supplemental request  of                                                                    
     $350,000 UGF for a Klutina Lake Road Survey.                                                                               
                                                                                                                                
     Section 17(e), page  64, lines 16-31 and  page 65 lines                                                                    
     1-7: Moves  debt service items from  the Constitutional                                                                    
     Budget Reserve section to the  Debt Service section and                                                                    
     funds the appropriations with general funds.                                                                               
                                                                                                                                
     Section 17(h)(14)-(15),  page 67, lines 11-19:  In lieu                                                                    
     of  general funds,  utilizes $12.3  million of  lapsing                                                                    
     general  obligation  bond  authorization to  repay  the                                                                    
     principal of 2013 series B bonds.                                                                                          
                                                                                                                                
     Section 17(m), page  69, lines 29-31 and  page 70 lines                                                                    
     1-7:  Replaces  $17.6  million of  general  funds  with                                                                    
     Alaska Comprehensive Health  Insurance funds for school                                                                    
     debt reimbursement.                                                                                                        
                                                                                                                                
     Sections 18(a),  page 70, lines 13-24:  Amends the FY18                                                                    
     Legislative Budget  and Audit  language to  prevent the                                                                    
     Alaska  Gasline Development  Corporation from  spending                                                                    
     additional designated program receipts.                                                                                    
                                                                                                                                
3:08:42 PM                                                                                                                    
                                                                                                                                
Mr. Ecklund continued reading from the summary of changes                                                                       
document:                                                                                                                       
                                                                                                                                
     Sections  18(b),  page 70,  lines  25-31  and page  71,                                                                    
     lines  1-2:  Amends  the FY19  Legislative  Budget  and                                                                    
     Audit   language   to   prevent  the   Alaska   Gasline                                                                    
     Development   Corporation   from  spending   additional                                                                    
     designated program receipts.                                                                                               
                                                                                                                                
     Section  19(c),  page  71,  lines  23-24:  Replaces  $2                                                                    
     million  of  general  funds with  Alaska  Comprehensive                                                                    
     Health Insurance  funds for  deposit into  the Disaster                                                                    
     Relief Fund.                                                                                                               
                                                                                                                                
     Section  19(f),   page  72,  lines  2-8:   Deposits  an                                                                    
     estimated $184 million ($168  million general funds and                                                                    
     $16  million  Alaska   Comprehensive  Health  Insurance                                                                    
     funds) into the Oil & Gas  Tax Credit fund based on the                                                                    
     statutory calculation.                                                                                                     
                                                                                                                                
     Section  19(g),  page  72,   lines  9-10:  Changes  the                                                                    
     effective   date  of   the  $30   million  Power   Cost                                                                    
     Equalization Endowment fund  deposit into the Community                                                                    
     Assistance fund from FY18 to FY19.                                                                                         
                                                                                                                                
     The  committee  substitute   eliminates  the  following                                                                    
     Governor's requests:                                                                                                       
     1.   Page  72, lines  11-26:  FY19  deposit of  general                                                                    
     funds  into   the  Public   Education  fund   for  K-12                                                                    
     Foundation    Formula    and   Pupil    Transportation.                                                                    
     (Duplicates the deposits proposed in HB287.)                                                                               
     2.   Page  73,  lines  1-3: FY18  and  FY19  open-ended                                                                    
     deposit  of designated  program  receipts collected  by                                                                    
     the  Alaska Gasline  Development  Corporation into  the                                                                    
     AKLNG Fund.                                                                                                                
     3.   Page 73,  lines 4-6: Transfer of  $12 million from                                                                    
     the In-state  Natural Gas Pipeline  fund to  the Alaska                                                                    
     Liquefied Natural Gas Project fund.                                                                                        
                                                                                                                                
     Section  20(c), page  75, lines  9-13: Appropriates  an                                                                    
     amount equal to 50  percent of punitive damages imposed                                                                    
     under AS 09.17.020(j) during FY18  into the Civil Legal                                                                    
     Services fund. The amount is estimated to be $1,000.                                                                       
                                                                                                                                
     Section  20(f),   page  76,  lines  1-2:   Changes  the                                                                    
     effective   date  of   the  $14   million  Power   Cost                                                                    
     Equalization Endowment fund  deposit into the Renewable                                                                    
     Energy fund from FY18 to FY19.                                                                                             
                                                                                                                                
     The  committee  substitute   eliminates  the  following                                                                    
     Governor's request:                                                                                                        
     1.   Page 76,  lines 3-4:  FY18 deposit  of $23,918,200                                                                    
     from the  general fund into  the Alaska  Marine Highway                                                                    
     System fund.                                                                                                               
                                                                                                                                
     Section 21 (Retirement System  Funding), page 77, lines                                                                    
     5-31 and page 78, line 1:                                                                                                  
     1.   Moves   retirement    system   items    from   the                                                                    
     Constitutional   Budget   Reserve    section   to   the                                                                    
     Retirement  System   Funding  section  and   funds  the                                                                    
     appropriations with general funds.                                                                                         
     2.   Eliminates  a  contingent appropriation  requested                                                                    
     by the  Governor reducing retirement  appropriations by                                                                    
     $25.5  million based  on  potential  savings under  the                                                                    
     Medicare Part D Employer Group Waiver Plan.                                                                                
     3.   Adds  intent language  for  the Alaska  Retirement                                                                    
     Management  Board to  consider the  funding ratio  when                                                                    
     making  recommendations for  the Alaska  National Guard                                                                    
     and Alaska Naval Militia retirement system.                                                                                
                                                                                                                                
     Section 23(b), page 79, lines  20-24: Amends the amount                                                                    
     of  shared  taxes  to local  governments  to  the  full                                                                    
     amount  of aviation  fuel tax  or surcharge  collected,                                                                    
     from $100,000 to $182,900.                                                                                                 
                                                                                                                                
     Section 25 (Constitutional  Budget Reserve Fund), pages                                                                    
     80 through 83:                                                                                                             
     1.   Subsection (a) is FY18 reverse sweep language.                                                                        
     2.   Subsection (b) is FY19 deficit filling language.                                                                      
     3.   Subsection  (c) is  FY19 head  room totaling  $100                                                                    
     million.                                                                                                                   
     4.   Subsection  (d)  is  borrowing  language  for  the                                                                    
     general  fund from  the  Constitutional Budget  Reserve                                                                    
     Fund.                                                                                                                      
     5.   Subsection  (e)  identifies  sections  (a)-(c)  as                                                                    
     needing  a ?  vote by  the legislature  in order  to be                                                                    
     effective.                                                                                                                 
                                                                                                                                
     The  document  compare  for the  Constitutional  Budget                                                                    
     Reserve  section reflects  items that  are being  moved                                                                    
     elsewhere  in  the  bill,  not  being  eliminated.  For                                                                    
     example,   debt    service   and    retirement   system                                                                    
     appropriations have  been relocated to  the appropriate                                                                    
     section of the bill.                                                                                                       
                                                                                                                                
     The  committee  substitute   eliminates  the  following                                                                    
     Governor's request:                                                                                                        
     1.   Page 80,  lines 9-13: Use of  the Statutory Budget                                                                    
     Reserve Fund for FY19.                                                                                                     
     2.   Page  81, lines  6-7: The  Governor's request  for                                                                    
     $27  million  to  pay  interest  on  a  debt  financing                                                                    
     mechanism for the  purpose of retiring oil  and gas tax                                                                    
     credit certificates.                                                                                                       
     3.   Page 83, lines 28-31 and  page 84, line 1: Deletes                                                                    
     contingency  language related  to  the Senior  Benefits                                                                    
     Payment Program.                                                                                                           
                                                                                                                                
     Legislative   Legal   Services   made   editorial   and                                                                    
     technical  changes throughout  the  bill  that are  not                                                                    
     included  in  this  list,  including  revising  section                                                                    
     references for  Lapse of  Appropriations, Retroactivity                                                                    
     and Effective Dates.                                                                                                       
                                                                                                                                
3:16:37 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  asked Mr. Ecklund  to review  the document                                                                    
"HB 286 Supporting Document A"  (copy on file). He asked for                                                                    
a comparison of the two versions of the bill.                                                                                   
                                                                                                                                
Mr. Ecklund detailed the columns within the document.                                                                           
                                                                                                                                
Co-Chair  Hoffman  asked Mr.  Ecklund  to  identify why  the                                                                    
Senate number  was substantially higher than  the governor's                                                                    
under statewide items                                                                                                           
                                                                                                                                
Mr. Ecklund  stated that  oil and  gas tax  credits affected                                                                    
that  number. He  remarked that  the governor's  version had                                                                    
$27  million in  anticipation  of  legislation passing.  The                                                                    
other  body's  version  was  $49  million,  and  the  Senate                                                                    
version had  a total of  $184 million of which  $168 million                                                                    
was UGF.                                                                                                                        
                                                                                                                                
Co-Chair Hoffman  asked if the $184  million was statutorily                                                                    
required after the spring forecast.                                                                                             
                                                                                                                                
Mr. Ecklund replied in the affirmative.                                                                                         
                                                                                                                                
Co-Chair  Hoffman  asked  if   the  number  was  before  the                                                                    
forecast.                                                                                                                       
                                                                                                                                
Mr.  Ecklund  believed  that that  the  fall  forecast  $206                                                                    
million.                                                                                                                        
                                                                                                                                
Senator Micciche  clarified that  Mr. Ecklund  had mentioned                                                                    
that  there was  contingency  language  and intent  language                                                                    
that would return the funding as bills pass.                                                                                    
                                                                                                                                
3:20:14 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman WITHDREW  his OBJECTION.   There  being NO                                                                    
OBJECTION, it was so ordered. SCS CSHB286(FIN) was ADOPTED.                                                                     
                                                                                                                                
Co-Chair Hoffman reviewed the  schedule for public testimony                                                                    
the following day.                                                                                                              
                                                                                                                                
Co-Chair Hoffman  thanked the subcommittee chairs  for their                                                                    
work  on the  budget. He  thanked  members for  work on  the                                                                    
budget.                                                                                                                         
                                                                                                                                
CSHB  286  was  HEARD  and HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB 287 Resolution Kenai.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 287 Support Spangler.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 287 Sen FIN 2-23-2018.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 287 Letters of Support.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 287 Sponsor Statement.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 287 Summary of Changes.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 287 Support Letter.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 287 SCSHB 287 work draft version R.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 286 Numbers and Language Spreadsheet Supporting Document A.pdf SFIN 4/5/2018 1:30:00 PM
HB 286
HB 286 Summary of Changes version N.pdf SFIN 4/5/2018 1:30:00 PM
HB 286
HB 287 Supporting Document A.pdf SFIN 4/5/2018 1:30:00 PM
HB 287
HB 286 SCSforCSHB work draft version N.pdf SFIN 4/5/2018 1:30:00 PM
HB 286
HB 285 SCSforCSHB 285 work draft version R.pdf SFIN 4/5/2018 1:30:00 PM
HB 285