Legislature(2019 - 2020)ADAMS ROOM 519
06/11/2019 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB19 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 19 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
June 11, 2019
10:06 a.m.
10:06:18 AM
CALL TO ORDER
Co-Chair Wilson called the House Finance Committee meeting
to order at 10:06 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Tammie Wilson, Co-Chair
Representative Jennifer Johnston, Vice-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Kelly Merrick
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
MEMBERS ABSENT
None
ALSO PRESENT
Remond Henderson, Staff, Representative Tammie Wilson;
Representative Chris Tuck; Representative Louise Stutes;
Representative Harriet Drummond; Representative Grier
Hopkins.
SUMMARY
CSSSSB 19(FIN)
APPROP: CAPITAL BUDGET; SUPPLEMENTAL
HCS CSSSSB 19(FIN) was REPORTED out of committee
with a "do pass" recommendation.
Co-Chair Wilson review the agenda for the day. She
indicated the committee would be taking up the capital
budget.
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 19(FIN)
"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."
10:06:39 AM
Vice-Chair Johnston MOVED to ADOPT proposed committee
substitute for CSSSSB 19(FIN), Work Draft 31-GS1904/N
(Caouette 6/10/19)(copy on file).
Co-Chair Foster OBJECTED for discussion.
Co-Chair Wilson asked her staff to review the changes in
the bill and acknowledged Representative Chris Tuck in the
audience.
10:07:17 AM
REMOND HENDERSON, STAFF, REPRESENTATIVE TAMMIE WILSON,
reviewed the major changes that were made since the bill
was presented and public testimony was heard. He pointed to
page 2, line 19. There was a $4 million appropriation for
the Interior Gas Project to help the Fairbanks area come
into air quality compliance with the Environmental
Protection Agency. The appropriation was conditional upon
the commercialization of the gas utility after January 2020
but before January 2021 and was funded through Alaska
Industrial Development and Export Authority receipts.
Mr. Henderson moved to page 2, line 27 where $10 million
was added to statewide addiction treatment for facility
capital matching grants. It was the intention of the
legislature that the Department of Commerce, Community and
Economic Development (DCCED) administered capital matching
grants to Alaska organizations committed to building new
addiction treatment facilities throughout the state. The
grants would match dollar-for-dollar local and private
contributions to increase the number of available addiction
treatment slots in the 9 regions identified by the
Department of Health and Social Services' 1115 waiver
application.
Mr. Henderson continued to page 4, line 30 which specified
funding to the Department of Corrections (DOC) for laundry
services. The fund was contingent upon contracts with DOC
and individual and private organizations for laundry
services. He pointed to page 6, line 30 reflecting a
reduction of $16 million to statewide deferred maintenance
and renovation repair. The legislature was requiring the
Office of Management and Budget (OMB) to submit a statewide
prioritized list of deferred maintenance projects no later
than December 31, 2019.
Mr. Henderson reported that the funding of $2.5 million for
the South Denali Visitor's Center was removed from the
budget. He highlighted page 11, line 28 which showed a
reduction in funding for the University of Alaska deferred
maintenance in the amount of $2.5 million. Instead, the
money was appropriated to the USArray Earthquake Monitoring
Network for sensor devices. Co-Chair Wilson interjected
that $7.5 million was left in the budget for the University
of Alaska Deferred Maintenance Program.
Mr. Henderson continued to page 17, line 18 added intent
language to better analyze the dangers of polyfluoroalkyl
substances (PFAS) and to develop a plan. Co-Chair Wilson
clarified that PFAS was the foam used in firefighting
throughout the state. There had been an uproar regarding
the change in the threshold considered to be dangerous. The
legislature was asking the Department of Environmental
Conservation (DEC) to conduct more analysis on the
potential harm of PFAS to Alaska's drinking water. She
confirmed with DEC that the department could fulfill the
intent language.
Mr. Henderson moved to the changes on page 28, line 1 which
contained funding for the reopening of the Palmer
Correctional Center and housing prisoners in or out of
state. It also added specific reporting requirements.
10:12:12 AM
AT EASE
10:12:58 AM
RECONVENED
Co-Chair Wilson indicated that on page 31, line 8 vaccine
receipts collected, under AS 18.09.220, were estimated to
be $25.5 million and were appropriated to the vaccine
assessment fund. The appropriation was a result of
legislation passed earlier in the current year.
Mr. Henderson continued with page 38, line 21 encompassing
reverse sweep language pertaining to the Constitutional
Budget Reserve (CBR). Section 26(b) appropriated interest
earned on general fund investments to go to the CBR. He
continued that Section 26(c) on page 39 clarified that the
reverse sweep was subject to a three-quarter vote.
Co-Chair Wilson noted there were close to 200 savings
accounts for different purposes. The funds in the accounts
were not dedicated but designated funds. She noted the
Power Cost Equalization fund which helped residents in
high-energy cost places. She also mentioned the Community
Revenue Sharing Fund and the Higher Education Fund that
helped students to acquire scholarships. She explained that
without including the language the monies would go into the
CBR. She reiterated that any money coming out of the CBR
required a three-quarter vote of the legislature.
Mr. Henderson continued to page 39, Section 29 which
contained contingency language. Section 29(a) outlined the
three-quarter vote requirement by the legislature for the
appropriations made through Sections 1-6 of the act. He
relayed that Section 26(b) contained contingency language
for DOC on the reopening of Palmer or out-of-state
contracts. It provided funding of $6 million when the
inmate population exceeded 5,130 on or before December 31,
2019. The following section [Section 26(c)] added
additional funding of $10.7 million when the inmate
population exceeded 5,500 or more before March 31, 2020. He
clarified that he was discussing contingency language
rather than a supplemental appropriation. The funds would
be available immediately upon reaching the target levels.
Mr. Henderson summarized that the bill required
approximately $1.4 billion in funding, $1.26 billion in
federal receipts, $162.5 million in CBR funding, $51.7
million in DGF, and $93.2 million in other state funds. He
was available to entertain questions.
Co-Chair Foster WITHDREW his OBJECTION to the adoption of
the work draft.
There being NO OBJECTION, it was so ordered.
10:16:38 AM
Representative Josephson referred to page 4, lines 24-31.
He thought the monies in the section were supposed to be
for the benefit of the Alaska Marine Highway System. He
asked if AMHS could still apply for the monies slated to
meet its laundry needs.
Co-Chair Wilson explained that the contingencies were
placed into the bill because the fate of AMHS was unknown.
The legislature did not want to invest an additional
$420,000 unless a contract with a vendor was in place
moving forward.
Representative Tilton asked Mr. Henderson to review the
funding sources.
Mr. Henderson responded that there was $1.26 billion in
federal receipts, $162.5 million in CBR funding, $51.7
million in DGF, and $93.2 million in other state funds.
Representative Tilton referred to page 2, line 27 regarding
intent language with the statewide addiction treatment. It
appeared the money would go out as a grant through DCCED
that complied with the 1115 waiver. She had received
feedback thanking her for putting things in the budget she
was not aware of. In the community she was from there were
questions about how people could apply for funding
statewide. There were some specific projects the Mat-Su
Health Foundation brought forward that equaled a smaller
amount of funds. She wanted to make sure the funds would be
available on a statewide basis.
Co-Chair Wilson intended for the funding to be accessible
statewide. The funding would pay for additional treatment
beds but did not cover operating costs. The appropriation
was not contingent on the 1115 waiver. However, there were
9 regions identified by the waiver which helped with
dispersing the funds. She noted that treatment beds were
lacking throughout the state. She recalled during public
testimony that receiving dollar-for-dollar federal funds
would help to keep the program going.
Representative Knopp referred to page 4, line 24. He
wondered if the legislature had reached out to DOC to
discuss the laundry contracts. It was his understanding
that DOC already had contracts with the cruise industry for
laundry services.
10:20:46 AM
Co-Chair Wilson indicated she had reached out to DOC but
did not receive a response. She suggested that if contracts
were in place, the intent language would be satisfied and
$420,000 would be available to upgrade the facility.
Representative Knopp surmised that if DOC was already into
the contracts, it should have receipt authority without
UGF.
Co-Chair Wilson understood that they had receipt authority
and a contract with AMHS. However, she thought an upgrade
was needed.
Representative Knopp stated, "But we never got an answer
from DOC is what you're telling me." Co-Chair Wilson
responded that he was correct.
Representative Sullivan-Leonard queried the grants that
might come through DCCED. She asked if a provision would be
included for projects under consideration requiring them to
be shovel-ready or far enough along that the state could
simply finish the project. She was looking for shovel-ready
projects.
Co-Chair Wilson preferred shovel-ready projects as well.
Beds were needed immediately rather than 4 years in the
future. She agreed with the idea of funding projects that
were nearly ready. She relayed that the funds had to go to
the capital portion of a project.
Representative Josephson referred to page 6. He asked about
the $16 million reduction. In the other body there was a
recommended change where the Department of Transportation
and Public Facilities would coordinate with the Office of
the Governor and deferred maintenance. He asked the
co-chair to remind members of what the committee substitute
did and the change.
Co-Chair Wilson responded that it reduced the amount the
legislature would be giving to the administration. The
committee had the administration before the committee to
discuss deferred maintenance. The presenters did not know
who owned the Capitol Building which raised concern. The
legislature had been asking for a priority list for a
significant period. Meanwhile, the legislature had been
appropriating a significant amount of money. She thought
that in lean times, the legislature needed to fund items
that rose to the top of the priority list. She thought
additional accountability was necessary.
Representative Josephson asked if the appropriation was a
separate appropriation for which the Office of the Governor
could not use except for deferred maintenance. He asked if
he was correct. Co-Chair Wilson clarified that it was her
intention for the funds to be used for deferred maintenance
rather than operating costs.
10:24:10 AM
Vice-Chair Johnston MOVED to report HCS CSSSSB 19(FIN) out
of Committee with individual recommendations.
Representative Josephson OBJECTED. He was pleased with the
committee substitute. He was concerned about the PFAS
appropriation. He explored Title 46 and Title 29 relative
to the response fund. The Prince William Sound Regional
Citizens Advisory Council, created through the Oil Spill
Prevention Act of 1990, had an appreciation and a concern
for PFAS. However, the council did not like the fact that
the legislature was draining response funds for things
other than sudden releases. In looking at Title 29, DCCED's
code, there was a section that specified incidences where
there were sudden releases. Other sections clarified the
use of the funds for sudden releases. There was concern in
the prior year about how the remediation of the Wrangell
junk yard dump was being funded. He reiterated his concern
about the account and thought the issue should be examined
further in 2020. Co-Chair Wilson agreed that the issue
should be on the following year's agenda.
Representative Sullivan-Leonard asked if amendments would
be allowed.
Co-Chair Wilson asked if the representative currently had
any amendments to offer.
Representative Sullivan-Leonard did not have one presently
but had one coming.
Co-Chair Wilson suggested that it would have to be in time
to move it.
10:26:50 AM
AT EASE
10:29:07 AM
RECONVENED
Representative Josephson WITHDREW his OBJECTION.
Representative Carpenter OBJECTED.
Representative Carpenter spoke to his objection. He
indicated he was given a period of 10 minutes to review the
committee substitute. He objected to several items in the
legislation. He did not like the idea of taking a
significant amount of money out of the CBR or writing blank
checks for addiction treatment without a plan. He wanted
more information to make a good decision. He thought he
would want to offer some amendments. He could not presently
support the bill.
Representative Carpenter MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Josephson, Johnston, Knopp, LeBon,
Merrick, Foster, Wilson
OPPOSED: Sullivan-Leonard, Tilton, Carpenter
The MOTION PASSED (8/3).
HCSSSSB 19(FIN) was REPORTED out of committee with a "do
pass" recommendation.
ADJOURNMENT
10:31:22 AM
The meeting was adjourned at 10:31 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 19 HCS WORKDRAFT v.N.pdf |
HFIN 6/11/2019 9:00:00 AM |
SB 19 |