Legislature(2019 - 2020)ADAMS ROOM 519
07/19/2019 01:00 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB2002 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB2001 | TELECONFERENCED | |
| *+ | HB2002 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
SECOND SPECIAL SESSION
July 19, 2019
1:02 p.m.
1:02:38 PM
CALL TO ORDER
Co-Chair Johnston called the House Finance Committee
meeting to order at 1:02 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Jennifer Johnston, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Kelly Merrick
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
Representative Adam Wool
MEMBERS ABSENT
Representative Ben Carpenter
ALSO PRESENT
Representative Tammie Wilson; Representative Louise Stutes;
Representative Steve Thompson, Paloma Harbour, Budget
Director, Office of Management and Budget; Donna Arduin,
Director, Office of Management and Budget.
SUMMARY
HB2002 APPROP: CAPITAL; SUPP; OTHER APPROP
HB2002 was HEARD and HELD in committee for
further consideration.
Co-Chair Johnston recognized Co-Chair Wilson in the room.
She discussed housekeeping.
HOUSE BILL NO. 2002
"An Act making appropriations, including capital
appropriations, supplemental appropriations, and other
appropriations; repealing appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
1:03:59 PM
PALOMA HARBOUR, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, introduced herself as the new budget director for
the Office of Management and Budget (OMB). She provided a
PowerPoint presentation, "HB 2002 Capital Budget Overview",
July 19, 2019 (copy on file). She shared that the
presentation would be quick and that questions could be
considered afterward.
1:05:48 PM
Ms. Harbour began with slide 3, HB2002 FY2020 Capital
Budget ($ Thousands):
HB 2002 Project Requests Will:
? Meet Federal matching requirements
? Maximize Federal funding for project grants
? Provide funding for projects where Constitutional
Budget Reserve funding was not approved in SB 19
1:06:12 PM
Ms. Harbour indicated that Slide 4 provided a summary of
the Capital and Operating funding in the bill, by agency.
Ms. Harbour turned to Slide 5:
? Department of Commerce, Community, and Economic
Development
? Community Block Grants $60.0 UGF (matching
$6,000.0 Fed)
? Alaska Travel Industry Association $7,420.0 UGF
? Hope Community Resources, Inc. $85.0 UGF
? Department of Corrections
? Mental Health: $2,540.0 UGF for Renovations
Required to Accommodate the Women's
Mental Health Unit at Hiland Mountain
? This will match funds provided by the Alaska
Mental Health Trust appropriated in SB 19
of $1,145.0 (Mental Health Trust Authority
Receipts)
? Department of Environmental Conservation
? Village Safe Water and Wastewater
Infrastructure Projects $12,080.0 (matching
$52,250.0
Fed)
1:07:11 PM
Ms. Harbour reviewed Slide 6:
? Department of Fish and Game
? Cook Inlet Stock Assessment $1,000.0 UGF
? Office of the Governor
? Capital Costs Related to Executive Branch
Office Buildings, Facilities, and IT Systems
$2,500.0 UGF
? Department of Natural Resources
? Critical Minerals Mapping $600.0 UGF (matching
$3,000.0 Fed)
? Geological Mapping for Energy Development
$300.0 UGF (matching $300.0 Fed)
? Arctic Strategic Transportation and Resources
(ASTAR) $2,500.0 UGF
1:07:58 PM
Ms. Harbour reviewed Slide 7:
? Department of Public Safety
Reappropriation of $1,059.0 for
Maintenance/Renovation of Rural Trooper Housing
? Department of Revenue Alaska Housing Finance
Corporation (AHFC)
? AHFC Competitive Grants for Public Housing
$350.0 UGF (matching $750.0 Fed)
? AHFC Federal and Other Competitive Grants
$1,500.0 UGF (matching $6,000.0 Fed)
? AHFC Housing and Urban Development Federal HOME
Grant $750.0 UGF (matching
$4,000.0 Fed)
? AHFC Rental Assistance for Victims - Empowering
Choice Housing Program (ECHP) $1,500.0
UGF
? AHFC Senior Citizens Housing Development
Program $1,750.0 UGF
? AHFC Supplemental Housing Development Program
$3,000.0 UGF
1:08:40 PM
Ms. Harbour turned to Slide 8:
? Department of Transportation and Public Facilities
? Decommissioning and Remediation of Class V
Injection Wells $2,200.0 UGF
? Alaska Marine Highway System Vessel Overhaul,
Annual Certification and Shoreside
Facilities Rehabilitation $13,500.0 UGF
? Other Federal Program Match $1,300.0 UGF
(matching $10,000.0 Fed)
? Federal-Aid Highway State Match $60,000.0 UGF
(matching $690,000.0 Fed)
? Federal-Aid Aviation State Match $12,000.0 UGF
(matching $187,200.0 Fed)
? Highway Safety Grants Program $238.3 UGF
(matching $8,000.0 Fed)
? Judiciary
? Cyber Security Courts $973.0 UGF
? Statewide Deferred Maintenance $1,500.0 UGF
? Legislature
? Capital Costs Related to Legislature,
Legislative Council, Council and Subcommittees
for
Renovation of Legislative Buildings and
Facilities $4,195.0 UGF
1:09:17 PM
Ms. Harbour turned to Slide 9, HB 2002 FY2020 Capital
Budget Operating Budget Items ($ Thousands):
Operating Fund Source Changes $14,132.8 (From Power
Cost Equalization to UGF)
Department of Administration
? Legal and Advocacy Services $1,995.6
? Division of Motor Vehicles $20.0
? Department of Corrections
? Population Management $4,241.5 (includes $524.5
fiscal note for HB 14)
? Health and Rehabilitation Services $4,045.3
? Administration and Support $175.0
? 24 Hour Facilities $438.4
? Department of Health and Social Services
? Children's Services $73.3
Ms. Harbour noted that the Operating fund source change was
the result of the PCE being unavailable due to the
Constitutional Budget Reserve (CBR) sweep.
Ms. Harbour turned to Slide 10:
Operating Fund Source Changes $14,132.8 (continued)
? Judiciary
? Alaska Court System $1,198.5 (Includes $62.0
fiscal note for SB 41)
? Department of Law
? Criminal Division $1,602.7
? Department of Public Safety
? Statewide Support $342.5
Ms. Harbour continued to Slide 11:
Fiscal Notes (HB 49 - Crimes; Sentencing; Drugs;
Theft; Reports)
? Department of Corrections
? Population Management, Palmer Correctional
Center $16,669.1 UGF
? 24 Hour Institutional Utilities $438.4 UGF
? Health and Rehabilitation Services, Physical
Health Care $4,584.3 UGF
1:10:00 PM
Ms. Harbour reviewed slide 12, HB 2002 FY 2020 Capital
Budget Section 8 Fund Transfers:
An amount equal to deposits in the budget reserve fund
(art. IX, sec. 17, Constitution of the State of Alaska) for
fiscal year 2019 from subfunds and accounts in the general
fund including the power cost equalization endowment fund
(AS 42.45.070) by operation of article IX, sec. 17(d),
Constitution of the State of Alaska, not to exceed the
amount necessary after appropriations and deposits to the
subfunds and accounts from fiscal year 2020 revenues, to
fund appropriations from those subfunds and accounts made
in ch. 1 -3, FSSLA 2019, and any other appropriation bills
effective in fiscal year 2020, the general fund to the
subfunds and accounts from which those funds were deposited
into the budget reserve fund.
1:10:12 PM
Co-Chair Foster asked Ms. Harbour to explain what was
happening with the funds for Power Cost Equalization (PCE).
He understood that payments would still go out under the
program and the fund would also be used for other expenses.
1:10:43 PM
Ms. Harbour informed that with the passage of SB 19 the
previous session fund sources had been changed from
unrestricted general funds to PCE funds. Additionally,
Capital appropriations had been made with PCE funds; these
changes had been made at the last minute. She lamented that
because the legislature failed to pass a three-quarter vote
to reverse the fund sweep, the funds within the PCE account
would be swept into the CBR and would not be available for
appropriation.
1:11:49 PM
Co-Chair Foster returned to her statement regarding the
PCE. He noted that the money generated from the earnings of
the PCE fund was approximately $60 million, $32 million of
which should have been distributed through the program to
communities in rural areas of the state. He suggested that
the remaining $30 million would have gone to Community
Assistance. He said that Community Assistance had been
replaced by the fiscal notes for the crime bill and
expressed concern that some of the $1 billion was being
used to pay for other things in the Capital budget.
Ms. Harbour clarified that the bill would replace where PCE
funds were previously being used with general fund dollars.
1:13:20 PM
Representative Knopp recalled that the original Capital
Budget contained a $17 million request from DOC for
population management, contingent on the reopening of the
Palmer Correctional Facility. That item had been vetoed by
the governor. He saw that the $17 million was back in the
new budget. He asked what the plan was regarding the
reopening of the Palmer Correctional Center.
Ms. Harbour responded that the funding would be going to
the Palmer Correctional Center; however, the language
related to contingency had been repealed.
1:14:48 PM
Representative Josephson referred to Slide 9. He wondered
whether PCE had traditionally been used to fund the items
proposed on the slide.
Ms. Harbour responded no. She added that it had been a
last-minute change.
1:15:18 PM
Representative Josephson asked whether the administration
wanted to fund the items with UGF rather than from the PCE
funds.
1:15:56 PM
DONNA ARDUIN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
responded that the administration had originally proposed
funding the items with UGF dollars.
Representative Josephson asked about the deadline for
receiving the federal grant monies.
Ms. Arduin responded that there was not hard and fast
deadline; however, the Department of Transportation and
Public Works would like to get the match soon to be able to
continue projects on schedule.
1:16:58 PM
Representative Josephson asked why the Alaska delegation in
Washington D.C. was anxious about the issue if there was
not hard and fast deadline.
Ms. Arduin thought that the federal match would ensure that
construction stayed on schedule.
Representative Josephson asked why it was the policy of the
administration to put all these sweepable funds into the
CBR.
Ms. Arduin indicated that the issues being addressed in the
bill had been created by the committee. The legislature
funded the items through the PCE at the last minute and
then failed to get a three-quarter vote to access the
funds. The administration was following the law and the
constitution to fix the accounts.
Representative Josephson commented that the PCE funds were
not sweep able under Hickel v. Cowper. He wondered whether
the administration was concerned with possible litigation.
Ms. Arduin responded that the administration had a
presentation that it was happy to provide to the committee.
1:19:16 PM
Co-Chair Foster disagreed that the legislature was
responsible for the lack of a reverse sweep. He noted that
governors, going back nearly 40 years when the PCE program
was first created, had not jeopardized the use of the
funds.
1:20:18 PM
Vice-Chair Ortiz asked whether the administration was
prepared to speak on what was not included in the current
bill that was included in the original budget the
legislature had sent to the governor.
Ms. Harbour responded that certain items from the
Legislatures bill might not be included in the current
bill. She stated that the legislation was intended to meet
critical holes and appropriations.
Vice-Chair Ortiz asked whether she was prepared to review
the items included or not included.
Ms. Harbour replied in the negative. She added that a
comparison of the two bills would need to be done.
1:21:29 PM
Vice-Chair Ortiz asked about the $1 million addition to the
Department of Fish and Game. He wondered whether the
addition was considered a direct add to the Capital Budget
that had not been reflected in any prior submission from
the legislature.
Ms. Harbour responded that the governor did submit the
request in his original Capital Budget. The legislature had
not included it in their version of the bill. She added
that the department felt that the item was critical.
1:22:30 PM
Representative LeBon mentioned the University Capital
Maintenance piece equal to $5 million, which was not
currently included in the bill.
Ms. Harbour believed that the funding for deferred
maintenance was included but not at the original level.
Representative LeBon whether the interior energy project,
proposed to be funded through Alaska Industrial Development
and Export Authority (AIDEA) receipts for $4 million, was
included.
Ms. Harbour indicated that the project was not included.
Representative LeBon asked if it had been discussed.
Ms. Harbour said that she had not been privy to that
conversation but that the reason for the veto was that cuts
needed to be made.
Ms. Arduin interjected that none of the governors vetoes
had been included in the bill and that the administration
did not intend to put them back in the budget.
1:23:52 PM
Representative Knopp asked about the Alaska Court System
and the original $1.2 million for salary adjustments for
court employees. He wondered about the expected increased
costs for the recent crime bill.
Co-Chair Johnston clarified that he was talking about the
operating budget.
Representative Knopp maintained his concern and requested
further explanation.
Ms. Arduin preferred to focus on the topic of the capital
budget.
1:25:07 PM
Representative Josephson asked what SB 19, as written by
the legislature, drew from the various funding sources.
Ms. Harbour asked Representative Josephson to clarify his
question.
Representative Josephson wondered if the CBR had been
realize and passed what would have been spent from the CBR
and, other sources, on capital expenses.
Ms. Harbour would come back with an answer to
Representative Josephson's question.
1:26:13 PM
Representative Knopp commented that the title of the bill
included other appropriations and felt that his previous
question was relevant.
1:26:39 PM
Representative Josephson asked whether the legislature
could decide about the capital budget in fall 2019 and
still receive federal match.
Ms. Arduin responded that it was important that the cash
flow needed to be available through construction season in
order to continue projects. She said that it was possible
that if the projects were not completed the state would
relinquish the federal match.
Vice-Chair Ortiz asked about Alaska Marine Highway System
(AMHS) and the approximately $13 million for vessel
maintenance and replacement. He noted that the budget
submitted by the legislature had included proceeds from
vessel sales to be added to the replacement fund. He asked
whether the administration had considered including the
funds.
1:28:19 PM
Ms. Harbour reiterated that vetoed items had not been added
back to the legislation.
1:28:44 PM
Vice-Chair Ortiz understood that the monies that he was
referring to had been a part of the capital budget sent to
the governor by the legislature.
Ms. Harbour responded that the funds he was referring had
been vetoed.
1:29:19 PM
Representative LeBon asked whether the administration would
consider using AIDEA receipts for Capital Budget items.
Ms. Arduin offered that the monies had been suggested for
one-time use for oil tax credits.
Representative LeBon asked if the amount was over $100
million.
Ms. Arduin replied that the legislature chose to use the
fund for a prospective bonding program for the credits.
Representative LeBon asked how statutory budget reserves
(SBR) might be used for Capital Budget appropriations.
Ms. Arduin responded that the money had been swept.
Representative Knopp asked whether there was money to fund
the capital budget.
Ms. Harbour replied that there was approximately $200
million for the budget. She would get a final amount to the
committee.
1:31:13 PM
Representative Wool asked about major transportation
projects and wondered how many current projects were
already funded.
Ms. Harbour thought the department would be better suited
to answer the question.
1:32:11 PM
Co-Chair Johnston repeated Representative Wool question.
1:32:23 PM
Representative Wool clarified that he was wondering about
projects that had secured funding in previous years.
1:32:40 PM
Representative LeBon referred to the list on Slide 8. He
asked whether the state was leaving any federal matching
funds on the table.
Ms. Harbour indicated that the state was capturing all the
federal funding for the listed projects.
1:33:13 PM
Representative Josephson asked whether the administration
prioritized capturing all the federal revenue for Capital
Budgets.
Ms. Arduin replied that the administration proposed to
capture all the federal transportation dollars allocated
for Alaska.
Representative Josephson had heard earlier in the day that
from David Teal, Director, Legislative Finance Division,
that the current bill could not be funded.
Ms. Harbour confirmed that Director Teal's numbers showed a
shortfall.
1:34:38 PM
Co-Chair Johnston wondered about federal matching funds.
She understood that in the past the state had received
lapsed federal funds from other states. She wondered
whether there was a date when the current federal match
would no longer be available to the state.
Ms. Harbour did not have an answer to her question.
Co-Chair Johnston thought it was an important question to
be answered. She believed that knowing the timeline was
imperative.
Ms. Harbour considered that regarding labor grants, the
federal government would review what had been spent to
date, and if a certain target had not been met the funds
would be put out to other agencies to be spent by September
30th. She was unaware of DOT's timeline.
HB 2002 was HEARD and HELD in committee for further
consideration.
Co-Chair Johnston discussed housekeeping.
ADJOURNMENT
1:36:51 PM
The meeting was adjourned at 1:36 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 7.19.19 HFC HB 2002 Capital Budget.pdf |
HFIN 7/19/2019 1:00:00 PM |
HB2002 |
| HB2001 Public Testimony Emails July 19.pdf |
HFIN 7/19/2019 1:00:00 PM |
HB2001 |