Legislature(2015 - 2016)BILL RAY CENTER 230

05/11/2016 03:00 PM Senate FINANCE


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03:01:43 PM Start
03:02:24 PM SB138
03:17:53 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 138 BUDGET: CAPITAL TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                       May 11, 2016                                                                                             
                         3:01 p.m.                                                                                              
                                                                                                                                
3:01:43 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair MacKinnon called the Senate Finance Committee                                                                          
meeting to order at 3:01 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Laura Cramer, Staff, Senator Anna MacKinnon.                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 138    BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          SB 138 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SENATE BILL NO. 138                                                                                                           
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,     reappropriations,     and     other                                                                    
     appropriations;  making  appropriations  to  capitalize                                                                    
     funds; and providing for an effective date."                                                                               
                                                                                                                                
3:02:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  MOVED   to  ADOPT  proposed  committee                                                                    
substitute  for  SB  138, Work  Draft  29-GS2741\P  (Martin,                                                                    
5/10/16).                                                                                                                       
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
3:02:45 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:03:43 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon explained  that the  capital budget  was                                                                    
being considered.                                                                                                               
                                                                                                                                
LAURA CRAMER,  STAFF, SENATOR ANNA MACKINNON,  discussed the                                                                    
most recent  changes to  the bill,  referring to  a document                                                                    
entitled "Changes  to SB 138 from  Version E to P"  (copy on                                                                    
file).                                                                                                                          
                                                                                                                                
     Section 1                                                                                                                  
                                                                                                                                
     Page  4,  line  28:  Department of  Health  and  Social                                                                    
     Services   Health    Information   Exchange   Providers                                                                    
     incentive  Program, $480.0  in UGF,  leverages $3,600.0                                                                    
     in federal funds.                                                                                                          
                                                                                                                                
     Page  7, line  22:  State  Equipment Fleet  Replacement                                                                    
     reduced by $4,600.0                                                                                                        
                                                                                                                                
     Page  7,  line  24: Federal  Program  Match,  increased                                                                    
     Federal-Aid  Highway   State  match   on  line   27  by                                                                    
     $7,000,000.  This  is  the   result  of  removing  some                                                                    
     reappropriations in section 25(d)                                                                                          
                                                                                                                                
Ms.  Cramer  specified  that  the  reduction  to  the  state                                                                    
equipment fleet  resulted in $20  million in  funding rather                                                                    
than  the   requested  $24.6  million.  She   discussed  the                                                                    
increase to the federal-aid  highway state match, specifying                                                                    
that the  unrestricted general fund  (UGF) had  been reduced                                                                    
with  $20   million  in  capital  income   fund,  which  was                                                                    
reflected elsewhere.  She continued  that the funds  were an                                                                    
increase over the previous committee substitute.                                                                                
                                                                                                                                
3:05:27 PM                                                                                                                    
                                                                                                                                
Ms. Cramer continued discussing the summary of changes:                                                                         
                                                                                                                                
     Section 4                                                                                                                  
                                                                                                                                
     Page  24, line  23: Legislature  - Office  Building and                                                                    
     Land  Purchase located  at 1500  W Benson  Boulevard in                                                                    
     Anchorage, $12,500,000 Alaska Capital Income Fund                                                                          
                                                                                                                                
     Section 7                                                                                                                  
                                                                                                                                
     Page  28,  line  9:  Department of  Health  and  Social                                                                    
     Services,  Juvenile   Justice  facility   staffing  and                                                                    
     health  care  $1,000.0  UGF. This  was  a  supplemental                                                                    
     request by the Governor                                                                                                    
                                                                                                                                
Ms. Cramer relayed that the juvenile justice item had been                                                                      
an outstanding item between the House and the Senate. She                                                                       
continued to discuss the summary of changes:                                                                                    
                                                                                                                                
     Page  28, line  29:  Department  of Natural  Resources,                                                                    
     Administration and Support  Services, technical fix due                                                                    
     to conference committee error in FY16 budget                                                                               
                                                                                                                                
Ms. Cramer clarified that the funds for the technical fix                                                                       
had been appropriated out of the in-state gasline fund, and                                                                     
should have been GF dollars.                                                                                                    
                                                                                                                                
3:07:37 PM                                                                                                                    
                                                                                                                                
Ms. Cramer continued to address the summary:                                                                                    
                                                                                                                                
     Section 17                                                                                                                 
                                                                                                                                
     Page 35, line 24: Department of Corrections -                                                                              
     Alaska  Corrections  Offender   Management  System  and                                                                    
     Victim Information  Notification System  to accommodate                                                                    
     new   probation  and   parole  incentives   amount  was                                                                    
     increased  by $250,000  from  $1,250,000 to  $1,500,000                                                                    
     (alcohol and other drug  abuse treatment and prevention                                                                    
     fund)  - Result  of  Senate Bill  91- Criminal  Justice                                                                    
     Reform. This  is contingent on  the passage  of justice                                                                    
     reform legislation. Contingency  language found on page                                                                    
     49, line 27                                                                                                                
                                                                                                                                
     Section 20                                                                                                                 
                                                                                                                                
     Page 40, line 12: Department of Fish and Game-                                                                             
     Changing  the  appropriation  made   in  2012  for  the                                                                    
     Research   Vessel   Resolution  from   Replacement   to                                                                    
     Refurbishment and Repair                                                                                                   
                                                                                                                                
Ms. Cramer  discussed the  criminal justice  reform funding,                                                                    
which had originally  had been funded at  $1.25 million. She                                                                    
elaborated   that   the   Department  of   Corrections   had                                                                    
communicated that  the funding amount would  not suffice for                                                                    
what they were  hoping to accomplish with the  passage of SB
91 [an omnibus  criminal justice reform bill  in the current                                                                    
legislature]. The change brought the  funding up to the full                                                                    
$1.5 million that was requested.                                                                                                
                                                                                                                                
3:09:28 PM                                                                                                                    
                                                                                                                                
Ms. Cramer continued to discuss the summary of changes:                                                                         
                                                                                                                                
     Section 21                                                                                                                 
                                                                                                                                
     Page  40,  line 19:  Department  of  Health and  Social                                                                    
     Services                                                                                                                   
     Modifications  to the  Medicaid Management  Information                                                                    
     System  as  a  result  of Senate  Bill  74  -  Medicaid                                                                    
     Reform.  $910.0 UGF  leverages $9,403.2  Federal Funds.                                                                    
     This is  contingent on the  passage of  Medicaid reform                                                                    
     legislation.  Contingency language  found  on page  49,                                                                    
     line 31                                                                                                                    
                                                                                                                                
     Section 22                                                                                                                 
                                                                                                                                
     Page 40, line 28:  Department of Law                                                                                       
     Reduces the  amount appropriated during the  2015 AKLNG                                                                    
     special session  by $4,100.0. Dept. of  Law is planning                                                                    
     to lapse this amount                                                                                                       
                                                                                                                                
Ms. Cramer  recounted that during  the October  2015 special                                                                    
session, the  Department of Law  had received  $10.1 million                                                                    
for the Alaska's Liquefied Natural  Gas (AKLNG) project. The                                                                    
department  had  communicated  that   $4.1  million  of  the                                                                    
funding was set to lapse,  and the new language would reduce                                                                    
the appropriation to $6 million.                                                                                                
                                                                                                                                
Ms. Cramer continued to discuss the summary:                                                                                    
                                                                                                                                
     Section 24                                                                                                                 
                                                                                                                                
     Page 42, line 13: Department of Revenue                                                                                    
     Reprogramming of the tax  revenue management system and                                                                    
     revenue  online  tax  portal. $1,200.00  UGF.  This  is                                                                    
     contingent  on   the  passage  of  tax   credit  reform                                                                    
     legislation.  Contingency language  found  on page  50,                                                                    
     line 3                                                                                                                     
                                                                                                                                
     Page 42, line 29:                                                                                                          
     Reappropriation total  has be reduced  from $19,731,605                                                                    
     to $13,507,546,  this is the  result of the  removal of                                                                    
     several projects originally identified with balances                                                                       
                                                                                                                                
Ms.  Cramer  elaborated  that the  reappropriation  for  the                                                                    
Department  of Transportation  and  Public Facilities  (DOT)                                                                    
was  revised as  a  result of  receiving  feedback from  the                                                                    
Office of Management  and Budget as well as  DOT. Several of                                                                    
the  reappropriations in  the previous  version of  the bill                                                                    
had been encumbered, and there  had been issues with some of                                                                    
the   reappropriations.   Consequently,   approximately   15                                                                    
reappropriations  in  the section  had  been  taken out  and                                                                    
revised.                                                                                                                        
                                                                                                                                
Ms. Cramer continued to address the summary of changes:                                                                         
                                                                                                                                
     Section 26                                                                                                                 
                                                                                                                                
     Page  47, line  16:  Gives the  Alaska Travel  Industry                                                                    
     Association  statutory   receipt  authority   to  spend                                                                    
     outstanding  receipts estimated  to be  $1,364,802 that                                                                    
     were   originally  collected   by  the   Department  of                                                                    
     Commerce,  Community  and   Economic  Development  from                                                                    
     advertisement sales and  industry contributions for the                                                                    
     Alaska  Travel Guide.  The management  of this  program                                                                    
     was  eliminated  from  the  Operating  Budget  and  the                                                                    
     legislature  has directed  industry  to  take over  the                                                                    
     program.   Without  this   language  and   giving  this                                                                    
     authority these receipt would go unspent.                                                                                  
                                                                                                                                
3:13:17 PM                                                                                                                    
                                                                                                                                
     Section 29                                                                                                                 
                                                                                                                                
     Page 49, line 7: Fund Capitalization                                                                                       
     Takes  the lapsing  funds from  the Department  of Law,                                                                    
     identified in  Section 22, and  deposits them  into the                                                                    
     AKLNG Fund                                                                                                                 
                                                                                                                                
     Transfers  $26,000.0  from  the  In-State  Natural  Gas                                                                    
     Pipeline  Fund  to  the Alaska  Liquefied  Natural  Gas                                                                    
     Project  Fund -  Intent for  administration to  pay for                                                                    
     AKLNG expenses through AGDC and the fund                                                                                   
                                                                                                                                
Ms.  Cramer discussed  the motivation  for transferring  the                                                                    
$26 million from  the in-state natural gas  pipeline fund to                                                                    
the AKLNG  fund. She discussed the  different agency funding                                                                    
requests  for  tasks  relating to  the  AKLNG  project.  The                                                                    
change would  require agencies to go  through Alaska Gasline                                                                    
Development Corporation  (AGDC) to get money  from the AKLNG                                                                    
fund in order to work project-specific tasks.                                                                                   
                                                                                                                                
Ms. Cramer continued to summarize the changes:                                                                                  
                                                                                                                                
     Section 32                                                                                                                 
                                                                                                                                
     Page  49,  line  23:   Retroactivity  clause  has  been                                                                    
     updated, should this bill pass  after the June 30, 2016                                                                    
     date certain sections would be retroactive                                                                                 
                                                                                                                                
     Section 33                                                                                                                 
                                                                                                                                
     Page 49, line 27:  Contingency language relating to the                                                                    
     passage  of justice  reform, Medicaid  reform, and  tax                                                                    
     credit reform                                                                                                              
                                                                                                                                
     Section 34  page 50, line  6: Immediate  effective date                                                                    
     for   supplemental,  FY17   Operating,  judgments   and                                                                    
     settlements,  fire suppression,  and the  retroactivity                                                                    
     clause                                                                                                                     
                                                                                                                                
       SCS 17 Capital:     SCS Total Op, Cap, & Sup:                                                                            
     TOTAL:            1,547,455.7                                                                                              
     1,626,997.7                                                                                                                
     UGF:               69,337.1                                                                                                
     136,976.8                                                                                                                  
     DGF:               49,705.9                                                                                                
     63,982.6                                                                                                                   
     Other:                103,178.1                                                                                            
     96,052.4                                                                                                                   
     FED:         1,325,234.6                                                                                                   
     1,329,985.9                                                                                                                
                                                                                                                                
     Total  capital reduction  UGF from  Governor to  Senate                                                                    
     CS:                                                                                                                        
                    (112,275.2)                                                                                                 
                                                                                                                                
Ms. Cramer  concluded that the  new capital budget  total of                                                                    
UGF  was $69,337,000.  With the  inclusion of  the operating                                                                    
and  supplemental  appropriations  found in  the  bill,  the                                                                    
total was $136,976,800.  She  noted that the total reduction                                                                    
from the governor's proposed budget was $112,275,000.                                                                           
                                                                                                                                
3:16:16 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
further OBJECTION, CSSB 138(FIN) version P was ADOPTED.                                                                         
                                                                                                                                
3:16:41 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:16:55 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon noted  that  the public  hearing on  the                                                                    
capital budget had been opened  and closed on April 6, 2016.                                                                    
She continued that there would be  a hearing on the bill the                                                                    
following  day, and  with  the support  of  the members  she                                                                    
hoped to move the bill out of committee.                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
3:17:53 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:17 p.m.                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
SB 138 work draft version P.pdf SFIN 5/11/2016 3:00:00 PM
SB 138