HOUSE BILL NO. 234 "An Act making supplemental appropriations, reappropriations, and other appropriations; amending appropriations; capitalizing funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." 2:09:12 PM ^GOVERNOR'S FY 20 SUPPLEMENTAL BUDGET AMENDMENTS 2:09:13 PM Mr. Steininger indicated he would be discussing the proposed supplemental amendments. He began with Judiciary on slide 24. The cost of the conversion to a bi-weekly payroll was reflected as well as funding for additional costs related to the state's accounting system, IRIS. Mr. Steininger reviewed additional amendments for Judiciary on slide 25. There was $75,800 related to additional costs for Executive Branch Services. Co-Chair Foster asked Mr. Steininger to return to page 25. He asked for further detail regarding the addition costs for Executive Branch Services. Mr. Steiniger replied that the risk management rate for the amount charged based on employees in the Judicial Branch increased. Judiciary did not have the flexibility in its budget to respond to the increase like other agencies might. Mr. Steininger indicated that other supplemental amendments included an adjustment to the Judgements, Claims, and Settlements Section adding two new judgements as well as place-holder language related to pending litigation. There was also a special appropriation, a lapse extension for the authority to buy back tax credits using proceeds from a bond sale. The authority existed in FY 20 and needed to be extended into FY 21 in case a bond sale occurred in the time period. Mr. Steininger reported that within the capital budget there was a $24 million project to refresh the Alaska Land Mobile Radio (ALMAR) System. He elaborated that the repeaters that were on the towers needed to be replaced. The item needed to be started relatively soon to ensure that the other partners within the system could stay onboard and keep the system functioning. Mr. Steiniger relayed that within DPS there was an adjustment to the project for FAA-required equipment on DPS aircraft. The amount OMB included in the supplemental budget a couple of weeks prior was lower that what was actually required to address all the aircraft that needed the equipment. The amount was increased by $293,400 for a total of just under $400,000 for the equipment. Co-Chair Foster asked about the lapsed extension in the special appropriation. He asked if it was for the $27 million that was in FY 20 so that it could roll over into FY 21. Mr. Steininger indicated that the amount was for several hundred million to spend the proceeds of a bond sale to actually purchase tax credits. Co-Chair Foster had heard that if the ALMR money was not appropriated to update the system, the other partners might pull out. Mr. Steiniger responded in the affirmative. He indicated he had finished his presentation. Co-Chair Johnston suggested the committee would discuss spending caps. She asked how they would fit into the governor's proposed budget and supplemental amendments. She referred to HJR 7 [Legislation introduced in 2019 regarding an appropriation limit]. Mr. Steininger agreed it would provide context. Co-Chair Johnston requested that he show how the budget fit into last year's proposed spending cap. She thought it would help in future conversations. 2:14:28 PM Co-Chair Foster summarized that the amendments reflected an increase of $45 million UGF for the operating budget, $4 million UGF for the capital budget, and $30 million for the supplemental budget. The total amount was $80 million UGF. He asked if his figures were correct. Mr. Steiniger responded affirmatively. Representative LeBon returned to the ALMR program. He asked if the request was to fund the program at $24 million to meet an expectation of the Department of Defense partner. He asked if there was an additional $5 million being proposed in the capital budget for the system. Mr. Steininger responded positively that in the amendments OMB reduced an existing capital request that was in the December release of the budget in the range of $7.6 million. After further conversation with the department, the funding request was reduced to $5 million for both SATS and ALMR. Representative LeBon asked if the total funding for the system was $29 million. Mr. Steininger responded in the affirmative in terms of capital projects. Co-Chair Foster commented that if the state were to lose the court case having to do with oil tax credits the cost to the state would increase dramatically from $55 million to $166 million if the committee followed the statutory minimum. The total adjustments proposed was $80 million but could grow by over $100 million if the scenario he suggested were to occur. Co-Chair Foster reviewed the agenda for the following meeting at 5:00 pm in the current day. HB 234 was HEARD and HELD in committee for further consideration.