CS FOR HOUSE BILL NO. 199(FIN) am "An Act making appropriations, including supplemental appropriations and capital appropriations; amending appropriations; and providing for an effective date." 9:54:55 AM KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, explained that HB 199 represented the non-transportation appropriations expected from the American Recovery and Reinvestment Act (ARRA), or economic stimulus bill. Ms. Rehfeld acknowledged concerns about drawing on reserves at the end of the current and next fiscal years as a result of the current revenue shortfall. The administration has been discussing replacing general funds with ARRA funds. She referred to a recommendation. The largest piece not included in the governor's request for the stimulus funds was related to education funding. She referred to two specific funds through the state fiscal stabilization program: · $20.7 million discretionary allocation · $93 million for education purposes Ms. Rehfeld explained that the House recommended that the first part be allocated to communities through an additional revenue-sharing payment. The administration hoped to use the funds for capital appropriations, particularly those in SB 75 related to the major maintenance list for schools, and relieve pressure on the FY10 budget. 9:58:59 AM Ms. Rehfeld reminded the committee that ARRA allows states to utilize the funds to help offset increases in school funding. She requested using the funds in FY10 and FY11 for increases already approved in the school funding formula. Ms. Rehfeld added that in the area of public safety, the administration had proposed utilizing justice assistance grants for capital projects rather than in the operating budget. She pointed to a Department of Public Safety appropriation in HB 199 for around $5.8 million in the operating budget to hire law enforcement officials. The governor's recommendation is to utilize the funds for a one- time capital expenditure and continue to discuss using general funds for law and public safety. Ms. Rehfeld noted that the final items had already been incorporated through the operating budgets, particularly in the areas of Medicaid, child support enforcement, and Child Support Block Grants. Ms. Rehfeld referred to potential amendments. 10:01:42 AM LARRY PERSILY, STAFF, REPRESENTATIVE MIKE HAWKER, HOUSE FINANCE COMMITTEE CO-CHAIR, provided an overview of the legislation as it passed from the House. House Bill 199 added in all the money available to the state. The largest pieces are $170 million for education, mostly state fiscal stabilization funds. The $93 million would flow through two school districts. The $27 million discretionary fund would go to communities as additional revenue-sharing dollars. He also pointed to funding for Title I, special education funding at over $73 million through the districts. Co-Chair Stedman asked for the definition of Title I. Mr. Persily described Title I as a distribution formula in federal law dealing with economically disadvantaged students. Mr. Persily added that approximately $56 million in stimulus funds was added to HB 199 in the House for energy efficiency grants, state energy program, weatherization funds, electronic medical records funding, and about $17 million for job training and employment services. 10:04:15 AM Senator Thomas asked how much of the stimulus money still remained. Mr. Persily answered that HB 199 leaves no stimulus money unclaimed. The grants are an unknown quantity, and so are not included. Co-Chair Stedman opened public testimony. STEVEN CUNNINGHAM, CITY CLERK, CITY OF HOUSTON (testified via teleconference), spoke on behalf of the mayor of Houston in support of maintaining revenue sharing. He described Houston as an economically depressed area of Alaska with little infrastructure. Co-Chair Stedman closed public testimony. Co-Chair Hoffman commented that the $20 million for revenue sharing was the only portion that would give local communities flexibility while stimulating the economy. He stated his strong support for revenue sharing. CS HB 199(FIN)am was HEARD and HELD in Committee for further consideration. 10:07:44 AM