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." 9:54:12 AM JESSE KIEHL, STAFF, SENATE DISTRICT B addressed HB 199, which appropriates the non transportation stimulus funds made available by the American Recovery and Reinvestment Act. He provided a sectional analysis. Section 1 makes appropriations for operating expenses of government and operating grants made to a number of school districts. These items initially required answers from the governor. Section 1 totals approximately $118 million in federal funds with an additional $40 thousand of general funds matching federal funds for health information technology. He introduced Section 4 containing items that the governor accepted without reservation. The committee as well as its counterpart in the other body agreed on capital projects and grants. 9:57:21 AM Mr. Kiehl stated that Section 4 addresses clean water and storage tanks as well as forestry, emergency shelter grants, and low income housing. He mentioned capital appropriations for the University of Alaska's research vessel through the stimulus act. Section 4 totals approximately $231 million in federal authority. 9:58:30 AM Mr. Kiehl reviewed Section 7 containing capital items and grants including the community development block grants for diesel emission reduction programs. He noted that one item in Section 7 from the Department of Environmental Conservation (DEC) requires an additional form of legislation. 9:59:23 AM Mr. Kiehl addressed Section 10 of the bill, which states the legislature's belief that the money is available one time only and general funds will not be forthcoming. He noted the legislative addition of Section 11, Page 17 adding $200 thousand of general funds appropriated to the Department of Administration (DOA) for oversight accounting. The federal stimulus law requires a great deal of accountability for the appropriated funds. The federal government is working closely with the legislature's audit division. 10:00:48 AM Mr. Kiehl reviewed Section 12, and the receipt of federal Medicaid funds should the match rate increase. Section 13 addresses additional federal funds available to the Department of Revenue (DOR) for child support collection. The program is a highly efficient way to use federal money. The program was set to end, yet will continue with the stimulus act. Mr. Kiehl addressed Section 14 as the largest single appropriation. Section 14 appropriates the fiscal stabilization funds existing in two categories. This bill appropriates $20.7 million to Alaska municipalities for revenue sharing. 10:02:05 AM Mr. Kiehl introduced Line 8, Page 19, which appropriates the fiscal stabilization Part A funds, $93 million for education. He concluded that the administration advocates for the spending of stimulus money only on items without ongoing obligations. He stated that the governor will take great care with these funds. 10:03:43 AM Co-Chair Hoffman asked about the education funds of $93 million and the specific language required for the school districts agreeing that the funding is available one time only. Mr. Kiehl answered that the federal stimulus law does not grant power to require such a signed document. He noted the legislative intent sections, which give Department of Education and Early Development (DEED) the instruction as seen on Page 16, Line 27. The legislature's intent is for DEED to ensure that the individual school districts understand the nature of the funding. Co-Chair Stedman MOVED to ADOPT Amendment 1, 26-GH1260\PA.1, Kane, 4/11/09: Co-Chair Stedman OBJECTED for the purpose of discussion. Page 19, line11: Delete "sec. 144002(a)" Insert "sec. 14002(a)(3)" 10:05:35 AM Mr. Kiehl explained Amendment 1. He opined that the amendment settles a large question. He noted that the amendment takes effect on Page 19, Line 11 and simply tightens the reference to the federal stimulus law under which the $93 million is distributed. He noted that Amendment 1 sets the policy call preferring the state distributes the funds to school districts as additional funds using the same proportions as Title 1. Title 1 refers to the elementary and secondary education act, which is a reasonable method of statewide fund distribution. He mentioned the lack of provision in Alaska's education funding formula to offset Title 1 money. With the adoption of Amendment 1, the $93 million will be distributed to school districts as additional monies. Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, Amendment 1 was ADOPTED. Co-Chair Stedman MOVED to ADOPT Amendment 2, 26-GH1260\PA.3, Kane, 4/14/09: Co-Chair Stedman OBJECTED for discussion. Page 7, line 26, following "2009": Insert "Entitlement Fund and" Mr. Kiehl described Amendment 2. He noted Page 7, Line 26 and a $1 million appropriation of federal receipt authority placed in the office of the governor reading "American Recovery and Reinvestment Act." 10:09:13 AM Mr. Kiehl addressed the category of entitlement funds applying most importantly to transportation funding. In the event that the state receives additional money in the form of an entitlement, this amendment allows the state to take it. Co-Chair Stedman informed that the amendment is a technical amendment to this amendment by adding an "s" to the end of "fund." Co-Chair Stedman MOVED to AMEND Amendment 2 by making entitlement fund plural. Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, Amendment 2 was ADOPTED. 10:10:29 AM Co-Chair Stedman MOVED to ADOPT Amendment 3, 26-GH1260\PA.2, Kane, 4/14/09: Co-Chair Stedman OBJECTED for discussion. Page 12, line 10: Delete "679,900" Insert "679,936" Page 12, line 13: Delete "3,960,000" in both places Insert "3,962,565" in both places Page 14, line 5: Delete "4,639,900: Insert "4,642,501: Page 14, line 13: Delete "$63,262,600" Insert "$63,265,201" Page 15, line 7: Delete "63,262,600" Insert "63,265,201" Mr. Kiehl described Amendment 3 as a housekeeping effort, which simply updates dollar amounts. Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, Amendment 3 was ADOPTED. 10:12:57 AM AT EASE 10:14:26 AM RECONVENED KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, expressed appreciation for the efforts of both bodies in reviewing the federal stimulus bill. She agreed that the policy questions were important. She noted that it is allowable to make use of the stabilization funds for the school funding formula increases based on the timing and statutory language of the American Recovery and Reinvestment Act. Given the current revenue shortfall, which was not the case when the school funding bill was passed, it is appropriate to bring the policy questions forward. She felt the recommendations were appropriate for consideration. Another policy decision was chosen as indicated by the amendment proposed. 10:16:20 AM Co-Chair Stedman clarified that the previous finance meeting included recommended administrative amendments that were not brought forward. (Copy on File) He apologized to Ms. Rehfeld for falling out of order yesterday. He acknowledged Ms. Rehfeld for the amount of effort she contributes. He commended Ms. Rehfeld's staff for their work on the stimulus bill policy discussions. Co-Chair Hoffman MOVED to report HB 199 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB NO. 199.(FIN) am was REPORTED out of Committee with a "do pass" recommendation. 10:18:13 AM AT EASE 10:21:42 AM REONVENED