Legislature(2009 - 2010)HOUSE FINANCE 519

04/13/2009 01:30 PM House FINANCE

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01:39:59 PM Start
01:40:38 PM SB75
02:02:26 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR SENATE BILL NO. 75(FIN)                                                                                                
     "An Act  making and  amending appropriations,  including                                                                   
     capital  appropriations,   supplemental  appropriations,                                                                   
     and appropriations  to capitalize  funds; and  providing                                                                   
     for an effective date."                                                                                                    
JAMES  ARMSTRONG,  STAFF,  CO-CHAIR  STOLTZE,  explained  the                                                                   
changes  in the  proposed  Committee Substitute,  Version  T.                                                                   
Section 1 is  the governor's budget proposal,  which switches                                                                   
appropriations to  general funds or other funds.   It reduces                                                                   
deferred  maintenance  requests by  60 percent,  removes  two                                                                   
large   Information  Technology   (IT)   projects  from   the                                                                   
Department of  Administration and the Department  of Revenue,                                                                   
and reduces  the Alaska  Housing Finance Corporation  request                                                                   
by 59 percent.   It removes additionally requested  funds for                                                                   
the Village  Safe Water  Program, reduces  the Department  of                                                                   
Transportation's  (DOT)   General  Fund  match   pot  by  $15                                                                   
million,  and adds  back the  Alaska Manufacturing  Extension                                                                   
Program.   It removes  $36 million  in receipt authority  for                                                                   
two new  UAF facilities  and adds $9.9  million to  the Court                                                                   
System  for  three  projects.    It  spends  $45  million  in                                                                   
additional  Cruise Ship  Funds, as  shown on  page 42 of  the                                                                   
Co-Chair Stoltze requested more  details on the criteria used                                                                   
for Cruise Ship Funds.                                                                                                          
Mr.  Armstrong  clarified  that after  discussions  with  the                                                                   
Department  of  Law  it  was discovered  that  there  was  an                                                                   
unexpected $50 million  more in Cruise Ship Funds.   When the                                                                   
program was  started it  was front loaded,  but none  of that                                                                   
money was  spent.   Last year the  governor vetoed  about $18                                                                   
million in projects.   Statewide projects related  to helping                                                                   
cruise  ship passengers  and which  could be  funded by  this                                                                   
account, were then sought.                                                                                                      
1:43:30 PM                                                                                                                    
Representative  Gara  asked which  version  of  the bill  Mr.                                                                   
Armstrong was referring to.  Mr.  Armstrong clarified that it                                                                   
was the Senate version, SB 75.                                                                                                  
Representative  Gara asked  if the  projects were  statewide.                                                                   
Mr. Armstrong  replied that they  were and further  explained                                                                   
that  projects were  identified  that might  fit cruise  ship                                                                   
passengers' needs.  He gave as  an example the Egan Center in                                                                   
Anchorage.   Co-Chair  Stoltze  added that  legal advice  was                                                                   
Co-Chair Hawker  characterized the projects as  being able to                                                                   
withstand court challenges.                                                                                                     
1:44:55 PM                                                                                                                    
Mr. Armstrong  continued to  explain that  Section 6  was the                                                                   
DOT stimulus  section.   It removed  all of DOT's  contingent                                                                   
road projects  that don't qualify  for stimulus funds.   Four                                                                   
of  five  of the  governor's  largest  priorities  were  also                                                                   
removed.   The  only new  project  was $3.5  million for  the                                                                   
Whittier Shot  Gun Cove Road.   The  Senate moved all  of the                                                                   
contingent projects  into the  funded projects category.   It                                                                   
totals  roughly  $247 million  of  stimulus and  regular  DOT                                                                   
program authority.                                                                                                              
Mr. Armstrong  related that Section  10 contains  the capital                                                                   
projects  that were  removed  from the  supplemental  budget.                                                                   
Section 14 E  is a $25 million placeholder  for the Renewable                                                                   
Energy   Fund  Grant.     Sections   19-34  are   legislative                                                                   
reappropriation requests.                                                                                                       
Mr. Armstrong concluded that the  proposed budget spends $500                                                                   
million less  than the governor's  request:  $209  million is                                                                   
general  funds and  $177 million  is other  state funds,  and                                                                   
$117 million is federal funds.                                                                                                  
1:46:24 PM                                                                                                                    
Representative  Austerman  inquired  whether  there  was  any                                                                   
cruise  ship tax  money left  "on  the table"  that could  be                                                                   
spent  this  year.   Mr.  Armstrong  replied that  there  was                                                                   
roughly $4 million left.                                                                                                        
Representative  Gara asked if  all new projects  not included                                                                   
in the governor's  budget were funded by the  cruise ship tax                                                                   
money.    Mr.  Armstrong  reported   that  the  Court  System                                                                   
requests for  roughly $10  million were  added by the  Senate                                                                   
Finance Committee.   Representative  Gara asked if  the Court                                                                   
System requests  and the  $45 million  in cruise ship  funded                                                                   
projects  were   the  only  new  projects.     Mr.  Armstrong                                                                   
explained  that the governor  proposed  to spend $40  million                                                                   
and  the  legislature  added $45  million  for  new  projects                                                                   
chosen from a list submitted by  legislators.  Representative                                                                   
Gara summarized  that the amount  increased from  $40 million                                                                   
to $85 million.                                                                                                                 
1:47:39 PM                                                                                                                    
Co-Chair Stoltze  noted a danger of not spending  cruise ship                                                                   
money as advised by Legislative Legal.                                                                                          
Vice-Chair Thomas asked if there  were any funds for harbors.                                                                   
Mr.  Armstrong  said  he  did   not  look  at  that  category                                                                   
specifically.     He  referred   Vice-Chair  Thomas   to  the                                                                   
Legislative Finance web page for that information.                                                                              
Co-Chair Hawker referenced  page 43 of the bill  to highlight                                                                   
money   going    from   the    passenger   vessel    services                                                                   
infrastructure - commercial vessel passenger tax account -                                                                      
toward various ports.                                                                                                           
1:49:51 PM                                                                                                                    
Co-Chair Hawker  MOVED to adopt  CSSB 75 (FIN),  26-GS1003\T,                                                                   
the  version  passed  out  of  the  Senate,  as  the  working                                                                   
document before the Committee.   There being NO OBJECTION, it                                                                   
was so ordered.                                                                                                                 
1:50:53 PM                                                                                                                    
Representative Salmon requested  information about Section 23                                                                   
on  page 68.    He expressed  concern  about  the amount  re-                                                                   
appropriated for his district.                                                                                                  
Co-Chair  Stoltze  commented   on  how  the  re-appropriation                                                                   
process is supposed to work with  members from both the House                                                                   
and the Senate reaching concurrence.                                                                                            
Representative   Salmon  stressed   the  importance   of  his                                                                   
district's needs.                                                                                                               
1:53:02 PM                                                                                                                    
Representative  Gara inquired  about the  process of  today's                                                                   
meeting.   Co-Chair  Stoltze  replied that  public  testimony                                                                   
would be taken.                                                                                                                 
Mr. Armstrong  related that  regarding re-appropriations,  it                                                                   
is incumbent on all of the legislative  offices to review the                                                                   
Mr.  Armstrong  noted,  in response  to  Vice-Chair  Thomas's                                                                   
concern, that the Harbor Program  with the Corps of Engineers                                                                   
was reduced by $1.15 million in general funds.                                                                                  
1:54:17 PM                                                                                                                    
Representative   Gara  voiced   concern  about   port-related                                                                   
projects funded  by cruise  ship funds.   He took  issue with                                                                   
how  the projects  were  ranked and  he  wondered what  other                                                                   
funding  sources were  available, especially  to the  Port of                                                                   
Anchorage Project.                                                                                                              
Co-Chair Hawker  disagreed that cruise ship  tax expenditures                                                                   
must be  associated with ports.   He suggested that  the best                                                                   
test  is whether  they would  provide value  for cruise  ship                                                                   
1:56:48 PM                                                                                                                    
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
OFFICE  OF  THE GOVERNOR,  pointed  out  that the  Senate  CS                                                                   
removed  some  of  the governor's  projects.    The  governor                                                                   
recognizes that there  are projects that are not  in the bill                                                                   
due to the current economy.  There  are some items that merit                                                                   
further  dialogue,  especially   those  that  could  leverage                                                                   
federal  dollars.   She listed  several  federal highway  and                                                                   
energy  projects.    There  are   also  resource  development                                                                   
priorities:  Dalton Highway  Project,  in-state gasline,  DOR                                                                   
reservoir studies, and access to western Alaska.                                                                                
1:59:11 PM                                                                                                                    
Vice-Chair  Thomas asked  if  the projects  required  general                                                                   
fund money.  Ms. Rehfeld said  they did; however, one project                                                                   
under the  Alaska Energy Authority  would be funded  from the                                                                   
Alaska Capital  Income Funds.   The Dalton project is  in the                                                                   
stimulus package.                                                                                                               
2:00:02 PM                                                                                                                    
Co-Chair   Hawker  reported   that  his   outtake  from   the                                                                   
governor's press conference was  an endorsement for continued                                                                   
frugal  budgeting  and to  further  reduce  the budget.    He                                                                   
questioned the request  to increase the budget.   He wondered                                                                   
if there  was a list of  offsets or further reductions.   Ms.                                                                   
Rehfeld did not have a list of  deletions.  She believed that                                                                   
it was the intent of the legislature  not to jeopardize match                                                                   
and leverage fund sources.                                                                                                      
AT-EASE:       2:01:33 PM                                                                                                     
RECONVENED:    2:02:26 PM                                                                                                     
Co-Chair  Stoltze noted  there would  be another  opportunity                                                                   
for public testimony.                                                                                                           
CSSB 75  (FIN) was  heard and HELD  in Committee  for further                                                                   

Document Name Date/Time Subjects
AARP.pdf HFIN 4/13/2009 1:30:00 PM
HB 204
Frequently Asked Questions.pdf HFIN 4/13/2009 1:30:00 PM
HB 204
HB 204 - Increase WWAMI Class Size.pdf HFIN 4/13/2009 1:30:00 PM
HB 204
Physician Shortage Fact Sheet Header.pdf HFIN 4/13/2009 1:30:00 PM
HB 204
Sponsor Statement WWAMI (3).pdf HFIN 4/13/2009 1:30:00 PM
HB 204
Stateof AlaskaDeptHSS.pdf HFIN 4/13/2009 1:30:00 PM
HB 204