Legislature(2017 - 2018)HOUSE FINANCE 519

02/22/2017 01:30 PM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 24(FIN) Out of Committee
Moved HB 48 Out of Committee
Heard & Held
Heard & Held
+ Subcommittee Reports; Amendment Proposals as TELECONFERENCED
+ New Operating Budget Amendment System TELECONFERENCED
Presentation: by David Teal, Dir. Leg. Fin. Div.
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 57                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     supplemental  appropriations and  reappropriations, and                                                                    
     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."                                                                                                        
HOUSE BILL NO. 59                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
2:56:43 PM                                                                                                                    
Co-Chair Seaton indicated  that it was an  opportune time to                                                                    
discuss the new amendment procedures.                                                                                           
2:57:20 PM                                                                                                                    
DAVID  TEAL, DIRECTOR,  LEGISLATIVE FINANCE  DIVISION (LFD),                                                                    
expressed  his intent  to discuss  the new  budget amendment                                                                    
system. He  believed the process  for legislators  and staff                                                                    
was very  similar to the  old system. He explained  that the                                                                    
old process  had worked but  it had been cumbersome,  due to                                                                    
technical or  structural errors that occurred.  For example,                                                                    
errors included the misnaming of  the agency, allocation, or                                                                    
appropriation;  removing money  that  did not  exist; and  a                                                                    
lack in  line item detail.  He furthered that it  forced LFD                                                                    
to  do a  lot of  guessing about  what the  amendment really                                                                    
meant  and what  was supposed  to  be done  with the  money.                                                                    
Additionally,  under  the old  system  the  co-chair had  to                                                                    
track amendments in a spreadsheet  because due to duplicates                                                                    
and other.  As amendments were  passed LFD had to  rekey the                                                                    
amendments  into the  budget system.  He explained  that the                                                                    
process  had  required  entering  the  same  data  at  three                                                                    
different  times.   He  added  that  often   times  proposed                                                                    
language  had not  gone through  Legislative Legal  Services                                                                    
and did not meet its  standards. The division had decided in                                                                    
the past  there was something wrong  with the inefficiencies                                                                    
and had been beginning to prepare a new amendment system.                                                                       
Mr.  Teal addressed  the new  amendment system.  He detailed                                                                    
that the system  offered drop down menus on  the LFD website                                                                    
to help avoid  technical problems. A new  amendment could be                                                                    
easily added by finance committee members only.                                                                                 
3:01:09 PM                                                                                                                    
Mr.  Teal walked  the committee  through an  explanation and                                                                    
used  the Department  of Revenue  (DOR) as  an example.  The                                                                    
system would  help users avoid technical  errors. He relayed                                                                    
that  once an  amendment  was entered  correctly the  author                                                                    
could edit,  delete, and attach  any PDF backup  including a                                                                    
Legislative Legal  Services language amendment. It  was also                                                                    
possible to share the material  with others. He compared the                                                                    
system   to   CAPSIS   [Capital   Project   Submission   and                                                                    
Information   System].  The   amendment  author   could  let                                                                    
Legislative   Finance  Division   view  the   material.  The                                                                    
division  would help  the  author  with transaction  titles,                                                                    
catch  errors,  edit  the explanation  if  desired,  and  so                                                                    
forth.  Theoretically the  process  would  result in  better                                                                    
Representative Kawasaki asked if  the amendment author would                                                                    
continue to  have access to  edit the amendment once  it was                                                                    
submitted in the system to the finance committee.                                                                               
Mr.  Teal answered  that LFD  could view  the amendment  and                                                                    
edit it if requested by  a finance member's office. The goal                                                                    
was to have errors fixed  prior to sending the amendments to                                                                    
the committee.                                                                                                                  
3:06:09 PM                                                                                                                    
Co-Chair Seaton asked if an  amendment could be changed once                                                                    
it had been shared with other committee members.                                                                                
Mr. Teal answered that the  amendment could be changed after                                                                    
it had been sent for viewing  by LFD, but once the amendment                                                                    
had been  submitted it  could not  be changed.  He explained                                                                    
that it would  prevent the potential for an  amendment to be                                                                    
edited while LFD was loading it.                                                                                                
Co-Chair  Seaton  asked  for  verification  that  amendments                                                                    
could be  shared with other  committee members  before being                                                                    
Mr. Teal replied that the  amendments could be shared at any                                                                    
time  and  cosponsors  could  be  added.  That  process  was                                                                    
between legislators' offices and was not viewed by LFD.                                                                         
Representative Wilson  asked about looking at  positions but                                                                    
not PCNs  [position control numbers]  that were  funded with                                                                    
half  general  funds  and  half   federal  funds.  With  the                                                                    
assumption  that federal  funds could  probably be  put into                                                                    
other positions  still in  the department,  she asked  if it                                                                    
was possible to  pay the salary with all  general funds. She                                                                    
remarked that  the department would most  likely determine a                                                                    
way  to  utilize  the   federal  funds.  Alternatively,  she                                                                    
wondered if it had to match the positions.                                                                                      
Mr.  Teal answered  that an  amendment  did not  have to  be                                                                    
matched.  For  example,  there was  a  governor's  amendment                                                                    
asking for  new positions.  It was  possible to  reverse the                                                                    
whole thing  or choose  up to ten  different fund  codes. He                                                                    
detailed that it  was possible to use general  funds but not                                                                    
the federal  funds. The maker  of the amendment  could chose                                                                    
whatever option they wanted.                                                                                                    
Representative Wilson  assumed the best  way to do  it would                                                                    
be  include   information  in  the  explanation   about  the                                                                    
rationale for the change.                                                                                                       
Mr. Teal answered  in the affirmative. The goal  was to have                                                                    
an explanation  that headed off questions  in the committee.                                                                    
Theoretically it would save time in committee.                                                                                  
3:09:06 PM                                                                                                                    
Co-Chair  Seaton thought  it was  important  for members  to                                                                    
understand how the process worked.  He described the process                                                                    
the committee would use to  develop the operating budget. He                                                                    
read from a prepared statement:                                                                                                 
     Subcommittees  are in  the process  of closing  out and                                                                    
     forwarding  their  recommendations  to  House  Finance.                                                                    
     When   each   department's   subcommittee   report   is                                                                    
     scheduled in  the House Finance the  subcommittee chair                                                                    
     will   describe  the   subcommittee's  recommendations.                                                                    
     Then,  if amendments  were  recommended, House  Finance                                                                    
     will  take up  those amendments  using the  Legislative                                                                    
     Finance  amendment report  instead  of  the packets  of                                                                    
     amendments  that were  used  in  prior sessions.  House                                                                    
     Finance will  also see  the statutory  changes proposed                                                                    
     by  the subcommittee  chairs.  Those statutory  changes                                                                    
     are listed  and briefly  explained in  the subcommittee                                                                    
     narrative  reports  and  each subcommittee  chair  will                                                                    
     need to submit their  statutory recommendations to each                                                                    
     affected policy  committee. We're not voting  on those,                                                                    
     those   are   recommendations   that  come   from   the                                                                    
     In  certain   circumstances  there  will   be  language                                                                    
     amendments  that  I will  propose  in  addition to  the                                                                    
     subcommittee  recommended amendments.  Those will  come                                                                    
     with  each department.  As Mr.  Teal mentioned,  I will                                                                    
     have  two   additional  amendments  proposed   for  the                                                                    
     Department  of Revenue  that we  will take  up tomorrow                                                                    
     and they're included in  the Legislative Finance report                                                                    
     that you  have in  the file and  you should  have three                                                                    
     files  on your  desk. After  we go  through all  of the                                                                    
     subcommittee reports  I will  also bring  forward other                                                                    
     language amendments for the  statewide items. That will                                                                    
     be at the end of the  process. I just want to reiterate                                                                    
     what  Mr.  Teal  has  said  in how  this  is  going  to                                                                    
     progress. Then we will have  a new committee substitute                                                                    
     drafted at  that point -  this is after  we incorporate                                                                    
     the subcommittee proposals  and the language amendments                                                                    
     that  will   generate  the   CS.  Once   the  committee                                                                    
     substitute is before us, we  will take public testimony                                                                    
     on  those amendments.  After public  testimony we  will                                                                    
     then  take  up  round two  amendments.  Any  additional                                                                    
     budget   amendments   from  House   Finance   Committee                                                                    
     members. Those amendments will need to be submitted                                                                        
     via the new operating budget amendment system.                                                                             
3:12:05 PM                                                                                                                    
Representative  Wilson  referred  to the  DOR  and  observed                                                                    
there were  amendments. She did  not see any  amendments for                                                                    
the Department of Military and  Veterans Affairs (DMVA). She                                                                    
asked  for verification  that  if members  did  not see  any                                                                    
amendments, someone would give  the subcommittee report, but                                                                    
there would be no accompanying amendments.                                                                                      
Co-Chair Seaton  noted there were  two amendments  [for DOR]                                                                    
that would be generated in the new system.                                                                                      
Mr. Teal  showed the LFD  website (on the  projector screen)                                                                    
related to  subcommittee reports. The items  would be posted                                                                    
as subcommittees  closed out  as they  were reported  out of                                                                    
committee.   He  pointed   out   that   the  Department   of                                                                    
Administration,  Department   of  Commerce,   Community  and                                                                    
Economic Development, Office of  the Governor, DMVA, and DOR                                                                    
had all closed out thus  far. Once a department subcommittee                                                                    
closed   out  LFD   would  post   the  transaction   detail,                                                                    
narrative, and amendment packets. He  used DOR as an example                                                                    
and   pointed  to   the  two   amendments   passed  out   of                                                                    
subcommittee  (one related  to mental  health and  the other                                                                    
related  to   the  Tax  Division).   Subcommittee  amendment                                                                    
packets would also be included  on the website. He looked at                                                                    
the  transaction report  for DOR  and  explained that  there                                                                    
were now  four amendments -  one of the  amendments involved                                                                    
language.   He  explained   that  one   of  the   additional                                                                    
amendments  would  move  paternity testing  money  from  the                                                                    
language section  of the bill  to Section 1.  The amendments                                                                    
would  be   voted  on  by   the  full   committee.  Attached                                                                    
supporting documents  would be the actual  Legislative Legal                                                                    
Services amendment.  Any other backup would  be attached and                                                                    
would be  in members'  packets. The  system gave  the public                                                                    
and all legislators  the ability to look  at amendments well                                                                    
in advance before they were  taken up during the meeting. He                                                                    
explained  that  the  new system  should  rectify  the  past                                                                    
problem  where amendments  that  members had  not seen  were                                                                    
printed right before a meeting.                                                                                                 
3:15:54 PM                                                                                                                    
Representative Wilson asked about DMVA.                                                                                         
Co-Chair Seaton noted members should  have the DMVA material                                                                    
in their packets.                                                                                                               
Representative Wilson surmised that  unlike the DOR example,                                                                    
members  would  not see  amendments  written  for DMVA.  She                                                                    
believed the information shown on  the website reflected the                                                                    
amendment  instead. She  explained  that  the DOR  amendment                                                                    
looked more like a format the committee was used to seeing.                                                                     
Mr. Teal answered in the  affirmative. He explained that the                                                                    
website  was showing  the amendments  that  were exactly  as                                                                    
passed  out  by  the  subcommittee  because  there  were  no                                                                    
language amendments. The subcommittees  had purview over the                                                                    
numbers section of the bill.  He elaborated that DOR had two                                                                    
separate  amendments  because  language  was  involved.  The                                                                    
website showed  what had  been done  with the  decrement and                                                                    
the transaction  type was "wordage,"  which meant  there was                                                                    
intent  added  by  the  committee.  Members  would  have  an                                                                    
opportunity to see the information early and vote on it.                                                                        
Representative Wilson thought it  would be difficult for the                                                                    
public to  understand. She referred  to DOR and  noted there                                                                    
were two  different types  of papers  [in the  packets]. She                                                                    
asked  for verification  that the  amendments the  committee                                                                    
was  used to  seeing  pertained only  to  the language,  but                                                                    
amendments related to the numbers  section would appear like                                                                    
the ones they had just seen for DMVA.                                                                                           
Mr. Teal  answered that  the "L" in  front of  the amendment                                                                    
number was  a signal there  was backup material.  The backup                                                                    
or supporting documentation would  be the amendment prepared                                                                    
by  Legislative   Legal  Services.  The  trouble   with  the                                                                    
amendment on the  screen (shown as a  typical amendment with                                                                    
page references  from Legislative  Legal Services)  was that                                                                    
most  people including  finance  committee  members, had  no                                                                    
idea what  the page references  meant. Much of  the language                                                                    
was conforming  and the amendment  did not specify  what the                                                                    
change  did.  The  action  of  the  amendment  was  actually                                                                    
described in the new system.  The DOR amendment he looked at                                                                    
moved the cost recovery  for paternity testing from language                                                                    
to Section  1. Hopefully  it would  be easier  for committee                                                                    
members and the public to understand amendments.                                                                                
3:19:38 PM                                                                                                                    
Co-Chair  Seaton  believed that  in  the  past the  language                                                                    
section changes all appeared in  a CS only. He detailed that                                                                    
amendments had  not been seen  by other finance  members and                                                                    
the  public.  The   new  system  would  bring   all  of  the                                                                    
amendments in front of the committee individually.                                                                              
Representative  Wilson  appreciated  what  the  chairs  were                                                                    
trying to do. She wanted to  ensure they were not looking at                                                                    
two different types of amendments.  She did not want to miss                                                                    
anything. She thanked the chair for his latitude.                                                                               
Co-Chair Seaton  explained the labeling contingency  for the                                                                    
amendments.  The  "L"  in  front   of  an  amendment  number                                                                    
indicated the  amendment was a  language amendment  from the                                                                    
subcommittee chair of the  operating budget. Amendments with                                                                    
no  "L" came  from the  numbers section,  which would  be in                                                                    
subcommittee reports.  He furthered  that instead  of having                                                                    
the  language changes  presented at  the  end in  a CS,  any                                                                    
language amendments  would be included in  members' packets.                                                                    
He  added that  statewide amendments  would be  wrapped into                                                                    
the language  section at the  end and would all  come before                                                                    
the committee.                                                                                                                  
Representative   Thompson  referred   to  the   subcommittee                                                                    
reports'  narrative, which  included recommendations  that a                                                                    
standing committee  change statutes  for a  particular item.                                                                    
He  observed there  were quite  a  few listed.  He asked  if                                                                    
members were allowed to object to the items in the process.                                                                     
Co-Chair  Seaton  explained  that the  recommendations  came                                                                    
forward  from  the  subcommittee   chair.  If  a  legislator                                                                    
disagreed they  could offer a  preferred format in  the form                                                                    
of  a bill.  He clarified  that the  committee would  not be                                                                    
debating  the   recommendations  by  the   subcommittee.  If                                                                    
someone  disagreed they  could communicate  to the  standing                                                                    
committee  chair or  to members  and the  standing committee                                                                    
may  not go  forward  with the  recommendation. Every  House                                                                    
member  had  the opportunity  to  have  the input  into  all                                                                    
committees  and  on  the House  floor.  A  legislator  could                                                                    
always  propose  a  statutory   amendment  in  the  form  of                                                                    
legislation.  The  goal  was  to  consolidate  and  look  at                                                                    
budgetary  impacts  and  make  recommendations  to  standing                                                                    
committees  to clean  up statutes  and get  rid of  indirect                                                                    
expenditures.   The  recommendations   would   be  made   by                                                                    
subcommittee chairs directly to  the standing committee. The                                                                    
information  would  get  reported,  but  the  House  Finance                                                                    
Committee  would not  discuss  and vote  on  the items  that                                                                    
would come forward as subcommittee recommendations.                                                                             
HB 57 was HEARD and HELD in committee for further                                                                               
HB 59 was HEARD and HELD in committee for further                                                                               
3:24:44 PM                                                                                                                    
Co-Chair Seaton announced that it was Mr. Teal's birthday.                                                                      
The co-chairs presented Mr. Teal with a present.                                                                                
Co-Chair Seaton addressed the schedule for the meeting the                                                                      
following day.                                                                                                                  

Document Name Date/Time Subjects
HB024 Supporting Document-Support Letters CSAC 2.2.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 24
HB024 Supporting Document-Support Letters ABADA 2.2.17.PDF HFIN 2/22/2017 1:30:00 PM
HB 24
HB024 Supporting Document-Support Letter AKDOL 2.1.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 24
HB024 Supporting Document-Support Letter AK HSS 2.2.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 24
HB024 Supporting Document-News Release DEA.Gov 2.2.17.PDF HFIN 2/22/2017 1:30:00 PM
HB 24
HB024 Supporting Document-Article WSJ 2.2.17.PDF HFIN 2/22/2017 1:30:00 PM
HB 24
HB 24 Sponsor Statement 2.2.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 24
HB024 Supporting Document-Article CBS News 2.2.17.PDF HFIN 2/22/2017 1:30:00 PM
HB 24
HB024 Supporting Document-Article Drugs.com 2.2.17.PDF HFIN 2/22/2017 1:30:00 PM
HB 24
HB048 Sponsor Statement 02.15.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 48
HB048 Supporting Documents - letters of support 02.15.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 48
HB048 Supporting Document - Sunset Audit 02.15.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 48
HB048 Sponsor Statement 02.15.17.pdf HFIN 2/22/2017 1:30:00 PM
HB 48