Legislature(2019 - 2020)ADAMS ROOM 519

02/19/2020 01:30 PM FINANCE

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Audio Topic
03:20:42 PM Start
03:22:01 PM HB205 || HB206
03:44:11 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 3:15 pm --
+= HB 205 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 206 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 205                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    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."                                                                         
                                                                                                                                
HOUSE BILL NO. 206                                                                                                            
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
3:22:01 PM                                                                                                                    
                                                                                                                                
Co-Chair  Johnston MOVED  to  ADOPT  the proposed  committee                                                                    
substitute  for  HB  205,  Work  Draft  31-GH2197\U  (Bruce,                                                                    
2/19/20). There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
3:23:15 PM                                                                                                                    
                                                                                                                                
BRODIE   ANDERSON,   STAFF,  REPRESENTATIVE   NEAL   FOSTER,                                                                    
explained  the changes  in the  in the  committee substitute                                                                    
(CS).  The  bill  included all  House  Finance  subcommittee                                                                    
actions and  changes made to  the language  section compared                                                                    
to  the   CS  introduced  the  past   Monday,  February  17,                                                                    
referenced as version M. The  new CS [version U] reflected a                                                                    
total agency operations budget of $9,033,970,300.                                                                               
                                                                                                                                
Co-Chair Foster asked  if Mr. Anderson was  referring to the                                                                    
summary of changes document.                                                                                                    
                                                                                                                                
Mr.   Anderson  replied   that  he   was  using   notes  and                                                                    
referencing a  Legislative Finance Division  document titled                                                                    
"2020 Legislature - Operating  Budget Agency Summary - House                                                                    
Structure -  Numbers and Language"  dated February  19, 2020                                                                    
(copy on  file). He informed  the committee that  the totals                                                                    
were included  on the  second page.  He restated  the agency                                                                    
operations  total  of  $9,033,970,300. The  budget  included                                                                    
$742,469,500  in statewide  items  including debt  services,                                                                    
retirement  payments,  fund capitalization,  and  transfers.                                                                    
The following  fund totals were included:  $2,871,124,000 in                                                                    
federal  funds;  $897,553,100  in designated  general  funds                                                                    
(DGF);  $1,602,942,400   in  "other"  funds   including  the                                                                    
authorization  of  interagency receipts,  airport  receipts,                                                                    
and   corporate   receipts   such   as   Alaska   Industrial                                                                    
Development  and Export  Authority  (AIDEA), Alaska  Housing                                                                    
Finance  Corporation   (AHFC)  and  Alaska   Aerospace;  and                                                                    
$4,404,882,300  [$4,404,820,300]   in  unrestricted  general                                                                    
funds (UGF).  He reported  that the  UGF spend  reflected an                                                                    
increase of  $258,551,200 or 6.2  percent from  the original                                                                    
FY  20  adjusted  base.  A large  portion  of  the  increase                                                                    
included the  $128 million  correction to  Medicaid funding.                                                                    
The budget was  $8.3 million or 0.2 percent above  the FY 20                                                                    
governor's  requested   budget,  not   including  amendments                                                                    
introduced by the governor that day.                                                                                            
                                                                                                                                
3:26:30 PM                                                                                                                    
                                                                                                                                
Mr. Anderson relayed that the  numbers section reflected all                                                                    
actions  taken by  subcommittees. He  directed members  to a                                                                    
comparison provided  in members' packets titled  "Summary of                                                                    
Changes     Operating Budget  -  CS  HB 205     31-GH2197\U,                                                                    
Bruce, 2/19/20" (copy on file):                                                                                                 
                                                                                                                                
     Summary of Changes  Operating Budget                                                                                       
     CS HB 205  31-GH2197\U, Bruce, 2/19/20                                                                                     
                                                                                                                                
     1.   Deleted the previous sec. 7, which deposited the                                                                      
     FY21 AIDEA Dividend to the Alaska Marine Highway                                                                           
     System fund.                                                                                                               
                                                                                                                                
Mr. Anderson noted that the first  item was in line with the                                                                    
normal  practice  of  spending  the AIDEA  dividend  in  the                                                                    
capital  budget.  He  continued   to  review  a  summary  of                                                                    
changes:                                                                                                                        
                                                                                                                                
     2.   Sec. 7, p. 53:                                                                                                        
     a.   Line 13, Deleted a section that appropriated                                                                          
     royalties   to   the    permanent   fund   beyond   the                                                                    
     constitutionally dedicated 25%;                                                                                            
                                                                                                                                
Mr.  Anderson noted  that the  deleted section  pertained to                                                                    
royalties from post 1979 fields.  He continued to review the                                                                    
changes:                                                                                                                        
                                                                                                                                
     b.   Line 17, modified section (b) to deposit the                                                                          
     entire percent of market draw of $3,091,492,927 from                                                                       
     the ERA to the general fund;                                                                                               
     c.   Removed the  appropriation for the  Permanent Fund                                                                    
     Dividend;                                                                                                                  
     d.   Line  22, added  a new  section (d)  for inflation                                                                    
     proofing, estimated to be $1,055,600,000.                                                                                  
     3.   Sec. 9, p.  55, line 17: added a  new section 9(e)                                                                    
     that amends  the FY20 Power Cost  Equalization estimate                                                                    
     from  $32.4  million  to  $29.7  million  based  on  an                                                                    
     updated  estimate  from  the  Department  of  Commerce,                                                                    
     Community and Economic Development.                                                                                        
     4.   Deleted   the    previous   section    (h)   which                                                                    
     appropriated  the   $2.8  million  from   the  Capstone                                                                    
     Avionics Revolving Loan Fund  to the Alaska Development                                                                    
     Team  as  a  multi-year  operating  item  (supplemental                                                                    
     effective date, covering FY20-FY23).                                                                                       
     5.   Sec. 14(b),  p. 58,  line 6:  added a  new section                                                                    
     (b)  that appropriates  the proceeds,  estimated to  be                                                                    
     $7,800, from  Veterans' special request  license plates                                                                    
     to DMVA for Veterans' memorials.                                                                                           
                                                                                                                                
Mr.  Anderson elaborated  that the  proceeds from  veterans'                                                                    
special  request  license  plates would  assist  in  funding                                                                    
repairs   and  replacements   for   veteran  memorials.   He                                                                    
continued reviewing the changes:                                                                                                
                                                                                                                                
     6.   Sec.  15(a), p.  58, line  17: deleted  the multi-                                                                    
     year effect  for this language  and restricted it  to a                                                                    
     single year.                                                                                                               
                                                                                                                                
Mr. Anderson noted that the  Department of Natural Resources                                                                    
and  the  Department  of Revenue  supported  the  change  in                                                                    
Section 15(a). He moved to the next change:                                                                                     
                                                                                                                                
     7.   Sec. 15(d), p. 58,  line 28: adjusted the estimate                                                                    
     for  fire  suppression  from   $8.5  million  to  $20.5                                                                    
     million to reflect the ten-year average for this item.                                                                     
                                                                                                                                
Mr. Anderson  relayed the change in  Section 15(d) pertained                                                                    
only  to  federal  authority. He  continued  to  review  the                                                                    
changes:                                                                                                                        
                                                                                                                                
     8.   Sec.  18(e), p.  60, line  3: added  debt payments                                                                    
     for  municipal  project  debt in  DOTPF  and  AEA.  The                                                                    
     addition totals $2,354.4 UGF.                                                                                              
                                                                                                                                
3:30:56 PM                                                                                                                    
                                                                                                                                
Mr. Anderson continued reviewing the summary of changes:                                                                        
                                                                                                                                
     9.   Sec. 19(a), p. 65,  line 7: an additional sentence                                                                    
     was added  to clarify that receipts  under this section                                                                    
     do  not  include  prior  fund  balances.  The  previous                                                                    
     language   already    prevented   this,    however,   a                                                                    
     longstanding  misinterpretation   led  to   RPLs  being                                                                    
     approved that were not consistent with this language.                                                                      
                                                                                                                                
Mr.  Anderson  expounded  that  Section  19(a)  allowed  the                                                                    
administration  to come  before the  Legislative Budget  and                                                                    
Audit  Committee   to  request  additional   authority.  The                                                                    
additional  sentence   had  been   added  for   clarity.  He                                                                    
continued reviewing changes:                                                                                                    
                                                                                                                                
     10.  Deleted prior  sec. 19(d) that would  have allowed                                                                    
     for  universal  carryforward for  statutory  designated                                                                    
     program receipts.                                                                                                          
                                                                                                                                
Mr.  Anderson relayed  that  Section 19(d)  had  been a  new                                                                    
request by the governor. He continued to highlight changes:                                                                     
                                                                                                                                
     11.  Sec. 20(g),  page 66, line 15:  amended the amount                                                                    
     of the  deposit into  the Community Assistance  Fund to                                                                    
     $30 million  from $28.7 million. The  change in section                                                                    
     9(e) that  adjusts the PCE estimate  for FY20 increases                                                                    
     the  amount available  for appropriation  from the  PCE                                                                    
     fund to the Community Assistance Fund.                                                                                     
                                                                                                                                
     12.  Sec.  21 Fund  Transfers,  page  68, beginning  on                                                                    
     line 29                                                                                                                    
     a.   Deleted  the prior  section  (l)  that would  have                                                                    
     deposited  the balance  of the  Large Passenger  Vessel                                                                    
     Gaming and  Gambling Tax account to  the Alaska Capital                                                                    
     Income Fund;                                                                                                               
     b.   Deleted   prior  section   (m)  that   would  have                                                                    
     deposited  the balance  of  the  Investment Loss  Trust                                                                    
     Fund into the Alaska Marine Highway System fund                                                                            
                                                                                                                                
Mr. Anderson elaborated on Section  21(m) and explained that                                                                    
the normal  practice for authorizing and  spending the funds                                                                    
was in the capital budget. He continued to review changes:                                                                      
                                                                                                                                
     c.   p. 71, line 4: added  a new section (l) depositing                                                                    
     the  $2.8  million  balance of  the  Capstone  Avionics                                                                    
     Revolving  Loan  Fund  to  the  Alaska  Marine  Highway                                                                    
     System fund  effective June, 30, 2020.  The fund lapses                                                                    
     on July 1,  so the FY20 supplemental  effective date is                                                                    
     necessary for this deposit to occur.                                                                                       
                                                                                                                                
3:33:42 PM                                                                                                                    
                                                                                                                                
Mr. Anderson continued reviewing the changes in the CS:                                                                         
                                                                                                                                
     13.  Sec. 26 Constitutional  Budget Reserve (CBR), page                                                                    
     75, beginning on line 5                                                                                                    
     a.   Removed  the prior  section  (b)  that would  have                                                                    
     filled the FY21 deficit from the CBR.                                                                                      
                                                                                                                                
Mr. Anderson noted  that because the budget  did not reflect                                                                    
a deficit,  the language  from the  prior Section  26(b) was                                                                    
not needed. He concluded his review of the changes:                                                                             
                                                                                                                                
     b.   Added   a  new   section  (b)   that  appropriates                                                                    
     interest  earned on  general fund  balances to  the CBR                                                                    
     for  compensation  of lost  earnings  when  the CBR  is                                                                    
     utilized for  cash flow. This section  does not require                                                                    
     a 3/4 vote of the legislature.                                                                                             
     14.  Sec. 29, p. 75,  line 31: adjusted the contingency                                                                    
     language   for   the   Alaska   Psychiatric   Institute                                                                    
     appropriation in Section 12 from  "over 79 beds" to "70                                                                    
     beds".                                                                                                                     
                                                                                                                                
Mr.  Anderson elaborated  on Section  29 and  explained that                                                                    
the  Alaska Psychiatric  Institute (API)  had been  trending                                                                    
upward  to  accommodate  the needs.  The  adjusted  language                                                                    
would allow  API to cover the  cost of filling the  last ten                                                                    
beds to capacity if needed.                                                                                                     
                                                                                                                                
3:35:02 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  asked  if  there  were  questions  on  the                                                                    
changes made in the bill.                                                                                                       
                                                                                                                                
Representative Wool asked for  verification that the changes                                                                    
adopted by the subcommittees were incorporated into the CS.                                                                     
                                                                                                                                
Co-Chair  Foster responded  affirmatively. He  asked members                                                                    
to contact his  office if they had  any subsequent questions                                                                    
on the  bill. The  CS was largely  the incorporation  of the                                                                    
subcommittee reports and changes to the language section.                                                                       
                                                                                                                                
Co-Chair  Johnston MOVED  to  ADOPT  the proposed  committee                                                                    
substitute  for  HB  206,  Work  Draft  31-GH2198\U  (Bruce,                                                                    
2/17/20). There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
Mr. Anderson  reviewed the  changes in  HB 206.  He informed                                                                    
the committee that all of the  Section 1 changes made by the                                                                    
subcommittee to  the operating budget numbers  sections were                                                                    
in line  with the  mental health board  recommendations. All                                                                    
of the  following items were  capital budget items  found in                                                                    
the mental health  operating budget. He looked at  page 3 of                                                                    
the summary  of changes document titled  "Summary of Changes                                                                    
   Mental Health  Budget -  CSHB 206    31-GH2198\U,  Bruce,                                                                    
2/17/20" (copy on file). He reviewed the changes:                                                                               
                                                                                                                                
     1.   Section 1    changes made by  subcommittees to the                                                                    
     operating budget numbers sections.                                                                                         
     2.   Page  10, line  21, AHFC  Beneficiary and  Special                                                                    
     Needs Housing:  Adds  $1.75 million of GF/Mental Health                                                                    
     and  $250.0 of  AHFC  Dividends,  increasing the  total                                                                    
     project  from  $1.7  million   to  $3.7  million.  This                                                                    
     matches    the    Mental   Health    Trust    Authority                                                                    
     recommendation.                                                                                                            
     3.   Page  10, line  23,  AHFC Homelessness  Assistance                                                                    
     Project:   Adds  $850.0 of  GF/Mental Health,  bringing                                                                    
     the project  total from $7.3 million  to $8.15 million.                                                                    
     This   matches  the   Mental  Health   Trust  Authority                                                                    
     recommendation.                                                                                                            
     4.   A project in the  Department of Transportation and                                                                    
     Public   Facilities,  Coordinated   Transportation  and                                                                    
     Vehicles, $1.3 million, was  removed. By tradition, the                                                                    
     House and  Senate leave  an item to  the other  body to                                                                    
     add  so  that  the  budget  can  be  addressed  in  the                                                                    
     Conference Committee.                                                                                                      
    5.   There are no changes to the language section.                                                                          
                                                                                                                                
Mr.  Anderson relayed  that all  of  the changes  in the  CS                                                                    
reflected  the  recommendations   forwarded  by  the  mental                                                                    
health trust board.                                                                                                             
                                                                                                                                
Co-Chair  Foster  asked  members  to  submit  amendments  by                                                                    
Monday, February  24 at 5:00  p.m. He reviewed  the schedule                                                                    
for the  following meeting. He  reviewed the  email address,                                                                    
phone number, and procedure for public testimony.                                                                               
                                                                                                                                
Representative Josephson  highlighted HB 206 as  an example.                                                                    
He noted that  version M dated January 22  was largely given                                                                    
to  the  legislature from  the  Alaska  Mental Health  Trust                                                                    
Authority  with   technical  changes  made   by  legislative                                                                    
drafters.  He  stated  his understanding  that  the  current                                                                    
version U was the working document.                                                                                             
                                                                                                                                
3:43:00 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster agreed.                                                                                                         
                                                                                                                                
Mr.  Anderson relayed  that amendments  would be  written to                                                                    
version U of the bills.                                                                                                         
                                                                                                                                
Representative  Josephson asked  for  verification that  the                                                                    
amendment deadline was Monday at 5:00 p.m.                                                                                      
                                                                                                                                
Co-Chair Foster  confirmed that  the amendment  deadline was                                                                    
Monday at 5:00 p.m. He  detailed that public testimony would                                                                    
be taken  Wednesday, Thursday, and  Friday at 5:00  p.m. and                                                                    
Saturday  at  12:00  p.m.  He   relayed  that  he  had  been                                                                    
considering an amendment deadline  of Saturday but wanted to                                                                    
give members more time.                                                                                                         
                                                                                                                                
HB  205  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  206  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB 205 & HB 206 Compare v.M to v.U 021920.pdf HFIN 2/19/2020 1:30:00 PM
HB 205
HB 206
HB 205 CS FIN WorkDraft v.U021920.pdf HFIN 2/19/2020 1:30:00 PM
HB 205
HB 205 HCS1 UGF Agency Summary 021920.pdf HFIN 2/19/2020 1:30:00 PM
HB 205
HB 205 HCS1 Al Funds Agency Summary 021920.pdf HFIN 2/19/2020 1:30:00 PM
HB 205
HB 205 TransComp 021920.pdf HFIN 2/19/2020 1:30:00 PM
HB 205
HB 206 CS FIN WorkDraft v.U021920.pdf HFIN 2/19/2020 1:30:00 PM
HB 206
HB 206 HCS1 MH Capital Project Detail 021920.pdf HFIN 2/19/2020 1:30:00 PM
HB 206