Legislature(2019 - 2020)SENATE FINANCE 532

06/08/2019 04:00 PM CONFERENCE COMMITTEE ON HB39 AND HB40

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Audio Topic
05:41:03 PM Start
06:25:49 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 39 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Moved CCS SSHB 39 Out of Committee
+= HB 40 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Moved CCS SSHB 40 Out of Committee
Dept. of Natural Resources
Permanent Fund
Closeouts
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 39(FIN) am(brf                                                                   
sup maj fld)                                                                                                                  
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
SENATE CS FOR CS FOR SS FOR HOUSE BILL NO. 39(FIN) am S                                                                       
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations; making  supplemental appropriations and                                                                    
     reappropriations;  and   providing  for   an  effective                                                                    
     date."                                                                                                                     
and                                                                                                                             
                                                                                                                                
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 40(FIN)                                                                          
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
SENATE CS FOR CS FOR SS FOR HOUSE BILL NO. 40(FIN)                                                                            
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
5:41:35 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster invited David Teal, Director of the                                                                             
Legislative Finance Division, to come to the testifier                                                                          
table.                                                                                                                          
                                                                                                                                
He explained how  objections would be handled.  If there was                                                                    
an objection,  he would make note  of that item and  hold it                                                                    
aside. The committee would continue  to go through the other                                                                    
items in  the department,  adopt them,  and then  would come                                                                    
back to any item that had an objection.                                                                                         
                                                                                                                                
In  the present  meeting the  committee would  be addressing                                                                    
the remaining  open items in  HB 39 and  HB 40 based  on the                                                                    
motion sheets dated June 8th for the following departments:                                                                     
                                                                                                                                
DEPARTMENT OF NATURAL RESOURCES                                                                                                 
PERMMANENT FUND                                                                                                                 
LANGUAGE ITEMS                                                                                                                  
                                                                                                                                
^DEPARTMENT NATURAL RESOURCES                                                                                                 
                                                                                                                                
5:42:20 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stedman  MOVED to  ADOPT  the  following in  the                                                                    
Department of Natural Resources budget:                                                                                         
                                                                                                                                
     Item 3    Senate                                                                                                           
                                                                                                                                
Representative Wilson Objected.                                                                                                 
                                                                                                                                
Representative Wilson expressed a  concern about the state's                                                                    
portion  of   costs  and   future  obligations   related  to                                                                    
receiving $1 million  in federal receipts for  a program the                                                                    
state  did  not  currently  have in  place.  She  hoped  the                                                                    
department would exercise caution in taking the funding.                                                                        
                                                                                                                                
Co-Chair Wilson WITHDREW her OBJECTION.                                                                                         
                                                                                                                                
Representative Tilton OBJECTED.                                                                                                 
                                                                                                                                
Representative  Tilton  aligned  herself with  the  comments                                                                    
made by the previous speaker.                                                                                                   
                                                                                                                                
Representative Tilton WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. The  action                                                                    
CLOSED  conferencable Item  3 in  the Department  of Natural                                                                    
Resources budget.                                                                                                               
                                                                                                                                
^PERMMANENT FUND                                                                                                              
                                                                                                                                
5:43:51 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stedman  MOVED to  ADOPT  the  following in  the                                                                    
Permanent Fund:                                                                                                                 
                                                                                                                                
     Item 1    House                                                                                                            
     Item 2    House                                                                                                            
     Item 3    House                                                                                                            
    Item 4    Senate, plus $2.6 billion for a total of                                                                          
               $9.4 billion                                                                                                     
     Item 5    Senate                                                                                                           
     Item 6    Senate, with $99.8 million appropriated from                                                                     
               the  Earning Reserve  Account to  the General                                                                    
               Fund and $99.8  million appropriated from the                                                                    
               General   Fund  to   the  principal   of  the                                                                    
               Permanent Fund                                                                                                   
     Item 7    Senate, with $80.0 million appropriated from                                                                     
               the  Earning Reserve  Account to  the General                                                                    
               Fund and $80.0  million appropriated from the                                                                    
               General   Fund  to   the  principal   of  the                                                                    
               Permanent Fund                                                                                                   
    Item 8    Senate, minus $2.6 billion for a total of                                                                         
               $9.4  billion. There  being NO  OBJECTION, it                                                                    
               was so ordered.                                                                                                  
                                                                                                                                
Representative Tilton OBJECTED  to Item 1, Item  4, and Item                                                                    
8.                                                                                                                              
                                                                                                                                
Co-Chair Foster indicated the  committee would address items                                                                    
1, 4, and 8.                                                                                                                    
                                                                                                                                
Representative Tilton spoke to  her objection. She explained                                                                    
that Item 1 would pay  a statutory dividend. She believed it                                                                    
was  the  legislature's obligation  to  follow  the law  and                                                                    
wanted to  see the  dividend remain in  the budget.  She had                                                                    
not seen another bill put  forward to support a dividend for                                                                    
the people of Alaska.                                                                                                           
                                                                                                                                
Senator Olson  also objected  to Item  1. He  disagreed with                                                                    
not  providing a  full  dividend to  Alaskans,  as they  had                                                                    
expectations  of  receiving  a   dividend.  He  thought  not                                                                    
issuing a  dividend would have  a detrimental effect  on the                                                                    
lower income residents of the State of Alaska.                                                                                  
                                                                                                                                
Representative  Wilson agreed  that  the legislature  should                                                                    
follow statute.  However, she did not  believe the operating                                                                    
budget  bill was  the appropriate  vehicle for  the dividend                                                                    
appropriation. She mentioned that  there was a separate bill                                                                    
making  its way  through  the process  that encompassed  the                                                                    
dividend amount  and the funding  mechanism. She  had always                                                                    
disagreed with having the dividend  in the operating budget.                                                                    
She believed  the operating budget should  only include day-                                                                    
to-day costs. She relayed that until  a few years ago it was                                                                    
not  being recorded  in  the same  way.  Although she  would                                                                    
support  taking  the  appropriation  out  of  the  operating                                                                    
budget,  she agreed  with the  dividend  and with  following                                                                    
statute.  She agreed  that a  bill  addressing the  dividend                                                                    
separately was the correct vehicle.                                                                                             
                                                                                                                                
5:47:52 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stedman  clarified to  Alaskans watching  at home                                                                    
that Item  1 would pull  the current year's dividend  out of                                                                    
the operating  budget by accepting the  House's position. He                                                                    
emphasized that the  position of the legislature  was not to                                                                    
not have a dividend, but  to address the issue separately in                                                                    
a  different  bill.  He thought  the  legislature  would  be                                                                    
paying a dividend in October 2019.                                                                                              
                                                                                                                                
Senator Olson  understood where the chairmen  of the finance                                                                    
committees from  each body were coming  from. However, until                                                                    
he saw a bill clarifying the  amount of the dividend and its                                                                    
fund source,  he could  not support Item  1 as  proposed. He                                                                    
was  concerned  about   his  constituents  being  negatively                                                                    
impacted by less than a full dividend.                                                                                          
                                                                                                                                
Representative Tilton MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: von Imhof, Wilson, Stedman, Foster                                                                                    
OPPOSED: Olson, Tilton                                                                                                          
                                                                                                                                
The MOTION  PASSED (4/2) [Note: House  (2/1); Senate (2/1)].                                                                    
Item 1 was ADOPTED.                                                                                                             
                                                                                                                                
5:49:49 PM                                                                                                                    
                                                                                                                                
Representative Tilton spoke to  her objection. She explained                                                                    
that Item 4  would remove approximately $9  billion from the                                                                    
Earnings Reserve Account  (ERA) and move it  into the corpus                                                                    
of  the Permanent  Fund.  Although she  was  not opposed  to                                                                    
moving  monies into  the corpus,  she  suggested the  amount                                                                    
might be too much at the present time.                                                                                          
                                                                                                                                
Representative  Wilson was  in favor  of moving  the sum  of                                                                    
$9.4 billion.  She mentioned the Legislature's  track record                                                                    
of  using  state  savings  to   pay  operating  expenses,  a                                                                    
practice  that   she  believed   could  not   continue.  She                                                                    
explained that  by transferring  the funds  from the  ERA to                                                                    
the corpus of the fund  the monies would be protected. Money                                                                    
could  only be  removed from  the corpus  by a  vote of  the                                                                    
people  of  Alaska. The  transfer  would  also allow  for  a                                                                    
greater   returns   because   the  Alaska   Permanent   Fund                                                                    
Corporation  (APFC)  would  know  the  money  could  not  be                                                                    
touched. The earnings  would be deposited into  the ERA. She                                                                    
had heard from  her constituents that they wanted  to have a                                                                    
Permanent Fund  in the  future. The  transfer would  help to                                                                    
ensure the health of the fund.                                                                                                  
                                                                                                                                
5:51:23 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stedman had a mild  objection. He indicated that,                                                                    
in the spirit of cooperation,  the Senate had proposed a $12                                                                    
billion  transfer but  compromised  its  number bringing  it                                                                    
down  to $9.4  billion.  He would  have  preferred a  larger                                                                    
number, but  thought the number  was workable. He  noted the                                                                    
significance of adding to the  corpus of the Permanent Fund.                                                                    
He thought all  members should take credit  for the historic                                                                    
appropriation,  as it  was the  largest appropriation  ever.                                                                    
The  benefits of  the  decision would  be  felt for  several                                                                    
generations.  He did  not  believe  the appropriation  would                                                                    
affect the  dividend, as there  would be  continued earnings                                                                    
on the  Permanent Fund.  The entire  fund would  continue to                                                                    
earn handsome  returns and could easily  generate $3 billion                                                                    
to $4 billion per year for the state.                                                                                           
                                                                                                                                
Vice-Chair   Stedman   mentioned   the   track   record   of                                                                    
accumulated earnings  and the spending  of billions  to meet                                                                    
state obligations.  He suggested that elected  officials had                                                                    
significant   concerns    about   preserving    the   wealth                                                                    
accumulation  over  the previous  40  years  for the  future                                                                    
benefit of  Alaskans. The  state had  ample funds  after the                                                                    
transfer  to pay  whatever dividend  amount the  legislature                                                                    
chose  in the  current  year. He  indicated  there would  be                                                                    
significant  funds  to  pay the  following  year's  dividend                                                                    
regardless of  the amount. He  reiterated that  the transfer                                                                    
did  not  affect  the  dividend.  However,  it  placed  $9.4                                                                    
billion  into the  constitutionally  protected corpus  which                                                                    
could only  be accessed  by the legislature  with a  vote of                                                                    
the people.  He reiterated that  the Senate had made  a good                                                                    
faith  effort to  work  with the  House to  come  up with  a                                                                    
compromise  amount. He  did  not want  to  see the  earnings                                                                    
squandered   leaving  future   Alaskans   with  a   crippled                                                                    
Permanent Fund and an empty  oil reservoir. He supported the                                                                    
compromise position with the House.                                                                                             
                                                                                                                                
5:56:13 PM                                                                                                                    
                                                                                                                                
Senator Olson  gave credit  to the  co-chair of  finance for                                                                    
his leadership when the bipartisan  coalition was in effect.                                                                    
He had  been responsible  for putting  $16 billion  into the                                                                    
Constitutional Budget Reserve (CBR)  which was spent leaving                                                                    
the state in crisis mode  again. However, his claim that the                                                                    
Senate passed  out a $12  billion transfer proposal  was not                                                                    
accurate,  as a  number of  members did  not agree  with the                                                                    
figure.  He conveyed  that the  reality was  that the  money                                                                    
going into the corpus would  no longer be accessible for any                                                                    
sort of  emergency in the future.  Of the years he  had been                                                                    
in  the legislature,  the budget  presented on  February 13,                                                                    
2019  was  the  most  precarious he  had  seen.  The  budget                                                                    
totally defunded  the Alaska Marine Highway  System which he                                                                    
argued was  completely irresponsible. He suggested  that the                                                                    
legislature needed  to have appropriate  access to  funds to                                                                    
be able  to continue state  services mandated by  the Alaska                                                                    
Constitution. He was concerned with the large amount.                                                                           
                                                                                                                                
Representative Tilton MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Foster, Stedman, Wilson, von Imhof                                                                                    
OPPOSED: Tilton, Olson                                                                                                          
                                                                                                                                
The MOTION  PASSED (4/2) [Note: House  (2/1); Senate (2/1)].                                                                    
Item 4 was ADOPTED.                                                                                                             
                                                                                                                                
5:59:06 PM                                                                                                                    
                                                                                                                                
Representative Tilton indicated that  she objected to Item 8                                                                    
for the  same reasons  as the previous  item. She  asked for                                                                    
someone to explain what Item 8 accomplished.                                                                                    
                                                                                                                                
Vice-Chair  Stedman   replied  that  they   were  offsetting                                                                    
similar to  the previous item  discussed. It had to  do with                                                                    
the  same issue  and monies  and accomplished  the transfer.                                                                    
The discussions and the arguments were the same.                                                                                
                                                                                                                                
Representative Tilton MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Olson, Stedman, Foster, von Imhof, Wilson                                                                             
OPPOSED: Tilton                                                                                                                 
                                                                                                                                
The MOTION  PASSED (5/1) [Note: House  (2/1); Senate (3/0)].                                                                    
Item 8 was ADOPTED.                                                                                                             
                                                                                                                                
6:00:57 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stedman wanted  to put  on record  that the  net                                                                    
result  of modified  items  6  and 7  was  identical to  the                                                                    
result of  former Senate items  2, 3,  6 and 7.  The changes                                                                    
complied   with  the   legislative  auditor's   request  for                                                                    
clarification that items 2, 3,  6 and 7 eliminated potential                                                                    
FY  18 and  FY 19  general fund  liability to  the Permanent                                                                    
Fund. Reports generated by  the Legislative Finance Division                                                                    
would show the movement of money  from the ERA to the corpus                                                                    
as  intra-fund transfers  that did  not affect  general fund                                                                    
revenue or  expenditures. The intent  of this  treatment was                                                                    
to ensure  that the  APFC would not  be forced  to liquidate                                                                    
assets in order  to transfer money from  the reserve account                                                                    
to the corpus.                                                                                                                  
                                                                                                                                
Vice-Chair Stedman  further explained  what was  being done.                                                                    
He relayed  that the  committee was  adding other  monies to                                                                    
the corpus of  the Permanent Fund. At the end  of the budget                                                                    
cycle  the legislature  would  be  transferring about  $10.5                                                                    
billion  including inflation  proofing for  FY 20.  He noted                                                                    
that 25 percent  of oil royalties was supposed to  go to the                                                                    
Permanent  Fund.  For  some  of the  newer  oil  fields,  50                                                                    
percent  of  the royalties  were  supposed  to go  into  the                                                                    
Permanent Fund. However, in some  cases that did not happen.                                                                    
Essentially, the committee was  trying to keep the Permanent                                                                    
Fund whole.                                                                                                                     
                                                                                                                                
Co-Chair  Foster  asked Mr.  Teal  if  he  wanted to  add  a                                                                    
comment.                                                                                                                        
                                                                                                                                
DAVID   TEAL,   DIRECTOR,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
suggested  that  Co-Chair  Foster  make it  clear  that  the                                                                    
committee  had  adopted  the  items that  did  not  have  an                                                                    
objection. He was not sure the co-chair had done so.                                                                            
                                                                                                                                
Co-Chair  Foster asked  for any  comments or  questions from                                                                    
members.                                                                                                                        
                                                                                                                                
                                                                                                                                
Senator Olson asked Mr. Teal  if there were any surprises in                                                                    
the  document, as  he and  other members  had only  seen the                                                                    
document when the meeting convened.                                                                                             
                                                                                                                                
Mr. Teal responded that he  did not think there was anything                                                                    
in the document that was  not clear. The Legislative Finance                                                                    
Division had  tried to put  as many notes of  explanation in                                                                    
the  document  as  possible. The  items  were  discussed  at                                                                    
length  by  the co-chairs.  He  thought  the decisions  were                                                                    
properly  explained.   He  could   not  see   anything  that                                                                    
underlined the motions on the page.                                                                                             
                                                                                                                                
6:05:19 PM                                                                                                                    
                                                                                                                                
Senator  Olson  was not  trying  to  imply that  anyone  did                                                                    
anything tricky. Rather,  he wanted to make sure  he had not                                                                    
missed something that was not obvious.                                                                                          
                                                                                                                                
Co-Chair Foster  summarized that  the committee  removed the                                                                    
amount of  the Permanent Fund  Dividend because it  would be                                                                    
dealt with  in another  piece of legislation.  Secondly, the                                                                    
committee put  $250 million of  oil royalty monies  into the                                                                    
Permanent Fund.  Lastly, the  committee placed  $9.4 billion                                                                    
into the  Permanent Fund where it  would be constitutionally                                                                    
protected. He asked Mr. Teal if he was accurate.                                                                                
                                                                                                                                
Mr. Teal responded that the co-chair had been very clear.                                                                       
                                                                                                                                
Co-Chair  Foster   clarified  that  there  was   NO  further                                                                    
OBJECTION,   it   was   so  ordered.   The   action   CLOSED                                                                    
conferencable Item 1 through Item 8 in the Permanent Fund.                                                                      
                                                                                                                                
Co-Chair Foster  indicated the committee would  be taking up                                                                    
amendments. Three items were before the committee.                                                                              
                                                                                                                                
6:06:40 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stedman  MOVED  to  ADOPT  Conference  Committee                                                                    
Amendment 3.                                                                                                                    
                                                                                                                                
Co-Chair  Stedman   explained  that  the   appropriation  in                                                                    
Permanent  Fund  Item  8  would  transfer  $9.4  Billion  of                                                                    
realized gains  from the Earnings  Reserve to the  Corpus of                                                                    
the   Permanent  Fund.   The  adoption   of  the   amendment                                                                    
instructed  the APFC  to transfer  any assigned,  associated                                                                    
unrealized gains  in conjunction with the  funds transferred                                                                    
in Permanent Fund Item 8.  The amendment also clarified that                                                                    
the funds appropriated from the  Earnings Reserve Account to                                                                    
the Corpus  of the Permanent  Fund in Permanent Fund  Item 8                                                                    
would serve as inflation  proofing payments to the Permanent                                                                    
Fund Corpus for the next eight years.                                                                                           
                                                                                                                                
There being NO OBJECTION, Amendment 3 was ADOPTED.                                                                              
                                                                                                                                
^LANGUAGE ITEMS                                                                                                               
                                                                                                                                
6:07:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stedman  MOVED to  REOPEN the  identical language                                                                    
from sections 23(i) and 24(f) of  the house version of HB 39                                                                    
and sections 32(h) and 33(f) of  the Senate version of HB 39                                                                    
previously adopted by the committee.                                                                                            
                                                                                                                                
Co-Chair Foster OBJECTED for discussion.                                                                                        
                                                                                                                                
Co-Chair Foster asked Mr. Teal to explain the motion.                                                                           
                                                                                                                                
6:08:42 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
6:09:56 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster  invited  Co-Chair Stedman  to  provide  an                                                                    
explanation of the changes.                                                                                                     
                                                                                                                                
Vice-Chair  Stedman explained  that  the  motion would  take                                                                    
Community  Assistance Program  funding from  the Power  Cost                                                                    
Equalization (PCE) Fund to the General Fund.                                                                                    
                                                                                                                                
Senator Olson  asked what would  happen with the  deficit of                                                                    
the PCE Fund.                                                                                                                   
                                                                                                                                
Vice-Chair Stedman  responded that  rather than  funding the                                                                    
Community Assistance Program through  the PCE Fund, it would                                                                    
be funded through the General Fund.                                                                                             
                                                                                                                                
Senator  Olson clarified  that the  PCE Fund  would be  held                                                                    
harmless.                                                                                                                       
                                                                                                                                
Co-Chair Foster responded, "That was my understanding."                                                                         
                                                                                                                                
Senator Olson asked Mr. Teal to comment.                                                                                        
                                                                                                                                
Mr. Teal indicated it was a fund source change.                                                                                 
                                                                                                                                
Co-Chair Foster WITHDREW his OBJECTION.                                                                                         
                                                                                                                                
Representative  Tilton OBJECTED.  She  understood that  with                                                                    
the  fund source  change the  monies would  come out  of the                                                                    
General Fund rather  than the PCE Fund. She  did not believe                                                                    
it was  an appropriate  time with state's  fiscal challenges                                                                    
to  draw the  proposed  amount from  the  General Fund.  She                                                                    
thought the action would not be prudent.                                                                                        
                                                                                                                                
6:12:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
6:14:09 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster  reexplained  that the  motion  before  the                                                                    
committee was to reopen certain sections.                                                                                       
                                                                                                                                
Representative Tilton WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
6:14:36 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
6:15:55 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Stedman  MOVED to  ADOPT Item  4, Senate,  with a                                                                    
fund  source change  for  the  Community Assistance  Program                                                                    
from 1169 (PCE Endowment Fund) to 1004 (General Fund).                                                                          
                                                                                                                                
Representative Tilton  OBJECTED. She spoke to  the objection                                                                    
earlier  when   the  sections   were  being   reopened.  She                                                                    
reiterated that  it was  not an appropriate  time to  add to                                                                    
the general fund budget.                                                                                                        
                                                                                                                                
Senator  Olson  asked what  the  fund  transfer did  to  the                                                                    
surplus of the General Fund.                                                                                                    
                                                                                                                                
Vice-Chair Stedman responded, "It shrinks it."                                                                                  
                                                                                                                                
Senator Olson asked how much it shrunk it.                                                                                      
                                                                                                                                
Co-Chair Stedman replied, "Just a little bit."                                                                                  
                                                                                                                                
Representative Tilton MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: von Imhof, Wilson, Olson, Stedman, Foster                                                                             
OPPOSED: Tilton                                                                                                                 
                                                                                                                                
The MOTION  PASSED (5/1) [Note: House  (2/1); Senate (3/0)].                                                                    
Language Item 4, Senate was ADOPTED.                                                                                            
                                                                                                                                
6:18:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stedman  MOVED to ADOPT  Item 5,  Senate, amended                                                                    
to  read, "The  sum  of $454,000  is  appropriated from  the                                                                    
Power  Cost Equalization  Endowment Fund  (AS 42.45.070)  to                                                                    
the renewable energy grant fund (AS 42.45.045)."                                                                                
                                                                                                                                
Representative Tilton  OBJECTED. She asked to  hear from Mr.                                                                    
Teal about the effect of the transfer.                                                                                          
                                                                                                                                
Mr. Teal  explained that the original  language followed the                                                                    
law  with   a  cascading   appropriation.  The   Power  Cost                                                                    
Equalization  Endowment Fund  earned  money.  The first  $30                                                                    
million of  the earnings went  to the PCE Program.  If there                                                                    
was additional money remaining,  the first $30 million would                                                                    
go to  the Community  Assistance Program, and  any remaining                                                                    
dollars would go  to the Renewable Energy  Grant Fund. After                                                                    
taking action  on Item 4,  the Community  Assistance Program                                                                    
would no longer  use PCE Funds. Under the  cascade, it would                                                                    
have put up  to $25 million into the  Renewable Energy Grant                                                                    
Fund. There  was some question  about the  interpretation of                                                                    
the  law and,  the  intent was  that  the original  $454,000                                                                    
would  go to  the  grant fund  rather  than cascading  being                                                                    
applied.   Rather   than   trying    to   argue   over   the                                                                    
interpretation  of the  law, the  approach was  to have  the                                                                    
original $454,000 and ignore cascading.                                                                                         
                                                                                                                                
Senator  Olson  asked  about  the  net  effect  to  the  PCE                                                                    
Endowment Fund.                                                                                                                 
                                                                                                                                
Mr.  Teal  explained  that  the   PCE  Fund  would  have  an                                                                    
additional $30  million that it  would not have  had without                                                                    
the action taken on Item 4.                                                                                                     
                                                                                                                                
Senator Olson asked for further clarification.                                                                                  
                                                                                                                                
Mr.  Teal  restated that  the  additional  $30 million  that                                                                    
would have  gone to the  Community Assistance  Program would                                                                    
remain in the PCE Fund.                                                                                                         
                                                                                                                                
Representative Tilton WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There  being NO  OBJECTION, it  was so  ordered. Item  5 was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
Co-Chair  Foster  indicated  that   the  action  CLOSED  all                                                                    
conferencable items in the budget.                                                                                              
                                                                                                                                
6:21:37 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stedman   MOVED  to  give   Legislative  Finance                                                                    
Division and Legislative Legal Services  the ability to make                                                                    
technical   and  conforming   changes   to  the   Conference                                                                    
Committee Substitute for HB 39 and HB 40.                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Vice-Chair   Stedman  MOVED   to  REPORT   CCSSSHB  39   and                                                                    
CCSSSHB 40 from committee with individual recommendations.                                                                      
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
6:22:32 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
6:24:14 PM                                                                                                                    
RECONVENNED                                                                                                                     
                                                                                                                                
Chair  Foster thanked  the committee  and support  staff. He                                                                    
also  thanked   Vice-Chair  Stedman  and  his   staff,  Pete                                                                    
Ecklund. He also  extended his thanks to  Senator von Imhof,                                                                    
Senator Olson, Representative  Wilson, Representative Tilton                                                                    
and their  staff. He  thanked David  Teal, Amanda  Ryder and                                                                    
the  crew at  Legislative Finance.  He thanked  Linda Bruce,                                                                    
the budget  bill drafter at  Legislative Legal  Services and                                                                    
the  rest of  the staff  at Legislative  Legal Services  who                                                                    
worked  diligently  on the  budget  bills.  He continued  to                                                                    
thank  the  Finance  Committee secretaries  and  Legislative                                                                    
Information Office staff who made  the committee process run                                                                    
smoothly. Lastly, he thanked his  staff Brodie Anderson, and                                                                    
Ryan Johnston.                                                                                                                  
                                                                                                                                
Vice-Chair  Stedman MOVED  to ADJOURN  proudly with  roughly                                                                    
$10.5 billion heading to the  corpus of the Alaska Permanent                                                                    
Fund. He  announced that  it had been  a historic  night and                                                                    
the chairman  had been a  pleasure to work with.  He thanked                                                                    
the committee.                                                                                                                  
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CCSSSHB 39 was REPORTED out of committee with a "do pass"                                                                       
recommendation.                                                                                                                 
                                                                                                                                
CCSSSHB 40 was REPORTED out of committee with a "do pass"                                                                       
recommendation.                                                                                                                 
                                                                                                                                

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