Legislature(2011 - 2012)HOUSE FINANCE 519

02/09/2012 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 283 BUDGET: CAPITAL TELECONFERENCED
Heard & Held
*+ HB 285 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
*+ HB 307 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS TELECONFERENCED
Heard & Held
*+ HB 286 G.O. BONDS FOR PORTS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 307                                                                                                            
                                                                                                                                
     "An  Act  making supplemental  appropriations,  capital                                                                    
     appropriations,  and   other  appropriations;  amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
2:38:47 PM                                                                                                                    
                                                                                                                                
KAREN  REFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                    
OFFICE OF THE GOVERNOR, discussed  that she would provide an                                                                    
overview of  HB 307 and would  highlight supplemental budget                                                                    
items  on   a  spreadsheet  titled  "FY   2012  Supplemental                                                                    
Requests"(copy on file).                                                                                                        
                                                                                                                                
Ms. Rehfeld  discussed that the FY  12 proposed supplemental                                                                    
budget totaled $97,236,400. She  provided a breakdown of the                                                                    
total:                                                                                                                          
                                                                                                                                
     Unrestricted General Funds         $78,514,700                                                                             
                                                                                                                                
     Designated General Funds           ($2,350,600)                                                                            
                                                                                                                                
     Other Funds                        $4,810,000                                                                              
                                                                                                                                
     Federal Funds                      $16,271,300                                                                             
                                                                                                                                
Ms. Rehfeld  explained that within the  supplemental request                                                                    
agency operations  totaled $38.9 million; $30.4  million was                                                                    
general fund. The request included:                                                                                             
                                                                                                                                
     Fire Suppression                   $4.9 million                                                                            
                                                                                                                                
     Disaster Relief                    $3.0 million                                                                            
                                                                                                                                
     Formula - Adult Public Assistance  $2.6 million                                                                            
                                                                                                                                
Ms.  Rehfeld  relayed  that  the  capital  supplemental  for                                                                    
emergency repairs and projects that  were ready to go to bid                                                                    
during  the upcoming  summer  totaled  $20.4 million;  $10.1                                                                    
million was general fund. The  bill included two significant                                                                    
settlements: (1)  a $20 million settlement  was reached with                                                                    
the Department  of Law for  the Optional  Retirement Program                                                                    
$20.0  million;  and,  (2) an  $18  million  settlement  was                                                                    
reached  with   the  Department   of  Education   and  Early                                                                    
Development for the Moore case.  She explained that the bill                                                                    
had 18 sections.                                                                                                                
                                                                                                                                
2:42:34 PM                                                                                                                    
                                                                                                                                
Ms.  Rehfeld  pointed  to  items  4  through  7  related  to                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
(DCCED)  (page  1 of  the  spreadsheet).  She detailed  that                                                                    
there had  been challenges  with the  Corporations, Business                                                                    
and  Professional Licensing  (CBPL)  Division fee  structure                                                                    
and how  it had  charged various  programs for  indirect and                                                                    
other activities.  The division had been  working to capture                                                                    
what  some of  the problems  had been  for the  past several                                                                    
years.  Item  6 was  the  largest  item  and related  to  an                                                                    
adjustment for licensing fees:                                                                                                  
                                                                                                                                
    Corporations, Business and Professional Licensing:                                                                          
                                                                                                                                
     Adjustment  for Licensing  Fees  -  Fund source  change                                                                    
     from    professional   licensing    receipts   (receipt                                                                    
     supported services)  to the  general fund  to reimburse                                                                    
     the   professions   for    historical   indirect   cost                                                                    
     overpayments  that were  associated  with the  Business                                                                    
     License and  Corporations programs. This is  a one-time                                                                    
     fund change.                                                                                                               
                                                                                                                                
     General Fund Receipt Supported Services $0.0                                                                               
                                                                                                                                
Ms. Rehfeld  expounded that the professional  licensing fees                                                                    
were  supposed  to  be   self-supporting;  however,  as  the                                                                    
charges were  incorrectly tagged to certain  boards the fees                                                                    
had gone  up. The  one-time change would  allow the  fees to                                                                    
carry  forward  into the  upcoming  year,  which would  help                                                                    
smooth  cost  increases over  time.  Other  CBPL items  were                                                                    
related  to indirect  charges  associated  with support  for                                                                    
professional  licensing  boards.  She  believed  legislative                                                                    
subcommittees would  spend a substantial  amount of  time on                                                                    
the issues.                                                                                                                     
                                                                                                                                
Co-Chair Thomas  pointed to  page 1, item  2 related  to the                                                                    
Public  Defender  Agency  (PDA)   under  the  Department  of                                                                    
Administration. He pointed to  the backup materials (Section                                                                    
1, page  2) and  asked about  the $125,000  for a  new lease                                                                    
remodel for  Kotzebue and an additional  $150,000 for "other                                                                    
anticipated  but  unbudgeted  maintenance."  He  opined  the                                                                    
items should have been in the FY 12 budget.                                                                                     
                                                                                                                                
Ms. Rehfeld  agreed. She  explained that  the administration                                                                    
had  worked hard  in the  past  several years  to avoid  not                                                                    
budgeting and  using the supplemental  to fall back  on. She                                                                    
detailed that the budgets for  the Office of Public Advocacy                                                                    
(OPA) and the PDA had  been among the most difficult budgets                                                                    
because the administration had not  been able to address the                                                                    
increasing caseloads in a reasonable  way. Work was underway                                                                    
to determine a better way to  budget for the two agencies in                                                                    
the future.                                                                                                                     
                                                                                                                                
Co-Chair  Thomas   wondered  whether  the  $45,000   for  an                                                                    
unbudgeted computer upgrade was  for more than one computer.                                                                    
He repeated his concern about unbudgeted items.                                                                                 
                                                                                                                                
2:48:03 PM                                                                                                                    
                                                                                                                                
Ms.  Rehfeld replied  that the  PDA item  would be  detailed                                                                    
further during the subcommittee process.                                                                                        
                                                                                                                                
Representative  Gara asked  about  a  $244,000 increase  for                                                                    
support  for CBPL  boards and  commission  members (page  1,                                                                    
item 4 on  the spreadsheet). He wondered why  the amount had                                                                    
been increased by 75 to 80 percent from the prior year.                                                                         
                                                                                                                                
Ms. Rehfeld  replied that the professional  licensing boards                                                                    
were  supposed to  be self-sufficient;  however, because  of                                                                    
some business  accounting challenges the state  had not been                                                                    
able to  track expenses  to the  right boards.  She believed                                                                    
that the  bill and  the FY  13 budget  tried to  correct the                                                                    
issue through the fees paid by the boards.                                                                                      
                                                                                                                                
Representative Gara remarked that it  was fine if the amount                                                                    
reflected reimbursement  to boards that had  put the funding                                                                    
in; however, he was concerned if the money was additional.                                                                      
                                                                                                                                
Representative Joule  referred to page 1,  item 9 associated                                                                    
with  Department of  Corrections (DOC)  community jails.  He                                                                    
wondered  how the  $600,000 was  broken out  between the  15                                                                    
community  jails.  The  administration had  brought  forward                                                                    
$190,000  for the  Kotzebue community  jail the  prior year;                                                                    
money had  been moved  around within the  line item  and the                                                                    
Kotzebue jail  had been  shorted by  approximately $125,000.                                                                    
He asked whether the item included funds to cover the jail.                                                                     
                                                                                                                                
Ms. Rehfeld  believed there  was a  specific line  item that                                                                    
covered  the  Kotzebue  jail.  She   relayed  that  DOC  had                                                                    
scheduled  a meeting  with the  jail  to discuss  reopening;                                                                    
some of the  funds in item 9 would help  with the reopening.                                                                    
The  item would  be  considered for  the  amended budget  as                                                                    
well. Part of the issue  related to how community jails were                                                                    
funded;  the  department  was  working to  come  up  with  a                                                                    
blended  per  bed rate  to  allocate  funding to  avoid  the                                                                    
situation that had occurred when the jail had closed.                                                                           
                                                                                                                                
2:53:42 PM                                                                                                                    
                                                                                                                                
Vice-chair  Fairclough communicated  that  according to  the                                                                    
backup  the  Kotzebue  jail  was   scheduled  to  reopen  on                                                                    
February  1, 2012.  She wondered  whether  the facility  had                                                                    
reopened. Ms. Rehfeld replied in  the negative. She restated                                                                    
that  DOC was  scheduled to  meet with  the jail  to discuss                                                                    
reopening.                                                                                                                      
                                                                                                                                
Vice-chair  Fairclough asked  about  a  $75,000 budget  item                                                                    
related to  dispatching services  for Kotzebue.  Ms. Rehfeld                                                                    
replied  that the  item  was for  the  Department of  Public                                                                    
Safety (DPS) and was not related to the Kotzebue jail.                                                                          
                                                                                                                                
Vice-chair  Fairclough observed  that the  dispatch services                                                                    
had been  paid for in  matching funds previously,  but would                                                                    
be charged to the state under the proposed budget.                                                                              
                                                                                                                                
Ms.  Rehfeld informed  the committee  that there  was a  DPS                                                                    
request  for transportation  during  the  time the  Kotzebue                                                                    
jail was closed.                                                                                                                
                                                                                                                                
Ms. Rehfeld  pointed to page  2, item 10 for  the Department                                                                    
of Education and Early Development (DEED):                                                                                      
                                                                                                                                
     Student and School Achievement:                                                                                            
                                                                                                                                
     Comprehensive    System    of    Student    Assessments                                                                    
     Contractual  Costs: this  additional funding  is needed                                                                    
     to   accommodate  the   negotiated  contract   for  the                                                                    
     Comprehensive  System of  Student  Assessments. The  FY                                                                    
     2013  Governor's budget  includes an  additional $750.0                                                                    
     for modified contract terms.                                                                                               
                                                                                                                                
     General Fund $1,000.0                                                                                                      
                                                                                                                                
Ms. Rehfeld elaborated that an  increase in the FY 13 budget                                                                    
had been included for standards based assessments.                                                                              
                                                                                                                                
Representative  Wilson believed  that funding  had not  been                                                                    
included for  the standards-based  assessments for  a couple                                                                    
of  years and  that  the item  made up  for  the error.  Ms.                                                                    
Rehfeld  believed  the  funding was  for  existing  contract                                                                    
increases. She deferred the question to DEED for follow up.                                                                     
                                                                                                                                
Representative  Wilson  had  received a  different  response                                                                    
from DEED. Ms. Rehfeld replied  that they would follow up on                                                                    
the question later.                                                                                                             
                                                                                                                                
2:56:23 PM                                                                                                                    
                                                                                                                                
Ms.  Rehfeld highlighted  Department  of  Health and  Social                                                                    
Services (DHSS) items 14 through 16 on page 2:                                                                                  
                                                                                                                                
     Item 14                                                                                                                  
     Adult Public Assistance:                                                                                                   
                                                                                                                                
     Adult  Public Assistance  Caseload  Growth -  Increased                                                                    
     program  enrollment, particularly  in the  disabled and                                                                    
     blind category  - tied  to the  dramatic growth  in the                                                                    
     Alaska  senior  population.  A  $6,075.0  increment  is                                                                    
     included in the FY 2013 Governor's budget.                                                                                 
                                                                                                                                
     General Fund $2,600.0                                                                                                      
                                                                                                                                
     Item 15                                                                                                                  
     Energy Assistance Program:                                                                                                 
                                                                                                                                
     Low Income Home Energy  Assistance Program (LIHEAP) and                                                                    
     Alaska Affordable  Heating Program for the  state based                                                                    
     on  projected needs.  The impact  of this  supplemental                                                                    
     request  is  being  considered for  a  FY  2013  budget                                                                    
     amendment.                                                                                                                 
                                                                                                                                
     General Fund $928.7                                                                                                        
                                                                                                                                
     Item 16                                                                                                                  
     Energy Assistance Program:                                                                                                 
                                                                                                                                
     Low Income Home Energy  Assistance Program (LIHEAP) and                                                                    
     Alaska Affordable  Heating Program for Tribes  based on                                                                    
     projected  needs.  The   impact  of  this  supplemental                                                                    
     request  is  being  considered   for  a  FY2013  budget                                                                    
     amendment.                                                                                                                 
                                                                                                                                
     General Fund $1,691.6                                                                                                      
                                                                                                                                
Representative  Edgmon asked  whether the  public assistance                                                                    
item  had been  included to  meet increased  caseload demand                                                                    
and expected federal shortfalls.                                                                                                
                                                                                                                                
Ms.  Rehfeld replied  that item  14 was  based on  increased                                                                    
demand.  There  was  also   contingency  language  that  was                                                                    
dependent on  the amount  of federal  funding that  would be                                                                    
provided. The  item was  designed to  fill the  shortfall in                                                                    
the projection for the remainder of the fiscal year. She                                                                        
expected to receive updated numbers in the future.                                                                              
                                                                                                                                
Ms. Rehfeld pointed to page 3, item 23 related to the                                                                           
Department of Law:                                                                                                              
                                                                                                                                
     Oil, Gas and Mining:                                                                                                       
                                                                                                                                
     Oil  and Gas  Outside  Counsel  - Increased  litigation                                                                    
     costs for  oil and gas outside  counsel attributable to                                                                    
     three types of cases:  tariff proceedings; Trans Alaska                                                                    
     Pipeline  System (TAPS)  property tax  proceedings; and                                                                    
     oil and  gas royalty  issues. An increment  of $6,150.0                                                                    
     is  included in  the  FY2013 Governor's  budget and  is                                                                    
     based on anticipated caseload.                                                                                             
                                                                                                                                
     General Fund $3,116.0                                                                                                      
                                                                                                                                
Ms. Rehfeld discussed item 25 for the Department of                                                                             
Military and Veterans Affairs (page 3):                                                                                         
                                                                                                                                
     Office of the Commissioner:                                                                                                
                                                                                                                                
     Base  Realignment  and   Closure  Commission  Impact  -                                                                    
     Department  of  Defense   Secretary  Leon  Panetta  has                                                                    
     announced that the  plan to cut nearly  $500 billion in                                                                    
     the  next  10  years  from the  Department  of  Defense                                                                    
     budget   will  impact   all  50   states  and   a  Base                                                                    
     Realignment  and  Closure  Commission  (BRAC)  will  be                                                                    
     requested  of Congress  to address  facility reductions                                                                    
     as soon  as possible.  The U.S. military's  presence in                                                                    
     Alaska  represents  10%  of the  state's  economy.  The                                                                    
     Alaska  Military  Force  Advocacy  and  Structure  Team                                                                    
     (AMFAST)  recommends  the  State   of  Alaska  hire  an                                                                    
     experienced consulting group  to address ideas proposed                                                                    
     by  the  next  BRAC.  This  request  will  promote  and                                                                    
     sustain Alaska's current  military facilities and force                                                                    
     structure.  The   impact  of  this  request   is  being                                                                    
     considered for a FY2013 budget amendment.                                                                                  
                                                                                                                                
     General Fund $300.0                                                                                                        
                                                                                                                                
                                                                                                                                
Co-Chair  Thomas remarked  that a  resolution passed  by the                                                                    
Senate discouraging the closure  of military bases in Alaska                                                                    
had  left out  Coast  Guard bases.  He  stressed that  Coast                                                                    
Guard  bases  were very  important  to  rural and  Southeast                                                                    
Alaska and would be included in the House resolution.                                                                           
                                                                                                                                
3:00:17 PM                                                                                                                    
                                                                                                                                
Representative  Gara  referred  to the  $3  million  outside                                                                    
counsel appropriation (page  3, item 23). He  opined that it                                                                    
was  less expensive  to hire  in-house counsel  for research                                                                    
memos,  briefings,  and other.  He  wondered  why the  state                                                                    
should  pay more  money for  outside counsel  when the  work                                                                    
could be done in-state.                                                                                                         
                                                                                                                                
Ms.  Rehfeld replied  that  there  were excellent  attorneys                                                                    
doing  great work  in the  areas that  needed assistance  on                                                                    
some  of the  important  larger ongoing  cases. She  relayed                                                                    
that it was  possible for some of  the work to be  done by a                                                                    
line  attorney  if  the  state   was  willing  to  bring  on                                                                    
additional  employees; however,  that was  not the  approach                                                                    
that  had currently  been taken.  The item  had been  on the                                                                    
administrations  list to  include  in  the operating  budget                                                                    
each year, but a supplemental request was usually required.                                                                     
                                                                                                                                
Representative Gara  noted that he  had worked on  the Exxon                                                                    
Valdez  oil  spill case  and  the  state had  hired  outside                                                                    
counsel at that  time as well. He  explained outside counsel                                                                    
had  done  work that  should  have  been done  in-house.  He                                                                    
believed that  administrations had  used outside  counsel to                                                                    
keep the  state employee  count down,  but it  actually cost                                                                    
the state more money.                                                                                                           
                                                                                                                                
Co-Chair Thomas  commented that  sometimes the  state needed                                                                    
to  hire former  state  attorneys who  had done  significant                                                                    
work on specific cases in order to gain their expertise.                                                                        
                                                                                                                                
3:03:55 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld flagged Department of  Natural Resources item 35                                                                    
(page 4):                                                                                                                       
                                                                                                                                
     Fire Suppression Activity:                                                                                                 
                                                                                                                                
     FY2012 Fire Suppression Activity - This is a                                                                               
     preliminary estimate of supplemental needs for spring                                                                      
     firefighting and  costs of  initial attack  of wildland                                                                    
     fires through June 30, 2012.                                                                                               
                                                                                                                                
     General Fund $4,892.5                                                                                                      
                                                                                                                                
Ms. Rehfeld  directed attention to  page 5, item 38  for DPS                                                                    
Alaska State Trooper detachments:                                                                                               
                                                                                                                                
     Replace Federal Pass through  Funds from Alaska Highway                                                                    
     Safety  Office -  The Alaska  Bureau of  Highway Patrol                                                                    
     will  no  longer  receive  federal  funds  for  non-DUI                                                                    
     related  traffic  enforcement.  In  order  to  maintain                                                                    
     traffic   enforcement  to   include  non-DUI   specific                                                                    
     activity,  such  as  impaired driving,  youth  drivers,                                                                    
     aggressive   driving  and   speeding,  and   seat  belt                                                                    
     enforcement, supplemental  funding is necessary  as the                                                                    
     current  budget cannot  absorb these  costs. Additional                                                                    
     federal  funding reductions  are  anticipated for  DUI-                                                                    
     related traffic  enforcement starting  in FY  2014. The                                                                    
     impact   of   this   supplemental  request   is   being                                                                    
     considered for a FY 2013 budget amendment.                                                                                 
                                                                                                                                
     General Fund $1,900.0                                                                                                      
                                                                                                                                
Ms. Rehfeld expounded that  the Department of Transportation                                                                    
and  Public  Facilities  (DOT)  would  continue  to  receive                                                                    
federal  highway  safety  funds,  but the  amount  of  funds                                                                    
related to driving under the  influence (DUI) would be less.                                                                    
She noted  that the  issue would  continue to  be monitored,                                                                    
given  the importance  of ongoing  DUI  and non-DUI  related                                                                    
enforcement on the highway safety corridors.                                                                                    
                                                                                                                                
Representative Doogan  surmised that the  federal government                                                                    
had discontinued funds and the  state had become responsible                                                                    
for  funding  items with  general  fund  money. Ms.  Rehfeld                                                                    
responded in  the affirmative. She clarified  that continued                                                                    
work  would  not  be funded  through  the  specific  highway                                                                    
safety grant.                                                                                                                   
                                                                                                                                
Representative  Doogan wondered  whether  an evaluation  had                                                                    
been  made   to  determine  whether  the   items  should  be                                                                    
continued or  lapsed. Ms. Rehfeld replied  that the governor                                                                    
considered  the issues  and had  brought forward  items that                                                                    
warranted ongoing work.                                                                                                         
                                                                                                                                
3:07:52 PM                                                                                                                    
                                                                                                                                
Representative Joule  pointed to  item 37 on  page 5  in the                                                                    
amount   of   $106,000   for    DPS   jails   and   prisoner                                                                    
transportation. He  did not know  what time period  had been                                                                    
used or whether there had  been earlier expenses. He pointed                                                                    
to a  $75,000 expenditure  (item 36)  and wondered  how much                                                                    
the items would  end up costing the state;  he thought costs                                                                    
could  have  been  saved.   He  discussed  the  difficulties                                                                    
related  to transportation  of prisoners  from rural  areas,                                                                    
many of which  did not have holding  facilities. He believed                                                                    
the state  was beginning to realize  that it had had  a good                                                                    
deal.  He  hoped  that  a  deal  between  Kotzebue  and  the                                                                    
administration could be settled.                                                                                                
                                                                                                                                
Ms. Rehfeld  agreed. She understood  that progress  had been                                                                    
made and the administration hoped for a positive outcome.                                                                       
                                                                                                                                
Co-Chair  Thomas remarked  that  the seatbelt  law had  been                                                                    
implemented  because the  federal government  would pay  for                                                                    
the  enforcement.  He  wondered  whether the  law  would  be                                                                    
repealed if the federal funding  was taken away. Ms. Rehfeld                                                                    
answered   that  item   38  did   not  relate   to  seatbelt                                                                    
enforcement,  which  was  attached to  a  different  federal                                                                    
highway safety funding stream.                                                                                                  
                                                                                                                                
Vice-chair Fairclough referred to  bad weather conditions in                                                                    
Eagle  River  and  Anchorage  that   had  resulted  in  road                                                                    
closures   and  stranded   drivers.  She   wondered  whether                                                                    
substantial funds had been included  for highway safety. She                                                                    
was concerned that residents would  have been unreachable in                                                                    
emergency situations.  She understood  that DOT  was working                                                                    
to  stay   on  top  of   the  issue.  She  pointed   to  two                                                                    
appropriations  for $100,000  apiece  for  sanding and  snow                                                                    
removal and wondered whether the amount was enough.                                                                             
                                                                                                                                
Ms. Rehfeld responded  that DOT would do what  was needed to                                                                    
protect  the safety  of citizens.  She expected  the numbers                                                                    
would  be refined  during session  to  account for  disaster                                                                    
relief.                                                                                                                         
                                                                                                                                
3:14:00 PM                                                                                                                    
                                                                                                                                
Representative  Neuman  was  concerned  that  the  long-term                                                                    
programs (e.g. item 38) that  had been funded by the federal                                                                    
government  in  the  past  almost  became  embedded  in  the                                                                    
operating budget.  He wondered  whether there  was a  way to                                                                    
identify federal funds that were  not coming or if the state                                                                    
was backfilling them with general funds.                                                                                        
                                                                                                                                
Ms. Rehfeld replied that the  administration worked with the                                                                    
departments  to identify  what  they  knew looking  forward;                                                                    
typically the reductions and timing  were not known very far                                                                    
in advance. She explained that  the co-chair had requested a                                                                    
look-back  on  federal funds  that  could  be identified  as                                                                    
going  away. The  issue also  involved funds  that had  gone                                                                    
directly  to  institutions, organizations,  or  communities;                                                                    
there would be  pressure for the state to look  at the items                                                                    
to determine  whether it should  continue them.  She pointed                                                                    
to  the  DPS  DUI  enforcement  federal  grant  change  that                                                                    
specified allowable  and unallowable costs as  an example of                                                                    
an issue the state would need to address.                                                                                       
                                                                                                                                
Representative Neuman  was interested in a  ten-year forward                                                                    
plan that  showed which  federal funds  the state  would not                                                                    
receive.  He believed  there were  many important  non-state                                                                    
items  that  the state  could  become  overloaded with  when                                                                    
funding was lost.                                                                                                               
                                                                                                                                
Ms. Rehfeld moved to DOT item 50 on page 6:                                                                                     
                                                                                                                                
     AIA Field and Equipment Maintenance:                                                                                       
                                                                                                                                
     Purchase De-icing  Chemicals - In FY2011,  the cost per                                                                    
     ton of  urea increased  from $342 per  ton to  $719 per                                                                    
     ton.  Also, the  airport has  commissioned a  third new                                                                    
     tank  for  potassium  acetate   in  order  to  mitigate                                                                    
     continuing supply  shortages. An increment  of $1,634.5                                                                    
     has been included in FY 2013 Governor's budget.                                                                            
                                                                                                                                
     International Airport Revenue Fund $1,634.5                                                                                
                                                                                                                                
Ms.  Rehfeld  looked at  item  52,  page  6 related  to  the                                                                    
University of Alaska:                                                                                                           
                                                                                                                                
     Anchorage Campus:                                                                                                          
                                                                                                                                
     Federal Receipt Authority for  Pell Grants - Additional                                                                    
     federal receipt authority is  needed to accommodate the                                                                    
     increases  in Pell  grant activity.  A related  FY 2013                                                                    
     budget amendment is also being considered.                                                                                 
                                                                                                                                
     Federal Receipts $5,000.0                                                                                                  
                                                                                                                                
Ms. Rehfeld directed attention to  capital items; there were                                                                    
several items that  were emergency in nature or  could go to                                                                    
bid during the upcoming summer  if the funding authority was                                                                    
moved   up.   She    highlighted   a   DOC   Yukon-Kuskokwim                                                                    
Correctional  Center  Dorm  Renovation  Project  for  Bethel                                                                    
(item 55, page 7):                                                                                                              
                                                                                                                                
     This project  is necessary  to replace  capital funding                                                                    
     that was  redirected from other projects  to address an                                                                    
     emergency   with    overcrowding   at   Yukon-Kuskokwim                                                                    
     Correctional  Center (YKCC).  The YKCC  Dorm Renovation                                                                    
     Project  adds  28   additional  bunks,  increasing  the                                                                    
     offender housing capacity to 193.                                                                                          
                                                                                                                                
     General Fund $1,284.5                                                                                                      
                                                                                                                                
Ms.   Rehfeld  furthered   that   DOC   had  used   deferred                                                                    
maintenance funds  that had been  slated for  other projects                                                                    
in  order to  complete the  work; therefore,  item 55  would                                                                    
provide the  department with  replacement funds.  She looked                                                                    
at item  57 on page 7  that funded $1.1 million  for a Kenai                                                                    
River  parcel  purchase  from the  Exxon  Valdez  Oil  Spill                                                                    
Settlement  (EVOSS)  trustee  council.  The  purchase  would                                                                    
provide public access to the river.                                                                                             
                                                                                                                                
Co-Chair  Thomas thought  EVOSS funds  were only  designated                                                                    
for oil  damaged properties. Ms. Rehfeld  explained that the                                                                    
EVOSS council had recommended the  fund source for the Kenai                                                                    
land purchase.  She could not  speak to the  requirements of                                                                    
the EVOSS funding.                                                                                                              
                                                                                                                                
Co-Chair  Thomas   thought  follow   up  on  the   item  was                                                                    
necessary.                                                                                                                      
                                                                                                                                
Ms. Rehfeld pointed to DOT items 59 and 60 on page 7:                                                                           
                                                                                                                                
     Item 59                                                                                                                  
     Alaska Marine  Highway System - Cordova  Dock Emergency                                                                    
     Repairs  - The  existing  float system  of the  Cordova                                                                    
    Dock needed emergency repairs in the fall of 2011.                                                                          
                                                                                                                                
     General Fund $1,200.0                                                                                                      
                                                                                                                                
     Item 60                                                                                                                  
     Alaska  Marine Highway  System  -  Vessel and  Terminal                                                                    
     Overhaul  and  Rehabilitation  -  Vessel  and  terminal                                                                    
     overhaul and  rehabilitation is primarily used  to meet                                                                    
     and  maintain United  States  Coast Guard  requirements                                                                    
     and obtain  Certificates of Inspection  (COI) necessary                                                                    
     to  operate the  vessels. Total  spending this  year is                                                                    
     slightly  higher than  previous years  due to  the one-                                                                    
     time  $1.2M  propeller  shaft  strut  replacement  work                                                                    
     required by the  Malaspina in order to  clear a pending                                                                    
     CG-835 No-Sail order which was about to expire.                                                                            
                                                                                                                                
     General Fund $5,455.0                                                                                                      
                                                                                                                                
Ms.  Rehfeld  relayed that  in  the  past several  years  $7                                                                    
million  to $8  million had  been included  annually in  the                                                                    
budget for overhaul work on state ferries.                                                                                      
                                                                                                                                
3:20:59 PM                                                                                                                    
                                                                                                                                
Vice-chair  Fairclough  wondered  which project  had  excess                                                                    
funds that  had been  redirected to  fund the  Bethel Yukon-                                                                    
Kuskokwim correctional facility (item 55, page 7).                                                                              
                                                                                                                                
Ms. Rehfeld replied that the  deferred maintenance money had                                                                    
been  diverted  from  other projects  in  order  to  address                                                                    
immediate   emergency  overcrowding   in  the   correctional                                                                    
facility;  the  funding  would allow  DOC  to  complete  the                                                                    
projects that had been shorted funds.                                                                                           
                                                                                                                                
Vice-chair  Fairclough  asked  why the  Kenai  River  parcel                                                                    
purchase  (item 57)  had  not  been included  in  the FY  13                                                                    
capital budget.                                                                                                                 
                                                                                                                                
Ms. Rehfeld answered that there  were a number of items that                                                                    
Department of Natural Resources  (DNR) needed to complete in                                                                    
order to purchase the property  and prepare the boat launch;                                                                    
DNR felt that more work could  be done on the boat launch if                                                                    
the funds were allocated sooner.                                                                                                
                                                                                                                                
Ms. Rehfeld explained that several  items on page 8 had been                                                                    
moved to the supplemental budget  in order to allow projects                                                                    
to go out to bid  during the current spring. She highlighted                                                                    
several capital items:                                                                                                          
                                                                                                                                
     Item 68                                                                                                                  
     Nome - Runway 10-28  Rehabilitation - This project will                                                                    
     rehabilitate, repave  and repaint  the settled  area on                                                                    
     the  main runway  of the  Nome Airport.  Repair of  the                                                                    
     settled  area   has  become  a  high   priority  safety                                                                    
     concern.  The project  will advertise  for construction                                                                    
     bids in  April 2012 with  a schedule for  completion by                                                                    
     fall of 2012.                                                                                                              
                                                                                                                                
     Federal Receipts $3,900.0                                                                                                  
                                                                                                                                
     Item 69                                                                                                                  
     Unalaska   -   Runway    Safety   Area   and   Pavement                                                                    
     Rehabilitation -  This project will construct  a runway                                                                    
     safety  area, runway  extension,  airport lighting  and                                                                    
     drainage   improvements,  other   minor  repairs,   and                                                                    
     address  poor  pavement   conditions  at  the  Unalaska                                                                    
     Airport. In order to  utilize the upcoming construction                                                                    
     season  and  not  have  to   wait  another  12  months,                                                                    
     authorization is needed before July 1.                                                                                     
                                                                                                                                
     Federal Receipts $3,000.0                                                                                                  
                                                                                                                                
     Item 71                                                                                                                  
     Anchorage  Metropolitan  Area Transportation  Solutions                                                                    
     (AMATS)  - Glenn  Highway Trail  Rehabilitation -  This                                                                    
     project  will  resurface  the  existing  Glenn  Highway                                                                    
     trail between  Muldoon Road  and North  Birchwood Loop,                                                                    
     construct  a   wayside  at  milepost  (MP)   8.6,  pave                                                                    
     existing parking  area at the westbound  weigh station,                                                                    
     replace the existing pedestrian  bridge over Ship Creek                                                                    
     (bridge  #1402),  construct  minor realignment  of  the                                                                    
     pathway  at the  Muldoon Interchange,  and upgrade  any                                                                    
     curb  ramps not  meeting  ADA guidelines.  In order  to                                                                    
     utilize the  upcoming construction season and  not have                                                                    
     to  wait another  12  months,  authorization is  needed                                                                    
     before July 1.                                                                                                             
                                                                                                                                
     Federal Receipts $2,340.0                                                                                                  
                                                                                                                                
Ms.  Rehfeld  directed attention  to  page  9 that  included                                                                    
Department  of  Law  (DOL) judgments  and  settlements.  She                                                                    
provided  detail on  the Moore  settlement  that focused  on                                                                    
helping low  performing districts  to achieve  success (item                                                                    
79). The $18  million would be used over  a five-year period                                                                    
and  a  committee would  be  appointed  (that would  include                                                                    
DEED) to design how the funds would be used.                                                                                    
                                                                                                                                
Co-Chair  Thomas wondered  whether funds  for non-performing                                                                    
schools could  be removed from  the operating  budget, given                                                                    
the $18 million allocation in the supplemental budget.                                                                          
                                                                                                                                
Ms. Rehfeld replied that the  funds in the supplemental were                                                                    
specific to  a legal  settlement. She deferred  the question                                                                    
to DOL for follow up.                                                                                                           
                                                                                                                                
3:25:10 PM                                                                                                                    
                                                                                                                                
Representative   Wilson   relayed   that   they   [Education                                                                    
Subcommittee]  were meeting  with  the  attorney general  to                                                                    
determine  what  the  state  could and  could  not  do.  She                                                                    
wondered why  the Moore settlement funds  had been allocated                                                                    
all  at once  if  they were  to be  spent  over a  five-year                                                                    
period.                                                                                                                         
                                                                                                                                
Ms. Rehfeld replied that the  decision may have been part of                                                                    
the settlement negotiation.                                                                                                     
                                                                                                                                
Representative Wilson would follow up on the issue.                                                                             
                                                                                                                                
Ms. Rehfeld referred  to page 9, item 80.  She detailed that                                                                    
the backup  materials included a complete  list of judgments                                                                    
and  claims. Item  80 was  the  largest and  related to  the                                                                    
optional retirement  system for university professors  and a                                                                    
change  in the  Teachers' Retirement  System (TRS)  employer                                                                    
contribution rate:                                                                                                              
                                                                                                                                
     Judgments  and   Settlements  -  Actual   judgment  and                                                                    
     settlement costs received as of January 30, 2012                                                                           
                                                                                                                                
     General Fund $20,770.8                                                                                                     
                                                                                                                                
Ms. Rehfeld discussed the  supplemental request for disaster                                                                    
relief; it was  hard to predict the level  of funding needed                                                                    
(item 87). The  item factored in expectations  based on fall                                                                    
and winter storms and potential spring flooding and other:                                                                      
                                                                                                                                
     Supplemental Disaster  Funding - Current  disasters are                                                                    
     expected to exhaust the available  general funds in the                                                                    
     Disaster Relief  Fund. In addition  to fall  and winter                                                                    
     storms,  traditionally there  are  springs floods  that                                                                    
     have been  eligible for expenditures from  the Disaster                                                                    
     Relief Fund.  The impact  of this  supplemental request                                                                    
    is being considered for a FY2013 budget amendment.                                                                          
                                                                                                                                
     General Fund $3,000.0                                                                                                      
                                                                                                                                
3:27:32 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  pointed to ratifications  on page 10.  Items 97                                                                    
through 99 reflected precise dollar  amounts; funds for fire                                                                    
suppression activity (item 97) were $36,388.                                                                                    
                                                                                                                                
Representative Costello looked at a  DNR item related to the                                                                    
gas pipeline  project (page 9,  item 85) that  included zero                                                                    
funding.  She asked  for  an explanation  on  the item  that                                                                    
appeared to be a statute related change.                                                                                        
                                                                                                                                
Ms.  Rehfeld  explained that  the  item  related to  ongoing                                                                    
Alaska Gasline  Inducement Act (AGIA) efforts  under DNR and                                                                    
extended  the lapse  date on  a previous  appropriation. She                                                                    
would follow up with the estimated amount.                                                                                      
                                                                                                                                
Representative  Neuman wondered  whether the  item 85  was a                                                                    
reappropriation  of   a  prior  supplemental.   Ms.  Rehfeld                                                                    
responded  that   some  of  the  AGIA   appropriations  were                                                                    
classified as  a "multi-year operating";  the administration                                                                    
followed up to  provide an estimate of  available funds that                                                                    
would allow  items to  continue into  the next  fiscal year.                                                                    
She would follow up with more detail.                                                                                           
                                                                                                                                
Vice-chair Fairclough  commended DOL for  resolving multiple                                                                    
legal cases that had been ongoing.                                                                                              
                                                                                                                                

Document Name Date/Time Subjects
HB 307-Supplemental_Spreadsheet_1-31-12.pdf HFIN 2/9/2012 1:30:00 PM
HB 307
HB286-DOR-TRS-NEW FN 01-31-12.pdf HFIN 2/9/2012 1:30:00 PM
HB 286
HB 286 Testimony.pdf HFIN 2/9/2012 1:30:00 PM
HB 286
HB 283-Response to HFC Questions Capital Budget letter dated 2.21.2012.pdf HFIN 2/9/2012 1:30:00 PM
HB 283