Legislature(2017 - 2018)ADAMS ROOM 519

04/30/2018 01:30 PM FINANCE

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Audio Topic
01:39:29 PM Start
01:40:37 PM HB284
03:09:25 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
+= HB 284 APPROP: CAPITAL BUDGET TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 30, 2018                                                                                            
                         1:39 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:39:29 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster called the House Finance Committee meeting                                                                      
to order at 1:39 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Mark Neuman (alternate)                                                                                          
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Steve Thompson                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Paul  Labolle,   Staff,  Representative  Neal   Foster;  Rob                                                                    
Carpenter,  Analyst,   Legislative  Finance   Division;  Pat                                                                    
Pitney, Director,  Office of  Management and  Budget, Office                                                                    
of  the Governor;  Shawnda O'Brien,  Assistant Commissioner,                                                                    
Finance  Management  Services.   Department  of  Health  and                                                                    
Social Services.                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 284    APPROP: CAPITAL BUDGET                                                                                                
                                                                                                                                
          HB 284 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
                                                                                                                                
HOUSE BILL NO. 284                                                                                                            
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,       supplemental      appropriations,                                                                    
     reappropriations,  and   other  appropriations;  making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:40:37 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:41:02 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Seaton  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute  for  HB  284, Work  Draft  30-GH2565\D  (Martin,                                                                    
4/25/18).                                                                                                                       
                                                                                                                                
Representative   Wilson    and   Representative   Guttenberg                                                                    
OBJECTED for discussion.                                                                                                        
                                                                                                                                
PAUL LABOLLE,  STAFF, REPRESENTATIVE NEAL  FOSTER, explained                                                                    
the  changes in  the work  draft.  He shared  that the  work                                                                    
draft  mirrored the  recent changes  by  the Senate  Finance                                                                    
Committee [to  SB 142, the  Senate's version of  the capital                                                                    
budget]. He  began with Section  1, pages 2 through  10 that                                                                    
included the  agency capital appropriations proposed  by the                                                                    
governor  and amended  by the  Senate Finance  Committee. He                                                                    
spoke to changes and highlights  in the section beginning on                                                                    
page 2, line  19 pertaining to bulk fuel  upgrades. The bill                                                                    
used nearly $5 million  in Alaska Industrial Development and                                                                    
Export Authority  (AIDEA) dividends to  replace undesignated                                                                    
general funds (UGF).                                                                                                            
                                                                                                                                
Representative  Wilson  remarked  that the  original  budget                                                                    
distinguished  between other  and federal  funds. She  asked                                                                    
why the current version did not.                                                                                                
                                                                                                                                
Mr.  Labolle answered  that  it  was a  change  made by  the                                                                    
Senate Finance  Committee that  moved an  appropriation from                                                                    
the contingency budget to the capital budget.                                                                                   
                                                                                                                                
Representative Wilson  asked for  a copy showing  a breakout                                                                    
of  general, other,  and federal  funds. She  explained that                                                                    
version   A  of   the  legislation   had   broken  out   the                                                                    
information.                                                                                                                    
                                                                                                                                
Mr.  Labolle  asked to  have  someone  from the  Legislative                                                                    
Finance Division (LFD) join the meeting.                                                                                        
                                                                                                                                
ROB  CARPENTER,   ANALYST,  LEGISLATIVE   FINANCE  DIVISION,                                                                    
replied  that  the Office  of  Management  and Budget  (OMB)                                                                    
landscape  format  included   general,  federal,  and  other                                                                    
funds,  but  the  legislative bills  had  never  broken  out                                                                    
federal funds;  the categories had  always been  general and                                                                    
other. He  noted that federal  funds fell under  the "other"                                                                    
category.                                                                                                                       
                                                                                                                                
1:44:21 PM                                                                                                                    
                                                                                                                                
Representative  Wilson referenced  version  A  of the  bill,                                                                    
which  had come  from the  governor and  included the  three                                                                    
categories. She  asked if it  was possible to see  the funds                                                                    
broken out in the three  categories. She reasoned that other                                                                    
funds could be anything.                                                                                                        
                                                                                                                                
Mr. Carpenter  asked if  she was  speaking about  reports or                                                                    
the legislation itself.                                                                                                         
                                                                                                                                
Representative Wilson was referencing the bill itself.                                                                          
                                                                                                                                
Mr. Carpenter answered that LFD  was not currently programed                                                                    
to  provide  the   breakout.  He  was  not   saying  it  was                                                                    
impossible, it had merely never been done by LFD.                                                                               
                                                                                                                                
Representative Wilson asked where version  A of the bill had                                                                    
come from. Mr. Carpenter answered OMB.                                                                                          
                                                                                                                                
Representative Wilson  asked for  verification that  LFD had                                                                    
compiled  the  work  draft currently  before  the  committee                                                                    
[version D].  Mr. Carpenter replied in the affirmative.                                                                         
                                                                                                                                
Representative  Wilson  suggested   help  from  Pat  Pitney,                                                                    
Director,  Office of  Management and  Budget, Office  of the                                                                    
Governor in  order to have  a better understanding  of where                                                                    
the money was coming from.                                                                                                      
                                                                                                                                
Mr. Labolle  advised that  the breakout  of the  funding for                                                                    
all projects in  Section 1 was included in  Section 2, pages                                                                    
11 through  13. The information enumerated  the various fund                                                                    
sources.                                                                                                                        
                                                                                                                                
Representative  Wilson  used  the  Alaska  Energy  Authority                                                                    
(AEA) as  an example  and observed that  the bill  broke the                                                                    
funding down by department but not project.                                                                                     
                                                                                                                                
Mr. Labolle  answered that the  financial reports  broke the                                                                    
funding detail down by project.                                                                                                 
                                                                                                                                
Vice-Chair  Gara asked  for verification  there  was an  LFD                                                                    
report for the current bill version.                                                                                            
                                                                                                                                
Mr. Carpenter answered  that all of the LFD  reports were on                                                                    
its website;  members should also  have a copy.  The reports                                                                    
broke the information out into detail.                                                                                          
                                                                                                                                
1:46:55 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz asked  if Mr.  Labolle was  addressing                                                                    
the bill or reports.                                                                                                            
                                                                                                                                
Mr. Labolle  replied he was  speaking to the bill.  He moved                                                                    
to page 3, lines 18 through  20. He detailed that the Senate                                                                    
had  added the  cruise ship  tender dock  reconstruction for                                                                    
$1.1 million  using cruise vessel passenger  funds. Also, on                                                                    
page 3, lines 31 through  32, the Senate added the Ketchikan                                                                    
cruise ship dock berth 4  expansion for $3 million in cruise                                                                    
vessel passenger funds. He moved  to page 4, lines 5 through                                                                    
9;  the Senate  had funded  the first  five projects  on the                                                                    
school  major maintenance  list for  $24.2 million.  Page 5,                                                                    
lines  14  and  15  pertained  to  Pittman  Robertson  funds                                                                    
received from  the federal government.  The Senate  had been                                                                    
concerned with over spending the  Fish and Game Fund and had                                                                    
replaced  the $2  million  in Department  of  Fish and  Game                                                                    
(DFG)  funds   with  $2  million  in   statutory  designated                                                                    
receipts and $2 million in the Charter Revolving Loan Fund.                                                                     
                                                                                                                                
Co-Chair Foster asked for a repeat of the information.                                                                          
                                                                                                                                
Mr. Labolle complied.  There had been concern  on the Senate                                                                    
side  that the  state was  overspending DFG  funds to  match                                                                    
Pittman  Robertson  funds;  therefore,  the  Senate  Finance                                                                    
Committee  had  elected to  use  $2  million in  statutorily                                                                    
designated  receipts   and  $2  million  from   the  Charter                                                                    
Revolving Loan Fund.                                                                                                            
                                                                                                                                
Representative Neuman asked if  all of the Pittman Robertson                                                                    
funds had  all been  used and  did not get  any back  on the                                                                    
three-to-one  match. He  assumed it  was the  reason it  had                                                                    
been  necessary  to  replace the  funding  with  statutorily                                                                    
designated  receipts.  Mr.  Labolle   answered  it  was  his                                                                    
understanding.                                                                                                                  
                                                                                                                                
Representative  Neuman   asked  about  the  source   of  the                                                                    
designated receipts.  He wondered if the  source was fishing                                                                    
license [fees].  Mr. Labolle  replied that  he did  not know                                                                    
the specific source.                                                                                                            
                                                                                                                                
Co-Chair  Foster   asked  staff   to  follow  up   with  the                                                                    
information. Mr. Labolle agreed.                                                                                                
                                                                                                                                
Representative Wilson asked if  the $2 million under general                                                                    
funds was from the Charter Revolving Loan Fund.                                                                                 
                                                                                                                                
Mr. Carpenter asked for a repeat of the question.                                                                               
                                                                                                                                
Representative Wilson  pointed to  [page 5] line  14 showing                                                                    
$2 million  in general  funds and  $10 million  other funds.                                                                    
She asked if  the $2 million in general funds  came from the                                                                    
Charter  Revolving Loan  Fund. She  assumed the  $10 million                                                                    
was Pittman Robertson funding.                                                                                                  
                                                                                                                                
1:51:05 PM                                                                                                                    
                                                                                                                                
Mr. Carter  answered that  the $2  million from  the Charter                                                                    
Revolving Loan Fund was designated general funds (DGF).                                                                         
                                                                                                                                
Representative Wilson  she asked  for verification  that the                                                                    
$10 million was Pittman Robertson funding.                                                                                      
                                                                                                                                
Mr. Carter answered there was  $6 million in federal Pittman                                                                    
Robertson  funding.  The  total  project  was  $12  million,                                                                    
comprised of $6  million federal funds, $2  million from the                                                                    
Fish and Game Fund,  $2 million statutory designated program                                                                    
receipts,  and $2  million from  the Charter  Revolving Loan                                                                    
Fund.                                                                                                                           
                                                                                                                                
Representative  Guttenberg stated  that the  legislature had                                                                    
dealt with the issue in  the Department of Natural Resources                                                                    
(DNR) and DFG operating budgets.  He asked how the increment                                                                    
under discussion meshed with that.                                                                                              
                                                                                                                                
Mr. Labolle would follow up.                                                                                                    
                                                                                                                                
Representative Guttenberg stated there  had been other funds                                                                    
used  in order  to access  Pittman Robertson  funds. He  was                                                                    
trying to determine how they meshed or conflicted.                                                                              
                                                                                                                                
Co-Chair  Foster   asked  staff   to  follow  up   with  the                                                                    
information.                                                                                                                    
                                                                                                                                
Mr. Labolle continued with page  5, lines 21 through 27. The                                                                    
Senate  had   included  $20  million  to   address  deferred                                                                    
maintenance  needs  with  state agencies  and  had  included                                                                    
intent language  that the Office of  the Governor prioritize                                                                    
deferred  maintenance  needs  and distribute  the  funds  to                                                                    
address the highest priority issues.                                                                                            
                                                                                                                                
Co-Chair Foster  asked if  the figure  was the  total amount                                                                    
carried over from the contingency  capital budget or part of                                                                    
the amount. Mr.  Labolle answered that $40  million had been                                                                    
included  in  the contingency  budget;  only  half had  been                                                                    
moved over.                                                                                                                     
                                                                                                                                
Representative   Wilson   believed   the   legislature   had                                                                    
allocated  $20   million  the  prior  year   with  the  same                                                                    
language.  She wondered  how much  of that  amount had  been                                                                    
spent.                                                                                                                          
                                                                                                                                
Mr. Labolle deferred the question to OMB.                                                                                       
                                                                                                                                
1:53:54 PM                                                                                                                    
                                                                                                                                
PAT  PITNEY,  DIRECTOR,  OFFICE OF  MANAGEMENT  AND  BUDGET,                                                                    
OFFICE OF  THE GOVERNOR, responded  that all but  just under                                                                    
$300,000  of  the  $20  million   had  been  distributed  to                                                                    
priority projects  to several different agencies.  She would                                                                    
have  to  pull a  report  to  determine the  precise  amount                                                                    
spent. The funds had been  distributed and the projects were                                                                    
being worked on.                                                                                                                
                                                                                                                                
Representative Wilson asked to  receive the project priority                                                                    
list attached  to the money as  well. She wanted to  see how                                                                    
far down the [project] list they had gotten.                                                                                    
                                                                                                                                
Ms. Pitney responded affirmatively.                                                                                             
                                                                                                                                
Vice-Chair  Gara remarked  that some  of the  state's lowest                                                                    
capital  budgets  had  been  in   the  past  few  years.  He                                                                    
referenced the  $20 million  increment under  discussion. He                                                                    
detailed  that  the  University of  Alaska  had  roughly  $1                                                                    
billion in deferred maintenance.  He asked for the remainder                                                                    
of the state's deferred maintenance cost.                                                                                       
                                                                                                                                
Ms.  Pitney  answered  the remainder  was  approximately  an                                                                    
additional $1 billion.                                                                                                          
                                                                                                                                
Vice-Chair Gara asked if the  $20 million increment [page 5,                                                                    
lines 21  through 27] was meant  to go towards the  total $2                                                                    
billion in  deferred maintenance. Mr. Labolle  answered that                                                                    
the $20 million did not include the University.                                                                                 
                                                                                                                                
Representative  Tilton  asked  about an  increment  for  the                                                                    
Office of the Governor  for modernization and replacement of                                                                    
the electronic  voting system (lines  19 and 20).  She asked                                                                    
if the increment had been added in the new work draft.                                                                          
                                                                                                                                
Mr. Labolle  believed the  item was  addressed later  in the                                                                    
presentation.                                                                                                                   
                                                                                                                                
1:56:24 PM                                                                                                                    
                                                                                                                                
Mr. Labolle  moved to page 5,  line 28 through page  6, line                                                                    
21 showing  information technology  (IT) projects  for state                                                                    
agencies  to  modernize systems  and  upgrades  in order  to                                                                    
remain compliant with federal  requirements. He believed the                                                                    
item would address Representative Tilton's question.                                                                            
                                                                                                                                
Representative Tilton clarified her  question was about page                                                                    
5,  lines 19  and  20.  She believed  Mr.  Labolle may  have                                                                    
inadvertently missed the item.                                                                                                  
                                                                                                                                
Mr. Labolle  replied that  page 5, lines  19 through  20 was                                                                    
the  governor's   project  to  modernize  and   replace  the                                                                    
existing  election  voting  system. He  detailed  that  $3.8                                                                    
million was  funded using  $3 million  in federal  funds and                                                                    
$800,000 in reappropriations located  in Section 14, with $1                                                                    
million currently in the election fund.                                                                                         
                                                                                                                                
Representative Wilson  asked why $800,000. She  thought only                                                                    
$150,000 was necessary to match  the $3 million. Mr. Labolle                                                                    
answered that the changes had been made by the Senate.                                                                          
                                                                                                                                
Representative Wilson  asked if the reason  for the Senate's                                                                    
change was unknown to the committee.                                                                                            
                                                                                                                                
Mr. Carpenter replied that the  total project cost requested                                                                    
by the governor  was $4.8 million. The  Senate organized the                                                                    
funding    differently    -    instead   of    having    two                                                                    
reappropriations and a scope change  on an existing project,                                                                    
the Senate  had reappropriated  the money into  the election                                                                    
fund and  had taken  all of  the money  out of  the election                                                                    
fund. The  project was identical to  the governor's proposal                                                                    
other than the structure of the appropriations.                                                                                 
                                                                                                                                
Representative  Wilson believed  the money  was coming  from                                                                    
left over  money from the  FY 18 budget.  Alternatively, she                                                                    
asked if the money was from previous years.                                                                                     
                                                                                                                                
Mr.  Carpenter  affirmed and  deferred  to  OMB for  further                                                                    
detail on the need for the $800,000.                                                                                            
                                                                                                                                
Ms. Pitney  answered that the project  scope and expectation                                                                    
of what it  would entail was the reason the  amount was $4.8                                                                    
million. She  stated it was  not necessarily the  match. The                                                                    
state  was fortunate  to have  $3 million  in federal  grant                                                                    
funds for  the project,  but the  additional request  was to                                                                    
pay for the remaining anticipated cost.                                                                                         
                                                                                                                                
1:59:31 PM                                                                                                                    
                                                                                                                                
Representative Wilson asked if the  money would go back into                                                                    
the General Fund if the cost happened to be lower.                                                                              
                                                                                                                                
Ms. Pitney  replied the election  fund did not lapse  back -                                                                    
the funds  would remain  in the election  fund and  could be                                                                    
reappropriated if that was the will of the legislature.                                                                         
                                                                                                                                
Mr. Labolle turned to page 6,  lines 25 and 26 and addressed                                                                    
funding for the emergency medical  services for Code Blue at                                                                    
the  FY 18  level  of  $500,000. Page  6,  lines  29 and  30                                                                    
included funding  for Pioneer  Home renovations  and repairs                                                                    
at the  FY 18  level in  the amount of  $1 million.  Page 7,                                                                    
lines 15 through 20 included  projects approved by the Exxon                                                                    
Valdez  Oil Spill  Trustee Council  using  Exxon Valdez  Oil                                                                    
Spill (EVOS) funds. He turned to  page 7, lines 30 to 31 and                                                                    
detailed that  the Senate had  reduced the  National Mineral                                                                    
Security  Program  funding   based  on  anticipated  reduced                                                                    
funding from  the federal government  from $15  million down                                                                    
to $5 million.                                                                                                                  
                                                                                                                                
Mr.  Labolle moved  to page  8, lines  24 through  25, which                                                                    
included  funding  for  Alaska Housing  Finance  Corporation                                                                    
(AHFC) deferred maintenance for  $3 million in federal funds                                                                    
and  $3 million  AHCC [Alaska  Housing Capital  Corporation]                                                                    
funds. The increment  was in addition to $3  million in AHFC                                                                    
funds  and  $1 million  in  federal  funds included  in  the                                                                    
operating budget for ongoing maintenance.                                                                                       
                                                                                                                                
2:01:33 PM                                                                                                                    
                                                                                                                                
Mr.  Labolle continued  on page  9, lines  4 through  5 that                                                                    
funded  senior citizen  housing at  the  FY 18  level of  $1                                                                    
million.  Page 9,  lines 6  and 7  included funding  for the                                                                    
Supplemental Housing Development Program  at the FY 18 level                                                                    
of $3 million.  Page 9, lines 13 through  17 included intent                                                                    
language  in response  to an  accident that  had closed  the                                                                    
Glenn Highway  and rerouted traffic  for multiple  days. The                                                                    
Senate  had added  language directing  the development  of a                                                                    
temporary traffic control plan  as well as emergency traffic                                                                    
control guidelines for the Glenn  Highway, milepost 0 to 35.                                                                    
Page 9, lines  26 through 28 included funding  by the Senate                                                                    
for the Municipal  Harbor Facility Grant Fund  at $5 million                                                                    
in  UGF and  reappropriations  found in  Section  22 of  the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative  Ortiz   asked  where  the  $5   million  was                                                                    
located. He only saw $3,031,000 on page 9.                                                                                      
                                                                                                                                
Mr. Labolle answered  that the remainder of  the funding was                                                                    
from reappropriations and was located in Section 22.                                                                            
                                                                                                                                
Mr. Labolle  turned to  page 10, lines  6 through  10, which                                                                    
included  $51  million  UGF  funding  for  the  federal  aid                                                                    
highway    match;    an    additional   $14    million    in                                                                    
reappropriations  was  located  in  Section  21.  Additional                                                                    
federal  aid  funding  was  also found  in  Section  21  for                                                                    
aviation.                                                                                                                       
                                                                                                                                
Mr. Labolle addressed  items that had been  removed from the                                                                    
governor's request. Funding  of $40 million for  the Port of                                                                    
Anchorage  had  been   removed.  The  correctional  security                                                                    
upgrade project had  been moved from the  numbers section to                                                                    
the language  section and  was funded  with reappropriations                                                                    
located in  Section 18.  Fish and  Game vessel  and aircraft                                                                    
maintenance  and repair  upgrades  had been  moved from  the                                                                    
numbers section to the language  section and was funded with                                                                    
reappropriations located  in Section 20. The  Senate did not                                                                    
include an amendment from the  governor requesting legal and                                                                    
financial due  diligence related to  AKLNG in the  amount of                                                                    
$750,000 for DNR and $750,000  for the Department of Revenue                                                                    
(DOR).                                                                                                                          
                                                                                                                                
Mr.  Labolle relayed  that  the Senate  did  not include  an                                                                    
amendment from  the governor related to  enhanced 911, which                                                                    
would have been  about $8.5 million. The  Senate had removed                                                                    
funding  for the  Adak airport  operations because  the item                                                                    
was  currently  in  conference committee  on  the  operating                                                                    
budget. The  Senate had  removed $1  million for  public and                                                                    
community  transportation state  match.  Lastly, the  Senate                                                                    
had  removed  the governor's  project  for  a commuter  rail                                                                    
concept at a total of $4.5 million.                                                                                             
                                                                                                                                
Co-Chair   Foster  asked   Mr.   Labolle   to  provide   the                                                                    
information to committee members.                                                                                               
                                                                                                                                
2:05:20 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara asked  if the $8.5 million  for enhanced 911                                                                    
was  to develop  a statewide  system for  areas without  911                                                                    
service.                                                                                                                        
                                                                                                                                
Ms. Pitney  answered in the affirmative.  She clarified that                                                                    
the  requested  funding  had  been   $8.5  million  with  an                                                                    
additional $1  million reappropriation. The funding  was for                                                                    
a  consolidated  911  system and  providing  access  to  all                                                                    
communities. She  explained that some communities  still had                                                                    
to use an  800 number [to access 911].  Most communities had                                                                    
911, but it was routed  through the telephone system, so the                                                                    
caller's   location   was   not  known,   making   emergency                                                                    
situations  very  difficult.  Enhanced 911  showed  location                                                                    
based on the  phone call. She relayed there were  only a few                                                                    
communities with enhanced 911.                                                                                                  
                                                                                                                                
Vice-Chair Gara supported the project.  He asked if the $9.5                                                                    
million  would fully  or only  partially cover  the enhanced                                                                    
911 project.                                                                                                                    
                                                                                                                                
Ms.  Pitney  answered  that enhanced  911  would  provide  a                                                                    
caller's location.  She detailed  there was a  newer version                                                                    
of 911 that allowed a person to send a picture and data.                                                                        
                                                                                                                                
2:07:53 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  asked if  the  enhanced  911 involved  the                                                                    
construction  of  a facility  and  removal  of two  contract                                                                    
facilities.                                                                                                                     
                                                                                                                                
Ms.  Pitney replied  there was  space in  the old  crime lab                                                                    
that would  be built out for  enhanced 911. The idea  was to                                                                    
bring contracts  currently with Wasilla  and Kenai  back in-                                                                    
house.                                                                                                                          
                                                                                                                                
Co-Chair  Seaton  clarified  that   the  increment  did  not                                                                    
pertain to the  911 and new telephone systems  that had been                                                                    
discussed by the legislature in the past.                                                                                       
                                                                                                                                
Representative  Neuman  asked  about the  consolidation.  He                                                                    
stated  that  state troopers  currently  had  to go  through                                                                    
contract  services  like  MatCom  in Mat-Su.  He  asked  for                                                                    
verification  the  consolidation  would mean  the  contracts                                                                    
with dispatch  organizations would not be  necessary and the                                                                    
service would all be in-house.  He believed the change would                                                                    
imbed  the funding  into the  Department of  Public Safety's                                                                    
(DPS) operating  budget. He asked about  the cost difference                                                                    
between contracting  the services out versus  doing the work                                                                    
in-house  by  DPS.  He  believed  troopers  liked  the  idea                                                                    
because it would  increase safety by reducing  the number of                                                                    
people  the call  had to  go through.  He communicated  that                                                                    
troopers were  supportive of their own  trooper dispatch. He                                                                    
wondered if the shift would bring a savings.                                                                                    
                                                                                                                                
Ms. Pitney  responded that the administration  believed that                                                                    
the operating funds  currently in the form  of contracts and                                                                    
some personnel (the contract  was slightly different between                                                                    
communities)  would remain  the  same if  the services  were                                                                    
brought  in-house.  The  administration did  not  project  a                                                                    
particular savings or expense  beyond getting the project up                                                                    
and running.                                                                                                                    
                                                                                                                                
Representative  Neuman  observed   there  were  trends  that                                                                    
seemed  to  go  back  and   forth  (e.g.  in  IT  and  human                                                                    
resources)  between contracting  services  out and  bringing                                                                    
services  back in-house.  He  did not  know  the reason  for                                                                    
going  out to  contract in  the first  place. He  elaborated                                                                    
that the  troopers wanted  to see  the service  in-house and                                                                    
had  been discussing  the issue  for several  years. He  had                                                                    
concern about  how it prepared other  communities who needed                                                                    
the  money  as  part  of  their  budgets.  For  example,  if                                                                    
communities  had contracts  going  out  for several  million                                                                    
dollars  for  dispatch,  the   change  would  include  their                                                                    
dispatch at the  same time. He asked if  there was something                                                                    
that  would help  communities that  were  already using  the                                                                    
funds  for  their  dispatch  at  the  same  time  to  create                                                                    
economies  of  scale.  He  reasoned   it  would  impact  the                                                                    
communities and he wondered how it would be dealt with.                                                                         
                                                                                                                                
2:11:49 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz addressed  the $1.5  million reduction                                                                    
to AKLNG  (two items  of $750,000 each).  He asked  how much                                                                    
the reduction set back the project.                                                                                             
                                                                                                                                
Ms. Pitney  replied that the funds  were for DNR and  DOR to                                                                    
conduct a  state best interest finding.  The reduction would                                                                    
slow the response  time for answers to  many questions about                                                                    
the  project. She  stated  it was  a  priority project.  She                                                                    
mentioned  legal   questions,  and  the  Black   and  Veatch                                                                    
contract  that  was  instrumental  in helping  to  move  the                                                                    
project. The project  was at the point  where the evaluation                                                                    
of  state  royalties,  revenue,  oil  and  gas  impacts  was                                                                    
important.  They  had  taken  a year  off,  which  had  been                                                                    
reasonable to wait for the  market and gas supply contracts.                                                                    
However, the  time had come to  put money back into  the due                                                                    
diligence.                                                                                                                      
                                                                                                                                
2:13:37 PM                                                                                                                    
                                                                                                                                
Representative Wilson stated there  that she had spoken with                                                                    
the  commissioner of  DPS  and had  learned  there would  be                                                                    
another $500,000 required in addition  to more employees for                                                                    
the enhanced  911 system.  She clarified that  it was  not a                                                                    
cost neutral program.                                                                                                           
                                                                                                                                
Vice-Chair Gara  thought there  were two  changes pertaining                                                                    
to  the  Department of  Health  and  Social Services  (DHSS)                                                                    
budget.  He  referenced  a   $2  million  appropriation  for                                                                    
Pioneer Home  renovation and repairs  to help add  space for                                                                    
individuals dealing  with dementia.  He only saw  $1 million                                                                    
included  and  wondered  if  it had  been  reduced  from  $2                                                                    
million. He asked about the governor's position.                                                                                
                                                                                                                                
Ms. Pitney answered that the  increment had been $2 million.                                                                    
The  administration believed  $2  million  was the  required                                                                    
cost.                                                                                                                           
                                                                                                                                
Vice-Chair  Gara  asked  for  detail  about  the  Code  Blue                                                                    
project.  He did  not  believe the  amount  included in  the                                                                    
current bill was the amount requested by the governor.                                                                          
                                                                                                                                
Ms. Pitney answered that the  governor had proposed the Code                                                                    
Blue project  in the contingency  capital budget to  be paid                                                                    
for  with  a tax.  The  governor's  budget had  included  $1                                                                    
million,  $500,000 had  been  the  traditional base  capital                                                                    
amount.                                                                                                                         
                                                                                                                                
Vice-Chair Gara  asked how the  funds would be used  for the                                                                    
Code Blue project.                                                                                                              
                                                                                                                                
Ms.  Pitney   answered  that  the  Code   Blue  project  was                                                                    
equipment  related and  primarily included  safety equipment                                                                    
for  community emergency  medical services.  She added  that                                                                    
myriad items were funded through it.                                                                                            
                                                                                                                                
Mr. Labolle  relayed that he  had a breakdown from  the Code                                                                    
Blue  organization  showing  what  would be  funded  if  the                                                                    
funding was  $1 million  or $750,000.  He would  provide the                                                                    
information to committee members.                                                                                               
                                                                                                                                
2:16:21 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster stated  the purpose of the  meeting had been                                                                    
to highlight the  changes made by the Senate  to the capital                                                                    
budget.                                                                                                                         
                                                                                                                                
Representative   Wilson  observed   there  were   additional                                                                    
changes in the bill that  had not been reviewed. She pointed                                                                    
to page 17  and remarked it was her  understanding there was                                                                    
a bill for the University  of Alaska for the UAA long-acting                                                                    
contraception  study. She  thought  it was  typical to  wait                                                                    
until  the  bill  passed  before  providing  funding  for  a                                                                    
project in the capital budget.                                                                                                  
                                                                                                                                
Mr. Labolle  answered it was  later in the  presentation. He                                                                    
moved  to Section  2, pages  11 through  13 that  included a                                                                    
breakout of  funding by agency  for the  appropriations made                                                                    
in Section 1. Section 3 on  pages 14 and 15 was the breakout                                                                    
of statewide  funding for appropriations made  in Section 1.                                                                    
Section 4,  page 16  included supplemental  capital projects                                                                    
and grants.  Lines 10  and 11  included projects  that moved                                                                    
the barracks from JBER  [Joint Base Elmendorf-Richardson] to                                                                    
Mertarvik in  order to  help relocate  the residents  of the                                                                    
village of Newtok. He detailed  that $960,000 leveraged $3.8                                                                    
million  in federal  funds  through  the Denali  Commission.                                                                    
Lines  15 and  17  increased the  appropriation  to an  EVOS                                                                    
project that had  been funded in FY 18 by  $3 million due to                                                                    
an update in the land appraisal.                                                                                                
                                                                                                                                
Co-Chair  Foster asked  if a  total of  $3 million  had been                                                                    
moved over.  He asked Mr.  Labolle to identify  whether full                                                                    
or partial amounts were carried over.                                                                                           
                                                                                                                                
Mr. Labolle asked if Co-Chair  Foster was speaking about the                                                                    
EVOS project or the JBER barracks.                                                                                              
                                                                                                                                
Co-Chair  Foster  requested to  hear  the  amount detail  on                                                                    
items going  forward. He  wanted members  to know  whether a                                                                    
total or partial appropriation had been moved forward.                                                                          
                                                                                                                                
Representative  Wilson   asked  why  the   Newtok  increment                                                                    
included  House  Districts  1 through  40.  She  stated  the                                                                    
project was very specific.                                                                                                      
                                                                                                                                
Mr. Labolle deferred the question to LFD.                                                                                       
                                                                                                                                
Mr. Carpenter  answered that he  believed it was  a drafting                                                                    
error.                                                                                                                          
                                                                                                                                
Representative  Wilson stated  that  the reappropriation  of                                                                    
$960,000  for  the  Newtok project  came  from  the  Susitna                                                                    
Watana  [Hydroelectric  Project].  She elaborated  that  the                                                                    
project  involved  moving  a community.  She  asked  if  the                                                                    
community would match or pay  the funds back. She was trying                                                                    
to  determine why  the state  was paying  to move  an entire                                                                    
community.                                                                                                                      
                                                                                                                                
Mr.  Labolle believed  the fund  source had  changed in  the                                                                    
Senate and it was not  the Susitna Watana reappropriation as                                                                    
requested by  the governor. He  did not believe there  was a                                                                    
local match. He deferred to OMB for further detail.                                                                             
                                                                                                                                
Ms. Pitney replied that she  was uncertain there was a local                                                                    
contribution.  She   detailed  it   was  the   top  priority                                                                    
community  that  had  been   impacted  by  coastal  erosion.                                                                    
Kivalina was high  on the priority list as  well, but Newtok                                                                    
moving  to Mertarvik  was further  in the  planning process.                                                                    
Part  of  the  priority   was  to  address  eroding  coastal                                                                    
communities where residents are displaced.                                                                                      
                                                                                                                                
2:21:20 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  asked  if the  appropriation  set  a                                                                    
precedent of using  state funds to move  communities. As the                                                                    
state looked at  possible payroll or other  taxes because it                                                                    
did  not have  enough  money, she  wondered  how to  justify                                                                    
allocating $960,000  in general  funds going to  Newtok. She                                                                    
reasoned  that disasters  happened everywhere  (e.g. Galena)                                                                    
and  new builds  had to  occur.  She wondered  if the  state                                                                    
would have to pay for  the next community that experienced a                                                                    
problem like  Newtok. She asked  what would happen  if there                                                                    
was no funding  from the Denali Commission at  that point to                                                                    
foot some of the bill.                                                                                                          
                                                                                                                                
Ms. Pitney replied that the  planning process to move Newtok                                                                    
and other  villages had been  ongoing. The  communities were                                                                    
moving  as fast  as possible  with available  funds. In  the                                                                    
future, when  match funding was  available, the  state would                                                                    
do  everything   possible  to  help  communities   in  their                                                                    
relocation efforts.                                                                                                             
                                                                                                                                
Representative Wilson  asked if the next  community would be                                                                    
expected  to receive  the same  amount of  state assistance.                                                                    
She  wondered if  it would  be  a potential  lawsuit if  the                                                                    
state  did  not  provide  the funding  because  the  current                                                                    
appropriation  started  down  a   road  of  providing  state                                                                    
assistance.                                                                                                                     
                                                                                                                                
Ms.  Pitney responded  it  was a  policy  call. The  village                                                                    
[Newtok] was  ready and it was  policy to do what  the state                                                                    
could to help it relocate.                                                                                                      
                                                                                                                                
Mr.  Labolle  addressed a  $2.5  million  increment for  the                                                                    
processing  and  storage  of untested  sexual  assault  kits                                                                    
statewide page  (16, lines  21 through  26). The  Senate had                                                                    
added  intent  language  to  guide  the  department  in  the                                                                    
process.                                                                                                                        
                                                                                                                                
Co-Chair Foster  asked for verification that  there had been                                                                    
zero  funds  for  the  item   previously.  He  believed  the                                                                    
increment was  a total of  $2.5 million. Mr.  Labolle agreed                                                                    
and relayed the increment was an "add" to the budget.                                                                           
                                                                                                                                
Representative Pruitt  asked how  close the funds  would get                                                                    
to  eliminating  the  backlog [in  untested  sexual  assault                                                                    
kits]. Ms. Pitney replied that she would follow up.                                                                             
                                                                                                                                
Co-Chair  Foster answered  that based  on his  conversations                                                                    
with Senate  members, $6  million was  needed to  get caught                                                                    
up.                                                                                                                             
                                                                                                                                
Representative   Pruitt  stated   the  item   was  something                                                                    
everyone felt was important to move forward on.                                                                                 
                                                                                                                                
2:24:45 PM                                                                                                                    
                                                                                                                                
Mr. Labolle  moved to page 17,  line 5 where the  Senate had                                                                    
included the Klutina Lake road  survey project for $350,000.                                                                    
The item had been requested by the governor.                                                                                    
                                                                                                                                
Representative Wilson  asked why the increment  pertained to                                                                    
House district  1 through 40.  She remarked on  the specific                                                                    
area of the  project. She asked how long the  survey was for                                                                    
$350,000. She believed the road was six miles long.                                                                             
                                                                                                                                
Mr.  Labolle replied  that the  increment  was a  part of  a                                                                    
settlement  with Ahtna.  He deferred  to  LFD regarding  the                                                                    
remainder of the question.                                                                                                      
                                                                                                                                
Representative  Wilson   commented  that  the   Flint  Hills                                                                    
settlement  went all  to district  3  and it  was a  lawsuit                                                                    
settlement. She  wanted to know  the difference  between the                                                                    
two.                                                                                                                            
                                                                                                                                
Mr.  Carpenter answered  that the  bill  version before  the                                                                    
committee was the first draft  by the Senate and there would                                                                    
be  drafting errors.  He appreciated  members pointing  them                                                                    
out.                                                                                                                            
                                                                                                                                
Representative Wilson  replied that  she was just  trying to                                                                    
make things equal.                                                                                                              
                                                                                                                                
Representative  Guttenberg   observed  that  the   last  two                                                                    
increments  were judgements.  He wondered  if that  could be                                                                    
the reason for the particular coding.                                                                                           
                                                                                                                                
Mr. Carpenter  replied that generally  a more  precise House                                                                    
district  was  specified  if possible  (unless  the  project                                                                    
impacted  more  than one  district,  which  would require  a                                                                    
statewide or regional specification).                                                                                           
                                                                                                                                
Representative Guttenberg  asked for clarification  that the                                                                    
increment   pertained  to   the  Ahtna   situation  out   in                                                                    
Glenallen.                                                                                                                      
                                                                                                                                
Ms.  Pitney answered  it  was  a survey  in  that area.  She                                                                    
detailed  there was  a right-of-way  that had  not yet  been                                                                    
surveyed. It  was the  state's best  interest to  survey the                                                                    
area. She elaborated it was not a judgement or settlement.                                                                      
                                                                                                                                
2:27:49 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  relayed that he  and Co-Chair Seaton  had a                                                                    
meeting  at  2:30 p.m.  and  Co-Chair  Seaton had  made  the                                                                    
motion to  adopt the  CS. Prior  to leaving  Co-Chair Seaton                                                                    
needed to  withdraw his motion.  He asked another  member to                                                                    
move to adopt the bill.                                                                                                         
                                                                                                                                
Co-Chair Seaton WITHDREW  his motion to adopt  the CS. There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Representative Grenn  MOVED to ADOPT the  proposed committee                                                                    
substitute  for  HB  284, Work  Draft  30-GH2565\D  (Martin,                                                                    
4/25/18).                                                                                                                       
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Foster handed the gavel to Vice-Chair Gara.                                                                            
                                                                                                                                
Mr. Labolle  continued on page  17, lines 9 through  12 that                                                                    
included $500,000 for the University  of Alaska to conduct a                                                                    
study for  long-acting contraception and for  the University                                                                    
to provide interim reports to the legislature.                                                                                  
                                                                                                                                
2:29:36 PM                                                                                                                    
                                                                                                                                
Representative Wilson  stated it  was her  understanding the                                                                    
topic  was included  in separate  legislation. She  believed                                                                    
the normal  process was  to pass  legislation with  a fiscal                                                                    
note versus putting the funding in the capital budget.                                                                          
                                                                                                                                
Mr. Labolle  replied that  the increment  had been  added by                                                                    
the Senate.                                                                                                                     
                                                                                                                                
Representative  Wilson  responded  that there  would  be  an                                                                    
amendment  offered on  the topic.  She brought  attention to                                                                    
another increment  pertaining to  the Alaska  Marine Highway                                                                    
System (AMHS)  that included House  districts 1  through 40.                                                                    
She believed it should be  corrected to reflect the accurate                                                                    
districts.                                                                                                                      
                                                                                                                                
2:30:21 PM                                                                                                                    
                                                                                                                                
Mr. Carpenter clarified that that  the appropriation to AMHS                                                                    
affected a great  deal of the state  including Southeast and                                                                    
Southwest Alaska,  out to the  Aleutian Chain. He  stated it                                                                    
was difficult to  pinpoint a location, so  the increment had                                                                    
traditionally been statewide.                                                                                                   
                                                                                                                                
Representative Wilson  indicated that  House district  3 had                                                                    
no ferries.                                                                                                                     
                                                                                                                                
Vice-Chair  Gara asked  for verification  that traditionally                                                                    
if  an   increment  impacted   multiple  districts   it  was                                                                    
reflected  as House  districts 1  through 40.  Mr. Carpenter                                                                    
responded that  a region was  identified when  possible, but                                                                    
otherwise an increment was listed as statewide.                                                                                 
                                                                                                                                
Representative Ortiz referred back to  line 9 on page 17. He                                                                    
asked if  there was  paperwork detailing  what the  UA long-                                                                    
acting contraception study was.  Mr. Labolle replied that he                                                                    
did not have backup pertaining to the particular project.                                                                       
                                                                                                                                
Representative Wilson assumed the  allocation in the current                                                                    
version  of  the capital  budget  included  the fiscal  note                                                                    
amount from a separate Senate bill on the same topic.                                                                           
                                                                                                                                
2:32:11 PM                                                                                                                    
                                                                                                                                
Mr. Labolle continued to Section  5 on page 18 that included                                                                    
funding by agency for the appropriations made in Section 4.                                                                     
                                                                                                                                
Vice-Chair  Gara  asked  if  they   were  changes  from  the                                                                    
original governor's bill.                                                                                                       
                                                                                                                                
Mr. Labolle  responded in the  negative. Section  5 included                                                                    
the  funding breakdown  for  Section 4.  Section  6 was  the                                                                    
statewide breakdown of funding [for Section 4].                                                                                 
                                                                                                                                
Mr.  Labolle moved  to Section  7, page  20. He  relayed the                                                                    
Senate  had  included   some  supplemental  operating  items                                                                    
proposed  by   the  governor.   There  were   still  several                                                                    
outstanding supplemental  items that had not  been agreed to                                                                    
by both bodies.                                                                                                                 
                                                                                                                                
Vice-Chair Gara  asked for clarification. He  surmised there                                                                    
were supplemental  items proposed by the  governor that were                                                                    
not included in  the current version of  the capital budget.                                                                    
He asked if the items [in  Section 7] were in the governor's                                                                    
supplemental and  represented no change from  the governor's                                                                    
and Senate's proposals.                                                                                                         
                                                                                                                                
Mr. Labolle  responded in the  negative. He  elaborated that                                                                    
there was  a separate supplemental budget  and the operating                                                                    
and  capital budgets  also included  their own  supplemental                                                                    
items. The fast-track supplemental  bill had been passed and                                                                    
included supplementals from all  three budgets that had been                                                                    
agreed upon.  Supplemental items that had  not been included                                                                    
in the fast  track bill had been removed  from the operating                                                                    
budget.  The remaining  supplemental  items  from all  three                                                                    
budgets were in  limbo and the only place to  catch them was                                                                    
the capital budget.                                                                                                             
                                                                                                                                
Vice-Chair  Gara  surmised  the supplemental  items  in  the                                                                    
current version  of the  capital budget  were some,  but not                                                                    
all of the  supplemental items in the  governor's budget. He                                                                    
asked  if the  supplemental  items included  in the  capital                                                                    
budget before  the committee reflected  the same  numbers as                                                                    
the governor's proposal.                                                                                                        
                                                                                                                                
Mr.  Labolle responded  in the  affirmative.  He listed  one                                                                    
exception  pertaining  to  Medicaid.  He  explained  that  a                                                                    
portion of the Medicaid supplemental  had been funded in the                                                                    
supplemental budget.  However, the item was  not included in                                                                    
the bill currently under consideration.                                                                                         
                                                                                                                                
2:35:07 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg referred  to  page  20, lines  28                                                                    
through  31  pertaining  to DNR,  OPMP  [Office  of  Project                                                                    
Management and  Permitting]. He  stated that  typically OPMP                                                                    
was in the operating budget.  He asked for further detail on                                                                    
the reduction [of $100,000].                                                                                                    
                                                                                                                                
Ms. Pitney  responded that OPMP  had agreed the  money would                                                                    
not be  used in the coming  fiscal year. The funds  had been                                                                    
reduced in the budget rather than  lapsing at the end of the                                                                    
year.                                                                                                                           
                                                                                                                                
Mr. Labolle  advanced to Section  8, which  included funding                                                                    
by agency for the appropriations  made in Section 7. Section                                                                    
9  was the  statewide funding  breakdown for  appropriations                                                                    
made in Section 7. Sections  10 through 19 were the language                                                                    
section and primarily  the governor's supplemental requests.                                                                    
Section  10, page  23,  subsection (c),  lines  1 through  7                                                                    
included  the  Department   of  Administration  (DOA)  labor                                                                    
contracts  and  negotiations  and  arbitration  support  for                                                                    
$792,000. The subsection extended  the lapse date through FY                                                                    
19.                                                                                                                             
                                                                                                                                
Representative  Wilson asked  about the  average arbitration                                                                    
negotiation cost.                                                                                                               
                                                                                                                                
Ms. Pitney replied that she  would follow up with specifics.                                                                    
There was  an operating  budget and  the increment  [on page                                                                    
23]   was  a   multi-year   amount  given   the  number   of                                                                    
negotiations  (some  of  which  were  contracted  out).  She                                                                    
relayed it was more than $792,000 in a year.                                                                                    
                                                                                                                                
Representative Wilson asked for  verification it cost almost                                                                    
$800,000  merely to  negotiate the  contracts. She  believed                                                                    
the  amount  did  not  include the  cost  of  the  contracts                                                                    
themselves.                                                                                                                     
                                                                                                                                
Ms.  Pitney answered  that  the  increment included  funding                                                                    
over and above the operating  for labor and personnel. Labor                                                                    
and   personnel   [DOA   Personnel  and   Labor   Relations]                                                                    
negotiated  the  contract,  but  occasionally  the  division                                                                    
needed contractual help. A small  amount of contractual help                                                                    
had  been used  over the  last  two years;  there was  still                                                                    
money  remaining in  the  $792,000  that the  administration                                                                    
wanted to extend in order  to access contractual help in the                                                                    
coming year.                                                                                                                    
                                                                                                                                
Representative   Wilson  surmised   the  increment   was  an                                                                    
operating cost in the capital budget.                                                                                           
                                                                                                                                
Ms. Pitney answered  it was the supplemental  section of the                                                                    
bill. She  explained that the  last section and much  of the                                                                    
current section included supplementals  that had not made it                                                                    
into the fast track supplemental bill.                                                                                          
                                                                                                                                
Representative  Wilson observed  it was  still an  operating                                                                    
cost. Ms. Pitney answered in the affirmative.                                                                                   
                                                                                                                                
Vice-Chair Gara  remarked that  the supplemental  portion of                                                                    
the  bill included  operating  budget  items. He  elaborated                                                                    
that the  section was  a combination  of the  capital budget                                                                    
and the  parts inserted by  the Senate on  the supplemental,                                                                    
which included operating and possibly some capital items.                                                                       
                                                                                                                                
Representative Neuman remarked it  was standard practice. He                                                                    
asked if the $792,000 was typical  or a new add-in to enable                                                                    
labor  negotiations. He  thought  it was  a new  expenditure                                                                    
line.   He   asked   if  additional   money   for   contract                                                                    
negotiations had been in the budget in the past.                                                                                
                                                                                                                                
Ms.  Pitney responded  the money  had been  included in  the                                                                    
budget the first year of  significant operating budget cuts;                                                                    
personnel  had  taken  a substantial  hit.  She  stated  the                                                                    
funding  had been  included because  labor negotiations  had                                                                    
been underway at  the time, which would  have been difficult                                                                    
with the  cut that had  been taken.  The funding had  been a                                                                    
way to ensure the administration  would be successful in the                                                                    
labor  negotiations even  though the  base operating  budget                                                                    
had been cut.                                                                                                                   
                                                                                                                                
Mr.  Labolle pointed  to line  1 [page  23], which  included                                                                    
language that was similar to  a reappropriation. He detailed                                                                    
the increment to DOA was funded  in SLA 2015, 2016 and 2017.                                                                    
The Senate had added the  underlined language [on line 7] to                                                                    
the  previous  appropriation;  it  was  a  budget  amendment                                                                    
rather than a reappropriation of a previous appropriation.                                                                      
                                                                                                                                
Representative Neuman asked if  the legislature could expect                                                                    
the item to  be embedded in the [DOA]  budget going forward.                                                                    
He assumed  the DOA budget  would continue to  have contract                                                                    
and  labor negotiations  in  the  future. Alternatively,  he                                                                    
wondered  if there  would be  a different  appropriation for                                                                    
settling labor relations.                                                                                                       
                                                                                                                                
2:41:50 PM                                                                                                                    
                                                                                                                                
Mr. Labolle answered  the increment [page 23, line  4] was a                                                                    
one-time appropriation that would not  appear in the base of                                                                    
the operating budget.                                                                                                           
                                                                                                                                
Mr. Labolle  moved to Section  11, page 23, lines  8 through                                                                    
18  for the  Department of  Education and  Early Development                                                                    
(DEED).  There  was  $400,000  from  the  Municipal  Capital                                                                    
Project  Matching   Grant  Fund  for  the   maintenance  and                                                                    
operation of  the Mt.  Edgecumbe aquatic  center. Subsection                                                                    
(b) included 1 percent for  art funds for the aquatic center                                                                    
were estimated to be $200,000  and were appropriated to DEED                                                                    
for equipment,  capital improvements, or maintenance  of the                                                                    
aquatic facility.                                                                                                               
                                                                                                                                
Representative Wilson  asked what Municipal  Capital Project                                                                    
Matching Grant funds were typically used for.                                                                                   
                                                                                                                                
Mr. Carpenter answered  that it was an old  program that had                                                                    
not been  used in 10 to  12 years. He explained  that at the                                                                    
time  there  had  been   municipal  match  and  incorporated                                                                    
community matching  grant funds  that the  state capitalized                                                                    
with  around  $20 million;  each  community  had received  a                                                                    
portion  based  on  a  formula  (approximately  $25,000  per                                                                    
year).  Communities had  been able  to  stockpile the  funds                                                                    
over multiple years to fund a future project.                                                                                   
                                                                                                                                
Representative  Wilson asked  if the  increment would  drain                                                                    
the fund to  zero. Mr. Carpenter answered  that the specific                                                                    
appropriation did  not. The fund contained  roughly $253,000                                                                    
after  the appropriation.  The programs  were  still on  the                                                                    
books but had not been funded in many years.                                                                                    
                                                                                                                                
Representative Wilson asked for  the annual maintenance cost                                                                    
of the pool,  once the additional $600,000  was allocated in                                                                    
the current budget.                                                                                                             
                                                                                                                                
Mr. Carpenter deferred the question to OMB.                                                                                     
                                                                                                                                
Ms. Pitney answered the annual  anticipated cost [of the Mt.                                                                    
Edgecumbe   aquatic  center]   was   between  $550,000   and                                                                    
$600,000.  She noted  that part  of the  cost could  be paid                                                                    
with receipts.                                                                                                                  
                                                                                                                                
Representative  Wilson asked  how much  the state  would pay                                                                    
annually  for  the  aquatic  center.  Ms.  Pitney  estimated                                                                    
$300,000.                                                                                                                       
                                                                                                                                
Vice-Chair Gara  asked for verification that  the increments                                                                    
in  the   language  section  were   governor's  supplemental                                                                    
requests  that had  been included  in  the Senate's  capital                                                                    
budget unamended. He  understood that some of  the items the                                                                    
governor had proposed were not included.                                                                                        
                                                                                                                                
Mr. Labolle answered in the affirmative.                                                                                        
                                                                                                                                
Mr. Carpenter  added that subsection  (b) [Section  11, page                                                                    
23] had been  added by the Senate and had  not been included                                                                    
in the governor's budget.                                                                                                       
                                                                                                                                
2:45:38 PM                                                                                                                    
                                                                                                                                
Mr.  Labolle  clarified  that   subsection  (b)  included  1                                                                    
percent  funding for  arts; subsection  (a)  was the  amount                                                                    
that had been in the supplemental.                                                                                              
                                                                                                                                
Vice-Chair  Gara  surmised  that  the  1  percent  funds  in                                                                    
subsection (b)  would have  gone to  arts, but  instead they                                                                    
were  going   to  the  project   listed  under   Section  11                                                                    
[maintenance  an  operation  of the  Mt.  Edgecumbe  Aquatic                                                                    
Center].                                                                                                                        
                                                                                                                                
Mr. Labolle answered in the affirmative.                                                                                        
                                                                                                                                
Mr. Labolle moved  to Section 12, page 23,  lines 19 through                                                                    
23 for the Department of  Health and Social Services (DHSS).                                                                    
The  increment  was  $5  million  to  the  Alaska  Temporary                                                                    
Assistance Program to satisfy  federal maintenance of effort                                                                    
requirements  for  FY  18  and  FY 19.  He  added  that  the                                                                    
original supplemental  request (the FY 18  portion) had been                                                                    
$2 million  and the Senate had  added the $3 million  for FY                                                                    
19.                                                                                                                             
                                                                                                                                
Representative Wilson believed the  $3 million was currently                                                                    
included in the  operating budget. She asked if  it would go                                                                    
away.                                                                                                                           
                                                                                                                                
Mr.  Labolle believed  the increment  was conferencable  and                                                                    
would come out of the capital budget.                                                                                           
                                                                                                                                
Vice-Chair  Gara asked  if the  $5  million increment  would                                                                    
fully satisfy the maintenance of effort requirement.                                                                            
                                                                                                                                
Ms. Pitney deferred to DHSS.                                                                                                    
                                                                                                                                
SHAWNDA O'BRIEN, ASSISTANT  COMMISSIONER, FINANCE MANAGEMENT                                                                    
SERVICES.   DEPARTMENT  OF   HEALTH  AND   SOCIAL  SERVICES,                                                                    
answered  that   the  department   was  on  track   to  meet                                                                    
maintenance  of effort  with the  request.  As written,  the                                                                    
appropriation would  occur in  multiple years.  She believed                                                                    
any amount not used  in FY 18 could be used  in FY 19, which                                                                    
the department projected would be necessary.                                                                                    
                                                                                                                                
Vice-Chair  Gara mentioned  maintenance  of  effort for  the                                                                    
Alaska Temporary  Assistance Program. He asked  if they were                                                                    
missing maintenance of effort funds for any other programs.                                                                     
                                                                                                                                
Ms. O'Brien replied in the negative.                                                                                            
                                                                                                                                
Mr. Labolle moved  to Section 13, page 23,  lines 24 through                                                                    
27 for the  Department of Law (DOL). The  increment was $3.4                                                                    
million   for  the   Civil  Division   for  judgements   and                                                                    
settlements in FY 18.                                                                                                           
                                                                                                                                
Representative Wilson  mentioned the Flint  Hills settlement                                                                    
of $14.3  million on  page 4 of  the legislation.  She asked                                                                    
why it  was listed under  [House] district 3,  Department of                                                                    
Environmental  Conservation (DEC)  and  not  under DOL.  She                                                                    
stated that the funding had all come from a law suit.                                                                           
                                                                                                                                
Mr. Labolle answered that the  appropriation for Flint Hills                                                                    
was being  handled by DEC,  whereas, the  language pertained                                                                    
to DOL.                                                                                                                         
                                                                                                                                
Representative Wilson remarked that  DOL made the settlement                                                                    
and she understood that many  times settlements went through                                                                    
departments. She  stated that the  increment to DEC  made it                                                                    
look like her district  was getting something special, while                                                                    
all they got  was contaminated. She stated that  part of the                                                                    
settlement  had come  through  DOL. She  asked  if the  bill                                                                    
specified the funding came from the lawsuit.                                                                                    
                                                                                                                                
2:50:19 PM                                                                                                                    
                                                                                                                                
Mr.  Carpenter   answered  that   DEC  was   contributing  a                                                                    
substantial portion,  as the increment  was a  large project                                                                    
to replace  the water system  - from the  settlement itself.                                                                    
He  explained  the  funding  was  going  to  a  construction                                                                    
project  versus paying  out the  settlement,  which DOL  was                                                                    
doing.                                                                                                                          
                                                                                                                                
Representative Wilson stated that DEC  was not using its own                                                                    
money. She  believed it was  funding from the  General Fund.                                                                    
She assumed Flint  Hills had also given  money. She wondered                                                                    
if budget details were included in  a budget book she had on                                                                    
hand.                                                                                                                           
                                                                                                                                
Mr. Carpenter  agreed. He detailed  there was  a multi-party                                                                    
contribution   for   the    expensive   project,   including                                                                    
contribution from the state through DEC.                                                                                        
                                                                                                                                
Representative  Wilson  stated  it  was  a  reason  she  got                                                                    
frustrated over  the statewide  portions. She  detailed that                                                                    
the  project looked  like it  was  a special  project for  a                                                                    
district,  but  in  reality,  it had  been  bargained  in  a                                                                    
lawsuit. She would  work with LFD to determine  if there was                                                                    
a better way to distinguish the information.                                                                                    
                                                                                                                                
Vice-Chair   Gara  stated   that  the   district  had   been                                                                    
contaminated and  everyone appreciated  the need  to address                                                                    
the  issue, but  the project  had also  received substantial                                                                    
tax credits to help pay for the refinery.                                                                                       
                                                                                                                                
Representative Wilson  corrected that  Flint Hills  had gone                                                                    
out  of business  before any  of the  tax credits  came; the                                                                    
company received  no tax credits  and the  contamination had                                                                    
been left.                                                                                                                      
                                                                                                                                
2:52:17 PM                                                                                                                    
                                                                                                                                
Representative  Neuman asked  about the  $3.37 million  paid                                                                    
out on  behalf of the  DOL Civil Division [Section  13, page                                                                    
23]. He asked if a large  portion of the funds were going to                                                                    
a  settlement. Alternatively,  he  wondered  if the  funding                                                                    
would  go to  numerous  small settlements  the division  had                                                                    
agreed upon.                                                                                                                    
                                                                                                                                
Mr. Labolle deferred to OMB.                                                                                                    
                                                                                                                                
Ms. Pitney  answered she  would follow  up with  detail. She                                                                    
believed one settlement  was over $1 million  and the others                                                                    
were smaller.                                                                                                                   
                                                                                                                                
Representative  Neuman   stated  it  was  his   concern.  He                                                                    
believed  there  were  one  or two  lawsuits  in  the  Civil                                                                    
Division - he  thought the $3.37 million was for  one or two                                                                    
settlements   as  opposed   to   numerous  settlements.   He                                                                    
requested detail.                                                                                                               
                                                                                                                                
Mr. Labolle turned  to Section 14, page 23,  line 28 through                                                                    
page  24,  line   11.  The  increment  was   $3  million  in                                                                    
reappropriations  for the  election fund  capitalization. He                                                                    
remarked  the  increment  was  the  reappropriation  he  had                                                                    
referenced earlier in the numbers  section. Section 15, page                                                                    
24, lines 12 through  20 included standard receipt authority                                                                    
language for  agencies to receive federal  and other receipt                                                                    
authority  from Legislative  Budget and  Audit. Section  16,                                                                    
page 24  included standard  language referring  to insurance                                                                    
claims; the  item specified  the amounts  to be  received in                                                                    
settlement of  insurance claims  would be  appropriated from                                                                    
the General Fund to the  State Insurance Catastrophe Reserve                                                                    
Account or to  the appropriate state agency  to mitigate the                                                                    
loss.  Section  17  pertained   to  the  National  Petroleum                                                                    
Reserve  and included  $11.6 million  in  impact aid  grants                                                                    
appropriated to  the Department  of Commerce,  Community and                                                                    
Economic  Development (DCCED)  for  capital project  grants.                                                                    
Section  18,  page   26,  lines  1  through   5  included  a                                                                    
Department  of  Corrections  (DOC) reappropriation  of  $1.6                                                                    
million for security upgrades at correctional facilities.                                                                       
                                                                                                                                
2:55:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara  asked if Sections  19 and 20 were  the same                                                                    
as governor's proposals.                                                                                                        
                                                                                                                                
Mr.  Labolle  affirmed   the  sections  included  governor's                                                                    
proposals, but  noted they were funded  differently. Section                                                                    
19,  page 26,  lines 6  through 22  included the  governor's                                                                    
request for a reappropriation not  to exceed $200,000 to DEC                                                                    
for  project administration  of  water quality  enhancement,                                                                    
water supply,  sewage, and solid waste  facilities grants to                                                                    
municipalities. Section  20, page  26, line 23  through page                                                                    
27, line  11 pertained  to the Department  of Fish  and Game                                                                    
and  included  reappropriations  estimated at  $309,000  for                                                                    
maintenance, repair,  and upgrades to vessels  and aircraft.                                                                    
Section  21, page  27, lines  12 through  24 included  $12.1                                                                    
million   in   reappropriations   to   the   Department   of                                                                    
Transportation and  Public Facilities (DOT) for  federal aid                                                                    
aviation  match and  other  nonfederal  aid highway  program                                                                    
match.                                                                                                                          
                                                                                                                                
Vice-Chair Gara  pointed to  lines 12  through 24  and asked                                                                    
for   verification  the   difference  from   the  governor's                                                                    
proposal  was  the  reappropriation of  AHFC  energy  rebate                                                                    
program funds.                                                                                                                  
                                                                                                                                
Mr. Labolle  answered in the  affirmative. He noted  it made                                                                    
up  for  the difference  in  the  reduction in  the  numbers                                                                    
section.                                                                                                                        
                                                                                                                                
2:57:00 PM                                                                                                                    
                                                                                                                                
Representative Neuman  stated that the increment  took money                                                                    
from the Home Energy Rebate Program.  He asked if use of the                                                                    
funds  left  the  program with  no  remaining  funding.  Mr.                                                                    
Labolle believed  the increment would zero  out the program.                                                                    
He deferred to LFD for verification.                                                                                            
                                                                                                                                
Mr.  Carpenter added  there would  be  funding remaining  to                                                                    
complete  closing  out  and wrapping  up  the  program.  The                                                                    
increment  [page 27,  lines 12  through 24]  would take  the                                                                    
remaining money that was unobligated.                                                                                           
                                                                                                                                
Representative Neuman asked for  verification that there was                                                                    
money  sequestered for  applicants who  were expected  to be                                                                    
approved.  He  believed  the   remaining  balance  would  go                                                                    
towards  closing  out  the  program.   He  stated  that  the                                                                    
language for  the program remained  in the budget.  He asked                                                                    
for  verification that  the program  would be  left unfunded                                                                    
for the time  being. Alternatively, he wondered  if the plan                                                                    
was to eliminate the program entirely.                                                                                          
                                                                                                                                
Ms. Pitney replied  that the rebate program  had been closed                                                                    
to  new applicants  over  one year  back  and any  remaining                                                                    
funding had  been moved towards weatherization.  The program                                                                    
would remain in statute, but there was no activity.                                                                             
                                                                                                                                
2:59:26 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara asked Mr. Labolle  to only review items that                                                                    
differed  from the  governor's proposal.  He added  that Mr.                                                                    
Labolle would  provide the committee  with the parts  of the                                                                    
governor's proposal that had been left out of the bill.                                                                         
                                                                                                                                
Mr. Labolle moved to page 33,  line 27 through page 34, line                                                                    
14. The item was an  amendment requested by the governor but                                                                    
was not in the governor's  amended version of the budget. He                                                                    
detailed it was a reappropriation  not to exceed $10 million                                                                    
to  DOT for  the  international airport  runway and  taxiway                                                                    
rehabilitation.  Section   22  included   a  reappropriation                                                                    
mentioned earlier for harbors and grants.                                                                                       
                                                                                                                                
Representative Wilson  asked why the money  would not return                                                                    
to AEA.                                                                                                                         
                                                                                                                                
Mr. Labolle answered  that the Senate had  chosen, in moving                                                                    
the  funding  from the  contingency  budget  to the  capital                                                                    
budget, to come  up with a new fund source  because the fund                                                                    
source  in the  contingency  budget was  not available.  The                                                                    
increment  was part  of the  items chosen  by the  Senate to                                                                    
make up the $5 million.                                                                                                         
                                                                                                                                
Representative  Wilson stated  that  typically AEA  projects                                                                    
were energy  related. She aske if  it had been the  norm for                                                                    
funding to  go back  into other  AEA projects  when projects                                                                    
were completed.                                                                                                                 
                                                                                                                                
Mr. Labolle answered that in  previous years it had been the                                                                    
norm for  reappropriations to stay  within agencies  and for                                                                    
legislative  appropriations to  remain  within district.  He                                                                    
explained  that  the  past  year was  the  first  time  that                                                                    
practice had begun to change.                                                                                                   
                                                                                                                                
3:02:11 PM                                                                                                                    
                                                                                                                                
Mr.  Labolle  moved  to  a  fund  transfer  from  the  Large                                                                    
Passenger  Vessel Gaming  and Gambling  Tax  Account to  the                                                                    
Alaska  Marine Highway  System (AMHS)  Fund  on Section  23,                                                                    
page 34, lines 20 through 22.                                                                                                   
                                                                                                                                
Representative  Pruitt asked  if  it was  legal  to use  the                                                                    
funds  for  AMHS.  He  asked for  verification  it  was  not                                                                    
something  directly  impacting  cruise  ships.  Mr.  Labolle                                                                    
replied in the affirmative. An  appropriation had to be made                                                                    
from  that account  to another  account or  it could  not be                                                                    
spent.                                                                                                                          
                                                                                                                                
Mr.  Carpenter   added  that  the  gambling   proceeds  were                                                                    
different from the head tax.  The head tax had restrictions,                                                                    
whereas there were no restrictions  on the use of the gaming                                                                    
and gambling tax on vessels.                                                                                                    
                                                                                                                                
3:03:17 PM                                                                                                                    
                                                                                                                                
Mr. Labolle moved  to Section 24, page 34,  lines 23 through                                                                    
28, which reflected  an add by the  Senate. The appropriated                                                                    
fees  collected from  the NRA  license  plate (estimated  at                                                                    
$6,000) to  DCCED to  distribute as a  grant for  the Alaska                                                                    
Scholastic  Clay Target  Program  for  youth shotgun  sports                                                                    
programs. He  moved to a  reappropriation of $98,782  to the                                                                    
City of  Kodiak for the  engineering of  a new fire  hall in                                                                    
Section 25,  page 34. He  noted the old fire  hall sustained                                                                    
structural damage  caused by an earthquake  in 2017. Section                                                                    
26   included   standard    reappropriation   language   for                                                                    
renovation  and repair  of technology  improvements. Section                                                                    
27 was the lapse section.                                                                                                       
                                                                                                                                
Representative Wilson  asked about Section 26.  She spoke to                                                                    
the  practice of  overfunding in  the operating  budget. She                                                                    
asked if it had been the  practice of the legislature to put                                                                    
lapsed  operating  budget  funds  into  the  capital  budget                                                                    
instead of back in the General Fund.                                                                                            
                                                                                                                                
Mr. Labolle replied in the affirmative.                                                                                         
                                                                                                                                
Representative  Wilson  asked  for   a  list  of  items  the                                                                    
[lapsed] funding  would go to.  Mr. Labolle would  follow up                                                                    
with the information.                                                                                                           
                                                                                                                                
Representative Wilson wanted to  show that all lapsing funds                                                                    
did  not go  back  to  the General  Fund  as  some may  have                                                                    
thought.                                                                                                                        
                                                                                                                                
Representative Pruitt referenced  the Kodiak reappropriation                                                                    
in Section  25. He observed  the funds were for  the design.                                                                    
He  wondered how  the project  would be  paid for  later. He                                                                    
asked  if the  legislature should  expect a  funding request                                                                    
for the project in the future.                                                                                                  
                                                                                                                                
Mr. Labolle deferred the question to OMB.                                                                                       
                                                                                                                                
Ms. Pitney responded  that the community was  looking at all                                                                    
options because it had to get  out of the old fire hall. She                                                                    
relayed  it would  be  necessary to  talk  to the  community                                                                    
about its financial plan.                                                                                                       
                                                                                                                                
3:06:04 PM                                                                                                                    
                                                                                                                                
Mr.  Labolle  continued  that  Section   27  was  the  lapse                                                                    
section.  Sections 28  through  30 were  the effective  date                                                                    
sections.                                                                                                                       
                                                                                                                                
Vice-Chair  Gara  stated  that  Mr.  Labolle  would  provide                                                                    
committee members  with a memorandum on  governor's proposed                                                                    
items that were  not included in the current  version of the                                                                    
bill. He mentioned  items he would like to  see addressed at                                                                    
a future meeting.  He highlighted the missing  money for the                                                                    
Medicaid supplemental.  He reasoned  that if the  state owed                                                                    
the money, it  owed the money. Additionally,  there had been                                                                    
$18 million  originally in  the governor's  operating budget                                                                    
for  a  four-year  alcohol  and  substance  abuse  treatment                                                                    
program to expand capacity. He  believed it should be in the                                                                    
capital budget,  but he did  not believe it was  anywhere in                                                                    
any of the budgets.                                                                                                             
                                                                                                                                
Representative   Wilson  highlighted   the  $960,00   Newtok                                                                    
increment and requested  follow up on whether  the state had                                                                    
funded relocation  of communities  in the  past. Separately,                                                                    
she  clarified that  the  state was  involved  in the  Flint                                                                    
Hills settlement  because the state  had owned  the property                                                                    
with   Williams  that   sold  to   Flint  Hills.   When  the                                                                    
contamination  had started  on the  property, the  state had                                                                    
been one of  the defendants. She elucidated it  was not like                                                                    
other projects  where state  money had  been going  into it.                                                                    
She  elaborated  that  a  lawsuit   had  occurred,  and  she                                                                    
believed  another   lawsuit  was  ongoing.  She   wanted  an                                                                    
explanation about why the increment  was showing up for DEC.                                                                    
She understood  DEC would be  doing the  work, but it  was a                                                                    
settlement and most of the time it stayed there [in DOL].                                                                       
                                                                                                                                
Vice-Chair  Gara requested  to  hear from  DEC  at a  future                                                                    
time. Ms. Pitney agreed.                                                                                                        
                                                                                                                                
Representative Grenn  WITHDREW his  motion to adopt  the CS.                                                                    
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HB  284  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Vice-Chair Gara recessed the meeting  to a call of the chair                                                                    
[note: the meeting never reconvened].                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:09:25 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:09 p.m.                                                                                          

Document Name Date/Time Subjects
HB 284 CS WORKDRAFT vD.pdf HFIN 4/30/2018 1:30:00 PM
HB 284
HB 284 v D AgencySummary.pdf HFIN 4/30/2018 1:30:00 PM
HB 284
HB 284 CS vDStatewideTotals.pdf HFIN 4/30/2018 1:30:00 PM
HB 284
HB 284 CS vD ProjectDetailByAgency.pdf HFIN 4/30/2018 1:30:00 PM
HB 284
HB 284 FY2019 Capital Budget, ACoA Comment.pdf HFIN 4/30/2018 1:30:00 PM
HB 284
HB 284 House Finance Committee Question 4-30-18.pdf HFIN 4/30/2018 1:30:00 PM
HB 284
HB 284 OMB CAP Response to 4.30.18 HFIN Meeting.pdf HFIN 4/30/2018 1:30:00 PM
HB 284