Legislature(2019 - 2020)ADAMS ROOM 519

02/12/2020 01:30 PM FINANCE

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Audio Topic
01:32:25 PM Start
01:33:28 PM HB205 || HB206
01:33:35 PM Fy 21 Budget Overview: Department of Military and Veterans Affairs
01:59:32 PM Fy 21 Budget Overview: Department of Labor and Workforce Development
02:26:15 PM Fy 21 Budget Overview: Department of Natural Resources
02:55:52 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 205 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 206 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
FY21 Dept. Budget Overviews:
- Dept. of Military & Veterans Affairs
- Dept. of Labor & Workforce Development
- Dept. of Natural Resources
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 12, 2020                                                                                          
                         1:32 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:32:25 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:32 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Kelly Merrick                                                                                                    
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Major  General Torrence  Saxe,  Commissioner, Department  of                                                                    
Military   and   Veterans    Affairs;   Stephanie   Richard,                                                                    
Administrative  Services  Director, Department  of  Military                                                                    
and  Veterans  Affairs,  Office of  Management  and  Budget,                                                                    
Office of  the Governor;  Cathy Mu?oz,  Deputy Commissioner,                                                                    
Department  of  Labor   and  Workforce  Development;  Hannah                                                                    
Lager,  Administrative  Services   Director,  Department  of                                                                    
Labor and  Workforce Development,  Office of  Management and                                                                    
Budget, Office  of the  Governor; Bill  Endicott, Operations                                                                    
Manager,  Management  Services,   Department  of  Labor  and                                                                    
Workforce Development;  Raquel Solomon-Gross, Administrative                                                                    
Services Director,  Department of Natural  Resources, Office                                                                    
of  Management and  Budget, Office  of  the Governor;  Brent                                                                    
Goodrum,   Deputy   Commissioner,  Department   of   Natural                                                                    
Resources.                                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Corri Feige, Commissioner, Department of Natural Resources;                                                                     
Sara Longan, Deputy Commissioner, Department of Natural                                                                         
Resources.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 205      APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                
                                                                                                                                
            HB 205 was HEARD and HELD in committee for                                                                          
            further consideration.                                                                                              
                                                                                                                                
HB 206      APPROP: MENTAL HEALTH BUDGET                                                                                        
                                                                                                                                
            HB 206 was HEARD and HELD in committee for                                                                          
            further consideration.                                                                                              
                                                                                                                                
FY 21 BUDGET OVERVIEWS:                                                                                                         
                                                                                                                                
     DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                                                                                
     DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT                                                                              
     DEPARTMENT OF NATURAL RESOURCES                                                                                            
                                                                                                                                
Co-Chair Foster reviewed the agenda for the meeting.                                                                            
                                                                                                                                
HOUSE BILL NO. 205                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    capitalizing   funds;    making                                                                    
     appropriations under art.  IX, sec. 17(c), Constitution                                                                    
     of the State of  Alaska, from the constitutional budget                                                                    
    reserve fund; and providing for an effective date."                                                                         
                                                                                                                                
HOUSE BILL NO. 206                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:33:28 PM                                                                                                                    
                                                                                                                                
^FY 21 BUDGET OVERVIEW:  DEPARTMENT OF MILITARY AND VETERANS                                                                  
AFFAIRS                                                                                                                       
                                                                                                                                
1:33:35 PM                                                                                                                    
                                                                                                                                
MAJOR  GENERAL TORRENCE  SAXE,  COMMISSIONER, DEPARTMENT  OF                                                                    
MILITARY AND VETERANS AFFAIRS, introduced himself.                                                                              
                                                                                                                                
STEPHANIE   RICHARD,   ADMINISTRATIVE   SERVICES   DIRECTOR,                                                                    
DEPARTMENT  OF  MILITARY  AND VETERANS  AFFAIRS,  OFFICE  OF                                                                    
MANAGEMENT AND BUDGET, OFFICE OF  THE GOVERNOR, introduced a                                                                    
PowerPoint  presentation  titled  "FY2021  Operating  Budget                                                                    
Overview:  Presentation  to  the House  Finance  Committee,"                                                                    
dated February  12, 2020  (copy on  file). She  reviewed the                                                                    
operating  budget comparison  between the  FY 19  management                                                                    
plan   and  FY   21  governor's   request  (slide   2).  She                                                                    
highlighted  the  increase  in  unrestricted  general  funds                                                                    
(UGF)  and  designated  general   funds  (DGF)  due  to  the                                                                    
transfer of the  Alaska Land Mobile Radio  System (ALMR) and                                                                    
State   of   Alaska    Telecommunications   Systems   (SATS)                                                                    
components  to  the  Department  of  Military  and  Veterans                                                                    
Affairs (DMVA).                                                                                                                 
                                                                                                                                
Ms.  Richard  shared that  she  intended  to highlight  some                                                                    
significant  budget   changes  in  future   slides.  Changes                                                                    
included the transfer  of the ALMR and  SATS components, the                                                                    
reduction  of   matching  funds  due  to   business  process                                                                    
realignment  and efficiencies  in the  Division of  Homeland                                                                    
Security   and  Emergency   Management,  the   reduction  of                                                                    
authority due to a divestiture  process in armories, and the                                                                    
reduction of authority due to janitorial contract savings.                                                                      
                                                                                                                                
1:35:18 PM                                                                                                                    
                                                                                                                                
Ms. Richard  addressed the  FY 21  fund source  breakdown by                                                                    
fund category  on slide  3. She pointed  out an  increase in                                                                    
the  General Fund  due to  the ALMR  and SATS  transfer. The                                                                    
budget included  a reduction in  "other" funds  reflecting a                                                                    
technical   cleanup  where   the  department's   interagency                                                                    
receipt   authority  had   been  aligned   with  anticipated                                                                    
revenue.                                                                                                                        
                                                                                                                                
Commissioner  Saxe  turned  to  slide  4  and  reviewed  the                                                                    
department's  mission  to  protect and  defend  Alaska.  The                                                                    
department  had  military  forces   in  the  state  and  was                                                                    
deploying  on  a  regular  basis.  The  department  provided                                                                    
homeland  security  and   defense,  emergency  preparedness,                                                                    
veterans  affairs, administrative  services,  and the  youth                                                                    
academy  providing  training  and  education  on  a  regular                                                                    
basis.  The  department had  about  4,000  military and  200                                                                    
state  workers.  He noted  that  Air  Force service  members                                                                    
accounted  for slightly  more of  the 4,000  individuals and                                                                    
the remaining individuals were in the Army.                                                                                     
                                                                                                                                
1:36:37 PM                                                                                                                    
                                                                                                                                
Commissioner  Saxe  addressed  the ALMR  transfer  from  the                                                                    
Department  of Administration  (DOA) to  DMVA (slide  5). He                                                                    
stated  there  was  a military  nexus  with  three  portions                                                                    
including  Anchorage,  the   [U.S.]  Department  of  Defense                                                                    
(DOD),  and  the  State  of Alaska.  He  remarked  that  the                                                                    
military  would use  the  ALMR  system in  the  event of  an                                                                    
emergency; however, it was not  the only user. He elaborated                                                                    
that the  system would be  used by the Department  of Public                                                                    
Safety (DPS) and  any part of the  state requiring emergency                                                                    
communication.  He explained  that  ALMR was  the radio  and                                                                    
SATS was the telephone line.                                                                                                    
                                                                                                                                
Ms. Richard  elaborated that the  transfer of  ALMR included                                                                    
the transfer  of $2.3 million  in general funds,  $60,000 in                                                                    
general fund program receipts (a  collection of fees for the                                                                    
service),  and federal  receipt authority  of $1.9  million.                                                                    
She relayed  that the function  aligned with  DMVA's mission                                                                    
to  provide  homeland  security and  defense  and  emergency                                                                    
response.                                                                                                                       
                                                                                                                                
Co-Chair Johnston noted that the  ALMR system had originally                                                                    
been under DOA.  It was her understanding  the system needed                                                                    
to be  upgraded and  that DOD  was waiting  to see  what the                                                                    
state  would  do. She  asked  if  DMVA was  the  appropriate                                                                    
department to house ALMR.                                                                                                       
                                                                                                                                
Commissioner  Saxe  answered  that   DMVA  was  an  adequate                                                                    
location for  the ALMR  system. He  believed the  nexus with                                                                    
the military made DMVA a  particularly strong department. He                                                                    
shared  that  he  had  regular  communication  with  General                                                                    
Bussiere,  commander   of  the  Alaska  Command.   They  had                                                                    
discussed that  because of the  military nexus  and homeland                                                                    
security  within the  department, DMVA  was a  good location                                                                    
for the  system. For example,  DMVA was one of  the agencies                                                                    
that  needed the  communication  during  the earthquake  [of                                                                    
2018 in Anchorage].                                                                                                             
                                                                                                                                
Co-Chair Johnston assumed  DMVA would work with  DPS and the                                                                    
Municipality of Anchorage in terms of coordination.                                                                             
                                                                                                                                
Commissioner Saxe  answered he  had spoken  extensively with                                                                    
DPS about  ALMR. He reported  that DPS had  done significant                                                                    
background work, which it had  provided. He intended to work                                                                    
hand in hand with DPS going forward.                                                                                            
                                                                                                                                
1:39:28 PM                                                                                                                    
                                                                                                                                
Commissioner Saxe remarked that  SATS was the telephone line                                                                    
that would need to be upgraded.                                                                                                 
                                                                                                                                
Ms.  Richard relayed  that with  the transfer  of SATS,  the                                                                    
satellite  infrastructure,  there  was a  transfer  of  $4.7                                                                    
million in  general funds, $90,000 in  program receipts, and                                                                    
24 permanent full-time positions.                                                                                               
                                                                                                                                
Commissioner Saxe added that DMVA  had reached out to the 24                                                                    
people and was taking them under its wing.                                                                                      
                                                                                                                                
1:40:17 PM                                                                                                                    
                                                                                                                                
Commissioner  Saxe  moved  to  slide  7  and  discussed  the                                                                    
reduction in  authority for the  Alaska State  Defense Force                                                                    
stipend. He  explained that the  Alaska State  Defense Force                                                                    
was  comprised of  members  of the  state  militia who  were                                                                    
always in  state status. The  individuals would  deploy only                                                                    
within  Alaska barring  an extreme  situation. For  example,                                                                    
some  of the  members had  deployed to  Puerto Rico  several                                                                    
years back during its crisis.  The department was looking to                                                                    
focus on efficiencies. He relayed  that DMVA wanted to store                                                                    
equipment at Alcantra. He noted  there was $30,000 available                                                                    
in  the commissioner's  fund,  which was  the  norm for  the                                                                    
State Defense  Force. The department  was resetting  back to                                                                    
the norm and looking for efficiencies.                                                                                          
                                                                                                                                
Representative Carpenter  asked if the transfer  of ALMR and                                                                    
SATS changed the federal mission  in any way. He wondered if                                                                    
the department would seek additional  bodies or mission sets                                                                    
from the  federal government in  regard to  the capabilities                                                                    
being required from the state level.                                                                                            
                                                                                                                                
Commissioner Saxe  answered the  transfer should  not change                                                                    
anything. The  three entities were  DOD, Anchorage,  and the                                                                    
State of Alaska.                                                                                                                
                                                                                                                                
Commissioner  Saxe moved  to  slide 8  and  shared that  one                                                                    
administrative position  would be deleted. He  reported that                                                                    
the individual  holding the position  had been  notified. He                                                                    
added   that  the   National  Guard   could   take  on   the                                                                    
administrative duties such as picking up mail.                                                                                  
                                                                                                                                
1:41:51 PM                                                                                                                    
                                                                                                                                
Commissioner Saxe  turned to slide  9 showing  the reduction                                                                    
of $400,000  in authority  for business  process realignment                                                                    
and efficiencies. He explained  that the action would reduce                                                                    
UGF and replace it with  federal funding. He elaborated that                                                                    
there  was   no  operational  limitation.  They   had  spent                                                                    
significant time  researching grant by grant  and capability                                                                    
by capability.  The only  true scope  change was  related to                                                                    
travel  for administrative  purposes.  For example,  someone                                                                    
could  travel to  Juneau for  the current  meeting; however,                                                                    
under the  proposed reduction,  they would  have to  call in                                                                    
via  teleconference. He  explained  that there  would be  no                                                                    
change  to the  afterhours call  center and  state emergency                                                                    
operations  center,  Amber  Alert, river  watch,  and  fleet                                                                    
management  for  department  vehicles.  He  relayed  that  a                                                                    
substantial amount of  good data had gone  into the decision                                                                    
to move from state to federal funding.                                                                                          
                                                                                                                                
1:42:53 PM                                                                                                                    
                                                                                                                                
Commissioner  Saxe moved  to slide  10  and shared  positive                                                                    
news that DMVA previously had  83 armories in Alaska that it                                                                    
was working to  reduce to 18. He explained  that the process                                                                    
of  giving back  an armory  to  a given  entity varied,  but                                                                    
typically  the process  involved an  environmental study  by                                                                    
the Army  Corps of Engineers  and the armory was  given back                                                                    
based  on  the  landowner.  The department  was  aware  that                                                                    
communities  wanted the  armories  back quickly  and it  was                                                                    
working  towards  the  goal.   The  slide  showed  completed                                                                    
transfers,  armories ready  for divestment,  and the  18 the                                                                    
department would  retain. He noted  that by in large  the 18                                                                    
DMVA would  retain were located  in the  larger [population]                                                                    
areas.                                                                                                                          
                                                                                                                                
Co-Chair Foster asked if the  process to go through the Army                                                                    
Corps of Engineers was typically 12 months or less/more.                                                                        
                                                                                                                                
Commissioner Saxe  answered that  the process  was typically                                                                    
longer. The  department spoke in  terms of years  because it                                                                    
was largely outside  of its control. He had  tasked staff to                                                                    
focus on the armories coming up  and to push it forward with                                                                    
the Army  Corps of  Engineers. He  remarked that  many times                                                                    
the squeaky wheel  got the grease. He had  been contacted at                                                                    
almost  every  event  he  had attended  by  someone  in  the                                                                    
community looking for  the armory to come  back. He provided                                                                    
the  best  estimate  he could,  and  staff  were  contacting                                                                    
people to provide an accurate estimate.                                                                                         
                                                                                                                                
Co-Chair Foster asked  if the process had to  go through DOA                                                                    
and the  Division of Public Facilities  under the Department                                                                    
of Transportation and Public Facilities.                                                                                        
                                                                                                                                
Commissioner Saxe  answered that  the process  primarily was                                                                    
limited  to  the  Army  Corps   of  Engineers;  however,  it                                                                    
operated on  a case-by-case  basis. He explained  that there                                                                    
were  different  paths depending  on  whether  the land  was                                                                    
federal, state, or Native owned.                                                                                                
                                                                                                                                
Representative Wool  had not been  aware there were  so many                                                                    
armories  around  the state  and  in  villages. He  wondered                                                                    
about  their primary  function.  He used  St.  Mary's as  an                                                                    
example. He asked if the department was storing arms.                                                                           
                                                                                                                                
Commissioner  Saxe answered  that  it  varied. He  explained                                                                    
that in  the past, the state  had guardsmen - Army  guard in                                                                    
particular -  at the armories.  He elaborated that  about 15                                                                    
to  20 years  back most  of the  guardsmen had  been brought                                                                    
back to  Anchorage and  Fairbanks. He  relayed that  many of                                                                    
the armories  were vacant and  DMVA wanted to give  the ones                                                                    
shown [in the  "Divest" category] back as  soon as possible.                                                                    
He  remarked that  it  was  the number  one  issue for  some                                                                    
villages  -  they  wanted  access to  the  armory  in  their                                                                    
village as  the buildings  were a good  place to  gather and                                                                    
were  typically good  structures. The  reduction of  $50,000                                                                    
shown on the slide reflected  future gains that would result                                                                    
from giving armories back.                                                                                                      
                                                                                                                                
Representative Wool  stated his understanding  that armories                                                                    
had historically  been used for  guardsmen and  the function                                                                    
had changed. He surmised that  the buildings were vacant and                                                                    
currently   unavailable  to   communities.   He  asked   for                                                                    
verification that DMVA was  essentially giving the buildings                                                                    
to the communities to use the space as needed.                                                                                  
                                                                                                                                
1:46:33 PM                                                                                                                    
                                                                                                                                
Commissioner Saxe agreed. He clarified  that it varied based                                                                    
on who owned  the land. He wanted to establish  hubs at some                                                                    
of  the larger  armories and  put guardsmen  back in  "this"                                                                    
area of  Alaska. They were  not contracting  completely; the                                                                    
department was  trying to  reverse the trend  a bit  and get                                                                    
people to  sign up  and join accordingly.  He noted  that 83                                                                    
armories were too many, based on current force structure.                                                                       
                                                                                                                                
Co-Chair  Foster  added that  there  were  a couple  of  the                                                                    
armory  facilities in  his district.  He explained  that the                                                                    
buildings were  very small and usually  completely abandoned                                                                    
and were without electricity, heat,  or water. He elaborated                                                                    
that  the  community  was  more   than  happy  to  take  the                                                                    
facilities to use  for youth programs or a  place for elders                                                                    
to meet. He thought it was a win-win situation.                                                                                 
                                                                                                                                
Vice-Chair  Ortiz  asked  if the  movement  to  divest  from                                                                    
various  armories  throughout  rural Alaska  would  have  an                                                                    
impact on  individuals' ability to  serve in the  guard. For                                                                    
example, he wondered  if divesting from the  armory in Akiak                                                                    
would impact  an Akiak  resident's ability  to serve  in the                                                                    
guard.                                                                                                                          
                                                                                                                                
Commissioner Saxe  replied that DMVA  was trying to  make it                                                                    
as easy  as possible for  people to join. For  example, they                                                                    
planned to  start up the  "milk run"  again to go  to bigger                                                                    
hubs within the state. He  explained that the department was                                                                    
not  consolidating to  Anchorage;  it  was consolidating  to                                                                    
rural hubs  (e.g. Nome, Bethel,  Galena). He  explained that                                                                    
if a person were in a  nearby village, the goal would be for                                                                    
that  person  to  have  the   ability  to  drill  in  a  hub                                                                    
community.  Anecdotally, there  were hundreds  of people  in                                                                    
Western Alaska who were interested  in joining. He stated it                                                                    
was an excitement they had not seen in years.                                                                                   
                                                                                                                                
Vice-Chair  Ortiz   asked  for   the  reason   in  increased                                                                    
excitement.                                                                                                                     
                                                                                                                                
Commissioner  Saxe believed  it  was getting  out there  and                                                                    
making sure people understood the  guard was "part of you as                                                                    
Alaskans  and we  invite  you  to become  part  of us."  The                                                                    
department had  sent additional recruiters  to that  area of                                                                    
Alaska and  it was  hosting events that  he and  other staff                                                                    
attended to invite  residents to join. He noted  that it was                                                                    
a practice that had not taken place in a while.                                                                                 
                                                                                                                                
1:49:04 PM                                                                                                                    
                                                                                                                                
Commissioner Saxe  addressed the reduction in  authority for                                                                    
janitorial contract  savings on slide 11.  He clarified that                                                                    
the department was not looking  to eliminate the contract in                                                                    
its entirety. The goal was to  have the guard step up and do                                                                    
more of the cleaning itself.                                                                                                    
                                                                                                                                
Ms. Richard added that the  proposal to reduce authority for                                                                    
janitorial contracts  would result  in General  Fund savings                                                                    
of $123,000  and federal receipt authority  of $378,000. She                                                                    
explained that the  effort was similar to work  the State of                                                                    
Alaska had  done several years  back. The idea was  to focus                                                                    
on cleaning  common areas  instead of  the entire  areas and                                                                    
reducing the frequency of visits.  The department targeted a                                                                    
50 percent  reduction from its  prior year  expenditure. She                                                                    
explained   that  the   numbers   on  slide   11  were   the                                                                    
department's  targeted figures.  She explained  that if  the                                                                    
proposal  went  forward,  the DMVA  procurement  team  would                                                                    
cancel the current contracts and  put the contracts back out                                                                    
to bid.  The department  did not  know which  facilities the                                                                    
savings  would  come  from;  it  would  depend  on  the  bid                                                                    
response.                                                                                                                       
                                                                                                                                
Commissioner  Saxe addressed  the  authority  to align  with                                                                    
anticipated expenditures  on slide 12. He  detailed that the                                                                    
Air Guard  had the  ability to increase  efficiencies, which                                                                    
the department  was aiming to do.  He noted the funds  to be                                                                    
eliminated (shown  on slide 12)  were excess and  would have                                                                    
no operational impact.                                                                                                          
                                                                                                                                
Representative      Sullivan-Leonard     considered      the                                                                    
responsibilities  and duties  of the  department. She  asked                                                                    
for an update  on the Alaska Military  Youth Academy (AMYA).                                                                    
She  asked how  it was  working and  how it  was translating                                                                    
into success  for program participants.  She asked  if there                                                                    
were aspects that needed improvement.                                                                                           
                                                                                                                                
Commissioner Saxe  relayed that  his wife had  sponsored two                                                                    
of  the  cadets  over  the  past couple  of  years.  He  had                                                                    
witnessed  the  lifechanging  impact   the  program  had  on                                                                    
participants. He shared that he had  been a fan of the youth                                                                    
academy prior to taking his  current position. He elaborated                                                                    
that the  state of the  academy was healthy.  He highlighted                                                                    
that one thing  that they had changed  was sending guardsmen                                                                    
in  much  larger numbers  to  help  out with  mentoring  and                                                                    
physical  training.  He  expounded that  youth  participants                                                                    
were getting  help on levels  that they had not  received in                                                                    
the past.  He had regular  meetings with academy  staff, and                                                                    
he  observed that  morale appeared  high. He  had asked  the                                                                    
academy  to have  authority and  responsibility at  the same                                                                    
level. He  explained that if someone  had responsibility for                                                                    
something,  they should  also have  authority for  that same                                                                    
thing -  from the  director level down  to the  trainers who                                                                    
met with  cadets. He had  a good  communication relationship                                                                    
with  academy  staff and  visited  on  a regular  basis.  He                                                                    
believed morale was high.                                                                                                       
                                                                                                                                
Representative Sullivan-Leonard  shared that she was  also a                                                                    
big  fan of  the program.  She asked  if there  had been  an                                                                    
increase or decrease in the number of AMYA participants.                                                                        
                                                                                                                                
Commissioner Saxe answered that  the enrollment numbers were                                                                    
pretty  steady at  around 135  to  150. He  stated that  the                                                                    
number was healthy.  He had asked AMYA staff  what the right                                                                    
number  is, and  the existing  enrollment was  approximately                                                                    
the target  they were looking  for. He explained  the number                                                                    
should not be so high  that staff could not address students                                                                    
on an individual basis. He  reported that the department had                                                                    
made  healthcare much  more robust  within  the program.  He                                                                    
found  it  inspirational  to see  that  program  staff  were                                                                    
completely vested in caring for the students.                                                                                   
                                                                                                                                
1:53:26 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  looked at  the operating  budget comparison                                                                    
on slide 2.  He asked whether the FY 21  budget reflected an                                                                    
increase or decrease if the ALMR transfer was backed out.                                                                       
                                                                                                                                
Ms.  Richard  answered there  would  be  a decrease  in  the                                                                    
budget if it did not include the transfer of ALMR and SATS.                                                                     
                                                                                                                                
Co-Chair Foster asked for the amount.                                                                                           
                                                                                                                                
Ms. Richard  answered that  the reduction  included $400,000                                                                    
UGF  in  the Division  of  Homeland  Security and  Emergency                                                                    
Management,  approximately  $123,000 related  to  janitorial                                                                    
services, $10,000 in the Office  of the Commissioner for the                                                                    
Alaska  State  Defense   Force  stipend,  and  approximately                                                                    
$3,000 for  the administrative  assistant position  that was                                                                    
primarily funded with federal funds.                                                                                            
                                                                                                                                
Co-Chair  Foster stated  his understanding  that the  budget                                                                    
was  down  UGF   when  ALMR  was  backed   out.  He  thanked                                                                    
Commissioner Saxe  for traveling  to Nome and  talking about                                                                    
getting some people out into  the hubs. He remarked that the                                                                    
effort  would  not  require  state  money;  it  looked  like                                                                    
federal  funds  would be  coming  in  that would  allow  the                                                                    
department to increase its presence.                                                                                            
                                                                                                                                
Vice-Chair Ortiz  looked at  slides 5 and  6 related  to the                                                                    
ALMR  and  SATS  transfer  into DMVA.  He  asked  about  the                                                                    
impetus of the transfer.                                                                                                        
                                                                                                                                
1:55:32 PM                                                                                                                    
                                                                                                                                
Commissioner   Saxe   answered   the  department   had   the                                                                    
connection to  the military and  close association  with its                                                                    
active duty  counterparts including  the Alaska  Command led                                                                    
by  Commander General  Busseire  and  homeland security.  He                                                                    
elaborated that  in the event  of a largescale  disaster, if                                                                    
necessary, they  would establish a dual  status commander to                                                                    
be in charge of state  and federal forces. He explained that                                                                    
in an  ultimate emergency  it would fall  on DMVA.  For that                                                                    
reason,  it  made  sense  to  have  ALMR  and  SATS  in  the                                                                    
department.                                                                                                                     
                                                                                                                                
Representative LeBon  asked for an  update on the  168th air                                                                    
refueling wing at  the Eielson Air Force Base.  He asked how                                                                    
the mission was going and what the future looked like.                                                                          
                                                                                                                                
Commissioner  Saxe  replied  that   he  was  a  former  wing                                                                    
commander  at Eielson.  He  detailed  that KC-135  airplanes                                                                    
continued to  shine. He elaborated that  the newest airplane                                                                    
was a 1963  model. He shared an analogy of  what it would be                                                                    
like to  drive a 1963  car. The department was  working with                                                                    
active duty. He  relayed that if Pacific  Air Forces decided                                                                    
to put  the new KC-46 at  Eielson, DMVA was very  open to an                                                                    
association on its current airplanes  and the KC-46. He unit                                                                    
was hovering around  the high 80s, the best it  had been for                                                                    
a long  time, and the  retention rate was about  97 percent.                                                                    
Clear Air Force Station was also underneath the wing.                                                                           
                                                                                                                                
Commissioner  Saxe reported  that  the  United States  Space                                                                    
Force would  be coming  to Alaska.  He detailed  that Alaska                                                                    
was one of  eight states with a space mission  at Clear. The                                                                    
mission would likely  be going to the  Space National Guard,                                                                    
which  would be  connected  directly into  Fort  Greely -  a                                                                    
spotter/sniper relationship. He  informed the committee that                                                                    
for  a relatively  small  wing, it  was  healthy and  moving                                                                    
forward. He reported that because  there were so many things                                                                    
happening within the  Interior on the military  side, it was                                                                    
an exciting time to be part of the wing.                                                                                        
                                                                                                                                
1:57:36 PM                                                                                                                    
                                                                                                                                
Representative  LeBon  asked if  the  arrival  of the  F-35s                                                                    
helped  with the  air refueling  mission.  He mentioned  the                                                                    
possibility of  getting the KC-46.  He asked if there  was a                                                                    
connection between the two.                                                                                                     
                                                                                                                                
Commissioner Saxe  believed there  was a connection,  but it                                                                    
was the Pacific Air Force's  call. He relayed that there was                                                                    
currently  a need  for  refueling.  He expressed  excitement                                                                    
that  Alaska would  have more  "5th-gen"  fighters than  any                                                                    
other  location  worldwide.  It was  necessary  to  ask  the                                                                    
question  and  be  able  to  address how  to  refuel  to  do                                                                    
aircraft coming in.                                                                                                             
                                                                                                                                
Representative  Carpenter  asked  if  the  new  Space  Force                                                                    
impacted  the Army  National Guard  current mission  at Fort                                                                    
Greely.                                                                                                                         
                                                                                                                                
Commissioner Saxe  answered that  about six months  back the                                                                    
plan had been  to transfer to the Space Force,  but that was                                                                    
no   longer   the  case.   However,   there   had  been   an                                                                    
unanticipated  change announced  earlier  in  the day,  that                                                                    
entailed the  transfer of  about 100  Army guardsmen  to the                                                                    
Space   Force.  He   relayed  that   there  would   be  more                                                                    
information to follow. He reported  that he was watching the                                                                    
situation carefully.                                                                                                            
                                                                                                                                
Representative Wool  asked if  the Space  Force was  its own                                                                    
separate branch.                                                                                                                
                                                                                                                                
Commissioner Saxe replied  that the Space Force  was its own                                                                    
separate branch,  but it was  still evolving.  He referenced                                                                    
the analogy  of the Air Force  evolving out of the  Army. He                                                                    
elaborated that it  would be a small force,  but he believed                                                                    
it would expand in numbers as it expanded in mission.                                                                           
                                                                                                                                
Co-Chair   Foster    thanked   the   department    for   its                                                                    
presentation.                                                                                                                   
                                                                                                                                
^FY 21  BUDGET OVERVIEW:  DEPARTMENT OF LABOR  AND WORKFORCE                                                                  
DEVELOPMENT                                                                                                                   
                                                                                                                                
1:59:32 PM                                                                                                                    
                                                                                                                                
CATHY MUNOZ,  DEPUTY COMMISSIONER,  DEPARTMENT OF  LABOR AND                                                                    
WORKFORCE DEVELOPMENT (DLWD), thanked  the committee for the                                                                    
opportunity  to  present.  She relayed  Commissioner  Tamika                                                                    
Ledbetter  was   currently  in  Washington   D.C.  attending                                                                    
meetings of the National  Association of Workforce Agencies.                                                                    
She  shared   that  the   commissioner  had   recently  been                                                                    
appointed  national  chair   of  the  Workforce  Development                                                                    
Committee,  which  had  been a  great  opportunity  for  the                                                                    
department  to  interact  with  other  states  on  workforce                                                                    
development best practices.                                                                                                     
                                                                                                                                
Ms.  Munoz  introduced  other   staff  from  the  department                                                                    
present at the  meeting. The department intended  to give an                                                                    
overview of its divisions and  programs and a summary of the                                                                    
FY 21 budget proposals from  the adjusted base. She provided                                                                    
a  PowerPoint  presentation  titled  "Alaska  Department  of                                                                    
Labor and  Workforce Development Department  Overview: House                                                                    
Finance Committee," dated February  12, 2020 (copy on file).                                                                    
She reviewed  the department's mission  to provide  safe and                                                                    
legal working  conditions and  to advance  opportunities for                                                                    
employment (slide  2). The department's mission  was carried                                                                    
out  through its  core services,  which included  protecting                                                                    
Alaskan workers  through the Alaska Occupational  Safety and                                                                    
Health  organization,  workforce   development,  and  income                                                                    
replacement.                                                                                                                    
                                                                                                                                
Ms. Munoz  highlighted that the department's  proposed FY 21                                                                    
budget totaled $150.5 million. She  detailed that 62 percent                                                                    
of  the total  was dedicated  to workforce  development. The                                                                    
agency  received  a  great   deal  of  federal  pass-through                                                                    
funding that  was shared with training  providers around the                                                                    
state.  The funds  were  also provided  to  job centers  and                                                                    
money  went out  to  individual Alaskans  who  were able  to                                                                    
access the services for training.                                                                                               
                                                                                                                                
2:02:36 PM                                                                                                                    
                                                                                                                                
Ms.   Munoz  highlighted   four  components   of  the   DLWD                                                                    
organization  on  slide  3.   The  first  component,  titled                                                                    
"Protect  Workers,"  included  the  Alaska  Labor  Relations                                                                    
Agency, the  Workers' Compensation  Division, and  the Labor                                                                    
Standards and Safety Division.  The second component, titled                                                                    
"Workforce  Development,"  included   the  Alaska  Workforce                                                                    
Investment  Board,  Division   of  Employment  Training  and                                                                    
Services,   Vocational   Rehabilitation,  and   the   Alaska                                                                    
Vocational   Technical  Center   (AVTEC)   in  Seward.   She                                                                    
elaborated that  the Alaska  Workforce Investment  Board was                                                                    
the  only board  of  its  kind in  Alaska  (many states  had                                                                    
multiple workforce development  boards) that coordinated and                                                                    
worked    with   training    providers.   The    board   had                                                                    
representatives from  K-12 public education,  the University                                                                    
of Alaska,  public and private training  programs, industry,                                                                    
and  the  State  of  Alaska. She  reported  that  AVTEC  had                                                                    
recently  been named  in the  top 10  percent for  colleges,                                                                    
universities, and training programs  around the country, for                                                                    
return on investment.  The department was very  proud of the                                                                    
designation.  She expounded  that the  designation had  been                                                                    
awarded by  Georgetown University's Center on  Education and                                                                    
the Workforce. She elaborated that  AVTEC had been ranked 41                                                                    
out of 4,500 schools and universities nationwide.                                                                               
                                                                                                                                
Ms.   Munoz   addressed    the   third   category,   "Income                                                                    
Replacement,"  that  included  Unemployment  Insurance,  and                                                                    
Disability  Determinations (slide  3). The  fourth category,                                                                    
titled    "Leadership    and    Support,"    included    the                                                                    
Commissioner's    Office,    Management    Services,    Data                                                                    
Processing,  Labor  Market  Information,  and  Leasing.  She                                                                    
detailed that Labor Market Information  was the research and                                                                    
analysis  division, the  publisher of  the Trends  magazine,                                                                    
and the producer of up to  date job data. She encouraged the                                                                    
committee  to look  at the  department's website  to find  a                                                                    
wealth of economic data.                                                                                                        
                                                                                                                                
2:05:03 PM                                                                                                                    
                                                                                                                                
Ms.  Munoz  moved  to  slide   4  and  discussed  department                                                                    
priorities. The  department's top  priority was  promoting a                                                                    
culture of  excellence in  customer service.  The department                                                                    
prided itself on  being very responsive to the  public - the                                                                    
open  for  business   philosophy  permeated  throughout  the                                                                    
department's  work. The  department  had  732 employees,  of                                                                    
which,  662  were  full-time,   48  were  part-time  (mostly                                                                    
seasonal  unemployment  insurance  employees), and  22  were                                                                    
temporary.  She   explained  that  most  of   the  temporary                                                                    
positions were student interns;  the commissioner had placed                                                                    
a priority on  bringing in high school  and college interns,                                                                    
which had been very successful.                                                                                                 
                                                                                                                                
Ms.  Munoz  highlighted that  the  department  was proud  of                                                                    
promoting  a  culture  of  business  friendly  service.  She                                                                    
detailed that  in 2019,  DLWD had  increased its  efforts in                                                                    
the Alaska  Occupational Safety and Hazard  Division through                                                                    
a more  cooperative strategy with the  regulative community.                                                                    
Additionally, the department  had completed 392 Occupational                                                                    
Safety   and   Health  Administration   (OSHA)   enforcement                                                                    
inspections of worksites to  ensure safe working conditions.                                                                    
The  efforts  resulted  in the  lowest  workplace  lost-time                                                                    
injury  since  2012.  The  department  also  placed  a  high                                                                    
priority   on  preparing   Alaskans   for   jobs  in   their                                                                    
communities.  One  of   the  commissioner's  priorities  was                                                                    
ensuring  that Alaskans  knew about  the many  opportunities                                                                    
and  services  throughout   DLWD,  including  training,  job                                                                    
preparation,   counseling,  adaptive   technology  for   the                                                                    
employment  of  the  disabled,   and  more.  The  department                                                                    
focused  on   the  efficient   and  effective   delivery  of                                                                    
services.  She elaborated  that  DLWD was  working to  build                                                                    
collaboration  between  the  divisions. Work  was  currently                                                                    
underway to  merge the  Workers' Compensation  Division with                                                                    
the Labor, Standards, and Safety Division.                                                                                      
                                                                                                                                
Ms. Munoz  expounded that DLWD  was also working  with other                                                                    
departments  to collaborate  and coordinate  ways to  better                                                                    
serve   Alaskans.   For    example,   the   department   was                                                                    
collaborating  with  the  Department of  Health  and  Social                                                                    
Services  on  the  At  Risk   Youth  Initiative  to  provide                                                                    
employment,  housing, and  training opportunities  for youth                                                                    
transitioning  out  of  foster  care and  high  school.  The                                                                    
department   was  also   incredibly  proud   of  the   Youth                                                                    
Homelessness  Demonstration  Project.   The  project  was  a                                                                    
successful  cooperative  effort   with  the  Alaska  Housing                                                                    
Finance Corporation  (AHFC) to receive a  perpetual grant of                                                                    
$1.65  million  to  combat  youth  homelessness  in  Alaska.                                                                    
Additionally, the  department was working with  other states                                                                    
where it could.  She cited the commissioner's  work with the                                                                    
National Association of State  Workforce Agencies and recent                                                                    
appointment  to the  Employment  and  Training Committee  as                                                                    
examples.                                                                                                                       
                                                                                                                                
2:08:36 PM                                                                                                                    
                                                                                                                                
Ms. Munoz reported  that the department was  excited to work                                                                    
with the  legislature to promote opportunities  for Alaskans                                                                    
to get  trained and  connected to  the opportunities  in the                                                                    
economy. She relayed that DLWD  looked forward to continuing                                                                    
to develop a locally grown workforce.                                                                                           
                                                                                                                                
HANNAH LAGER,  ADMINISTRATIVE SERVICES  DIRECTOR, DEPARTMENT                                                                    
OF  LABOR AND  WORKFORCE DEVELOPMENT,  OFFICE OF  MANAGEMENT                                                                    
AND  BUDGET,  OFFICE  OF  THE  GOVERNOR,  reviewed  a  chart                                                                    
showing a three-year lookback of  the department's budget on                                                                    
slide 5.  She remarked  that the  three bars  looked similar                                                                    
because  a  significant  portion  of  the  DLWD  budget  was                                                                    
federal funding.  Federal funds  accounting for  the largest                                                                    
portion  of the  budget at  50 percent  as shown  in yellow.                                                                    
Designated general  funds (DGF)  shown in  orange, accounted                                                                    
for 25 percent,  other funds shown in gray  accounted for 12                                                                    
percent, and unrestricted general  funds (UGF) accounted for                                                                    
about 13 percent.  She reported that in 2019  there had been                                                                    
a small uptick  in UGF funding in the amount  of $250,000 in                                                                    
the  Labor Market  Information component  for one-time  2020                                                                    
census  outreach. The  department's  request for  FY 21  was                                                                    
$18.6  million, which  was  a  drop of  $2.1  million or  10                                                                    
percent from FY 19.                                                                                                             
                                                                                                                                
Ms.  Lager   provided  a  breakdown  of   the  $2.1  million                                                                    
decrease.  She detailed  that $1.4  million was  a net  zero                                                                    
fund change  between UGF and  DGF related to  the correction                                                                    
of  the  categorization  of   certified  payroll  fees.  She                                                                    
explained  that the  change was  an accounting  cleanup. She                                                                    
elaborated that $250,000 was the  difference in the one-time                                                                    
census item in FY 19.                                                                                                           
                                                                                                                                
2:11:00 PM                                                                                                                    
                                                                                                                                
Ms. Lager  turned to slide 6  showing the FY 21  fund source                                                                    
breakdown by fund category. She  pointed to the table at the                                                                    
top  of the  slide  and  noted that  the  department had  no                                                                    
formula programs.  She added that  TVEP funding was  kind of                                                                    
like  a   formula  program,  but  it   was  not  technically                                                                    
categorized  as such.  The total  operating  budget of  $150                                                                    
million   was  reflected   on  the   nonformula  line.   She                                                                    
highlighted  duplicate funding  shown on  the third  line of                                                                    
the  table.  She  detailed  that  the  money  reflected  one                                                                    
section of  the state  paying another  section of  the state                                                                    
for  services  provided.  Duplicate  funding  accounted  for                                                                    
approximately   10   percent   of  the   budget,   including                                                                    
interagency receipts  and capital improvement  project (CIP)                                                                    
receipts (money  spent from previously  appropriated capital                                                                    
projects).   For   example,   the  administration   of   the                                                                    
department   was  paid   for  by   other  sections   of  the                                                                    
department;  therefore, the  money  was  counted twice.  She                                                                    
noted that  without the duplicate  funding line,  the budget                                                                    
was approximately $135 million.                                                                                                 
                                                                                                                                
Ms.  Lager  pointed to  the  bottom  of  slide 6  showing  a                                                                    
variety of  funding sources. Many  of the fund  sources were                                                                    
in the  DGF category and  were funds specified  for specific                                                                    
payments or programs.                                                                                                           
                                                                                                                                
Ms. Lager  moved to  slide 7 and  reviewed changes  from the                                                                    
adjusted base.  Item 1 showed  a reduction of funds  for the                                                                    
commissioner's office. She explained  that in previous years                                                                    
the funds  had been used  for legal expenses for  a specific                                                                    
litigation  that was  no longer  underway. Item  2 reflected                                                                    
the elimination  of a position in  the Anchorage procurement                                                                    
office as  a result of  streamlining. She detailed  that the                                                                    
department  was   eliminating  reception  in   the  specific                                                                    
office. Item 3 showed the  reduction of general funds in the                                                                    
Data Processing  Section, which  would increase  reliance on                                                                    
federal funds  - making  people pay  for their  own projects                                                                    
through  federal awards  or other  funding  sources. Item  4                                                                    
showed  a  small  increment for  research  and  analysis  to                                                                    
benefit  the Alaska  Mental Health  Trust Authority  (AMHTA)                                                                    
and its beneficiaries.                                                                                                          
                                                                                                                                
Ms.  Lager continued  to review  items  on slide  7. Item  5                                                                    
reflected   the   elimination   of   the   online   training                                                                    
clearinghouse  from the  Labor  Market Information  Section.                                                                    
She explained that  the tool had likely been  very useful to                                                                    
the public  10 years back,  but now most of  the information                                                                    
could  be found  via an  online search.  She added  that the                                                                    
tool was not  statutorily required. Item 6  pertained to the                                                                    
consolidation of  two administrative  positions into  one in                                                                    
the  Juneau  Labor Market  Information  Office  in order  to                                                                    
increase efficiencies.                                                                                                          
                                                                                                                                
Ms. Lager  moved to item  7 on  slide 7. She  explained that                                                                    
the previous  year, HB 79  had passed, which phased  out the                                                                    
Second Injury  Fund for the  department. The  department had                                                                    
put forward a fiscal note  that would have gradually reduced                                                                    
its authority from the fund over  a period of years until it                                                                    
was  reduced to  a zero  balance. The  department had  taken                                                                    
another  look  and  recognized that  most  of  the  payments                                                                    
coming  out of  the fund  were lifetime  payments for  total                                                                    
disability;  therefore,  DLWD  would need  to  continue  its                                                                    
authority to  make the  payments until the  fund was  out of                                                                    
money.  Item 7  reflected half  of the  transaction and  the                                                                    
other  half was  -$400,000,  which  resided before  adjusted                                                                    
base (it was  not included on the slide but  was included in                                                                    
the budget  book). She  explained that  the two  sums netted                                                                    
out to zero.  The slide reflected what  the department would                                                                    
have done if the fiscal note had been adopted.                                                                                  
                                                                                                                                
Ms.  Lager  concluded with  item  8  on  slide 7.  The  item                                                                    
reflected a  correction to  the categorization  of certified                                                                    
payroll fees.  She elaborated that for  years the department                                                                    
had collected the  fees and put them into  the General Fund,                                                                    
and it had spent from  the General Fund. She elaborated that                                                                    
they  had  reviewed  the  statute   and  the  fees  met  the                                                                    
definition of  program receipts  under the  program receipts                                                                    
statute; therefore,  they were switching  the categorization                                                                    
in order to reflect the budget more accurately.                                                                                 
                                                                                                                                
2:15:20 PM                                                                                                                    
                                                                                                                                
Ms. Lager moved  to slide 8 and continued  to review changes                                                                    
from the adjusted  base. Item 9 reflected  the adjustment of                                                                    
administrative and investigative  positions in its Fairbanks                                                                    
office  for wage  and  hour  administration. She  elaborated                                                                    
that an  office assistant  position in  the office  had been                                                                    
vacant  for  more than  a  year;  therefore, the  department                                                                    
planned to  delete the  position and to  use other  staff in                                                                    
the area  to help  support the  administrative needs  of the                                                                    
section.  Additionally, an  investigator  position was  also                                                                    
being  reclassified to  a wage  and  hour technician,  which                                                                    
would result in some changes in legal fees in the office.                                                                       
                                                                                                                                
Ms. Lager addressed  item 10 on slide 8.  The component only                                                                    
had $3,000  UGF remaining.  Anecdotally, it likely  cost the                                                                    
department  more than  $3,000 to  administer the  structures                                                                    
and to  track and budget  for them annually;  therefore, the                                                                    
amount  would  be cleared  out.  Item  11 pertained  to  the                                                                    
unemployment  insurance  component   and  would  delete  two                                                                    
positions  and associated  federal authority.  She expounded                                                                    
that the  positions had been  vacant for close to  two years                                                                    
and  the  department  wanted to  ensure  it  was  accurately                                                                    
reflecting its needs  in the budget. Item 12  fell under the                                                                    
vocational  rehabilitation  component.  The  department  had                                                                    
closed  its Kodiak  office on  December 31,  2019; the  item                                                                    
would delete the two positions and budget authority.                                                                            
                                                                                                                                
Ms. Lager  moved to items  13 and 14  on slide 8  related to                                                                    
AVTEC. She explained  that AVTEC was focused  on making sure                                                                    
that  student fees  charged support  themselves for  student                                                                    
consumables  such   as  gas  supplies  for   welding  shops.                                                                    
Additionally,  AVTEC   was  putting  forward   a  regulatory                                                                    
package  that would  include a  4 percent  tuition increase.                                                                    
The  department  was  working to  ensure  that  AVTEC  would                                                                    
continue to  be affordable and competitive,  but also making                                                                    
sure students  covered a  bit more of  their costs.  Item 14                                                                    
also  pertained  to  AVTEC.  She  detailed  that  AVTEC  was                                                                    
focused on leveraging  contractual training opportunities to                                                                    
help support some of its program operations.                                                                                    
                                                                                                                                
Ms. Lager  reviewed item 15  on slide 8. She  explained that                                                                    
the increment pertained to AVTEC  continuing to evaluate its                                                                    
programs. She expounded  that as one of  its instructors was                                                                    
retiring,  AVTEC had  realized that  with a  slight calendar                                                                    
shift it could have one instructor teach two programs.                                                                          
                                                                                                                                
2:17:25 PM                                                                                                                    
                                                                                                                                
Co-Chair  Johnston asked  for the  current  formula for  the                                                                    
STEP [State Employment and Training Program].                                                                                   
                                                                                                                                
Ms.  Munoz replied  that STEP  funding was  financed through                                                                    
the portion  of the employment security  tax. She elaborated                                                                    
that 0.5  percent of  wages was  taken from  employees' pay.                                                                    
She detailed that  STEP was 0.10 percent of  the 0.5 percent                                                                    
or approximately $8 million per year.                                                                                           
                                                                                                                                
Co-Chair Johnston  asked when the  STEP percentage  had last                                                                    
been adjusted.                                                                                                                  
                                                                                                                                
Ms. Lager replied  that the department would  follow up with                                                                    
the information.                                                                                                                
                                                                                                                                
Co-Chair  Johnston  noted she  had  heard  some interest  in                                                                    
making an adjustment to the percentage.                                                                                         
                                                                                                                                
Ms.  Lager  highlighted  the  department's  proposed  FY  21                                                                    
capital budget  on slide 9.  The proposal was limited  to an                                                                    
increment   for  the   Vocational  Rehabilitation   Business                                                                    
Enterprise  Program   facility  development   and  equipment                                                                    
replacement.  She   briefly  referenced  slide   10  showing                                                                    
information on  significant budget  changes in FY  20. Slide                                                                    
11 showed  TVEP funding  history from  FY 17  to FY  21. She                                                                    
pointed out that  FY 21 was the  same as FY 20  for the time                                                                    
being.  The  department  knew that  reauthorization  of  the                                                                    
program was  needed, and that  legislation was  currently in                                                                    
progress  to do  so.  She informed  the  committee that  the                                                                    
program was currently scheduled to sunset on June 30, 2020.                                                                     
                                                                                                                                
Representative  Knopp noted  there was  a line  item in  the                                                                    
subcommittee  budget  that  was  not  currently  before  the                                                                    
committee. He  asked for an  explanation of the  function of                                                                    
the business partnership program.                                                                                               
                                                                                                                                
Ms. Munoz replied that the  business partnership was through                                                                    
the  Division of  Vocational Rehabilitation.  She elaborated                                                                    
that  the  function  was to  ensure  priority  for  disabled                                                                    
vendors  in the  bidding of  contracts for  food service  in                                                                    
state facilities.                                                                                                               
                                                                                                                                
2:20:48 PM                                                                                                                    
                                                                                                                                
Representative  Knopp noted  that  in FY  16 the  employment                                                                    
security and business partnership  program had been combined                                                                    
and  moved  into the  Division  of  Employment and  Training                                                                    
Services. He  thought the move  likely made sense.  He noted                                                                    
that  the   department  was  moving   $10  million   to  the                                                                    
commissioner  and  administrative services  from  employment                                                                    
and training  services. He was concerned  about getting away                                                                    
from the intent of the program.                                                                                                 
                                                                                                                                
Ms. Munoz deferred the question to a colleague.                                                                                 
                                                                                                                                
BILL  ENDICOTT,  OPERATIONS  MANAGER,  MANAGEMENT  SERVICES,                                                                    
DEPARTMENT OF LABOR AND  WORKFORCE DEVELOPMENT, replied that                                                                    
the  Business  Enterprise  Program  was  administered  under                                                                    
Director  Duane   Mayes  in   the  Division   of  Vocational                                                                    
Rehabilitation. He referenced a  merger that had occurred in                                                                    
FY 16. He  detailed that there had been  a separate Division                                                                    
of   Business   Partnerships.    The   division   had   been                                                                    
consolidated into  the Employment  Security Division  and it                                                                    
had  been renamed  the Division  of Employment  and Training                                                                    
Services.  Part  of  the consolidation  related  to  finding                                                                    
efficiencies. He  believed the merging of  the divisions had                                                                    
saved  $600,000 through  the consolidation  of  some of  the                                                                    
leadership  positions and  other.  He stated  that about  23                                                                    
positions had been moved into  a division with closer to 400                                                                    
positions.  The change  had  also  enabled streamlining  and                                                                    
efficiencies.  The  business partnership's  primary  purpose                                                                    
was  to confer  with the  Alaska Workforce  Investment Board                                                                    
and  provide  for  priority  programs  for  federal  dollars                                                                    
received.  He  elaborated  that business  partnership  would                                                                    
receive  the federal  funding and  employment security,  now                                                                    
Division of Employment and Training  Services, would use the                                                                    
funds to do the training.                                                                                                       
                                                                                                                                
2:23:26 PM                                                                                                                    
                                                                                                                                
Representative Knopp  remarked that employment  and training                                                                    
services  was   being  moved   into  the   commissioner  and                                                                    
administrative  services budget  at  about  $10 million.  He                                                                    
asked  if   the  department  was  downsizing   the  business                                                                    
partnership programs or no longer  used them. He wondered if                                                                    
the department was getting away  from the original intent of                                                                    
the program.                                                                                                                    
                                                                                                                                
Mr. Endicott  responded that it  was his  understanding that                                                                    
the  leadership's approach  was to  provide for  streamlined                                                                    
services.   He   elaborated   that  the   Alaska   Workforce                                                                    
Investment Board  fell under the commissioner's  office. The                                                                    
board  provided  for  identification  of  priority  training                                                                    
services.  Part of  the workforce  development component  in                                                                    
employment and training services  was called the grants unit                                                                    
and  was specifically  moved under  the board  to streamline                                                                    
decision  making  with  the   grant  delivery  process.  The                                                                    
structure was  designed to  reduce the  overall coordination                                                                    
and collaboration of activities within the same department.                                                                     
                                                                                                                                
2:25:07 PM                                                                                                                    
                                                                                                                                
Vice-Chair Ortiz  commended and  thanked Ms. Munoz  for help                                                                    
she  had provided  a  couple of  his  constituents over  the                                                                    
summer.                                                                                                                         
                                                                                                                                
Co-Chair Foster  noted that Ms. Munoz  had previously served                                                                    
on the House Finance Committee.                                                                                                 
                                                                                                                                
Co-Chair   Foster    thanked   the   department    for   its                                                                    
presentation.                                                                                                                   
                                                                                                                                
^FY 21 BUDGET OVERVIEW: DEPARTMENT OF NATURAL RESOURCES                                                                       
                                                                                                                                
2:26:15 PM                                                                                                                    
                                                                                                                                
CORRI FEIGE,  COMMISSIONER, DEPARTMENT OF  NATURAL RESOURCES                                                                    
(via   teleconference),  provided   opening  comments.   She                                                                    
thanked  the  committee  for  its  time.  She  introduced  a                                                                    
PowerPoint  presentation  titled  "FY2021  Operating  Budget                                                                    
Overview, Department  of Natural Resources:  Presentation to                                                                    
House Finance," dated February 12,  2020 (copy on file). She                                                                    
reviewed the Department of  Natural Resources' (DNR) mission                                                                    
to  develop,  conserve, and  maximize  the  use of  Alaska's                                                                    
natural resources, consistent with  the public interest. She                                                                    
stated that  with its mission  in mind, DNR had  worked hard                                                                    
to develop  an operating budget focusing  on its statutorily                                                                    
mandated programs. The department  was working to remove the                                                                    
roadblocks   to  the   fulfillment  of   the  state's   land                                                                    
entitlement,  growing   the  state's  economy   and  revenue                                                                    
streams,  and providing  high quality  level  of service  to                                                                    
Alaskans.                                                                                                                       
                                                                                                                                
Commissioner  Feige reported  that over  the past  year, DNR                                                                    
had strategically  deployed resources within  the department                                                                    
to better manage areas of  growing economic development like                                                                    
aquatic farming. The department  had placed a heavy emphasis                                                                    
on doing  more with  what it  had. She  stated that  DNR was                                                                    
placing a sharp  focus on recruitment and  retention to save                                                                    
the state money. She explained  that turnover cost the state                                                                    
money. The department  wanted to improve the  quality of its                                                                    
workforce as well as its outputs.                                                                                               
                                                                                                                                
RAQUEL  SOLOMON-GROSS,   ADMINISTRATIVE  SERVICES  DIRECTOR,                                                                    
DEPARTMENT OF  NATURAL RESOURCES,  OFFICE OF  MANAGEMENT AND                                                                    
BUDGET, OFFICE  OF THE GOVERNOR,  noted that  her colleagues                                                                    
would review  their own divisions. She  highlighted that DNR                                                                    
had prepared  a program guide  for the past four  years. She                                                                    
detailed that the document provided  a deeper dive into each                                                                    
of  the   department's  programs  and  their   budgets.  The                                                                    
document would be provided to the committee.                                                                                    
                                                                                                                                
Ms. Solomon-Gross began  on with the FY  21 operating budget                                                                    
comparison on slide 2. She read from prepared remarks:                                                                          
                                                                                                                                
     Our  department's   mission:  develop,   conserve,  and                                                                    
     maximize   the  use   of  Alaska's   natural  resources                                                                    
     consistent with the public  interest. The Department of                                                                    
     Natural  Resources generates  a  large  portion of  the                                                                    
     state's   revenue   from  multiple   funding   sources,                                                                    
     including  oil  and   gas  royalties,  material  sales,                                                                    
     mining  leases,  seismic  data sales,  park  fees,  and                                                                    
     recording fees, just to name a few.                                                                                        
                                                                                                                                
     On  a ten-year  average, the  department brings  in $28                                                                    
     for  every general  fund  dollar  we are  appropriated.                                                                    
     This  is  a  direct indication  of  activity  happening                                                                    
     across the state. I want  to point out that all dollars                                                                    
     in this presentation will be represented in thousands.                                                                     
                                                                                                                                
     The chart in front of  you compares the department's FY                                                                    
     19  and FY  20 management  plan  budgets to  the FY  21                                                                    
     governor   budget  by   each   of   the  four   funding                                                                    
     categories,  with  the   corresponding  dollar  amounts                                                                    
     shown at the bottom.  Those categories are unrestricted                                                                    
     general  funds, designated  general  funds, other,  and                                                                    
     federal. Comparing  the FY 19  management plan  and the                                                                    
     FY 21 governor  budget there is an  overall increase of                                                                    
     less than 1 percent.                                                                                                       
                                                                                                                                
2:31:21 PM                                                                                                                    
                                                                                                                                
Ms. Solomon-Gross turned to slide 3 and reviewed the                                                                            
department's FY 21 fund source breakdown by fund category                                                                       
with prepared remarks:                                                                                                          
                                                                                                                                
     Our total FY  21 general fund budget of  just over $101                                                                    
     million,   which   includes   both   unrestricted   and                                                                    
     designated general  funds, is  62 percent of  our total                                                                    
     budget.   This  number   is  important   because  every                                                                    
     reduction we  have equates to  people and  our capacity                                                                    
     to do  work. DNR's operating  budget is funded  with 20                                                                    
     different fund sources.                                                                                                    
                                                                                                                                
     In  the  DGF  or   designated  general  fund  category,                                                                    
     general  fund  program  receipts make  up  the  largest                                                                    
     portion of this category.  Some examples are park fees,                                                                    
     material  sales,  mining  leases, recording  fees,  and                                                                    
     seismic  data   sales.  With  a  few   exceptions,  all                                                                    
     designated  general fund  revenue collected  above what                                                                    
     we  are  appropriated and  spend,  goes  back into  the                                                                    
     general  fund.   The  exceptions   to  that   would  be                                                                    
     divisions  that  have   carryforward  language  in  the                                                                    
     budget   bill.  For   example,  with   that  additional                                                                    
     language in the bill, the  Division of Parks is able to                                                                    
     carryforward  what's been  collected in  previous years                                                                    
     above what they  are appropriated to spend  in order to                                                                    
     fill  that  general  fund  program  receipt  bucket  in                                                                    
     future  years   to  get   them  through   those  slower                                                                    
     generating revenue  years. An  example of when  this is                                                                    
     needed is in a high  fire season certain park areas may                                                                    
     need to  be closed  to the public;  therefore, bringing                                                                    
     in less revenue.                                                                                                           
                                                                                                                                
     We  also  have the  State  Land  Disposal Income  Fund,                                                                    
     which  is  revenue  from  state  land  sales.  We  have                                                                    
     vehicle  rental  tax, which  is  a  10 percent  fee  on                                                                    
     passenger vehicle rentals  used for tourism, marketing,                                                                    
     and development.  We also  have timber  receipts, which                                                                    
     is the sale of timber on state lands.                                                                                      
                                                                                                                                
     Moving down  to the  "other" category. A  large portion                                                                    
     of  this  category   is  statutory  designated  program                                                                    
     receipts (SDPR). This revenue  comes from memorandum of                                                                    
     agreements we  have with nongovernmental  agencies. For                                                                    
     example,   our  Office   of   Project  Management   and                                                                    
     Permitting  is   largely  funded  with  SDPR   and  has                                                                    
     agreements to  coordinate permitting  activities across                                                                    
     the state.                                                                                                                 
                                                                                                                                
2:33:39 PM                                                                                                                    
                                                                                                                                
Ms. Solomon-Gross advanced  to slide 4 and  discussed the FY                                                                    
21 operating budget by core services with prepared remarks:                                                                     
                                                                                                                                
     Here  we have,  listed  in priority  order, DNR's  four                                                                    
     core  services for  each of  the four  fund categories.                                                                    
     Those four areas  are: fostering responsible commercial                                                                    
     development,  mitigate   threat  to  the   public  from                                                                    
     natural  hazards, provide  access  to  state lands  for                                                                    
     public  and private  use,  and  ensure sufficient  data                                                                    
     acquisition and assessment.                                                                                                
                                                                                                                                
Ms.  Solomon-Gross  highlighted   that  under  the  mitigate                                                                    
natural hazard threat category,  of the $50.2 million, $46.8                                                                    
million was  dedicated to fire.  The second column  from the                                                                    
right showed  the percentage of  general funds  allocated to                                                                    
each  core service,  including  unrestricted and  designated                                                                    
general funds.                                                                                                                  
                                                                                                                                
2:34:32 PM                                                                                                                    
                                                                                                                                
Ms.  Solomon-Gross  moved  to  a comparison  of  the  FY  20                                                                    
management plan and the governor's  FY 21 proposed budget on                                                                    
slide 5. She read from prepared remarks:                                                                                        
                                                                                                                                
     The  biggest  change  you'll notice  here  is  the  net                                                                    
     decrease in  unrestricted general funds  of $4,226,000.                                                                    
     The  FY  21 amount  is  reduced  by  the balance  of  a                                                                    
     multiyear  operating appropriation  DNR received  in FY                                                                    
     17  for Arctic  Strategic Transportation  and Resources                                                                    
     (ASTAR).  This  operating appropriation  terminates  at                                                                    
     the end of FY 20.                                                                                                          
                                                                                                                                
     Also  included  in  the  FY   21  governor  budget  are                                                                    
     increment  requests for  each  division  to offset  the                                                                    
     increased cost  related to  union salary  increases and                                                                    
     health  insurance costs.  The total  increment for  the                                                                    
     department is $415,000.  Those increments are allocated                                                                    
     by  fund source  based on  how positions  are currently                                                                    
     funded.  For  example, if  a  position  is 100  percent                                                                    
     federally  funded,  the  department is  allocated  only                                                                    
     federal  funds  for  those increased  costs  associated                                                                    
     with that position.                                                                                                        
                                                                                                                                
     As  we go  through each  division, we'll  speak to  the                                                                    
     other changes included in the FY 21 governor budget.                                                                       
                                                                                                                                
2:35:50 PM                                                                                                                    
                                                                                                                                
Ms. Solomon-Gross reviewed a comparison of positions on                                                                         
slide 5:                                                                                                                        
                                                                                                                                
     Over to the  right of the slide we  have the comparison                                                                    
     of positions between  FY 20 management plan  and the FY                                                                    
     21 governor  budget. Since FY  16, DNR has  reduced our                                                                    
     workforce   by  104   permanent  full-time   positions.                                                                    
     Between FY  20 and  FY 21  there is  a net  increase of                                                                    
     three  positions.   You'll  notice  that  there   is  a                                                                    
     negative  14  non-perm  positions  and  a  positive  14                                                                    
     permanent part-time positions. This  is due to a couple                                                                    
     of requests  in the  FY 21  governor budget  to replace                                                                    
     non-perm  positions with  permanent seasonal  positions                                                                    
     in order to support a more sustainable workforce.                                                                          
                                                                                                                                
Ms.  Solomon-Gross  moved  to  slide  6  showing  additional                                                                    
detail on positions  broken out by division.  She noted that                                                                    
more of the  information would be addressed  in the division                                                                    
specific slides.                                                                                                                
                                                                                                                                
2:36:48 PM                                                                                                                    
                                                                                                                                
Ms. Solomon-Gross moved to the Support Services Division                                                                        
budget on slide 7 and read from prepared remarks:                                                                               
                                                                                                                                
     The first  division slide  we have  is the  Division of                                                                    
     Support Services.  Our mission: provide  client focused                                                                    
     efficient   and   cost-effective   financial,   budget,                                                                    
     procurement,  human  resource, information  technology,                                                                    
     and  recording services  to the  Department of  Natural                                                                    
     Resources  and  the  public. The  Information  Resource                                                                    
     Management  Section used  to include  IT staff  for the                                                                    
     department  before  IT  was centralized  statewide  and                                                                    
     those positions  were transferred to the  Department of                                                                    
     Administration   to    the   Office    of   Information                                                                    
     Technology.  This  section  is   now  made  up  of  our                                                                    
     Geographic Information Systems (GIS) Unit.                                                                                 
                                                                                                                                
     The division is  what would normally be  referred to as                                                                    
     the Division of Administrative  Services in other state                                                                    
     agencies,  but   DNR  is   also  responsible   for  the                                                                    
     statewide  Recorder's  Office,  which no  other  agency                                                                    
     has, which  is why in  years past the name  was changed                                                                    
     to Support Services.                                                                                                       
                                                                                                                                
     Much of  the change you see  here between FY 20  and FY                                                                    
     21 is  for those  salary and health  insurance increase                                                                    
     costs  that I  referred to  earlier. For  this division                                                                    
     specifically, it  was about $20,000 in  total. That net                                                                    
     decrease in the  other fund category is in  part due to                                                                    
     a  transfer  or  a repurposing  of  excess  interagency                                                                    
     receipt authority  that was  transferred to  the Public                                                                    
     Information Center (PIC). The PIC  is in part funded by                                                                    
     other DNR  divisions, so as  their need  for additional                                                                    
     staff  is increased,  this transfer  will provide  them                                                                    
     the  mechanism to  collect and  spend those  from other                                                                    
     DNR divisions.                                                                                                             
                                                                                                                                
2:38:26 PM                                                                                                                    
                                                                                                                                
Commissioner   Feige    provided   an   overview    of   the                                                                    
commissioner's office budget on  slide 8. The biggest change                                                                    
was the  closeout of the  ASTAR project. She  explained that                                                                    
within the  commissioner's office  there were  three central                                                                    
areas of focus.  She described the first as one  of the more                                                                    
important  areas  of  focus,  which  included  ensuring  due                                                                    
process to Alaskans and the  assurance that DNR was carrying                                                                    
out  its statutorily  mandated programs.  The  focus on  due                                                                    
process  included  ensuring  the department  was  processing                                                                    
administrative appeals associated  with the leases, permits,                                                                    
or  other  transactions  taken on  by  the  department.  She                                                                    
explained that  beginning in January of  2019, DNR inherited                                                                    
a  backlog of  155 administrative  appeals and  in the  past                                                                    
year it  had adjudicated  52 of the  155. At  present, there                                                                    
was a  log of about 115  active appeals. She noted  the work                                                                    
took a significant amount of staff time.                                                                                        
                                                                                                                                
Commissioner Feige  continued to address  the commissioner's                                                                    
office  budget  on  slide  8. The  office  also  focused  on                                                                    
actively   promoting   Alaska's   resources   and   resource                                                                    
development  to domestic  and  international investors.  She                                                                    
explained  that the  focus carried  the message  that Alaska                                                                    
was  open   for  business.  Additionally,  it   shared  with                                                                    
industries interested  in resource development  exactly what                                                                    
Alaska's   resource   development   was,   Alaska's   unique                                                                    
characteristics,  and  to  dispel myths  about  working  and                                                                    
operating  in  Alaska.  She  noted  that  the  work  took  a                                                                    
significant amount of staff time.                                                                                               
                                                                                                                                
Commissioner Feige  reported that  DNR continued to  focus a                                                                    
substantial amount  of the  commissioner's office  staff and                                                                    
time on working federal  land planning and management issues                                                                    
that impact  Alaska at the  ground level. The  office worked                                                                    
closely with its Washington  D.C. delegation. Currently they                                                                    
were working  to align revisions  to the  state's Geothermal                                                                    
Development  Program with  new proposed  federal legislation                                                                    
being advanced by Senator Lisa  Murkowski. The office placed                                                                    
a  great deal  of  emphasis on  issues  of navigability  and                                                                    
taking  title to  state submerged  lands  and lifting  long-                                                                    
lived PLOs  in order for the  state to have access  to lands                                                                    
and resources due through the statehood entitlement.                                                                            
                                                                                                                                
2:41:41 PM                                                                                                                    
                                                                                                                                
SARA  LONGAN,  DEPUTY  COMMISSIONER, DEPARTMENT  OF  NATURAL                                                                    
RESOURCES (via teleconference), provided  an overview of the                                                                    
Office of Project Management and  Permitting (OPMP) on slide                                                                    
9. She read from prepared remarks:                                                                                              
                                                                                                                                
     The mission of the  office is to coordinate multiagency                                                                    
     regulatory    reviews    and   authorizations,    while                                                                    
     collaboratively engaging  federal agencies on  land use                                                                    
     planning  and policy  initiatives.  The biggest  change                                                                    
     from  prior  fiscal year  is  less  than a  10  percent                                                                    
     increase in UGF funding. This  consists of a request to                                                                    
     add $595,000 to compensate or  to provide support for a                                                                    
     federal  plan review  and  coordination. As  mentioned,                                                                    
     this  office  dedicates   important  time  and  effort,                                                                    
     closely working with  the federal government, advancing                                                                    
     and  protecting state's  interests during  federal land                                                                    
     planning and  initiative reviews.  You'll see  that the                                                                    
     number of positions from prior year remains unchanged.                                                                     
                                                                                                                                
2:42:50 PM                                                                                                                    
                                                                                                                                
Ms. Longan  turned to slide 10  and gave an overview  of the                                                                    
Division of  Geological and Geophysical Surveys  budget with                                                                    
prepared remarks:                                                                                                               
                                                                                                                                
     The  mission  of  this division  is  to  determine  the                                                                    
     potential of Alaska land for  the production of metals,                                                                    
     minerals, fuels,  and geothermal resources.  Helping to                                                                    
     locate   and   supply  groundwater   and   construction                                                                    
     material   and  the   potential  geologic   hazards  to                                                                    
     buildings, roads, bridges, and other installations.                                                                        
                                                                                                                                
     There is a  very minor change in the  budget from prior                                                                    
     years,  but  there are  differences  in  the number  of                                                                    
     positions. For example, there is  a proposal to replace                                                                    
     six non-permanent  positions to permanent  seasonal, in                                                                    
     support of  critical projects. This is  to help achieve                                                                    
     sustainability   and   retention  of   our   workforce.                                                                    
     Changing a  part-time position to a  seasonal full-time                                                                    
     position  to meet  increased  workload  and adding  two                                                                    
     natural  resource  technicians  for  the  multispectral                                                                    
     scanning  project. This  project  is  critical to  help                                                                    
     leverage  the geological  materials  center energy  and                                                                    
     mineral  core and  rock  collection.  Scanning of  this                                                                    
     collection  will electronically  archive the  materials                                                                    
     and  will preserve  the  value  before those  materials                                                                    
     degrade.                                                                                                                   
                                                                                                                                
2:44:12 PM                                                                                                                    
                                                                                                                                
Ms. Longan moved to slide 11 and reviewed the Division of                                                                       
Oil and Gas budget with prepared remarks:                                                                                       
                                                                                                                                
     The  Division of  Oil and  Gas's mission  is to  manage                                                                    
     lands for  oil and  gas and geothermal  exploration and                                                                    
     development  in  a  fair   and  transparent  manner  to                                                                    
     maximize  prudent use  of  resources  for the  greatest                                                                    
     benefit of all Alaskans.  In addition, facilitating the                                                                    
     safe  and  environmentally   conscious  operations  and                                                                    
     maintenance of common carrier pipelines.                                                                                   
                                                                                                                                
     There  is  a negative  percent  change  in the  overall                                                                    
     budget  from  prior  fiscal  years  of  less  than  one                                                                    
     percent.   This    was   accomplished   in    part   by                                                                    
     consolidating  the  state  pipeline  section  into  the                                                                    
     Atwood Building at a savings  of $218,000. Through this                                                                    
     division's gain in  operational efficiencies, they were                                                                    
     able  to  transfer   two  natural  resource  specialist                                                                    
     positions  to the  Division of  Mining, Land  and Water                                                                    
     for aquatic farm application and processing.                                                                               
                                                                                                                                
     There was  also the opportunity to  delete one position                                                                    
     that is  a non-permanent  position that was  vacant for                                                                    
     longer  than 12  months.  For all  personnel costs  for                                                                    
     personnel  members,   the  total   change  here   is  a                                                                    
     reduction of three positions.                                                                                              
                                                                                                                                
Representative  Josephson  asked   about  the  aquatic  farm                                                                    
application   processing   positions  formerly   under   the                                                                    
management plan natural resource  specialist. He wondered if                                                                    
the  farmers  would   have  to  absorb  the   costs  of  the                                                                    
positions.  Alternatively,  he  wondered if  the  state  was                                                                    
using UGF for the expenses.                                                                                                     
                                                                                                                                
Ms. Longan answered  that the farmers would not  have a cost                                                                    
impact. The  department gained efficiencies in  the Division                                                                    
of  Oil  and  Gas  and  transferred  the  resources  to  the                                                                    
Division of Mining, Land and  Water in order to transfer the                                                                    
two natural resource specialist positions.                                                                                      
                                                                                                                                
2:46:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair Ortiz  referenced mariculture  farms [application                                                                    
processing].  He asked  if the  change  was a  result of  an                                                                    
increase or expected increase  of applications. He supported                                                                    
the change.                                                                                                                     
                                                                                                                                
Ms.  Longan  answered there  had  been  an increase  in  the                                                                    
number  of  applications.  In  order  for  the  Division  of                                                                    
Mining, Land and  Water to support the increase  there was a                                                                    
need  to accept  a transfer  of the  two positions  from the                                                                    
Division of Oil and Gas to  the Division of Mining, Land and                                                                    
Water.                                                                                                                          
                                                                                                                                
2:47:17 PM                                                                                                                    
                                                                                                                                
Ms. Longan addressed the Mental  Health Trust Land Office on                                                                    
slide 12 with prepared remarks:                                                                                                 
                                                                                                                                
     The mission  of this office  is to protect  and enhance                                                                    
     the  value   of  Alaska   Mental  Health   Trust  lands                                                                    
     including  minerals, coal,  oil  and  gas, timber,  and                                                                    
     real  estate,  while  maximizing  revenues  from  those                                                                    
     lands over time for mental health services.                                                                                
                                                                                                                                
     As a  reminder, the trust  land office budget  is zero-                                                                    
     based, meaning it  is backed out every  year and starts                                                                    
     from  scratch.  It is  approved  by  the Alaska  Mental                                                                    
     Health  Trust Authority  Board.  In FY  19 this  office                                                                    
     generated $10.6  million in  revenues from  rents, land                                                                    
     sales, and royalties.                                                                                                      
                                                                                                                                
     There is  really not much  to report here other  than a                                                                    
     cost savings  of $78,900  achieved by  gaining internal                                                                    
     efficiencies. The  number of proposed positions  in the                                                                    
     current  proposed  plan  remains the  same  from  prior                                                                    
     years.                                                                                                                     
                                                                                                                                
2:48:24 PM                                                                                                                    
                                                                                                                                
BRENT  GOODRUM, DEPUTY  COMMISSIONER, DEPARTMENT  OF NATURAL                                                                    
RESOURCES,  reviewed the  Division of  Agriculture's mission                                                                    
to  promote and  encourage development  of the  agricultural                                                                    
industry in  Alaska (slide  13). He  relayed there  had been                                                                    
considerable  discussion  about  the division's  budget  the                                                                    
previous year.  The proposed budget  changes for FY  21 were                                                                    
primarily  due to  union salary  and  health insurance  cost                                                                    
increases.                                                                                                                      
                                                                                                                                
Mr. Goodrum  reviewed the Division of  Forestry's mission to                                                                    
serve  Alaskans through  sustainable  forest management  and                                                                    
wildland  fire protection  (slide 14).  He highlighted  that                                                                    
the 2019 fire  season had been historic at 742  fires on 2.6                                                                    
million acres  that burned throughout the  state. He thanked                                                                    
the firefighters for their work  in combatting the fires. He                                                                    
detailed  that the  Forest  Inventory  and Analysis  Program                                                                    
would benefit  from the conversion  of eight  positions from                                                                    
temporary hires to permanent seasonal  staff. The cost would                                                                    
be  covered entirely  with federal  funds. Additionally,  an                                                                    
increase  in  DGF for  timber  sale  preparation would  help                                                                    
deliver  more   wood  to  the  forest   product  sector,  to                                                                    
communities, and to the public.                                                                                                 
                                                                                                                                
2:49:55 PM                                                                                                                    
                                                                                                                                
Mr.  Goodrum  addressed the  Division  of  Mining, Land  and                                                                    
Water on  slide 15.  The division's  mission was  to provide                                                                    
for  the appropriate  use and  management of  Alaska's state                                                                    
owned land  and water aiming towards  maximum use consistent                                                                    
with the  public interest. He  detailed that  the governor's                                                                    
budget   provided  additional   staffing  for   two  growing                                                                    
sections within the division. One  additional staff had been                                                                    
identified  to increase  the capability  of  the Land  Sales                                                                    
Section in  Fairbanks. The  governor's budget  supported the                                                                    
growing mariculture  industry by requesting funding  for the                                                                    
two  previously identified  positions from  the Division  of                                                                    
Oil  and  Gas  to  help  process  the  number  of  increased                                                                    
applications. He elaborated that as  of the current week the                                                                    
division  was  working  on 34  applications  and  was  still                                                                    
receiving applications  through April 30.  The appropriation                                                                    
would  be greatly  appreciated and  helpful to  the program.                                                                    
Additionally, the  governor's budget added language  for the                                                                    
potential carryforward of general fund program receipts.                                                                        
                                                                                                                                
Mr. Goodrum advanced to slide  16 and discussed the Division                                                                    
of Parks and Outdoor  Recreation. The division's mission was                                                                    
to  provide outdoor  recreation opportunities  and conserves                                                                    
and  interprets natural,  cultural,  and historic  resources                                                                    
for  the  use, enjoyment,  and  welfare  of the  people.  He                                                                    
shared that it was the  50th anniversary of the Alaska State                                                                    
Parks.  He  relayed   that  there  would  be   a  number  of                                                                    
activities throughout  the state celebrating  the milestone.                                                                    
The budget included an increase  in interagency authority to                                                                    
support  transparent   budgeting  of   reimbursable  service                                                                    
agreements in  the division  and its  Office of  History and                                                                    
Archeology.  He  expounded  that  in  2019,  the  Office  of                                                                    
History and Archeology reviewed  over 930 projects statewide                                                                    
and  had signed  five major  agreements. He  noted that  the                                                                    
division  was  seeking   to  eliminate  eight  non-permanent                                                                    
positions.                                                                                                                      
                                                                                                                                
2:52:14 PM                                                                                                                    
                                                                                                                                
Representative Josephson asked  Commissioner Feige about her                                                                    
feelings  on  ASTAR's  work  in   terms  of  what  had  been                                                                    
accomplished and whether it was worthwhile.                                                                                     
                                                                                                                                
Commissioner Feige believed the  ASTAR project had been very                                                                    
successful. She reported that ongoing  work would be done in                                                                    
the next  two to  three years, but  the increments  would be                                                                    
transferred to  a capital project.  She detailed  that ASTAR                                                                    
had  been  focused  on ensuring  there  were  corridors  for                                                                    
fiberoptics  for   communication  and  for   developing  and                                                                    
enhancing community security  and connectedness. The program                                                                    
had  also  been  focused  on  transportation  corridors  and                                                                    
availability of gravel, materials,  and water for supporting                                                                    
the work.                                                                                                                       
                                                                                                                                
Commissioner Feige  noted that  the North Slope  Borough and                                                                    
communities  in the  borough,  specifically  in the  Natural                                                                    
Petroleum  Reserve-Alaska  (NPRA)  had  constructed  an  all                                                                    
winter snow  road in  the past  two winters.  She elaborated                                                                    
that the road allowed for  travel between Barrow and Nuiqsut                                                                    
and possibly  Atqasuk to get  out to the Dalton  Highway and                                                                    
Fairbanks. She shared  that she and Ms. Longan  had met with                                                                    
North Slope Borough  leadership in May in  Utquigvik and had                                                                    
discussed the  impact of  the snow road.  The borough  had a                                                                    
full  transportation  plan defined  and  would  like to  see                                                                    
ASTAR develop into  a program to help  define strategic road                                                                    
corridors.  The hope  was to  eventually have  an all-season                                                                    
gravel road to connect the  communities and help drive their                                                                    
cost  of living  down  and increase  community security  and                                                                    
connectedness. She  believed the ASTAR program  had been and                                                                    
would continue  to be  incredibly important,  especially for                                                                    
North Slope communities.                                                                                                        
                                                                                                                                
Commissioner   Feige   thanked   the   committee   for   its                                                                    
flexibility on the presentation format.                                                                                         
                                                                                                                                
HB  205  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  206  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster reviewed  the  schedule  for the  following                                                                    
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
2:55:52 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:55 p.m.                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
HFC FY21 DMVA Operating Budget Overview 2.12.2020 FINAL.pdf HFIN 2/12/2020 1:30:00 PM
HFC-DLWD Budget Overview 02.12.2020.pdf HFIN 2/12/2020 1:30:00 PM
DNR FY21 Gov HFin Budget Overview.pdf HFIN 2/12/2020 1:30:00 PM
DOLWD Response to Q HFC Budget Overview 03.2.2020.pdf HFIN 2/12/2020 1:30:00 PM