Legislature(2017 - 2018)HOUSE FINANCE 519
06/10/2017 10:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB23 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 23 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
FIRST SPECIAL SESSION
June 10, 2017
11:20 a.m.
11:20:43 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 11:20 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Cathy Tilton
Representative Tammie Wilson
Representative Mark Neuman (alternate)
MEMBERS ABSENT
Representative Steve Thompson
ALSO PRESENT
Paul Labolle, Staff, Representative Neal Foster; Rob
Carpenter, Analyst, Legislative Finance Division; Ed King,
Special Assistant, Department of Natural Resources; John
Skidmore, Director, Criminal Division, Department of Law;
Gene Therriault, Deputy Director, Statewide Energy Policy
Development, Alaska Energy Authority, Department of
Commerce, Community and Economic Development; Mike Vigue,
Director of Program Development, Department of
Transportation and Public Facilities; Pat Pitney, Director,
Office of Management and Budget, Office of the Governor;
Brian Fechter, Analyst, Office of Management and Budget;
Representative DeLena Johnson; Representative George
Rauscher; Representative Colleen Sullivan-Leonard;
Representative Dan Saddler; Representative Andy Josephson.
PRESENT VIA TELECONFERENCE
Frank Richards, Senior Vice President, Alaska Gasline
Development Corporation (AGDC); Heidi Teshner, Director,
School Finance and Facilities, Department of Education and
Early Development.
SUMMARY
CSSB 23(FIN) am
APPROP: CAPITAL BUDGET
CSSB 23(FIN) am was HEARD and HELD in committee
for further consideration.
[Note: meeting recessed to the following day and the bill
was reported out at that time. See June 11, 2017 2:00 p.m.
minutes for detail.]
Co-Chair Foster reviewed the meeting agenda. He informed
members that amendments were due by 2:00 p.m. that day.
CS FOR SENATE BILL NO. 23(FIN) am
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
11:22:03 AM
Co-Chair Seaton MOVED to ADOPT the proposed committee
substitute (CS) for CSSB 23(FIN) am, Work Draft 30-GS1854\T
(Martin, 6/9/17). There being NO OBJECTION, it was so
ordered.
11:23:00 AM
RECESSED
2:15:49 PM
RECONVENED
Co-Chair Foster explained that the CS had been adopted
earlier in the day.
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, explained
the changes in the CS from the Senate version to House
version T:
The first change can be found on page 7, on line 19,
AHFC Supplemental Housing Development, $750,000 that
was decremented in Senate has been restored. On Line
21, AHFC Teacher Housing and Public Safety
Professionals Housing, the same $750,000 that was
decremented in the Senate has also been replaced. On
Line 31, Alaska Marine Highway System (AMHS) vessel,
there's a fund source change in the numbers section,
page 11 and 12, and it changes the fund source from
vessel replacement fund to general fund as was in the
original version of the bill. Next page, page 8, line
4, Public and Community Transportation State Match $1
million, this was removed in the Senate and replaced
in this version.
2:18:56 PM
Mr. Labolle turned to page 49, line 10:
This is language having to do with the payment of
settlements and judgements assessed to the state, that
language was removed in the Senate version and
replaced with line item appropriations of specific
judgements and settlements. That line item
appropriation was replaced with language in the
governor's supplemental.
Representative Wilson asked why they went from more
transparency to less.
Mr. Labolle replied there was one settlement that had been
excluded in the line items, which was for Planned
Parenthood. Legislative Legal Services preferred open-ended
language in the event there were judgements and settlements
that were unknown at the drafting of the bill.
Representative Wilson asked about the amount for Planned
Parenthood.
Mr. Labolle replied $1.1 million. The next change appeared
on page 57, line 20.
The Senate had put in language to make an
appropriation with Alaska Liquefied Natural Gas
(AKLNG) project funds to the Department of Law for
additional prosecuting attorneys. In our version of
the bill we extended the effective years of the
appropriation so it would include FY 18, FY 19 and FY
20.
2:21:29 PM
Representative Wilson asked if it would allow contracting
out for attorneys.
Mr. Labolle was not sure.
ROB CARPENTER, ANALYST, LEGISLATIVE FINANCE DIVISION, did
not know precisely; however, given the language stating "to
hire additional prosecuting attorneys" that it would be in-
house. He noted it would be a Legislative Legal Services
question.
Vice-Chair Gara noted that the state had sometimes
contracted out for defense attorneys at a lower rate,
sometimes for civil attorneys, but had not contracted out
for prosecutors.
Representative Wilson noted that she did not know whether
it had been offered in light of the case backlog. She was
curious about the timeline of three years versus one year.
She could wait to hear from Legislative Legal Services.
2:23:27 PM
Mr. Labolle turned to the next change on page 57, line 30:
This is a reappropriation that funds the ASTAR [Arctic
strategic transportation and resources] project and it
reappropriates money from Department of Transportation
and Public Facilities, Trunk Road (phase one) from the
Department of Natural Resources for reservoir studies,
North Slope and Cook Inlet; and from the Alaska
Railroad for Tanana River bridge access, and the
amount of that reappropriation was $7.8 million.
Representative Wilson thought it looked like the "road to
resources." She stated there was a lot of discussion of
whether AIDEA [Alaska Industrial Development and Export
Authority] was going to fund that project. She asked if it
was the same project. If so, she wondered what part of the
project it would fund.
Mr. Labolle deferred to the department.
ED KING, SPECIAL ASSISTANT, DEPARTMENT OF NATURAL
RESOURCES, answered the money was for the pre-engineering
phase of the project. The money would be used to hire four
people for contract work. He referred to the NPR-A
[National Petroleum Reserve in Alaska]. Currently those
activities were not permitted under the management plan of
the NPR-A, but with the recent signature of U.S. Department
of Interior Secretary Ryan Zinke the department could get
the infrastructure into the areas. The design for the road
was part of the process. The intent of the project was to
connect multiple communities and to open access.
Representative Wilson asked if it would be a state
maintained road or would be free of restrictions.
Mr. King answered they were in early stages of the project.
Currently the department was leaning towards some form of
revenue bonding by the borough to take on management of the
road through arrangements with industry partners. They were
not envisioning the road would be state-maintained.
Representative Wilson hoped if the money was put into the
road that everyone would have access. Some of the monies
were coming from the Tanana Bridge, which can be used by
Fairbanks residents for a week or two each year for hunting
purposes. She felt it was putting a lot of money into
something that could not be utilized. She preferred
something that all Alaskans could use.
2:27:23 PM
Mr. Labolle spoke to page 57, line 12:
This is Department of Public Safety language that the
Senate put in for the hiring of additional state
troopers. Similar to what we did with Department of
Law we extended the fiscal years of that appropriation
to include FY 18, FY 19 and FY 20.
Representative Guttenberg spoke to money taken out of the
AKLNG project fund. He wondered if the committee could hear
from the department regarding the impact of that decrement.
2:28:39 PM
AT EASE
2:30:20 PM
RECONVENED
Co-Chair Foster moved back to the changes in the bill while
waiting for a representative from the administration.
Mr. Labolle addressed the Juneau Access project on page 59,
line 8:
This is the Juneau Access Project. The original
version of the bill reappropriated funds left in that
project to the Alaska class ferry and to Northern Lynn
Canal transportation improvements. The Senate removed
those reappropriations and this reinserts the same
reappropriations.
Co-Chair Foster noted that the Department of Law was
online.
JOHN SKIDMORE, DIRECTOR, CRIMINAL DIVISION, DEPARTMENT OF
LAW, was available for questions.
Vice-Chair Gara spoke to prosecutor positions. He asked
whether, if $5 million was split over a three-year period,
it would suffice or whether they could make do with less.
Mr. Skidmore replied that the figures used by DOL were
$225,000 per attorney. He could not determine where the
prosecutors would be placed until he had seen the resources
appropriated by the legislature. He reminded the committee
that the department had not requested additional funds,
however, they would evaluate where those funds would be
used if the money was allocated.
Vice-Chair Gara referred to the attorney cost. He
calculated it was approximately seven or eight attorneys.
He asked if it met the need.
Mr. Skidmore replied that in terms of the need - if there
were additional funds appropriated, the department would
use funds to engage in additional prosecutions. It was
difficult to specify the need. He believed they were
currently prosecuting cases with 11 prosecutors, and as the
positions had been reduced, they had reduced the number of
prosecutions. He felt it was a subjective evaluation when
it came to the number of prosecutions the state wanted to
carry out.
2:35:53 PM
Vice-Chair Gara remarked that the department had lost about
11 prosecutors and the bill language would add about 7. He
asked if the increment would be sufficient to prosecute
more cases.
Mr. Skidmore answered that it would return the number of
prosecutors to just below the level of about three years
earlier. He added that during the same timeframe the state
had been doing fewer prosecutions also because there had
been fewer referrals from law enforcement. He did not have
the data on hand. He believed the department would have the
ability to do more prosecutions with more staff, but he did
not believe it was necessary to return to the number of
three years earlier.
2:38:35 PM
Representative Wilson spoke to the bill that specified "to
hire prosecutors." She asked whether the department would
only need it because some cases went on longer than others.
Mr. Skidmore answered that the department did not generally
hire contractors for prosecution cases. The only time in
which this would happen was for a very specific appeal or
post-conviction relief in which there was an obvious
limitation on the work required. He did not believe the
department would; however, the department had found itself
short-staffed on a number of occasions and in order to fill
gaps due to family leave, DOL had contemplated bringing in
former experienced prosecutors.
Representative Wilson asked if Mr. Skidmore was concerned
that the increment would only last three years, and that
hiring people may involve letting them go at the end of
that period.
Mr. Skidmore answered in the affirmative and added that it
would take considerable thought from management on how that
would be addressed.
2:41:53 PM
Representative Neuman remarked he had concerns about
appropriating leftover capital monies from capital projects
for an operating budget increment. He discussed that in the
past the funds had been used to receive federal matching
funds for highway funds. He believed it could leave a
considerable hole in the operating budget of $500 million.
Representative Guttenberg found it frustrating to hear
there were not enough referrals from the troopers. He
thought it may be that more prosecutors without more
troopers may be the cause. He spoke to a rise in burglaries
in his district.
Mr. Skidmore responded in the affirmative. He spoke to the
need for balance across the criminal justice system. He
thought that in part it was due to a lack of deferrals;
however, the percentage of referrals declined had increased
due to a lack of prosecutors. If the referrals increased,
the department would definitely need more prosecutors.
2:45:06 PM
Representative Guttenberg asked about the impact on the $50
million allocation out of the AKLNG fund on the ongoing
project negotiations and efforts to get gas to the market.
GENE THERRIAULT, DEPUTY DIRECTOR, STATEWIDE ENERGY POLICY
DEVELOPMENT, ALASKA ENERGY AUTHORITY, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, replied that
the loss of the funding would be severely detrimental to
moving forward. He referred to a series of very positive
meetings in Washington, D.C., and it was clear the loss of
funding would put the brakes on the project.
Representative Guttenberg asked for more detail about
conversations Mr. Therriault had in Washington, D.C. He
asked at which level of personnel they were discussing the
project.
Mr. Therriault answered they had met with federal
Department of Transportation and with PHMSA - Pipeline and
Hazardous Materials Safety Administration, which would make
determinations on the investments for infrastructure and
could aid in managing the costs related to the project.
Department of Interior Secretary Zinke had been in the
state and had indicated the desire to develop more oil and
gas on the North Slope, and the state needed infrastructure
to get gas to market. They met with staff at the White
House who were working on the president's infrastructure
endeavors, specifically energy infrastructure and making it
accessible to Alaska citizens and supporting military
installations in Alaska. The CEO of Alaska Gasline
Development Corporation (AGDC), Keith Meyer, had changed
his travel plans in order to be present. He detailed it had
been a full afternoon of meetings with various department
secretaries. Vice-President Pence had opened proceedings.
President Trump had heard the recommendations at the end of
the meetings. He felt very positive about how the
administration was viewing the project. He had met a number
of agency personnel who had experience working in Alaska,
so they understood the issues involved and were interested
in ensuring there was appropriate latitude given to the
project in regards to construction permitting. They had
impressed upon the federal agencies that they would require
appropriate resources to ensure the project went forward.
The department was looking to advance Federal Energy
Regulatory Commission (FERC) and regulatory components.
They had come up with draft letters of intent. The major
efforts were aimed at establishing whether the project
could be regulated, financed, permitted, and whether there
were customers. Once those components were established, the
project could commence construction.
2:52:44 PM
Representative Guttenberg felt the project discussions had
gotten pretty far down the road.
Representative Neuman asked how close the project was to
establishing what the final cost was.
Mr. Therriault answered in the recent calendar year, a lot
of money had been spent on engineering to get a better idea
of costs. Previous calculations had been brought down to an
upper number of $43 billion, so it was still a project with
significant cost. Going from three trains to two trains
would drop the potential price dramatically. There would
still be the same size pipeline, as there was still
interest in having the same capacity. The agency was
examining the market demand to discover how it might impact
the price.
Representative Neuman requested the information through the
chair's office. He remarked that in going from three or
possible four trains to two, there would be significant
change in the costs.
2:55:24 PM
Vice-Chair Gara asked why the Trump Administration would
want to help Alaska transport gas internationally.
Mr. Therriault answered it involved balance of trade, for
example with China. He described meetings with the Chinese
government and large energy purchasers, both in Alaska and
in China.
Vice-Chair Gara asked how much money was still available.
Mr. Therriault answered there was $102 million at the
beginning of the calendar year. The rest of FY 17 was drawn
from for the effort with FERC. It involved a larger
expenditure at the beginning of the fiscal year then
tapered off near the end of FY 18.
Vice-Chair Gara asked for verification the plan was to use
all of the available funds through FY 18.
Mr. Therriault replied in the affirmative.
Vice-Chair Gara asked whether the permitting work could be
used a few years down the road.
Mr. Therriault answered that the approval by FERC and based
on his experience working at Alaska Energy Authority (AEA)
there were some FERC permits for hydro projects that could
be extended, which was not unusual. The agency believed the
project worked even at the current prices. It was felt
there was $1 billion of free cash flow just from operating
the components of the infrastructure, and additionally the
state would be selling gas molecules.
3:00:15 PM
Vice-Chair Gara had been skeptical that at current prices
the state could profit. He queried whether the money spent
would disappear as the price was so low and whether the
money was well spent at the present time if the price was
higher in five or six years.
Mr. Therriault deferred to Mr. Richards.
FRANK RICHARDS, SENIOR VICE PRESIDENT, ALASKA GASLINE
DEVELOPMENT CORPORATION (AGDC) (via teleconference), stated
his understanding of the question.
Vice-Chair Gara restated his question.
Mr. Richards replied the FERC process was for an
environmental impact statement. It was said there were
50,000 pages of environmental, safety, reliability and
engineering data. Once FERC made the determination, the
normal timeframe for developing gas was about 18 months.
The agency had specifically asked that they complete the
process by the end of 2018. If approval were received by
December 31, 2018, the document would remain viable until
2023. If construction did not begin immediately, the
document would stay active for three to five years. After
that, if FERC saw that there was no construction, it would
ask for a refresh of the data.
3:04:26 PM
Co-Chair Seaton stated it had been generally described as a
FERC license. He referred to the $102 million and asked if
it would take the project to a FERC license or to a number
of other unanswered questions before the project could
begin.
Mr. Therriault deferred to Mr. Richards.
Mr. Richards answered that the budget presented to the
board for FY 17 and FY 18 was the anticipated cost to
advance to the FERC process. Currently there was a very
sound environmental document before FERC. The information
should be able to answer most of the questions. If there
was an additional request for wetlands data, that could be
carried out in the field in a timely fashion. The goal was
to remain within the funds appropriated in FY 17 and FY 18
expenditure.
Co-Chair Seaton asked for clarification of whether the
agency did or did not anticipate additional questions that
would extend the process.
Mr. Richards did not know what was in the minds of the
regulators, but there would be questions. He believed the
questions that were brought forward could be answered with
the funds available.
Mr. Therriault added that the meetings and positive
reception had been surprising. Although there would be
questions, the departments were not supposed to use the
permitting process to grind projects to a halt. He believed
available dollars could be stretched to complete the
process.
Representative Pruitt asked whether during the meetings in
Washington, D.C., there was discussion not only of the
Alaska project, but many projects.
Mr. Therriault replied in the affirmative. He detailed it
had been clear it had not been to focus on particular
projects; however, as they talked about mechanisms that
could be used, it was implied that if presenters wanted to
use their project to highlight how a mechanism would be
beneficial, there would be that opportunity.
3:10:19 PM
Representative Pruitt was trying to understand whether
there was a consensus that the administration was fully
with the state.
Mr. Therriault answered that the summit at the White House
had been a discussion about incentivizing infrastructure
investment. While that had been very positive, the meetings
with the personnel in the agencies had been the most
productive. They all knew that the administration had a
focus on infrastructure and that their agencies were
supposed to use flexibility to get things through the
process.
3:12:45 PM
Mr. Labolle asked members to return to page 52 of the bill,
line 24 was the fiscal note adjustment associated with
passage of the Real ID Act.
Representative Pruitt stated that the above-mentioned line
was regarding the Alaska Housing Finance Corporation.
Mr. Labolle clarified he was referring to Section 24, line
28.
Mr. Labolle turned to page 55, line 28:
This is a reappropriation from the Knik Arm crossing
and environmental impact statement and from DMVA
deferred maintenance projects arming facilities to the
Department of Education.
It continues on to the next page where it lists the
Department of Military and Veterans Affairs deferred
maintenance projects and it reappropriates that to the
Department of Education for construction of the
Kivalina K-12 replacement. The amount of that
appropriation is approximately $7 million and that is
the amount that is short in the original estimate in
for the construction of that school associated with
the Kasayulie case.
3:15:18 PM
Representative Pruitt asked how much of the $7.1 million
was coming from funding for the Knik Arm Project and how
much was from the Army Guard portion.
Mr. Labolle clarified that $5 million was coming from the
Knik Arm Project and the remaining $2.1 million coming from
DMVA.
Representative Pruitt asked whether it was for the road or
for the school. Mr. Labolle responded it was for the
school.
Representative Pruitt asked about the road funding.
Mr. Labolle deferred to Mr. Carpenter.
Mr. Carpenter asked Representative Pruitt to repeat his
question.
Representative Pruitt asked whether there was still going
to be a need for money in the future for the road. He
thought $8 million was needed for the road project.
Mr. Carpenter responded that the amount for the road was
upwards of $54 million. He added that this money completed
what was required to fulfill Kasayulie case to build the
Kivalina School.
Representative Pruitt asked what had changed resulting in
the need for an additional $7 million.
Mr. Carpenter answered that it was a timing issue. The
amount in the settlement was determined, then a new CIP
[Capital Improvement Project] priority report came out
subsequently with higher amounts. Even though the
settlement gave a certain number, it was determined that
the state was still liable for the additional amount
subsequently.
Representative Pruitt asked if it was expected that all
obligations would be fulfilled within a relatively short
time.
Mr. Carpenter believed the amount fulfilled the obligation.
He remarked there was nothing eminent because the road had
to be built prior to its construction. He would defer to
DOT [Alaska Department of Transportation] on that issue.
Representative Pruitt asked about appropriations being
necessary at the current time, and whether the costs would
increase over time, given that there was no current
timeline.
Co-Chair Foster asked if Department of Education and Early
Development (DEED) could become available for questions.
3:21:07 PM
Representative Tilton asked about required follow-through
regarding the Knik Arm Project and whether any monies would
have to be returned to the federal government.
Mr. Carpenter believed no money would have to be returned.
He thought it would be a good idea to hear from DOT.
Representative Neuman asked about the total cost of the
school and the road. He also asked about the number of
students that would attend the school.
Mr. Labolle responded $45 million for the school and then
later $7 million was added to the assessment. The cost of
the road was approximately $57 million. He deferred to DEED
for the number of students.
Representative Neuman confirmed that the total was around
$110 million and reiterated his interest in receiving
student numbers.
Mr. Labolle replied in the affirmative.
3:23:24 PM
MIKE VIGUE, DIRECTOR OF PROGRAM DEVELOPMENT, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, replied to
Representative Tilton's question regarding monies returned
to the federal government and stated that there would be no
requirement to re-pay money for that project.
Representative Pruitt asked whether there was federal
participation in the road project and what the timeline was
for the school construction.
Mr. Vigue answered the department was currently using
federal highway funds to complete an EIS [environmental
impact study] in collaboration with the borough. He would
find out what the schedule was but the design could not be
completed until the NEPA [National Environmental Policy
Act] document was completed.
Representative Pruitt asked about the typical timeframe and
expectation of the design after that phase.
Mr. Vigue replied there were numerous variables that would
dictate the timeframe. Typically it would take a couple of
years, but this would assume that permitting was immediate.
Representative Pruitt stated the road would not be
completed for several years and he believed the school
could not begin construction until the road was complete.
He asked for confirmation that it would take anywhere from
two to ten years to complete.
Mr. Vigue answered in the affirmative.
3:27:22 PM
Representative Neuman asked what authority DOT had to use
federal highway funds for the road project to the school.
Mr. Vigue answered that the department was allowed to use
apportionments from the Federal Highway Administration on
any public road in the state of Alaska. It was not unusual
to use such fund to build the road.
Representative Wilson stated the school was in a unique
position with the road issue. She asked whether there was a
problem of violations as the state could not build the
school until the road was built.
HEIDI TESHNER, DIRECTOR, SCHOOL FINANCE AND FACILITIES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT (via
teleconference), replied there had been conversations with
the borough and the school district. It seemed the road
piece was moving forward so that construction on the school
could commence.
Representative Wilson asked whether the amount of money
named was to avoid problems with the court case.
Ms. Teshner asked for verification she was referring to the
$7.1 million.
Representative Wilson was talking more broadly than the
$7.1 million. She asked what the exact figure was for the
project.
Ms. Teshner responded that the full amount was almost
$63 million to build the school, and that $7.1 million was
in addition to the $43 million already given. The
understanding was that this was the full amount required
and no more would be asked for.
Representative Wilson thought it meant they were
$13 million short.
Mr. Carpenter thought she had said $53 million total.
Ms. Teshner clarified that she had meant $63 million.
Representative Wilson asked for a firm number so that the
school would be fully funded and the state would be in
compliance.
Mr. Carpenter asked Ms. Teshner whether she was including
the local match.
3:33:02 PM
AT EASE
3:51:33 PM
RECONVENED
Co-Chair Foster referred to a letter from the
administration pertaining to the Kivalina School.
Representative Wilson noted the letter was currently being
copied for members.
Co-Chair Foster thought the final number had been reached.
Representative Wilson explained they were capital
improvement funds and there was a 20 percent match required
by the borough, which added up to the $63 million figure.
There was a difference between the state and borough share.
Vice-Chair Gara asked for verification that the road had
not been funded in the past.
Mr. Labolle replied that the road had not been funded. He
could not guarantee the appropriation would fund the
construction of the road.
Vice-Chair Gara asked about the Alaska State Trooper
appropriation.
Co-Chair Foster noted the issue was separate.
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, addressed a letter from the
administration related to the Kivalina School [addressed to
Senator Anna MacKinnon from the Department of Law, related
to the Kasayulie v State case, dated April 9, 2015, (copy
on file)]. She stated that making the appropriation cleaned
up the obligation from the state for the settlement.
Representative Wilson read from page 2 of the letter:
…another possibility that we believe fully complies
with the consent decree would be an appropriation,
effective no later than July 1, 2015, in the amount of
$50,475,822. The sum of $50,475,822 represents the
total current eligible amount the Kivalina School
could receive, minus the Northwest Arctic Borough's
participating share.
She believed it would be the best the legislature would
receive in terms of a guarantee. She highlighted that the
road was not part of it.
3:56:34 PM
Representative Ortiz asked about the current situation with
the students in the Kivalina region. He asked where they
currently attended school.
Ms. Teshner replied the students were continuing to attend
school at the existing facility. There were approximately
56 unhoused students.
Representative Pruitt asked for clarification.
Ms. Teshner answered that at the time of the original
application the Kivalina School had about 56 unhoused
students which meant that there had not been enough room.
They were attending, but they were over capacity, so
considered unhoused. Hence the need for a replacement
school.
Representative Wilson shared that she had been to Kivalina
and the school had to use outbuildings. There was another
legal memorandum dated April 13, 2016, and within it the
November 2013 CIP priority list. She remarked that if the
required amount was growing by $7 million every two or
three years, it was pretty alarming. She would distribute
the document to members.
3:59:12 PM
Vice-Chair Gara spoke to two increases in the Senate
capital budget. He spoke to an increment related to state
troopers. He asked for verification the operating budget
contained funds for 20 trooper positions that had not been
filled.
Ms. Pitney replied in the affirmative. The state was having
difficulty with trooper recruitment and retention. Once all
positions were filled, the administration would be happy to
request additional funds for troopers.
Vice-Chair Gara did not realize there were 20 unfilled
trooper positions. He mentioned a new 6 percent increase in
the trooper labor contract in the current year. He asked if
the state would still have the ability to hire the
additional positions.
Ms. Pitney answered there was sufficient funding to hire
for the positions. She added that there had recently been a
trooper graduation with only five graduates. The funding
was available and it would take time to hire new troopers.
Vice-Chair Gara asked if Ms. Pitney could confirm in
writing that there was funding for 20 or however many
positions in order to have an informed discussion on the
House floor.
Ms. Pitney complied.
Representative Wilson asked if the state library was bonded
or had been paid for in full with different appropriations.
Ms. Pitney replied it had been a GO [general obligation]
bond appropriation in 2012.
Representative Wilson spoke to numerous reappropriations.
She wondered why they were not paying off the bond debt
instead of reappropriating funds.
Ms. Pitney answered there was a combination, but the bulk
was GO bonded.
Representative Wilson remarked there was still had debt.
Representative Ortiz asked for verification there were
numerous vacant Village Public Safety Officer (VPSO)
positions. He asked if there was funding available for
those as well.
Ms. Pitney spoke to recruitment challenges with VPSO
positions. She stated that the Department of Public Safety
(DPS) was working on that challenge.
4:04:29 PM
Mr. Labolle turned to page 76, line 12:
This is for the Alaska class ferry. It's a
reappropriation for $1.2 million that was set aside
for art in the original appropriation and that was
being reappropriated to the Alaska class ferries for
equipment.
Representative Wilson asked if it meant money originally
for artwork could be used for other purposes.
Mr. Labolle answered that the reappropriation had been
requested by the department.
BRIAN FECHTER, ANALYST, OFFICE OF MANAGEMENT AND BUDGET,
explained that in statute 1 percent of the value of
facilities had to be spent for art. As the M/V Taku was
being decommissioned, the art on the ferry could be moved
elsewhere.
4:06:46 PM
Representative Wilson asked if the same principle could be
applied to other buildings.
Mr. Fechter stated it would require special language but
art that was not displayed could be used that way.
Representative Wilson hoped to utilize the money for
library books and other needs.
Mr. Labolle advanced to page 76, line 20:
This is language that allows the department to
backfill the federal highway match if reappropriations
made in this bill did not equal the $58 million
originally appropriated in the governor's budget. So,
Representative Wilson earlier mentioned there being a
number of appropriations in this budget. The Senate
version of the bill took numerous - over 100 -
appropriations to offset general funds that were in
the original version of the bill. Another item to
discuss ties into that, which is several of those
reappropriations were either not available or the
amount of money was incorrect and we've made that
technical fix in the bill as well, though you won't
see it because you can't show something that's not
there, so going through that process and finding out
ok, well we've identified these approximately 25
reappropriations that are not available or the amounts
were incorrect, so this language is in there in case
any of those remaining appropriations were also not
available or the amounts were not correct.
Representative Wilson asked if they were backfilling it
with general funds.
Mr. Labolle replied in the affirmative.
Representative Wilson asked if DOT was required to use the
money only for match.
Mr. Labolle replied in the affirmative - it specified
federal highway match. He moved to the next change on the
same page:
This is, again, the reappropriation of the Alaska
Liquefied Natural Gas project and it's $25 million.
The Senate version appropriated that to the Public
School Trust Fund. We changed that language and
appropriated it to the Public Education Fund.
Representative Ortiz asked if it had been part of the
$50 million appropriation.
4:10:27 PM
Mr. Labolle replied that it was $25 million and that it was
indeed part of the $50 million appropriation.
Representative Wilson thought they had skipped a $10
million appropriation for road maintenance and plowing.
Mr. Labolle noted no change had been made to the provision.
Representative Wilson requested to hear from the
department. She asked how DOT was planning on utilizing the
funds.
Mr. Vigue answered that the $10 million would be used for
items which were not typically federally funded. He
specified that federal funds could not be used for potholes
and similar maintenance items.
Representative Wilson asked if the department had
maintenance lists for those things which required state
money.
Mr. Vigue replied that DOT had a long list of deferred
maintenance needs. He would ensure that it was provided to
the legislature.
Representative Wilson asked whether there would be new
hires to accomplish this or whether the money would be
utilized for materials.
Mr. Vigue answered the money would be for current crew and
for commodities.
4:13:12 PM
Mr. Labolle addressed the last change - the House version
removed the $288 million appropriation from the Statutory
Budget Reserve (SBR) to the oil and gas tax credit fund.
Representative Neuman asked for the page number. Mr.
Labolle replied that it had been removed from the bill.
Representative Neuman asked for a repeat of the
information. Mr. Labolle complied.
Representative Pruitt asked where that left the state's
remaining obligation. Mr. Labolle replied that it was
approximately $1 billion.
Representative Neuman asked if $288 million remained in the
SBR. Mr. Labolle replied in the affirmative.
4:14:56 PM
Representative Wilson asked about the difference between
the Public School Trust Fund and the Public Education Fund.
Mr. Labolle replied that the trust fund put out money used
for education versus the public education fund that
directly paid for the Base Student Allocation (BSA).
Ms. Teshner asked for clarification on the question.
Representative Wilson spoke to the funding change from the
Public School Trust Fund to the Public Education Fund. She
wanted to know the difference was between the two funds.
Ms. Teshner replied that the public school trust fund was
managed by DOR and had to do with income from the sale or
lease of land through an act of Congress. The education
fund was the mechanism paying for the BSA and pupil
transportation.
Co-Chair Foster asked for verification the BSA was paid out
of that.
Ms. Teshner replied in the affirmative.
Representative Wilson asked for verification that funds
were not typically put into the trust fund, only into the
education fund.
Ms. Teshner answered in the affirmative. She detailed the
trust was the investment, used to help pay for the
foundation program.
4:17:31 PM
Representative Neuman believed when the federal government
gave Alaska its portion of federal lands, part of that
money went into the "Public Trust School Education Fund."
Representative Pruitt asked about reappropriation language
very similar to what had originally been in the governor's
budget related to the Juneau Access project. He believed
the governor was not opposed to Senate language that
removed the item from the budget. He asked for detail.
Ms. Pitney answered that the governor was not opposed to
the Senate's action. The Senate left the funding in the
project.
Representative Pruitt noted the funds were intended to
match other federal money. He asked for the total project
cost.
Ms. Pitney believed the total project cost was estimated at
$550 million - others had estimated it would be $750
million. It did not impact the federal matching funds.
4:20:31 PM
Representative Pruitt clarified that no additional money
was needed. He asked for confirmation that state's
obligation was complete and the reset would be fulfilled by
federal money.
Ms. Pitney responded it depended on the total project cost.
Through the highway process, the selection of the no-build
option had been submitted.
Representative Pruitt stated that the City of Juneau and
City Assembly had recently passed a resolution of support
for the project that had been sent to the governor.
Ms. Pitney replied that the governor understood that the
City of Juneau was in support of the project.
Vice-Chair Gara verified that adding the Juneau Access
project would not increase the amount of federal funding
coming in.
Ms. Pitney replied in the affirmative.
Vice-Chair Gara surmised in the future a future Juneau
access road would take federal funds away from another
project.
Ms. Pitney answered in the affirmative.
Vice-Chair Gara asked for verification that the governor
had not been planning on spending funds on the project in
the current year because the project had been put on halt.
Ms. Pitney answered in the affirmative.
Vice-Chair Gara surmised if the money were put back in the
fund, that project would still be on halt.
Ms. Pitney answered it would take a reopening of the
project and review, which would take a considerable amount
of time. The money was to stay in the bank with that
project name on it.
Representative Neuman thought there had been some
misinformation stated. He spoke to the Juneau Access
project and the Knik Arm Bridge project. He had submitted
letters to the governor from the then DOT commissioner and
the chief planner, Mr. Otteson, both stating there would be
no issue of losing federal funding at the time for other
state projects. The Statewide Transportation Improvement
Program (STIP) would be re-evaluated but would not remove
funds from any project in the state.
Representative Pruitt wanted to confirm there was not
another $500 million project the funds would be moved to.
He stated there were not that many large project so this
would impact federal funds.
4:25:12 PM
Co-Chair Seaton asked about the approximate size of the
STIP. He wondered if it was large enough to absorb any
funds in the project.
Ms. Pitney answered that her colleague Mr. Vigue had to
ensure projects were moving and that more were in the
pipeline. The department planned not to have any available
federal funds not utilized in the state.
Representative Pruitt countered there were a limited number
of projects for which federal funds were available.
Ms. Pitney answered there were more projects on the
planning list for transportation than there was federal
funding available. The department consciously maintained a
larger list in the event a project higher on the list ran
into problems. There were enough priorities to utilize
federal funds for the timeframe of the STIP, which was a
six-year outlook.
4:27:25 PM
Representative Wilson asked LFD for the amounts in the
Public Education Fund and in the trust fund.
Co-Chair Foster noted the committee would recess prior to
taking up amendments.
Representative Pruitt asked whether there would be
flexibility regarding format and submission of conceptual
amendments.
Co-Chair Foster responded there had been amendments
submitted to a prior version of the bill and whether they
would match up would be addressed by Legislative Legal
Services.
Representative Pruitt explained there were several
substantial changes in the CS. He believed there were
members with concerns about having amendments prepared to
meet the timeframe.
4:30:43 PM
Co-Chair Foster stated there were currently four
amendments. He understood the timeline was very short and
would allow amendments up until 2 p.m.
4:31:14 PM
AT EASE
4:36:00 PM
RECONVENED
Co-Chair Foster noted the meeting would recess to address
some of the issues discussed during the meeting.
4:36:20 PM
RECESSED
10:04:11 PM
RECONVENED
Co-Chair Foster relayed the meeting would recess until 2:00
p.m. the following day.
Co-Chair Seaton relayed that the committee was waiting on
the drafting of amendments.
[Note: Meeting Reconvened the following day, see separate
minutes document dated June 11, 2017 at 2:00 p.m. for
detail.]
10:04:57 PM
RECESSED
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 23 version T.pdf |
HFIN 6/10/2017 10:00:00 AM |
SB 23 |
| SB 23 DOL Letter RE Kasayulie v. State.pdf |
HFIN 6/10/2017 10:00:00 AM |
SB 23 |
| SB 23 - Amendment packet v. T.pdf |
HFIN 6/10/2017 10:00:00 AM |
SB 23 |