Legislature(2019 - 2020)ADAMS ROOM 519
04/02/2019 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB38 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 38 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 2, 2019
1:30 p.m.
1:30:43 PM
CALL TO ORDER
Co-Chair Wilson called the House Finance Committee meeting
to order at 1:30 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Tammie Wilson, Co-Chair
Representative Jennifer Johnston, Vice-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
MEMBERS ABSENT
None
ALSO PRESENT
Lacey Sanders, Budget Director, Office of Management and
Budget; Laura Cramer, Deputy Director, Office of Management
and Budget; Shelly Willhoite, Capital Budget Coordinator,
Office of Management and Budget; Hanna Lager, Division
Operations Manager, Division of Administrative Services,
Department of Commerce, Community and Economic Development.
SUMMARY
HB 38 APPROP: CAPITAL BUDGET
HB 38 was HEARD and HELD in committee for further
consideration.
Co-Chair Wilson reviewed the meeting agenda.
HOUSE BILL NO. 38
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
1:31:24 PM
LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, provided a PowerPoint presentation titled "HB 38 -
FY2020 Capital Overview," dated April 2, 2019 (copy on
file). She began on slide 3 and discussed that the
governor's FY 20 capital budget request included deferred
maintenance projects, federal matching requirements, and
maximization of federal funding for project grants. She
reported that the original project request had totaled
$1,261,259,300, comprised of $143 million General Funds
(GF), $90 million in other funds, and $1.027 billion in
federal funds. She elaborated that amendment packages had
been submitted to the legislature on March 14 and March 27,
which included an increase of $10 million in other receipts
and a decrease of $12.5 million in federal funds. The total
amended [capital] budget was $1,258,818,000.
Vice-Chair Ortiz asked why there had been a $12.5 million
reduction in federal funds.
Ms. Sanders replied that the decrement in the amendments
was related to the National Petroleum Reserve-Alaska (NPR-
A) impact grants. The Department of Commerce, Community and
Economic Development (DCCED) had submitted two amendments
to the legislature. The first was for a supplemental that
distributed grant funding received in 2019. The second
amendment trued up the same grant projects for FY 20. She
detailed that the estimate had been approximately $19
million in the initial budget, but the actual federal
funding received had been closer to $6 million.
Vice-Chair Ortiz asked if the NPR-A revenues were less than
anticipated.
Ms. Sanders replied in the affirmative. She detailed there
may be an additional grant process later in FY 20 if
additional federal revenue was received. At present,
approximately $6.5 million had been received and was
allocated in the FY 20 budget.
1:35:11 PM
Ms. Sanders moved to a bar chart on slide 4 showing a
historical summary of capital requests by funding source.
The blue portion of the bars reflected unrestricted general
fund (UGF) appropriations from FY 16 through FY 20. The
bars also included designated general funds (DGF) [in
orange], other funds [in gray], and federal receipts [in
yellow].
Ms. Sanders turned to slide 5 and relayed the presentation
was intended as an overview of the governor's capital
budget request. The slide provided a budget breakdown by
agency and included both amendment packages put forward in
March for a total of $1.2 billion.
1:36:22 PM
Ms. Sanders advanced to slide 6 that highlighted items
included in the budget. The first increment was for a
Department of Transportation and Public Facilities (DOT)
federal highway surface transportation project. The project
consisted of $690 million in federal receipts and $35
million UGF state highway match. The total required amount
for the federal funding was $60 million. She explained that
a reappropriation was requested in the capital budget that
would use $25 million from the Tustumena replacement for
the federal highway match to meet the FY 20 federal match
requirement.
Vice-Chair Ortiz addressed the reappropriation related to
the Tustumena. He asked how much money there had been in
federal funds for the Tustumena vessel replacement if it
went forward.
Ms. Sanders replied $220 million in federal receipts.
Vice-Chair Ortiz asked how close the $220 million and the
state match came to paying for the vessel replacement.
Ms. Sanders replied that she knew there had been some work
done on design, but she did not know how far along the
project had progressed.
LAURA CRAMER, DEPUTY DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, replied that the federal funds and state match
would have fully funded the Tustumena replacement.
Vice-Chair Ortiz asked for verification the administration
was requesting a reappropriation of $690 thousand [$690
million] in federal funds to go towards the federal highway
program.
Ms. Sanders clarified the move only took the GF portion
that was matching the Tustumena project and reappropriated
the funds to the capital project for federal highway
surface transportation. The request did not move federal
receipts allocated for the [Tustumena] project - the
receipts still resided with that project.
Co-Chair Wilson clarified the figure was $690 million, not
$690 thousand.
1:39:54 PM
Co-Chair Wilson referenced the $690 million in federal
funds and noted her understanding that the number may be as
high as $750 million. She wondered about the possibility of
the number increasing. She believed some states had not
used all of their funding the previous year and there had
been a "round two" of federal funding distributed. She was
trying to determine what the odds were the state would get
more than $690 million.
Ms. Sanders replied the $690 million was the maximum amount
that would be received in FY 20. She had not received
additional information from DOT specifying an additional
allocation would be made.
Co-Chair Wilson wanted to ensure the state was matching
available federal funds.
Representative Josephson believed Ms. Sanders had stated
the sizeable federal match for the Tustumena replacement
would remain in that account effectively. He asked about
the administration's ultimate intent for the funds, given
the its belief that the state should not have a purely
government backed role in the Alaska Marine Highway System
(AMHS).
Ms. Sanders replied the intent was currently to bring on a
marine consultant to determine what the future of AMHS
would look like. The match funding allocated in the capital
budget would be reappropriated to the federal highway
surface transportation project. Until a study by a marine
consultant was completed, the project would not move
forward.
1:42:09 PM
Ms. Sanders directed attention to the second item under DOT
on slide 6. The airport improvement program totaled $198.7
million, comprised of $187.2 million in federal receipts
and $11.5 million in other receipts. She reported the item
had been amended in the March 14th submission of amendments
to increase the other receipts by a total of $21.5 million.
She moved to an increment for statewide federal programs,
which consisted of $38.5 million in federal receipts, $10
million in other receipts, and $238.3 million UGF.
Ms. Sanders advanced to the last item on slide 6 and
relayed that the NPR-A impact grant program had been
amended in the March 14 packet. She detailed the increment
had initially been put forward as an estimate of $19
million in federal receipts and it had been reduced to
approximately $6.5 million. Additionally, the amendment
packet had allocated the funding to the individual grants
based on the department's grant solicitation process.
Ms. Sanders moved to slide 7 and addressed the Department
of Environmental Conservation Village Safe Water Projects
totaling $64.830 million, comprised of $52.250 million in
federal receipts, $12.080 million in UGF, and $500 thousand
in other receipts (typically statutory designated program
receipts that communities contributed towards projects).
Co-Chair Wilson asked how much the projects had been the
previous year; how much had been spent; and whether the
state met its federal matching funds obligation, or whether
the state used more UGF than federal funds.
Ms. Sanders did not have the expenditure detail on hand.
She would follow up on the question.
1:44:53 PM
Co-Chair Wilson asked what the department could do to make
sure villages were able to maintain systems once they were
installed. She believed where maintenance funds came from
had become a substantial issue. She explained that most
areas did not have large populations or tax base.
Ms. Sanders agreed to provide the information.
Ms. Sanders highlighted the South Denali Visitor's Center
under the Department of Natural Resources (DNR) on slide 7.
The project would utilize $4.5 million from the Alaska
Housing Finance Corporation (AHFC) dividend and $10.3
million from the Alaska Industrial Development and Export
Authority (AIDEA) dividend (the dividends were returned to
the state on an annual basis, were classified as UGF, and
were available for appropriation). Additionally, the
project would use $10.2 million in AIDEA receipts.
Vice-Chair Ortiz asked about how the AIDEA dividends and
receipts had been used in previous budget cycles.
Ms. Sanders answered that the dividend funds could be used
at the discretion of the legislature and were classified as
UGF. She explained the funds could be and had been used on
a variety of projects. The AIDEA receipts had historically
been used in the operations of the AIDEA corporation.
Vice-Chair Ortiz asked Ms. Sanders to repeat her answer.
1:47:20 PM
Ms. Sanders replied that AIDEA receipts had typically been
used in the operations of the AIDEA corporation.
Vice-Chair Ortiz asked if it was the department's
understanding that AIDEA did not need the receipts to run
the corporation in the upcoming year.
Ms. Sanders answered that she could not speak to the
details of the analysis done by the Department of Revenue
(DOR). It was her understanding there were excess AIDEA
receipts available for appropriation. There were two
increments in the governor's proposed budget that utilized
AIDEA receipts.
Vice-Chair Johnston discussed where the AIDEA receipts came
from. She used the Red Dog Mine as an example, where she
believed the bonds had likely been paid off and there was
still a lease agreement. She asked if AIDEA receipts came
from the lease agreement.
Ms. Sanders replied that she would follow up in writing.
She noted the scenario provided by Co-Chair Johnston was
not her understanding of the receipts. She reported the
receipts were utilized by the corporation for investing in
projects.
Vice-Chair Johnston stated that receipts were one thing and
fund balances were another. She asked for verification Ms.
Sanders was specifically saying receipts and not fund
balances.
Ms. Sanders answered that AIDEA receipts was a fund code
outlined for the AIDEA corporation funding. She would
follow up to provide clarity on the receipt source.
1:49:21 PM
Representative LeBon asked for verification that AIDEA
receipts were a combination of return on investment and
earnings from participation and direct loans made by AIDEA.
Ms. Sanders would follow up to ensure the information
provided to the committee was accurate.
Representative LeBon believed his statement was correct. He
explained that the receipts were the earnings of
investments made by AIDEA - some were participation loans
with banks; some were direct loans by AIDEA and some were
investments. He elaborated that AIDEA used some of its
earnings for the purpose. He detailed that dividends were
paid under a different formula. He explained that drawing
on AIDEA's capital was another path of utilizing AIDEA for
different purposes. He believed the project would be a
reasonable use of AIDEA earnings. He reported that in the
participation loan world, AIDEA used earnings from other
investments (prior years' returns) to fund bank
participation loans. He clarified that AIDEA did not go to
the bond market every time a bank did a participation loan.
Vice-Chair Ortiz asked how close the combined sources of
funds came to paying for the South Denali Visitor's Center.
Ms. Cramer replied that the last updated estimates for the
project were $27 million. The total for the project on
slide 7 was about $25 million due to the possibility of
federal and private funds. She elaborated that phase one of
the project had been completed using state, federal, and
private funds. The department was confident it could
achieve the $27 million mark with those additional [federal
and private] funds.
Vice-Chair Ortiz asked if the South Denali Visitor's Center
was a state park.
Ms. Cramer answered in the affirmative. She did not know
whether it was designated as a state park - she believed it
was. She explained that part of the issue was the high
traffic currently experienced by the Denali National Park.
The center would divert some of the traffic and save wear
and tear on the national park roads.
1:52:13 PM
Co-Chair Wilson wondered who wanted the project. She stated
the Denali and Mat-Su Boroughs did not want the project.
Ms. Cramer answered the project had been put forward by the
department for years. She elaborated that phase one of the
project had been completed and it had been a department
priority for many years.
Co-Chair Wilson asked what phase one was and what revenue
it brought in.
Ms. Cramer complied. She detailed that phase one had been
the buildout of some trails, camping spots, electrical, and
roads. She did not have the amount that had been funded on
hand. She believed the initial revenue projections for
phase one had been around $48,000; however, the estimate
had been exceeded and annual revenue was approximately
$75,000.
Co-Chair Wilson pointed out that the cost for phase one had
not been provided; therefore, the committee did not know
the expense to revenue ratio.
Ms. Cramer did not have the data on hand. She would follow
up with the information.
Representative Josephson surmised dividends were not
synonymous with receipts. He asked if they meant to use the
word dividend or receipt on slide 7.
Ms. Sanders answered that the AIDEA and AHFC dividend funds
were intended to be used for the project. She elaborated
there were available dividends that had been made to the
state. Additionally, the use of $10.2 million in AIDEA
receipts was also intentional. She clarified they were
separate funding sources.
1:54:04 PM
Vice-Chair Ortiz was supportive of projects enhancing and
assisting the tourism industry statewide. He asked if there
was a projection for the ongoing and maintenance costs of
the project. He used the state museum as an example of a
project that had been shown to require some significant
ongoing maintenance costs. He asked about expected revenue
projections.
Ms. Cramer replied that revenues were anticipated to exceed
$1 million by the fifth year of operation, which would
fully cover operating costs for phase two of the project.
Representative Carpenter asked who would own and operate
the visitor's center.
Ms. Cramer answered the state would own and operate the
facility. She noted that the federal government had
tentatively committed to running some of the park
operations at no cost to the state.
Representative Carpenter asked for a repeat of the
information.
Ms. Cramer answered that the state would own and operate
the visitor's center.
Co-Chair Wilson asked for verification the UGF funds could
be used for other projects if they were not used on the
visitor's center project.
Ms. Cramer replied in the affirmative.
1:55:56 PM
Ms. Sanders addressed deferred maintenance components on
slide 7. She noted there was a significant backlog in the
state's deferred maintenance projects. The first increment
was $4.5 million from the Public Building Fund,
administered by the Department of Administration (DOA). She
explained that state agencies contribute to the fund, which
was used for deferred maintenance projects on state-owned
buildings. The second request was $2.7 million UGF for the
Court System, which received its own money for deferred
maintenance projects. The third increment was $26.6 million
DGF from the Alaska Capital Income Fund for the Office of
the Governor. She explained the intention was to have a
single project where the Office of the Governor worked with
DOT and its facilities maintenance group to identify and
prioritize the projects for all state agencies (she noted
the process had been used the preceding year as well). She
elaborated that instead of having individual projects
throughout the agencies, there would be one project that
allowed for flexibility in responding to deferred
maintenance projects that may move up on the priority list.
Ms. Sanders moved to the fourth deferred increment, which
was for the Department of Education and Early Development
(DEED) K-12 major maintenance project totaling $7.4 million
DGF from the Capital Income Fund. The amount would fund the
first project on the K-12 major maintenance list. The fifth
project was $5 million DGF from the Capital Income Fund for
the University.
Co-Chair Wilson asked for an explanation of the Capital
Income Fund and how it was funded.
Ms. Sanders explained that the Alaska Capital Income Fund
received receipts from the Amerada Hess settlement on an
annual basis. She elaborated that the previous session the
legislature passed legislation designating the fund for use
of deferred maintenance.
Co-Chair Wilson asked if there was other money deposited
into the fund when projects had money left over.
Ms. Sanders answered that in recent history there had been
other UGF deposits made to the fund by the legislature from
gaming and gambling. The primary source of funds was from
the Amerada Hess settlement.
Co-Chair Wilson asked for the current fund balance.
Ms. Sanders answered there were two appropriations - one in
the supplemental budget and one in the capital budget -
utilizing the full fund balance for deferred maintenance.
She would follow up with the total.
1:59:48 PM
Representative LeBon asked if the $10.2 million in AIDEA
receipt funds was being treated as an investment or grant.
Ms. Sanders answered the funds would be an appropriation to
DNR specifically for the [South Denali Visitor's Center]
project. She clarified that the funds were not a grant and
not a loan.
Representative LeBon surmised the funds were an investment
into the project.
Ms. Sanders replied affirmatively.
Vice-Chair Ortiz asked for the current balance of the
state's growing deferred maintenance obligation.
SHELLY WILLHOITE, CAPITAL BUDGET COORDINATOR, OFFICE OF
MANAGEMENT AND BUDGET, answered the amount was about $9
billion [note: this figure was revised later in the
meeting].
Vice-Chair Ortiz asked for verification that theoretically
the legislature could use the $10 million in AIDEA receipts
and $4.5 million in [AHFC] receipts for deferred
maintenance as well as the particular project. He asked if
that was a legal use of the funds.
Ms. Sanders replied in the affirmative.
2:01:33 PM
Vice-Chair Ortiz asked if it was also true deferred
maintenance costs would continue to increase if the
maintenance was not addressed.
Ms. Sanders agreed. She elaborated that the reason for the
supplemental and capital budget requests was to prioritize
deferred maintenance.
Representative Josephson looked at the statewide
prioritized deferred maintenance increment of $26.6
million. He asked if Ms. Sanders had stated that the method
of the governor's office making prioritizing decisions for
various agencies was something the previous administration
had done as well.
Ms. Sanders answered that OMB had been working on
developing a comprehensive system that outlined the
deferred maintenance prioritization. She expounded that in
the past individual agencies came forward with their
priorities, while there may have been other priority needs
that were more pressing. She explained the idea was a
single allocation where DOT and the governor's office
worked together to prioritize needs.
Representative Josephson asked if the previous
administration had used the same process.
Ms. Sanders replied affirmatively.
Representative Tilton asked if the administration was also
identifying assets the state may be better off selling.
Ms. Sanders answered in the affirmative. She detailed that
the administration had put forward a governor's directive
to work through divesting any state owned facilities that
may no longer be necessary.
2:03:38 PM
Representative Carpenter asked what the annual cost for
deferred maintenance would be if the state were to keep up
with the $9 billion total cost.
Ms. Sanders did not have information on the growth at the
time. She suggested the possibility of asking DOT experts
to address the committee to explain how they valued assets
and what the growth was over time.
Representative Carpenter considered the $9 billion as an
unfunded liability. He did not know whether current
spending was keeping up with the cost, but he suspected it
was not. He wanted a better idea of how bad the situation
was.
Ms. Sanders believed that four to five years earlier there
had been some information on a plan to keep up with
deferred maintenance growth.
Representative Carpenter assumed the state had not kept
with the plan referenced by Ms. Sanders.
Ms. Sanders replied that based on the state's financial
downturn, the budget had not maintained the amount
necessary to keep up with the figure determined in the past
plan.
Representative Carpenter remarked that he guessed that was
the case considering the deferred maintenance cost was $9
billion. He did not believe that had been a good plan.
2:05:37 PM
Representative LeBon stated that in the business world,
replacement and reserves was 3 to 5 percent, which equated
to $300 million to $500 million.
Co-Chair Wilson referenced the Public Building Fund under
DOA. She surmised someone was putting money away because
there was $4.5 billion that could be utilized in the fund.
She wondered why they were not doing the same thing in the
statewide priority list. She thought it sounded like the
courts were doing the same thing. She recalled that Ms.
Sanders had said the UGF funds for the courts (on slide 7)
were funds the courts had put away.
Ms. Sanders answered there were certain state-owned
buildings that fell under the Public Building Fund. She
detailed that the court's buildings, University buildings,
and schools did not fall under that fund; therefore, those
entities did not contribute to the fund.
Co-Chair Wilson expressed confusion and asked if the Public
Building Fund was used for buildings that were not state-
owned.
Ms. Sanders clarified the funds went to state-owned
buildings.
Co-Chair Wilson asked for verification that state-owned
buildings were underneath the fund, but the University and
courts were not.
Ms. Sanders answered that the University and the Court
System had and maintained their own buildings.
Co-Chair Wilson asked if the University put any money away
for deferred maintenance.
Ms. Sanders answered that she did not know what University
was putting away for its own buildings. She reported the
University had come to the governor with a request for
deferred maintenance funding.
Co-Chair Wilson asked for verification that the legislature
could make the $5 million for the University into matching
funds to find out whether it put funding away for its
buildings.
Ms. Sanders deferred the question to the University.
Co-Chair Wilson directed remarks to the committee and
relayed they could choose to designate the funds as
matching funds to ensure money was put in by the
University. She asked for a list of where the $26 million
had been spent the previous year. She thought there was a
priority list that was much newer than the five-year old
list [mentioned by Ms. Sanders]. She furthered that the
priority list was supposed to include buildings the state
was going to sell and which it would utilize. She asked OMB
to try to find more current information.
2:08:10 PM
Ms. Sanders clarified she had been referring to a proposal
on a plan to move forward with deferred maintenance several
years ago. She had information to provide to the committee
on the current prioritization list.
Co-Chair Wilson communicated her preference for the list to
also include buildings the state was trying to sell and
consolidate.
Representative Carpenter cited FY 13 as a year where state
revenues were high. He asked if there had been a deferred
maintenance list at the time or whether the state had been
fully funding its maintenance requirements. He was trying
to gauge how long the state had been deferring maintenance.
Ms. Sanders replied that OMB would follow up. She believed
there had always been a deferred maintenance backlog.
Representative Sullivan-Leonard asked when the Public
Building Fund and Alaska Capital Income Fund had been
established and what the intent had been for the funds. She
believed they had been around for some time.
Ms. Sanders answered that she could not provide a history
on the Public Building Fund. She relayed that the Alaska
Capital Income Fund had existed for a significant amount of
time. She detailed the fund had typically been utilized for
capital projects. She reiterated her earlier testimony that
the previous session the legislature had designated the
fund specifically for deferred maintenance projects.
2:10:03 PM
Representative Carpenter stated it would be helpful to know
which projects had been deferred the longest.
Ms. Sanders replied that OMB would provide a spreadsheet
with the list of deferred maintenance projects. She did not
know whether the list included the date a project had been
added.
Ms. Sanders reported that the presentation had concluded.
Co-Chair Wilson shared that a detailed list had been
provided to committee members [summary sheet titled
"Governor's Capital Budget - Appropriations and Allocations
(by department) (1196)," provided by OMB and released on
February 13, 2019 (copy on file)]. She referenced DNR's
Arctic Strategic Transportation and Resources (ASTAR)
program, to which the legislature had allocated funding the
previous year. She asked for a description of the program,
its status, and how much money had been spent to date.
Ms. Cramer replied that the legislature had allocated $10
million to ASTAR the previous year. She explained the
program was to "build out" the North Slope by connecting
communities and exploring resource development projects and
opportunities. She reported that the increment in the
proposed capital budget was $3 million. She detailed the
request from DNR had initially been $5 million, but the
administration had asked the department to revise the
amount based on its true needs for FY 20, which had
resulted in the $3 million request.
Co-Chair Wilson asked for the status of the program. She
wondered if any roads had been built or if the projects
were at an impact study phase.
Ms. Cramer replied that numerous studies had taken place
and there had been work with local communities to determine
potential impacts on the communities. She relayed her
understanding there was roughly $1.5 million remaining from
the appropriation made the previous year, which was
expected to be spent by July 1.
Co-Chair Wilson asked if any of the NPR-A funds for the
region could be utilized to move the project forward more
quickly.
Ms. Cramer answered in the negative. She expounded that the
DNR commissioner was exploring the idea, but it would
require a federal change to the NPR-A grant process.
Representative Josephson requested transaction sheets and
expenditure information on ASTAR's funding to date.
2:13:09 PM
Ms. Cramer agreed to provide the information.
Co-Chair Wilson asked about a $7.4 million increment for
the Alaska Travel Industry Association (ATIA). She
highlighted $1.5 million from the increment designated to
assuring direct flights from to priority international
markets. She asked for detail.
Ms. Sanders answered that the ATIA capital project was $7.4
million grant to a named recipient. She detailed the money
went to ATIA and was primarily used for flyers and
handouts, the website, and visitors guide. She was not
familiar with the increment highlighted by Co-Chair Wilson.
She noted the department was also available for questions.
Co-Chair Wilson asked if the state was subsidizing any
flights.
Ms. Sanders would follow up.
Ms. Sanders made clarifying remarks related to the deferred
maintenance liability. She elucidated that the $9 billion
number provided earlier in the meeting was the replacement
value of the assets. The current deferred maintenance
backlog was approximately $1.9 billion. She would follow up
with any additional information.
Co-Chair Wilson explained the reason for the different
colored sheets in member's capital budget binders; paper
colors changed as different amendments were added. She
noted that the NPR-A funds had not been included in the
budget until March 27. She asked if the item had come in
late and if it was normal to receive the funds.
Ms. Sanders answered that OMB received an estimate when the
governor's budget was released each year. Once the grant
application period was closed and grant awards were
identified, OMB submitted amendments to the legislature
breaking out the allocations.
2:16:16 PM
Representative Josephson remarked that DCCED had some
oversight [related to the NPR-A grant process], but he
wondered whether there was a sense the funds were proforma
because it was federally required.
Ms. Sanders answered that the grant process had very
specific guidelines; grant applications were ranked, and
funding was allocated. She relayed there was not
significant discretion in the process.
Vice-Chair Johnston asked about the $1.5 million [to ATIA]
to prioritize international markets (i.e. China). She
thought it may be necessary to hear directly from ATIA. She
was aware of a minimum of three other efforts to obtain the
direct flights. She hoped there was a coordination of
efforts.
Co-Chair Wilson replied that would be nice. She relayed
that her office would reach out to ATIA.
Representative Sullivan-Leonard noted the budget included a
$6 million and $60 thousand increment for community block
grants. She asked for detail on the grants and recipients.
Ms. Sanders answered that the request was received
annually. She elaborated the request included $6 million in
federal receipts and $60 thousand in matching funds. She
detailed the community services block grant had one
nonprofit called the Rural Alaska Community Action Program
that received a portion of the funding. She believed
RuralCap was receiving funding from the community
development block grants.
Co-Chair Wilson wondered why the state, not communities,
was matching the federal funds.
Ms. Sanders deferred the question to DCCED.
HANNA LAGER, DIVISION OPERATIONS MANAGER, DIVISION OF
ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE, COMMUNITY
AND ECONOMIC DEVELOPMENT, replied that half of the $6
million in federal funds went to Ruralcap as a grant. The
community action association was a federal designation and
was the only entity in the state that could receive the
funds. The remaining $3 million and the required $60
thousand state match went out through a competitively
awarded grant program. The recipients were not listed in
the bill because they had not yet been identified; the
information would be available over the next year as the
grants were awarded.
Co-Chair Wilson asked why the state was matching the funds.
She believed there were other federal funds that
communities were responsible for matching.
Ms. Lager answered the $60 thousand was a required state
match to receive the federal funding.
Co-Chair Wilson asked for verification that the state could
not make the communities match the funds. Alternatively,
she wondered if it did not matter who provided the matching
funds.
Ms. Lager answered it was her understanding that the state
was required to provide matching funds in order to receive
the federal funds.
Co-Chair Wilson requested to see the document specifying
that the state could not allow others [i.e. communities] to
participate.
Representative Tilton asked if there were metrics showing
the effectiveness of the programs receiving grant funding.
Ms. Lager replied that DCCED required periodic grant
reporting once a grant was awarded. She did not have any
detail on hand and would follow up with the information.
HB 38 was HEARD and HELD in committee for further
consideration.
Co-Chair Wilson reviewed the schedule for the following
day.
ADJOURNMENT
2:21:06 PM
The meeting was adjourned at 2:21 p.m.