Legislature(2021 - 2022)ADAMS 519
02/22/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB281 || HB282 | |
| Fy 23 Budget Overview: Department of Environmental Conservation | |
| Overview: Governor's Budget Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 281 | TELECONFERENCED | |
| += | HB 282 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 22, 2022
2:11 p.m.
2:11:59 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 2:11 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool (via teleconference)
MEMBERS ABSENT
Representative Ben Carpenter
ALSO PRESENT
Ruth Kostik, Administrative Services Director, Department
of Environmental Conservation, Office of Management and
Budget, Office of the Governor; Neil Steininger, Director,
Office of Management and Budget, Office of the Governor.
PRESENT VIA TELECONFERENCE
Jason Brune, Commissioner, Department of Environmental
Conservation.
SUMMARY
HB 281 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 281 was HEARD and HELD in committee for
further consideration.
HB 282 APPROP: MENTAL HEALTH BUDGET
HB 282 was HEARD and HELD in committee for
further consideration.
FY 23 BUDGET OVERVIEW: DEPARTMENT OF ENVIRONMENTAL
CONSERVATION
OVERVIEW: GOVERNOR'S BUDGET AMENDMENTS
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 281
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental appropriations; 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. 282
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; making capital
appropriations and supplemental appropriations; and
providing for an effective date."
2:13:00 PM
^FY 23 BUDGET OVERVIEW: DEPARTMENT OF ENVIRONMENTAL
CONSERVATION
2:13:03 PM
JASON BRUNE, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION (via teleconference), introduced a PowerPoint
presentation titled "Department of Environmental
Conservation: House Finance Committee," dated February 22,
2022 (copy on file). He reviewed the department's mission
on slide 2:
Conserving, improving, and protecting Alaska's natural
resources and environment to enhance the health,
safety, and economic and social well-being of
Alaskans.
Commissioner Brune addressed the Department of
Environmental Conservation's (DEC) values on slide 3
including objectivity, accountability, integrity,
collaboration, and customer service (with an emphasis on
customer service for the regulated community). He stated
the department wanted to ensure it was a partner in
protecting human health and the environment and in
advancing the state's economy. He turned to slide 4 and
highlighted the department's focus on four primary
components including air quality, water, environmental
health, and spill prevention and response. He noted the
department also had a Division of Administrative Services.
Commissioner Brune advanced to slide 5 and provided various
metrics from 2021. He detailed the department had issued
over 11,000 permits, approvals, certifications, and plan
reviews. The department had conducted over 2,000
inspections and site visits. He noted approximately 25
percent of the inspections were virtual or had used
technology. The department had focused on trying to limit
its environmental footprint and reducing paper use as well.
He elaborated that with nearly 85 percent of DEC's
employees teleworking, the department wanted to make sure
materials were accessible for people working from home. He
relayed that nearly 200 filing cabinets had been eliminated
and documents had been scanned, which made teleworking much
easier. The department had provided nearly 350
presentations and trainings to Alaskans. Additionally, DEC
was focused on employee retention and had put an emphasis
on training for employees. The average employee had
received about 50 hours of training in the past year.
2:17:21 PM
Commissioner Brune reviewed the department's five divisions
and leadership positions on slide 6. He listed the names of
individuals in leadership positions including, Emma Pokon,
Deputy Commissioner; Ruth Kostik, Administrative Services
Director; Christina Carpenter, Director, Division of
Environmental Health; Alice Edwards, Director of the
Division of Air Quality; Tiffany Larson, Director of the
Division of Spill Prevention and Response; and Randy Bates,
Director of the Division of Water. He stated the
individuals' combined state service exceeded 100 years.
2:18:11 PM
RUTH KOSTIK, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF ENVIRONMENTAL CONSERVATION, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, reviewed the department's
operating budget funding history on slide 7, reflecting the
governor's amended budget in the FY 23 column. She
highlighted the DEC budget had been relatively flat over
the past four years. The increase in FY 23 primarily
reflected primacy initiatives that would be discussed later
in the presentation. She noted the increase was accompanied
by an increase in 37 positions. She added that the slide
did not reflect any of the federal infrastructure bill
funds, which would come in a separate appropriations bill.
Representative Johnson referenced the statement that the
infrastructure bill would be in a separate appropriation.
She asked if there would be additional personnel needed to
ensure the state was spending the infrastructure money
appropriately. She asked the presenters to highlight where
the funds may be throughout the presentation.
Ms. Kostik answered that roughly $65 million would come in
through state clean water and drinking water revolving loan
funds. She detailed that most of the $65 million would go
out as loans to communities for water and wastewater
systems. The bill reauthorized the Village Safe Water
Program and included $40 million from the Environmental
Protection Agency (EPA), which did not reflect an increase.
The increase in Village Safe Water was largely with funds
coming through the Indian Health Service (IHS) and for lead
communities. The department was still working on what the
staffing would look like with the administration.
Representative Johnson requested to know more when the
department learned the information.
2:21:09 PM
Vice-Chair Ortiz referred to Infrastructure Investment and
Jobs Act (IIJA) funds for clean water. He asked if it
looked like the resources would significantly address the
existing clean water issues in rural areas.
Ms. Kostik answered there was about $3 billion going to IHS
nationwide. The state anticipated receiving $2 billion to
$2.1 billion of the total over the next five years. She
explained the number was based off of what was documented
in the sanitation deficiency system used by IHS to document
rural needs. She noted that DEC entered projects into the
system as well. The number was based off of the calculated
need when the [federal] bill had passed. She stated that
more projects may arise and costs may increase with
inflation over time, but the incoming funding should be
able to address or come close to addressing the need in
underserved and unserved communities in rural Alaska.
2:22:57 PM
Ms. Kostik turned to slide 8 and discussed the transfer of
the Exxon Valdez Oil Spill Settlement Trustee Council
(EVOSTC) administrative budget from the Department of Fish
and Game (DFG). She expounded DEC would assume the
responsibility to provide accounting and procurement
support for the council. The change was technical and would
not impact the EVOS operations. She noted the six trustees
(three federal and three state members) had unanimously
agreed on the transfer. She added that Commissioner Brune
was currently the chair of the council.
Ms. Kostik turned to slide 9 and highlighted an increment
to DEC Administrative Services to cover the costs of
administering the EVOS budget. She noted the item had been
inadvertently missed in the governor's original budget and
was included in the amended budget. There was a similar
amount decremented from the DFG budget.
Representative Edgmon stated that a couple of committee
members were on the DFG subcommittee. He stated the
increment had come up as a discussion item in the past
couple of weeks. He recalled the subcommittee had been told
the change seemed like the right thing to do. He relayed
the subcommittee had not heard a concrete reason the
transfer should take place. He asked for more detail.
Ms. Kostik deferred to the commissioner.
Commissioner Brune answered that he had been spending
significant time with the EVOSTC staff working on the
winding down. He detailed that the council had allocated
funds to approximately $150 million for projects over the
past year. There was approximately $160 million in funds
remaining. He had been spending a lot of time day to day
that DFG Commissioner Vincent-Lang had not been able to
spend. He reported it made sense to move the council to DEC
where the oversight would be occurring. He relayed that the
budget and transfer was approved unanimously by the
council. He explained that the council believed it was
appropriate make the transfer to DEC.
2:26:11 PM
Representative Edgmon asked if there were operational
efficiencies to be gained by the move.
Commissioner Brune replied that he would not characterize
the change as resulting in operational efficiencies. He was
personally spending the most time on the subject and it
made sense to have the council fall under the DEC budget if
his position was leading the state's efforts. In that
regard, he believed it resulted in efficiencies.
Vice-Chair Ortiz asked if it was accurate to say that the
remaining resources would be spent on projects related to
fish and fish resource issues.
Commissioner Brune answered in the negative. There were all
sorts of injured resources from the spill including
herring. He shared that over $30 million had been funded
for mariculture projects. There had been additional funding
for marine mammals and anthropological resources. He
highlighted two projects receiving approximately $8 million
to $10 million for a cultural resource museum in Kodiak and
Anchorage. He was happy to provide the list of projects
funded at the October meeting. He noted that some of the
projects were fish related, but not all.
2:28:15 PM
Vice-Chair Ortiz clarified that he had meant the council
related more to aquatic resources than land issues related
to DEC.
Commissioner Brune answered that DEC dealt with water
quality and impaired water bodies, which was one of the
recently funded projects. He elaborated there was a habitat
subaccount where land acquisitions had occurred and
upgrades to lands had occurred on the Kenai and in other
spill impacted areas. He expounded there had been efforts
to try to improve habitat for species that were impacted by
the spill to ensure species could recover or remain
recovered.
2:29:44 PM
Ms. Kostik moved to slide 10 and discussed building
maintenance and operations. The department owned one
building, the environmental health laboratory in Anchorage.
The building maintenance and operations appropriation
funded the maintenance and utilities for the building
including two maintenance staff. She relayed that the
building utility rates had increased. She noted the
appropriation had not received an increment since FY 12.
She highlighted that utility costs had increased across the
board: water and sewer were up 66 percent, electricity was
up 59 percent, natural gas was up 35 percent, solid waste
was up 64 percent, and biohazard waste was up 211 percent.
The department was just finishing up an energy efficiency
project that was providing a large reduction in utility
cost, but savings were paying off a loan that paid for the
improvements. She explained that it had been based on
utilities at a point in time. While savings would occur
over the years, utility rates would continue to go up. She
stated the increment was a much needed increase to the base
budget.
Ms. Kostik turned to slide 11 and discussed an increment
related to primacy over the Resource Conservation and
Recovery Act (RCRA), a federal law covering the management
of solid waste. She highlighted that Subtitle C was the
management of hazardous waste. She elaborated that in 2000,
DEC received approval from the EPA to oversee Subtitle D,
the management of nonhazardous waste. The department
already had statutory authority to assume primacy over
Subtitle C. She noted that Alaska and Iowa were the only
two states without primacy over the program. She stated
that Alaska would benefit from instate oversight of RCRA.
She elaborated that EPA staff in Seattle were heavily
focused on enforcement, whereas DEC would focus on
technical and compliance assistance. She stated that DEC
staff were instate and understood Alaska's unique
challenges. She added that DEC would have greater
regulatory flexibility than EPA. The request was for
$830,000 and six staff. The department did not anticipate
adding additional staff in future years. She relayed the
amount was the anticipated base for the program once the
state achieved primacy. After the anticipated two-year
application process, there would be federal grant funds
available to offset $400,000 undesignated general funds
(UGF) with federal receipts.
Representative Josephson referenced Ms. Kostik's statement
that the federal focus was on enforcement and the state's
focus would not be on enforcement. He asked what was wrong
with enforcement.
Ms. Kostik replied there was nothing wrong with
enforcement, but the department would rather help entities
get better and do better while providing compliance
assistance rather than using fines and penalties.
Commissioner Brune clarified that the department would
enforce when needed. The department wanted to work
collaboratively with the regulated community on a daily
basis to ensure human health and the environment were
protected and that hazardous waste was handled in the
appropriate way.
Representative Rasmussen asked if the department had any
other authorities when it came to reprimanding
mismanagement of hazardous waste or other DEC infractions.
She asked if the department's only existing mechanism was
to fine people and report it to law enforcement. She
wondered if the department had any policing ability.
2:34:55 PM
Commissioner Brune replied that with the exception of
limited circumstances, the department did not have ticket
writing authority. He explained that notices of violation
were typically referred to the Department of Law.
Representative Johnson looked at slide 11 and stated her
understanding it was a two-year process for the state to
get primacy over Subtitle C. She stated her understanding
the cost was $830,000 and the state would receive $400,000
back. She asked if it was the full amount over two years or
if there would be additional cost to the state in the next
couple of years.
Commissioner Brune answered it was an annual cost of
$830,000 paid fully with general fund dollars in the first
two years as the state pursued primacy. Once the state
received primacy from the EPA, the state would receive
$400,000 annually from the EPA which would replace $400,000
in general funds.
Representative Johnson wondered why the state would want to
take over primacy if it would cost the state $430,000 per
year.
Commissioner Brune emphasized the importance of local
control of local permitting. He stated the department
wanted people who understood Alaska and the importance of
the environment, handling hazardous waste, and the
wetlands, rather than having people out of state in charge
who rarely visit. The department believed local expertise
was important to be able to give counsel to people applying
for permits. He wanted to provide accessibility to Alaskan
regulators on a daily basis to help protect human health
and the environment. He believed it was a good investment
of state general funds.
Representative Johnson provided a scenario where a local
government had an issue with the EPA. She asked if the EPA
could supersede the state and do its own enforcement. She
thought it seemed to be that way currently. She did not
know how it would work when the state assumed the proposed
level of primacy.
2:39:39 PM
Commissioner Brune answered that as with any federal
primacy program, federal laws were passed by Congress
(e.g., Clean Air Act, Clean water Act, and RCRA) and the
programs were designed to be assumed by states. He stated
that with respect to RCRA Subtitle C, 48 of 50 states had
chosen to do so. He confirmed that at any point the federal
government could come and ensure the states were doing
things appropriately and provide enforcement when
necessary. He explained that when a state had primacy, the
federal government was required through cooperative
federalism to consult and work with the state on any
concerns. The likelihood of the federal government coming
in was far less if the state had primacy and was done in
collaboration with the state if it happened.
Representative LeBon remarked it appeared the change would
give the state more flexibility related to permitting,
appeals, and enforcement. He stated, "As an advantage for
the cost benefit analysis, it would pay for the state in
that sense."
Commissioner Brune agreed.
2:41:27 PM
Ms. Kostik moved to slide 12 and relayed that ocean ranger
fees were collected from cruise ships. She elaborated that
a recent lawsuit against the City and Borough of Juneau had
determined paying for fish tissue testing was not an
appropriate use of the funds. Consequently, the
administration was requesting to change the fund source for
fish tissue testing from ocean ranger fees to UGF. She
noted there had been a similar fund source change the
previous year for commercial passenger fees for the
commercial shellfish testing program. The fund source
change on slide 12 provided the last funding cleanup
associated with cruise ship fees used for things other than
cruise ship activities.
Representative Josephson stated that frequently there were
discussions on the House floor about the dividend formula
not being complied with and that the school bond debt
program [statutory language] used the word "shall." He
asked if the state still had a law in place that
anticipated having actual ocean rangers on vessels.
Commissioner Brune replied that the law was still on the
books. He relayed that ocean rangers could be DEC
employees. He detailed DEC employees had been on every ship
that entered Alaska waters in the past year. He referred to
a bill recently introduced by the administration related to
ocean rangers. The administration believed DEC staff did a
better job and could do a better job incorporating the
oversight as well as using technology to oversee cruise
ships in Alaska waters.
Ms. Kostik advanced to slide 13 and relayed that Title I
air quality permits were issued for construction projects,
whereas Title V permits were operating permits. She
detailed that Title I fees were collected as general fund
program receipts and Title V fees were collected as clean
air protection funds. She explained that EPA guidance had
changed so that moving forward, projects that would
ultimately be operating permits or projects would be
classified as Title V from the beginning. The change
resulted a change in the fund source for incoming fee
revenue. Consequently, the department was requesting a fund
source change from general fund program receipts to clean
air protection funds. Additionally, the item cleaned up
some hollow federal authority.
2:44:53 PM
Ms. Kostik turned to slide 14 and explained the prevention
account of the Oil and Hazardous Substance Release
Prevention and Response Fund was funded by a $0.04 per
barrel surcharge on crude oil as well as a $0.95 per gallon
surcharge on refined fuel. There was also cost recovery
from responsible parties. The department did not anticipate
collecting sufficient revenue to cover the base budget for
FY 23 and would no longer have a fund balance to help make
up the difference. She detailed that SPAR had taken budget
cuts in recent years to try to address some of the annual
shortfall in revenue collection. The department was
requesting holding the budget steady without further cuts.
As such, the budget included a fund source change from the
prevention account to UGF to make up the difference for
what was collectible. She noted the governor's original
request was $1,275,200 and the governor's amended budget
increased the number by $43,000 based on an update made
after the release of the fall revenue projections. The
increment ensured SPAR would be held harmless in the coming
year.
Representative Josephson appreciated the UGF dollars for
the SPAR account. He asked if the SPAR account balance of
close to $8 million had been swept into the Constitutional
Budget Reserve (CBR).
Commissioner Brune replied affirmatively.
Representative Josephson spoke to the sustainability of the
fund and remarked that the fund had been depleting even
with the $8 million. He asked if the fund's sustainability
had been partially eliminated due to the sweep. He noted
that theoretically, groups like the Prince William Sound
Regional Citizens Advisory Council that cared about SPAR's
solvency and health could come back every December or
January requesting UGF.
Commissioner Brune agreed. He relayed he had focused on
bringing sustainability to SPAR over the past three years.
He characterized the UGF component as exciting and was
pleased there would be general fund dollars for SPAR. He
highlighted the way to increase SPAR's budget was to
increase [oil] production because SPAR was funded at $0.04
per barrel. He was glad to see there were general fund
dollars after the monies had been swept. He noted the
department had been on the record the past couple of years
supporting an increase to the refined fuel surcharge from
$0.95 per gallon to $1.05 per gallon.
2:48:29 PM
Representative Josephson emphasized the statement that the
administration was on the record for supporting an increase
in the surcharge from $0.95 per gallon to $1.05 per gallon
for SPAR.
Commissioner Brune confirmed the statement.
Ms. Kostik discussed the assumption of 404 primacy on slide
15. She explained that Section 404 of the Clean Water Act
regulated the discharge of dredged and fill materials into
waters and wetlands. Activities permitted under Section 404
may include site improvement fill for residential,
commercial, or recreational development; construction of
breakwaters, levies, dams, dikes, or weirs; and placement
of fill material for roads, airports, or buildings. She
elaborated that Alaska's wetlands covered approximately 174
million acres or about 43 percent of Alaska's surface area.
She asserted that Alaska would benefit from instate
oversight.
Ms. Kostik explained that a state-run program was
accountable to Alaskans and the legislature and would
assure Alaska had control of its permitting priorities. She
continued that primacy enabled the state to integrate the
dredge and fill program with other land and water related
management programs. She stated the results would be faster
permitting and stable risk-based enforcement. She relayed
permits issued under 404 primacy would reflect Alaska's
unique conditions with Alaska-specific program guidance.
She explained that a state-run Section 404 would reduce the
uncertainty resulting from shifting national priorities.
The change would build on work done by DEC in 2014 and 2015
when the legislature gave the department statutory
authority to pursue primacy. Similar to RCRA, the
department anticipated a two-year application process to
achieve primacy. The request was $4.9 million UGF and 28
positions. The department anticipated adding funding for an
additional four positions in FY 24.
2:50:59 PM
Representative Rasmussen asked what type of work the 28
positions would do until the 404 primacy was approved.
Commissioner Brune answered that the process had started in
2012/2013 when the legislature gave statutory authority for
DEC to pursue primacy. He relayed the process would
continue where it left off. In conjunction with the EPA and
Corps of Engineers, the department had to determine which
lands were assumable for permitting. He elaborated there
would be certain lands maintained by the corps and EPA. He
noted the state wanted as much as it could get. The
department would also work with the Fish and Wildlife
Service and the National Marine Fisheries Service on doing
the biological opinion on how the state would handle
Endangered Species Act consultations going forward. He
continued that if the state was granted primacy, it was
possible National Environmental Policy Act (NEPA) analyses
would not be done because there would not be a federal
nexus. He clarified it was not to say that what was done as
part of NEPA would not be overseen by DEC. The department
would have to have an agreement with federal agencies like
the NMFS and Fish and Wildlife Service on how consultation
for endangered species would occur.
Commissioner Brune continued to address slide 15 and 404
primacy. He explained that other work would be done trying
to get the expertise for overseeing the state's wetlands
and permitting. He relayed the application process would be
lengthy. He highlighted there were three states with
primacy. He detailed that New Jersey and Michigan had
primacy for a couple of decades and Florida had just
recently been granted primacy in the past year and a half.
He had a number of conversations with Florida's former
secretary of environment to talk about Florida's process
and look at its application.
2:53:56 PM
Representative Rasmussen asked what could be expected in
terms of the time expedited on permits if the proposal
passed and was implemented.
Commissioner Brune answered that depending on the
complexity of a project, certain projects would not have to
go through NEPA if the state had primacy. He elaborated
there was significant time savings when projects did not
have to do an environmental impact statement or
environmental assessments. He spoke about the advantage of
the ability to coordinate the functions of the 404 program
with the 402 program or National Pollution Discharge
Elimination System (NPDES) permitting. He detailed that
currently the department had to go back and forth between
the EPA, Corps of Engineers, and DEC for the 401
certifications. There would be significant time savings. He
noted that there may not be much of a difference for some
projects and others would result in a significant time save
savings.
Representative LeBon asked if the permitting for fill
material into waters and wetlands was primarily done
through the Corps of Engineers. He recalled having clients
who had been frustrated with the permitting process
timeline. He stated the subjectivity of defining what
constituted wetlands had also been a high level of
frustration. He suggested it had been so frustrating for
construction developers and project managers that they had
decided to move forward and ask for permission later.
Commissioner Brune confirmed that the Corps of Engineers
oversaw the 404 permitting. He clarified the EPA was
responsible for granting primacy and had the final say. He
relayed the EPA had been helpful throughout the process and
had met with the department a number of times. He explained
the programs were designed to be assumed by the state
because states knew their wetlands and geography better
than anyone. He emphasized that having the expertise
developed within the state would be vital and would help
decrease the timeframes, especially as people cycled in and
out of the state in the Corps. He believed the change would
help bring predictability and would help mitigate the
impact on wetlands during proposed projects.
2:58:11 PM
Vice-Chair Ortiz referenced the requested increments for
404 primacy and RCRA totaling $5.7 million UGF and 32
additional state positions. He thought it seemed to be in
the opposite direction from the administration's past
budgeting process efforts. He asked why the administration
was pursuing the idea at present.
Commissioner Brune answered the department had mandates to
pursue primacy for RCRA and 404 as directed in law passed
by previous legislatures. He stated the timing was
expedited as the state wanted control and oversight over
its permitting processes. The administration wanted
Alaskans permitting Alaska projects (as opposed to
individuals permitting projects from out of state). He and
the governor believed timing was of the essence. He stated
that no one knew the state's wetlands and how to handle
hazardous waste like Alaskans did. He believed the present
was the ideal time.
Vice-Chair Ortiz highlighted the bullet point on slide 15
that one of the benefits would be to provide streamlined
permitting and greater certainty to the regulated
community. He asked if there had been a recent backlog of
projects that had not received permits. He asked for an
example of a project that may be permitted more quickly if
the state assumed 404 primacy. He asked if the goal was to
move certain projects along and if so, what type of
projects.
Commissioner Brune answered it had been a steady buildup.
He detailed that with respect to RCRA, 48 of 50 states had
assumed primacy. He believed it was time for Alaska to do
so. With respect to 404, he believed having the expertise
gleaned from the State of Florida had demonstrated that
things could be done and overseen by people in Alaska. He
did not think a specific project had driven the state to
the current point. He highlighted the administrations'
overall goal of having Alaskans in charge of permitting the
projects and protecting Alaskans' human health and the
environment.
3:02:00 PM
Representative Josephson stated that the Clean Water Act
was a Nixon era law that was updated under the Carter
administration. He asked for verification that only three
states had assumed 404 permitting primacy.
Commissioner Brune confirmed there were three states with
primacy over 404. He believed the law had been put in place
during the Nixon administration. He stated that Alaska had
175 million acres of wetlands. He pointed out that the
Lower 48 used to have 200 million acres of wetlands and the
number had been reduced to 100 million. He remarked that
those in charge of overseeing wetland permitting in the
Lower 48 had chosen to pave their states and not pay
attention to the ecological value of wetlands. He stated
that less than one quarter of one percent of the state's
wetlands had been impacted. He continued that the state was
the best judge to understand how its wetlands were
protected, to allow projects to go forward when
appropriate, and to mitigate the impact of the dredge and
fill activity. He thought it was the right time.
Representative Josephson stated it was the seminal act in
the dispute over the Pebble headwaters. He stated that if
Alaska assumed primacy, the litigation would no longer be
captioned "EPA versus X" but Alaskans challenging DEC.
Commissioner Brune thought the Pebble project was complex
and likely would have had a federal nexus one way or the
other. He had worked on the project and noted there had
been discussions of a port, LNG import facilities, and a
number of things that would have a federal nexus and would
require federal permitting. There were certain areas where
the state would assume primacy and other areas where the
Corps of Engineers would maintain them. He relayed that the
department would opt to receive 100 percent of the 404;
however, the law was written to ensure navigable waters,
ports, harbors, and others were maintained by the Corps of
Engineers. He believed there was a high likelihood the
federal nexus would have remained for the Pebble project, a
NEPA analysis would have been conducted, and litigation
against the project would have been with the federal
government as well.
Co-Chair Foster thanked the presenters.
^OVERVIEW: GOVERNOR'S BUDGET AMENDMENTS
3:05:36 PM
Co-Chair Foster noted that the meeting would recess at 3:30
p.m. until the following morning at 9:00 a.m. if not
completed.
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, referenced several spreadsheets
showing governor's proposed amendments for the operating,
capital, and supplemental budgets. He began with a
spreadsheet titled "FY23 Operating Governor Amended," dated
February 14, 2022 (copy on file). Item 1 was $75,000 in
retirement system funds within the Department of
Administration (DOA) for educational outreach for members
of Teachers' Retirement System (TRS) to inform them of
their ability to enter into the Social Security system if
they chose. Item 2 was a $5 million increment, of which
$1.6 million came from unrestricted general funds (UGF). He
detailed there had been multiple components in the budget
related to salary and benefit adjustments negotiated with
the Labor, Trades, and Crafts bargaining unit. Item 3 was a
reduction of $400,000 in the Division of Corporations,
Business and Professional Licensing (CBPL). He elaborated
the governor's budget had included $1.5 million to ensure
the division did not have to raise license fees to
licensees. Since that time in December, the department
determined it only needed $1.1 million in order to
accomplish the goal. The item reflected a reduction in the
authority.
Mr. Steininger moved to a technical correction on line 4.
He detailed there was an associated $7 million increase in
the language section on the last page in the packet. He
relayed the transaction associated with the language
section was flagged as non-language in the budget system
which caused it to end up in the bill.
3:08:30 PM
Mr. Steininger moved to item 5 pertaining to multiple
components within the Department of Corrections (DOC). The
item was $4.8 million including $4.4 million UGF for a 2
percent cost of living adjustment (COLA) for the
Correctional Officers Association. Item 6 was a technical
correction to the description of an item in population
management related to the geographic distribution of
positions added in the governor's budget. Item 7 was a
small adjustment to the Technical Vocational Education
Program (TVEP) funding. He noted there were several of the
items throughout the amendment packet. He explained the
program [funding] was based on an estimate updated
throughout the year. The item reflected an update to the
current estimate done by the Department of Labor and
Workforce Development (DLWD). Item 8 within the Department
of Environmental Conservation (DEC) was $200,000 associated
with the Exxon Valdez Oil Spill Trustee Council
administrative costs. He noted the council had been moved
from the Department of Fish and Game (DFG) to DEC.
Mr. Steininger moved to item 9 within DEC totaling $125,000
of federal indirect costs (the allowable indirect rate
billed to federal programs) that could be used to support
the operational and maintenance costs of the environmental
health laboratory. Item 10 was a correction to the general
funds needed to ensure the operations of the Spill
Prevention and Response (SPAR) program within DEC. He noted
the prior presenter had discussed the calculation to ensure
the program was fully funded and some of the changes that
occurred after the release of the December budget, which
required an additional $43,000 in general funds. Item 11
pertained to the Office of Children's Services (OCS) under
the Department of Family and Community Services for
workforce stabilization bonuses totaling $3.5 million,
including $2.2 million UGF. The funding was intended to
address recruitment and retention challenges facing OCS in
the past several years.
3:10:59 PM
Mr. Steininger moved to page 2, item 12 including $169,700
UGF to address traumatic stress issues experienced by OCS
frontline social workers. He added that the previous item
and upcoming items [items 11 through 19] were part of a
package to address staff and children at OCS and needs
brought up as part of the governor's People First
initiative. Item 13 was $900,000 and four temporary
positions within [OCS] frontline social workers. He
elaborated the positions were long-term nonpermanent
supervisory positions to help the organization work through
some of the recruitment and retention issues. Item 14 was a
field training compensation program to provide additional
training opportunities to OCS staff. Item 15 was 26
additional staff for OCS including support staff and direct
workers in addition to workers to help support and ensure
the success of the Tribal Welfare compact. The item totaled
$2.8 million and $1.8 million UGF.
Mr. Steininger moved to item 16, $100,000 to increase
support for vocational opportunities and training for
youths exiting the foster care system. Item 17 was $200,000
for a partnership with the Alaska Impact Alliance to work
on evidence-based program development for OCS. Item 18 was
$700,000 for the foster care special needs program where
costs above and beyond the base rate paid to foster parents
were accounted for. The funding was to address some of the
youths with more complex life situations that needed to be
dealt with by foster parents. Item 19 included $1 million
for OCS supporting foster children from 18 to 21 years of
age.
3:14:00 PM
Representative LeBon looked at item 13 and asked what long-
term nonpermanent positions were. He asked if there would
be a similar request for the next several budget cycles.
Mr. Steininger answered that long-term nonpermanent was one
of the main state position categories. Other categories
included permanent full-time, temporary, and seasonal
positions. He explained that long-term nonpermanent
positions were temporary in nature with a longer term
outlook. He elaborated the specific situation included a
project to address some of the recruitment, retention, and
support needs within OCS. There was not a precise deadline
when the need for the positions would cease. He furthered
that the needs were not permanent; therefore, it was not
fair to hire a position advertised as permanent when the
need may not go on indefinitely. The position category
aimed to signal the position was for a project or something
of that nature that had an expiration whether that
expiration was known or not.
3:15:54 PM
Representative LeBon asked if a long-term nonpermanent
position became automatically permanent at some point time
if the situation persisted for more than two to four years.
Mr. Steininger answered there was no time frame when the
classification of position became permanent. He detailed
that because the position was flagged differently than a
permanent full-time position, it was easier to check in
with the department to see how the project was progressing
and whether the position could be removed from the budget.
In some situations, long-term nonpermanent positions became
permanent (e.g., positions that had been around for a
decade).
Representative LeBon asked if the success of the positions
lead the administration to someday determine to keep the
positions long-term. He wondered if the label long-term
nonpermanent would continue for several years. He decided
it was possible.
Mr. Steininger replied that the goal was for a surge in
support to stabilize OCS and its recruitment and retention
issues. The idea was to help the agency become a better
place where staff stayed longer. He stated that hopefully
the positions would not be needed long-term.
Representative Rasmussen asked if other states had
implemented a similar strategy. She wondered about the
rationale behind the method. She was not certain how
temporary nonpermanent positions would lead to stability
and help for OCS.
3:18:37 PM
Mr. Steininger responded that long-term nonpermanent
positions were used to staff up larger than the long-term
need, especially when there was significant staff
attrition. The hope was to be able to stabilize some of the
workflow and the pressure put on staff. He elaborated when
there was significant attrition, the workload was put on
the shoulders of existing staff and the situation started
becoming unsustainable. Having a surge in staffing could
help alleviate some of the workload concerns. There would
continue to be some attrition naturally due to retirement
or people moving on or up. The goal was to stabilize and
land at a lower level of staffing dictated by the permanent
long-term workload. The idea was to relieve some of the
workload and make the job more doable.
Representative Rasmussen stated it appeared the item was
for a supervisory unit. She did not know how the department
expected to fill the new positions when there was currently
difficulty with recruitment. She imagined the work was
specialized and required a social work background. She
wondered how the department planned execute the plan.
Mr. Steininger replied that the department could follow up
with more information. He pointed to an increment for
workforce stabilization bonuses aimed at addressing some of
the recruitment and retention issues. The administration
was hoping the combination of all of the various support
items would help address some of the recruitment issues.
3:21:51 PM
Mr. Steininger moved to page 3, line 20. The governor's
December 15 budget included the addition of two positions
to support the new Department of Family and Community
Services including a new department technology officer and
a new administrative services director under the Office of
Information Technology and the Office of Management and
Budget respectively; however, the money to pay for the
positions had inadvertently been left out. The increment on
line 20 would pay for the positions. Item 21 was $550,000
in federal grants for DFG subsistence research. Lines 22
and 24 under the Department of Health relocated a mental
health trust Crisis Now continuum of care grant. Item 23
was $200,000 UGF under the Department of Health associated
with a multi-partner partnership to expand the Master of
Social Work degree program at the University of Alaska.
Partners included the state and private entities to expand
the capacity at the university.
Mr. Steininger moved to line 25, a new item from the Alaska
Mental Health Trust Authority (AMHTA) that would add
$285,000 for the Open Beds program. The increment would go
to a software system supported by the trust. Item 26 was an
adjustment to TVEP under DLWD. Item 27 was $1.7 million in
federal receipts for increases to existing federal grants
for DLWD. He noted that the $550,000 on line 21 was not
associated with the federal infrastructure bill. The grants
were existing outside the federal investment. Item 28 was
another adjustment to TVEP.
3:24:38 PM
Mr. Steininger moved to item 29 for the Department of
Natural Resources. The item was $262,000 and two positions
related to working on power diversification and renewable
energies in the State of Alaska. Items 30 and 31 were
adjustments to add detail on how the Department of Natural
Resources (DNR) would manage its partnership with the
Future Farmers of America group.
Mr. Steininger turned to page 4, line 32 including
approximately $171,000 for the Department of Public Safety
(DPS). He elaborated that 36 positions had been added in
the FY 21 budget but were only funded at 75 percent. As
more trooper positions were filled, the state was
completing the remaining 25 percent funding for the
positions. Item 33 was a change to the description for the
missing and murdered indigenous persons addition to the
Alaska State Trooper detachments. The increment would add
more clarity as a result of conversations during the
subcommittee process. Item 34 was a fund source change in
the DPS Bureau of Investigations. He explained that as the
department looked at its state homeland security grant
awards, it realized the funds had been budgeted as IA
[interagency] but should have been CIP [capital improvement
program]. Both fund sources were "other" funds; therefore,
the increment reflected a net zero change. Item 35 included
an adjustment to the description to clarify the location of
some additional Wildlife Trooper positions. Item 36 was for
the Department of Revenue and corrected a rate reduction
that had inadvertently occurred twice [in FY 22 and FY 23].
3:26:54 PM
Mr. Steininger shared that rows 37, 39, and 40 were
adjustments to ensure federal funding for the Silver Tip,
Chitina, Birch Lake, and Dalton Highway maintenance
stations was accurately reflected. He explained that as the
administration worked through the scenario to maximize the
use of federal funds in the Department of Transportation
and Public Facilities operating budget, a couple of
maintenance stations added back to the budget the previous
year had dropped off of the analysis. The federal funds
would support the opening of the maintenance stations. Rows
38, 41, and 42 were related to COLAs for the Labor, Trades,
and Crafts bargaining unit and ensured the correct fund
source was assigned. Item 43 corrected fund source usage
from designated general funds to other funds. Item 44 was
another adjustment to TVEP. Item 45 was a small adjustment
requested by the Court System.
Mr. Steininger turned to page 5, line 46 showing the
opposite side of a technical correction shown on page 1
related to Alaska Seafood Marketing Institute (ASMI) and
federal funding received by the agency the previous year.
Co-Chair Foster believed the total FY 23 operating budget
change was $14.8 million.
Mr. Steininger agreed.
Co-Chair Foster noted the committee would hear a review of
the governor's supplemental and capital amendments the
following morning.
HB 281 was HEARD and HELD in committee for further
consideration.
HB 282 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
day.
^RECESSED until February 23, 2022 at 9:00 A.M.
3:30:04 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| DEC HFC Department Overview 02.22.2022.pdf |
HFIN 2/22/2022 1:30:00 PM |
|
| FY2022_Supplemental_Summary_2-14-22.pdf |
HFIN 2/22/2022 1:30:00 PM |
(All Sup Bills) HFIN Amendment Overview OMB |
| HB 281 FY2023_Operating_Amendments_2-14-22.pdf |
HFIN 2/22/2022 1:30:00 PM |
HB 281 |
| HB 283 FY2023 Governor Amend Bill Capital Summary Spreadsheet - 2.14.2022 Final v2.pdf |
HFIN 2/22/2022 1:30:00 PM |
HB 283 |
| HB 284 FY2022_Supplemental_Amendments_2-14-22.pdf |
HFIN 2/22/2022 1:30:00 PM |
HB 284 |
| HB 284 re Amendment Legal Letter to Co-Chairs 2-16-22.pdf |
HFIN 2/22/2022 1:30:00 PM |
HB 284 |