Legislature(2025 - 2026)ADAMS 519
04/28/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB57 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 57 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 28, 2025
4:28 p.m.
4:28:32 PM
CALL TO ORDER
Co-Chair Schrage called the House Finance Committee meeting
to order at 4:28 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative DeLena Johnson
ALSO PRESENT
David Scott, Staff, Senator Bert Stedman; Michael Partlow,
Capital Budget Coordinator, Legislative Finance Division.
SUMMARY
SB 57 APPROP: CAPITAL/FUNDS/REAPPROP
SB 57 was HEARD and HELD in committee for further
consideration.
Co-Chair Schrage reviewed the meeting agenda.
SENATE BILL NO. 57
"An Act making appropriations, including capital
appropriations and other appropriations; making
reappropriations; making appropriations to capitalize
funds; and providing for an effective date."
Co-Chair Schrage encouraged committee members to limit
discussion on the bill to technical questions during the
current meeting. He invited the bill presenter to the table
and asked for an overview.
4:29:51 PM
DAVID SCOTT, STAFF, SENATOR BERT STEDMAN, directed
attention to the reports included in committee packets
(copy on file). The first document showed capital budget
statewide totals [generated by the Legislative Finance
Division (LFD)]. Column [1] showed the governor's amended
budget, which reflected the governor's December 15 budget
inclusive of amendments submitted by his office on later
dates. Column [4] reflected the bill currently in front of
the committee and Column [4]-[1] showed the differences
between the current bill and the governor's amended budget.
He explained that the easiest way to understand an
appropriation bill was to get the information from the
reports rather than going line by line through the bill.
The second report showed project detail by agency for all
departments. The report contained every project in the
budget, the governor's original proposal, the Senate's
changes to the bill, and the funding source for each
project. He noted the that the reports were on BASIS and
available to the public.
Mr. Scott explained that the capital budget process was a
collaborative effort between the House Finance Committee
and Senate Finance Committee capital budget co-chairs. The
offices held several in-person meetings. He shared that he
worked closely with his counterpart in Co-Chair Schrage's
office, which included meeting on a daily basis. He
elaborated that since the beginning of session there had
been meetings with the governor's office, the Office of
Management and Budget (OMB), departments, agencies, the
Court System, and the University. He noted that the work
was all done with LFD's assistance and expertise.
Mr. Scott explained that the budget before the committee
prioritized statewide needs over district-specific
projects. In recognition of the current fiscal situation,
it was the smallest unrestricted general fund (UGF) budget
in five years (since the COVID session, which had only been
~60 days and there had not been time to go through a robust
process on the capital budget). The current budget
concentrated on essential infrastructure investments,
public safety upgrades, and statewide deferred maintenance
needs. He relayed that he would address matching funds,
individual projects accepted from the governor's budget,
the deferred maintenance package, and an explanation of the
funding mechanisms.
4:33:22 PM
Mr. Scott explained that "match" referred to state dollars
that leveraged federal funding. The goal was to capture as
much of the federal funding as possible. The budget
included $2.5 billion in federal funding captured with $150
million UGF. The federal funding was spread out among
several departments and agencies. The Department of
Transportation and Public Facilities (DOT) was the largest
recipient and included funding for roads, highways,
bridges, airports, ferries, and disaster response. The
Department of Environmental Conservation (DEC) also
received substantial match funding for the Village Safe
Water program for basic sanitation needs in rural Alaska.
The Alaska Energy Authority (AEA) and Alaska Housing
Finance Corporation (AHFC) received significant federal
funding. The National Guard Armories under the Department
of Military and Veterans Affairs (DMVA) were receiving
match for renovations and upgrades at seven statewide
sites. The remainder of the match funds would go to the
Department of Health, DEC, Department of Fish and Game,
Department of Natural Resources, and the University.
Mr. Scott discussed projects within the capital budget. The
bill denied all individual CAPSIS [Capital Project
Submission and Information System] requests. He explained
that each of the 60 legislators had a CAPSIS account.
Additionally, municipalities, communities, and some
501(c)(3) organizations were allowed to request state
funding. The total request from all 60 legislative offices
in the current session was $3.2 billion. The bill denied 16
projects requested by the administration totaling $49
million. Of the 27 projects approved in the budget, their
size and scope had been reduced by $10.5 million through
several meetings and negotiations with departments and
agencies. The total cost of projects added after match was
$88.8 million.
Mr. Scott highlighted notable projects included in the bill
beginning with the Dixon Diversion project. He detailed
that the overall project was to increase the capacity of
Bradley Lake hydroelectric. He pointed out that the funding
in the bill was limited to allowing AEA to obtain the
Federal Energy Regulatory Commission (FERC) license. Once
the license was obtained, AEA would begin working on a
construction funding package. He added that AEA and the
Railbelt utilities were in partnership with the project.
The bill included funding to AHFC for senior housing and
rental assistance for victims displaced due to domestic
violence. The budget included several information
technology (IT) hardware, software, and network projects in
departments (Department of Administration, Department of
Law, Department of Labor and Workforce Development, and
Department of Revenue) to allow government to operate
efficiently. The budget also included funding for Dalton
Highway (also known as the Haul Road) maintenance. The
Dalton Highway was the route used to get supplies up to the
North Slope.
4:38:01 PM
Mr. Scott continued to review projects included in the
capital budget. The budget included $26 million in
designated general funds (DGF) from the Marine Highway Fund
(fare box revenue) for AMHS vessel maintenance and
overhaul. He stated that the Department of Public Safety
(DPS) was the biggest winner in the budget and funds were
allocated to the purchase of body armor and protective
equipment, and aircraft and vessel maintenance and repair.
The largest UGF item was for a new Evidence Building at the
DPS Fairbanks Post. He detailed that the current evidence
rooms in Fairbanks were Conex boxes, which were not ideal.
He elaborated that there was black mold in the rooms that
could ruin the evidence. Additionally, DPS staff had to
wear full hazmat gear in order to go into the rooms to get
evidence to bring to court.
Mr. Scott highlighted that the budget funded the first six
projects on the Renewable Energy Fund list compiled by the
Renewable Energy Fund Advisory Committee under AEA. The
projects were located in Pelican, Naknek, Skagway,
Kwethluk, Quinhagak, and Nenana. The budget included
funding for a request for court security upgrades within
the Judiciary. Additionally, there was funding to DFG for
statewide salmon studies for up to date information in
order for the department to sustainably manage fish runs.
Mr. Scott reviewed that of the 27 projects and $89 million,
there was $46 million in UGF for 19 projects, $34 million
in DGF for 5 projects, and $9 million in other funds for 3
projects. He highlighted that the Harbor Matching Grant
contained some funding and was not sweepable. He explained
that when the grant contained available funding it could be
used by DOT without further appropriation. He elaborated
that DOT had communicated the funding would be used for
three projects in the coming year including the Eliason
Harbor in Sitka, the Aurora Harbor in Juneau, and Statter
Harbor in Auke Bay.
4:42:12 PM
Representative Galvin asked Mr. Scott to refer to page
numbers when applicable.
Mr. Scott replied affirmatively. He turned attention to the
deferred maintenance package negotiated between Co-Chair
Schrage and the Senate Finance Committee co-chair. He
stated that deferred maintenance was a serious issue that
would not go away by ignoring it. He underscored it was a
statewide liability that required serious attention.
Otherwise, the state would be dealing with negative
consequences including safety hazards and negative costs in
the future. The current deferred maintenance package was
$36 million. He noted that $19 million was for the Major
Maintenance Fund for K-12.
Representative Allard was trying to follow along and
requested the location of the items in the bill.
Mr. Scott requested an at ease.
4:43:42 PM
AT EASE
4:48:02 PM
RECONVENED
Co-Chair Schrage relayed that some materials had been
distributed in order for members to follow along.
Mr. Scott reviewed that the deferred maintenance package
was $36 million. He noted that $19 million would go to the
Major Maintenance Fund for K-12, which would fund the first
five projects on a list compiled by DEED. There was $5
million for the University and $1.4 million for Mount
Edgecumbe. He explained that Mount Edgecumbe was not
eligible to apply for major maintenance grants; it did not
compete against other schools in the state, but it competed
against all other state assets for deferred maintenance.
There was $750,000 in deferred maintenance funds for the
Judiciary and $10 million in statewide funds for the
governor's office. He clarified that the statewide
increment for the governor's office was for emergent issues
arising during the year that needed to be addressed quickly
in order for state operations to continue.
Representative Galvin asked if the funding for the
governor's office was only used for deferred maintenance
and not emergencies. Alternatively, she asked whether it
was an emergency fund filler. For example, she asked if it
was roofs and boilers or something else.
Co-Chair Schrage responded that there was language that
restrained the expenditure of the funds.
Mr. Scott deferred the question to LFD.
4:50:15 PM
MICHAEL PARTLOW, CAPITAL BUDGET COORDINATOR, LEGISLATIVE
FINANCE DIVISION, explained that the statewide deferred
maintenance appropriation to the governor's office was for
any deferred maintenance needs for state assets. He
elaborated that due to the deferred maintenance backlog,
the funds had been more recently used for emergent needs.
He detailed that each department applied based on its
priorities. He furthered that if a roof was collapsing or
there were other emergent needs, those things received a
higher priority. He noted that because of the billion
dollar scale of the state's deferred maintenance list,
there was always a roof collapsing somewhere.
Mr. Scott continued to explain the funding mechanisms. The
budget reappropriated old UGF from old and stalled projects
in the amount of $47.1 million (Section 13 of the bill,
page 44) and $20.9 million in old match for highway and
aviation. The action displaced $68 million UGF. The bill
increased the Alaska Industrial Development and Export
Authority (AIDEA) dividend to the statutory cap. He
detailed that AS 44.88.088 stated that the AIDEA dividend
must be between 25 and 50 percent of AIDEA's net income. In
the current year, the AIDEA board authorized a $20 million
dividend, which was 30 percent of the net income. The bill
increased the number to the statutory cap of 50 percent of
net income or $12.5 million. The actions displaced $80
million UGF.
Co-Chair Schrage asked for verification it was an
additional $12.5 million above the amount authorized by the
board.
Mr. Scott confirmed that the budget added $12.5 million on
top of the $20 million authorized by the board.
Representative Galvin asked if the bill added $68 million
plus $12.5 million for a total of $80.5 million.
Mr. Scott responded affirmatively.
Representative Allard asked if the maintenance for Mount
Edgecumbe fell under DOT.
Mr. Scott responded that DOT performed the maintenance at
Mount Edgecumbe, but to his knowledge, the funding went to
Mount Edgecumbe.
4:53:25 PM
Mr. Scott concluded his review of the capital budget. The
budget contained $161.6 million UGF, which was $119.8
million less than the governor's submitted budget. The
reductions had been achieved by denying $49 million in
administration requests, reducing approved projects by $10
million, and displacing $80.5 million UGF das a result of
reappropriations and the AIDEA dividend. The total capital
spend was $2.9 billion.
Representative Stapp observed there was a fund source
change for the AIDEA dividend software system replacement
from general funds to Permanent Fund Dividend (PFD) funds.
He asked when the project was supposed to be completed. He
understood it had been in the queue for a long time.
Mr. Partlow responded that he had not seen a specific
timeline for the project. He stated that the development of
a replacement for the original dais program had been going
on for well over a decade.
Representative Stapp asked how many decades it would take
to replace software for the PFD, especially if PFD money
was used. He asked about the Nome Port reappropriation. He
thought it appeared the funds were encumbered. He asked if
they were creating a liability in the general fund match
dollars for DOT for reappropriating encumbered funds.
Mr. Scott believed that a committee substitute by the House
Finance Committee would address the issue.
Co-Chair Foster asked how many CAPSIS requests were
submitted.
Mr. Scott replied that he would follow up with the
information.
4:56:59 PM
Co-Chair Josephson looked at the funds for DPS to purchase
body armor. He noted he had seen it in the operating budget
as well. He asked about the distinction between what was
included in the operating budget and the increment in the
capital budget.
Mr. Scott answered that he did not know. His focus was on
the capital budget.
Representative Bynum appreciated the overview provided by
Mr. Scott. He recognized it was a difficult budget due to a
lack of funding and he was grateful for the hard work
getting the information to the committee. He expressed
concern about the school major maintenance. He understood
the state was in a difficult position in terms of how the
item was funded. He discussed that major maintenance was
updated by the most emergent needs. He underscored that
there were school districts that were not putting in the
adequate maintenance necessary to maintain their facilities
and were letting them go into lapse in order to get on the
list to get funded. He stressed the committee needed to
take a better look at the issue because there were many
needs across the state and many districts doing a lot of
hard work to maintain their facilities, while there were
other districts that had testified to the committee that
they were not doing [a lot of work to maintain facilities]
because they otherwise would not get funding.
Representative Hannan relayed that the committee had heard
from the Court System on its capital needs the previous
week. She looked at contingency language related to the
sale of the Stratton Library in Sitka to the Court System
in Section 18, page 51. She observed that it appeared the
building had not yet been sold. She asked about the sale
price and what the state's investment needed to be to get
it functional as a court building.
Mr. Scott responded that he did not know what the total
cost would be to turn the Stratton Library into a
courthouse. He believed the Court System would have the
numbers. He relayed that there had been discussions between
DEED and the Judiciary in the past and there had been a $2
million appropriation to transfer the property in the FY 25
capital budget that was vetoed.
Representative Hannan remarked that the committee had heard
from the Judiciary that it was a necessary step. She
pointed out that the item was not mentioned with any dollar
figure in the budget and the bill contained the contingency
language "request a supplemental." She did not want the
legislature to be shocked the following session if it
received a supplemental capital request. She thought the
item was something the legislature should predict and
account for in the future.
5:01:21 PM
Representative Stapp remarked that the AIDEA board had
approved a specific dividend amount and the budget included
a larger number. He asked what would happen if the AIDEA
board said it would not give a larger dividend.
Mr. Scott answered that he did not know what would happen,
but AIDEA would have to speak to the legislature about it
on the record.
Representative Stapp asked about a reappropriation of
enhanced 911 funding to the Rabinowitz Courthouse.
Mr. Scott stated his understanding that the increment would
help with communications pertaining to security while
transporting prisoners in the elevators.
Representative Bynum highlighted the $155 million UGF match
used to capture $2.5 billion of federal funding. He asked
if there were other instances where federal funding was not
available due to issues within DOT. He used the Statewide
Transportation Improvement Program (STIP) as an example. He
asked if there was potential the state could come as a
later supplemental associated with the correction of the
errors.
Mr. Scott asked if Representative Bynum was inquiring
whether the state could potentially lose federal funding.
Representative Bynum replied affirmatively.
Mr. Scott answered that he had heard no concern from OMB,
DOT, LFD, or anyone about the state's federal highway or
aviation match.
Representative Tomaszewski asked whether the Senate had
removed an increment for Alaska Gasline Development
Corporation (AGDC) phase 1. He asked for detail about the
$4.2 million increment.
Mr. Scott responded that the increment had been removed by
the Senate. He could not speak to any motives associated
with the removal of the funding.
Representative Tomaszewski asked what phase 1 of the
project entailed.
Mr. Scott replied that he did not have the information, but
he could provide it to the committee later.
SB 57 was HEARD and HELD in committee for further
consideration.
5:04:52 PM
Co-Chair Schrage reviewed the schedule for the following
meeting.
ADJOURNMENT
5:05:22 PM
The meeting was adjourned at 5:05 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 57 GovAmdT to SenateT No MH Statewide Totals 4-23-25.pdf |
HFIN 4/28/2025 1:30:00 PM |
SB 57 |
| SB 57 GovAmdT to SenateT ProjectDetailByAgency 4-23-25.pdf |
HFIN 4/28/2025 1:30:00 PM |
SB 57 |
| 04.28.25 OMB House Finance FY2026 Gov Amend Budget.pdf |
HFIN 4/28/2025 1:30:00 PM |
HB 53 |
| Attachment B - FY2025_Op_Supplemental_Bill_Spreadsheet_04.25.2025.pdf |
HFIN 4/28/2025 1:30:00 PM |
HB 53 |
| Attachment C - FY2025_Capital_Supplemental_Bill_Spreadsheet_4.25.2025.pdf |
HFIN 4/28/2025 1:30:00 PM |
|
| Attachment A - FY2026 Op Governor Amend Bill Spreadsheet 04.25.2025.pdf |
HFIN 4/28/2025 1:30:00 PM |
|
| SB 57 SFIN Changes 042825.pdf |
HFIN 4/28/2025 1:30:00 PM |
SB 57 |
| 05.01.25 HFIN OMB Gov Amend Budget Follow-up to 04.29.25 Hearing.pdf |
HFIN 4/28/2025 1:30:00 PM |