Legislature(2023 - 2024)SENATE FINANCE 532

04/18/2023 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 54 APPROP: SUPPLEMENTAL; REAPPROP; AMENDING TELECONFERENCED
<Pending Referral>
<Bill Hearing Canceled>
+= SB 54 APPROP: SUPPLEMENTAL; REAPPROP; AMENDING TELECONFERENCED
Heard & Held
Overview by Neil Steininger, Director, Office of
Management and Budget
+= SB 41 APPROP: CAPITAL/SUPPLEMENTAL TELECONFERENCED
Heard & Held
Overview by Neil Steininger, Director, Office of
Management and Budget
+= SB 29 CIVICS EDUCATION; EST AK CVCS ED COMM TELECONFERENCED
Moved CSSB 29(FIN) Out of Committee
+= SB 87 LUMBER GRADING PROGRAM TELECONFERENCED
Moved SB 87 Out of Committee
+= SB 104 CIVIL LEGAL SERVICES FUND TELECONFERENCED
Moved SB 104 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 107 PERMANENT FUND DIVIDEND; POMV SPLIT TELECONFERENCED
Heard & Held
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 18, 2023                                                                                            
                         9:02 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:02:44 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:02 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Donny Olson, Co-Chair                                                                                                   
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Click Bishop                                                                                                            
Senator Jesse Kiehl                                                                                                             
Senator Kelly Merrick                                                                                                           
Senator David Wilson (via teleconference)                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Paloma Harbour, Fiscal  Management Practices Analyst, Office                                                                    
of  Management  and  Budget, Office  of  the  Governor;  Tim                                                                    
Lamkin,  Staff,  Senator  Gary Stevens;  Ken  Alper,  Staff,                                                                    
Senator Donny Olson; Senator  Jesse Bjorkman, Sponsor; Laura                                                                    
Achee,  Staff,  Senator   Jesse  Bjorkman;  Senator  Forrest                                                                    
Dunbar,  Sponsor;  Arielle  Wiggin, Staff,  Senator  Forrest                                                                    
Dunbar; Pete  Ecklund, Staff, Senator Bert  Stedman; Senator                                                                    
Cathy Giessel.                                                                                                                  
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Dom  Pannone, Administrative  Services Director,  Department                                                                    
of Transportation and Public Facilities, Juneau.                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 29     CIVICS EDUCATION; EST AK CVCS ED COMM                                                                                 
                                                                                                                                
          CSSB 29  (FIN) was REPORTED out  of committee with                                                                    
          four   "do   pass"    recommendations,   one   "no                                                                    
          recommendation" and with one  new fiscal note from                                                                    
          the Department of Education and Early Development                                                                     
                                                                                                                                
SB 41     APPROP: CAPITAL/SUPPLEMENTAL                                                                                          
                                                                                                                                
          SB 41 was HEARD and  HELD in committee for further                                                                    
          consideration                                                                                                         
                                                                                                                                
SB 54     APPROP: SUPPLEMENTAL; REAPPROP; AMENDING                                                                              
                                                                                                                                
          SB 54 was HEARD and  HELD in committee for further                                                                    
          consideration                                                                                                         
                                                                                                                                
SB 87     LUMBER GRADING PROGRAM                                                                                                
                                                                                                                                
          SB 87 was REPORTED out  of committee with five "do                                                                    
          pass"  recommendations,  one "no  recommendation",                                                                    
          and  with one  previously published  fiscal impact                                                                    
          note: F1(DNR)                                                                                                         
                                                                                                                                
SB 104    CIVIL LEGAL SERVICES FUND                                                                                             
                                                                                                                                
          SB 104  was REPORTED  out of committee  with three                                                                    
          "do     pass"    recommendations,     three    "no                                                                    
          recommendations",  and with  one  new fiscal  note                                                                    
          from  the Department  of  Commerce, Community  and                                                                    
          Economic Development                                                                                                  
                                                                                                                                
SB 107    PERMANENT FUND DIVIDEND; POMV SPLIT                                                                                   
                                                                                                                                
          SB  107  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration                                                                                                 
                                                                                                                                
SENATE BILL NO. 41                                                                                                            
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations   and   other   appropriations;   making                                                                    
     supplemental  appropriations; making  appropriations to                                                                    
     capitalize  funds;  and   providing  for  an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
SENATE BILL NO. 54                                                                                                            
                                                                                                                                
     "An    Act    making    supplemental    appropriations,                                                                    
     reappropriations,  and  other appropriations;  amending                                                                    
     appropriations; capitalizing  funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:04:21 AM                                                                                                                    
                                                                                                                                
PALOMA HARBOUR, FISCAL  MANAGEMENT PRACTICES ANALYST, OFFICE                                                                    
OF MANAGEMENT AND BUDGET, OFFICE  OF THE GOVERNOR, discussed                                                                    
the  presentation, "State  of Alaska,  Office of  Management                                                                    
and  Budget,   Supplemental  Budget  SB54,   Senate  Finance                                                                    
Committee; April  18, 2023" (copy  on file). She  pointed to                                                                    
slide 2, "FY2023 Supplemental Budget Overview."                                                                                 
                                                                                                                                
Co-Chair Stedman queried the total number.                                                                                      
                                                                                                                                
Ms. Harbour  replied that the total  supplemental number for                                                                    
both operating and capital was  $113.3 million in UGF; $50.6                                                                    
million  in DFG;  $63.8 million  other  state funds;  $125.8                                                                    
million  in  federal  funds;  which  totaled  around  $353.5                                                                    
million.                                                                                                                        
                                                                                                                                
Co-Chair Olson wondered how close  oil was to the projection                                                                    
of $87.50 per barrel.                                                                                                           
                                                                                                                                
Ms. Harbour  replied that  as of April  10, 2023  the actual                                                                    
forecast  was  $83.55 per  barrel.  She  explained that  the                                                                    
price of oil exceeded that amount over the last eight days.                                                                     
                                                                                                                                
Co-Chair Stedman queried the number  of deficit in oil price                                                                    
projection for 2023.                                                                                                            
                                                                                                                                
Ms. Harbour agreed to provide that information.                                                                                 
                                                                                                                                
Ms. Harbour  looked at slide 3,  "Operating Supps Department                                                                    
Summary." She  noted that the  large requests were  the fire                                                                    
supplementals, Department  of Corrections  (DOC), Department                                                                    
of  Public  Safety  (DPS), and  University  of  Alaska  (UA)                                                                    
bargaining  unit  increases.  She  noted  that  the  highest                                                                    
request was $3.7 million for judgments and settlements.                                                                         
                                                                                                                                
Ms. Harbour  pointed to slide  4, "Capital  Supps Department                                                                    
Summary." She outlined the specific  requests in the capital                                                                    
budget supplemental.                                                                                                            
                                                                                                                                
Co-Chair  Hoffman queried  the  reason for  the switch  from                                                                    
general funds to designated general funds for UA.                                                                               
                                                                                                                                
Ms. Harbour replied that it was mostly related to receipt                                                                       
authority.                                                                                                                      
                                                                                                                                
Co-Chair Hoffman queried the specific project.                                                                                  
                                                                                                                                
Ms. Harbour replied that the project was listed in the                                                                          
backup details.                                                                                                                 
                                                                                                                                
Ms. Harbour addressed slide 5, "Senate Finance Question                                                                         
Responses":                                                                                                                     
                                                                                                                                
     Senator    Wilson     asked    about     FY2022    Fire                                                                    
     Suppression/Preparedness   activity   and   why   there                                                                    
     appears to be a lapse.                                                                                                     
                                                                                                                                
     There  appears  to  be  a  UGF  lapse  in  FY2022  Fire                                                                    
     Suppression Activity,  due to  the $15 million  in ARPA                                                                    
     revenue replacement supplemental  funding that was able                                                                    
     to be utilized.                                                                                                            
                                                                                                                                
     Senator  Bishop  asked  how much  of  the  FY2023  fire                                                                    
     suppression supplemental is remaining for fires.                                                                           
                                                                                                                                
     The   supplemental   submitted    January   31st,   was                                                                    
     insufficient  to cover  spring fires.  The supplemental                                                                    
     budget amendments submitted  February 14th, include the                                                                    
     last  $1.2 million  needed to  cover fires  from Summer                                                                    
     and  Fall  of  2022,  as well  as  an  additional  $6.8                                                                    
    million for anticipated Spring 2023 fire activity.                                                                          
                                                                                                                                
9:10:38 AM                                                                                                                    
                                                                                                                                
Ms. Harbour pointed to slide 6, "Senate Finance Question                                                                        
Responses (Dollars in thousands)":                                                                                              
                                                                                                                                
     Senator   Hoffman  asked   about   the  Department   of                                                                    
     Correction's  plan  for  managing  situations  where  a                                                                    
     correctional facility is over capacity.                                                                                    
                                                                                                                                
     The  Department  of   Corrections  has  recently  taken                                                                    
     proactive   measures   to  ensure   that   correctional                                                                    
     facilities do  not remain overcrowded.  Capacity levels                                                                    
     are  checked  daily  and  as  numbers  rise  at  intake                                                                    
     facilities,    the    Classification   Unit,    Central                                                                    
     Transportation  Unit,   Facility  Superintendents,  and                                                                    
     Institutional  Probation  Officers   work  together  to                                                                    
     develop  a  plan  to move  offenders  to  remain  below                                                                    
     capacity.                                                                                                                  
                                                                                                                                
     Senator   Hoffman  asked   about   the  Department   of                                                                    
     Correction's  plan  for  managing  situations  where  a                                                                    
     correctional facility is over capacity.                                                                                    
                                                                                                                                
     The  Department  of   Corrections  is  using  emergency                                                                    
     contract  workers to  cover various  work such  as food                                                                    
     services,  maintenance,  medical,   mental  health  and                                                                    
     education/programs  where  needed.  The  department  is                                                                    
     also   using   on-call  non-permanent   positions   for                                                                    
     medical, mental  health, and  administrative vacancies.                                                                    
     These  efforts provide  coverage  while recruiting  for                                                                    
     permanent classified positions.                                                                                            
                                                                                                                                
Ms. Harbour addressed slide 7, "Senate Finance Question                                                                         
Responses (Dollars in thousands)":                                                                                              
                                                                                                                                
     Senator Stedman  asked for more information  related to                                                                    
     the increased utility costs within the Department of                                                                       
     Fish  and  Game  as  it   relates  to  fuel  needs  for                                                                    
     hatcheries.                                                                                                                
     • Hatchery utility  costs have risen over  the past two                                                                    
     years due  to the  volatility in  fuel oil  and natural                                                                    
     gas  prices  in  the Fairbanks  markets.  For  example,                                                                    
     rates  increased   at  the  Ruth  Burnett   Sport  Fish                                                                    
     Hatchery  (RBSFH)   for  natural  gas,  fuel   oil  and                                                                    
     electricity 4.8  percent, 142.4 percent and  50 percent                                                                    
     respectively,   between   FY2020    and   FY2022.   For                                                                    
     perspective, in  FY2022, annual consumption  rates were                                                                    
     207,495  CCF of  natural  gas, 34,700  gallons of  fuel                                                                    
     oil,   and  1,485,840   KWH   of  electricitythis    is                                                                    
     substantial  consumption, so  even  small increases  in                                                                    
     utility  rates can  have  a large  impact  on cost  let                                                                    
     alone what has occurred.                                                                                                   
     •  In comparison,  William  Jack  Hernandez Sport  Fish                                                                    
     Hatchery (WJHSFH)  operates on electricity  and natural                                                                    
     gas. Prices  have been stable in  the Anchorage market.                                                                    
     The FY2023  allocation for  utilities to  this facility                                                                    
     of  $880K reflects  a $50K  reduction  from the  FY2022                                                                    
     level of $931K to assist  in covering the RBHSFH FY2023                                                                    
     increase.                                                                                                                  
     •  Legislative   authority  appropriated  to   the  new                                                                    
     Anchorage  and Fairbanks  Hatcheries RDU  in FY2023  is                                                                    
     slightly  less  than  the   FY2022  level  without  any                                                                    
     allowance  to  account   for  the  higher  utility/fuel                                                                    
     costs.                                                                                                                     
     •  Efforts   are  underway   with  the   Department  of                                                                    
     Transportation and  Public Facilities  (DOT and  PF) to                                                                    
     conduct   energy   audits    that   hope   to   improve                                                                    
     efficiencies  at these  facilities  and translate  into                                                                    
     cost saving.                                                                                                               
                                                                                                                                
Ms. Harbour pointed to slide 8, "Senate Finance Question                                                                        
Responses (Dollars in thousands)":                                                                                              
                                                                                                                                
     Senator  Kiehl  asked   about  the  methodology  behind                                                                    
     deciding  which parks  to re-open,  and whether  or not                                                                    
     there's a prioritized list.                                                                                                
     The  Division of  Parks and  Outdoor Recreation  (DPOR)                                                                    
     does  not  maintain a  list  or  methodology to  reopen                                                                    
     parks because they are open  to the public unless there                                                                    
     is  a  reason  to  close. When  situations  arise  that                                                                    
     necessitate a  temporary closure of a  state park unit,                                                                    
     DPOR works  quickly to remedy and  address those issues                                                                    
     to   reopen  public   access   to  outdoor   recreation                                                                    
     opportunities.                                                                                                             
     A park  unit may have  a gate closed during  the winter                                                                    
     months   due   to   management  decisions   or   budget                                                                    
     limitations. Gates  are closed  to many  campgrounds in                                                                    
     the wintertime across the state  due to lack of ability                                                                    
     to plow  and staff  the unit. Many  of these  areas are                                                                    
     converted  into  wintertime recreational  opportunities                                                                    
     including  groomed   ski  trails.  The   division  also                                                                    
     maintains management  control and the ability  to limit                                                                    
     specific recreational uses within each.                                                                                    
                                                                                                                                
Ms. Harbour pointed to slide 9, "Senate Finance Question                                                                        
Responses (Dollars in thousands)":                                                                                              
                                                                                                                                
     Senator  Olson asked  for additional  details regarding                                                                    
     the Advanced Air Mobility project.                                                                                         
     The  Advanced Air  Mobility (AAM)  Infrastructure study                                                                    
     will  result  in a  report  that  will inform  Alaska's                                                                    
     build  out of  NextGen technology  to improve  aviation                                                                    
     safety  and  reliability.  The study  will  include  an                                                                    
     inventory of  all existing state, public,  federal, and                                                                    
     military infrastructure assets and  a gap analysis that                                                                    
     highlights needs for the full implementation of AAM.                                                                       
     Alaska is the most dangerous  place to fly according to                                                                    
     the  FAA. The  AAM  is  going to  look  at the  current                                                                    
     infrastructure  and lack  of  infrastructure needed  to                                                                    
     keep our airspace safe. This  study will highlight what                                                                    
     we  do have,  what  we don't  have  and some  potential                                                                    
     solutions. There's  a lot of opportunities  in front of                                                                    
     Alaska to capture federal funding  that can be utilized                                                                    
     to improve the safety  of Alaska's airspace. This study                                                                    
     is exploring solutions that  fit within current federal                                                                    
     funding streams but will also  highlight the needs that                                                                    
     fall outside of current or conventional funding.                                                                           
                                                                                                                                
Senator Bishop queried the person available from the                                                                            
Department   of   Transportation   and   Public   Facilities                                                                    
(DOT/PF).                                                                                                                       
                                                                                                                                
Ms. Harbour replied that Mr. Pannone was online from                                                                            
DOT/PF.                                                                                                                         
                                                                                                                                
Ms. Harbour highlighted slide 10, "Senate Finance Question                                                                      
Responses (Dollars in thousands)":                                                                                              
                                                                                                                                
     Senator   Hoffman   requested  confirmation   regarding                                                                    
     whether or not  there are shortages for  ice roads that                                                                    
     need to be addressed.                                                                                                      
     Northern  Region (NR)  has $250.0  in their  budget for                                                                    
     ice  roads.  They received  an  increment  of $50.0  in                                                                    
     FY2013 for the  ice road to Kiana  (TORA with Northwest                                                                    
     Arctic Borough  (NWAB)) and  $200.0 in  FY2023 (Tanana,                                                                    
     Rampart,  and  NWAB). To  the  best  of NR's  knowledge                                                                    
     there are  no additional needs or  identified shortages                                                                    
     for ice roads.                                                                                                             
     In   Alaska's   Statewide  Transportation   Improvement                                                                    
     Program (STIP), there is $2  million in federal funding                                                                    
     for Ice  Roads and Seasonal Roads  Maintenance Program.                                                                    
     The  Department of  Transportation  established a  Safe                                                                    
     Ice Roads for Alaska  (SIRA) Program for communities to                                                                    
     competitively  access  funding   for  ice  roads.  This                                                                    
     funding has been awarded to  communities and the Native                                                                    
     Village  of Napaimute  received just  under $500.0  for                                                                    
     over 200 miles.                                                                                                            
                                                                                                                                
Ms. Harbour looked at Attachment 1 and Attachment 2 (copies                                                                     
on file).                                                                                                                       
                                                                                                                                
Co-Chair Stedman asked for the details of the attachments.                                                                      
                                                                                                                                
Ms. Harbour looked at Attachment 1.                                                                                             
                                                                                                                                
9:15:10 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman requested that  the highlights be addressed                                                                    
on each item.                                                                                                                   
                                                                                                                                
Ms. Harbour noted that fire supplemental.                                                                                       
                                                                                                                                
Ms.  Harbour noted  that  the  Department of  Administration                                                                    
(DOA)  were  all  related  to one  issue,  which  was  lease                                                                    
payments.                                                                                                                       
                                                                                                                                
Ms.  Harbour noted  some cleanup  items for  bargaining unit                                                                    
agreements.                                                                                                                     
                                                                                                                                
Ms. Harbour  noted the  items related  to the  Department of                                                                    
Education and Early Development (DEED).                                                                                         
                                                                                                                                
Senator Bishop  noted that  electricity rates  had increased                                                                    
by 50 percent.                                                                                                                  
                                                                                                                                
Ms. Harbour stated that page  9 included additional costs to                                                                    
the Department of Fish and Game (DFG).                                                                                          
                                                                                                                                
9:20:45 AM                                                                                                                    
                                                                                                                                
Ms.  Harbour  noted  the  supplemental  ask  from  DPS.  She                                                                    
continued to outline the details within the attachment.                                                                         
                                                                                                                                
Senator  Bishop wondered  whether  the maintenance  operator                                                                    
wage issue had seen resolution.                                                                                                 
                                                                                                                                
9:24:15 AM                                                                                                                    
                                                                                                                                
DOM  PANNONE, ADMINISTRATIVE  SERVICES DIRECTOR,  DEPARTMENT                                                                    
OF  TRANSPORTATION   AND  PUBLIC  FACILITIES,   JUNEAU  (via                                                                    
teleconference),  replied that  the  department submitted  a                                                                    
supplemental request for funding  for the critical incentive                                                                    
pay in January.                                                                                                                 
                                                                                                                                
Senator  Bishop  wanted  to  ensure  that  the  request  was                                                                    
expedited to ensure the integrity of the workforce.                                                                             
                                                                                                                                
Co-Chair Olson remarked on some  damage to a jet engine from                                                                    
the Nome  Airport. He  wanted to  know the  mission critical                                                                    
status. He  stressed that there was  an individual component                                                                    
that  allowed  for  application  for  the  mission  critical                                                                    
status.                                                                                                                         
                                                                                                                                
Mr. Pannone agreed.                                                                                                             
                                                                                                                                
9:25:46 AM                                                                                                                    
                                                                                                                                
Co-Chair  Olson  wondered  whether  there needed  to  be  an                                                                    
increase  to  the  amount  available  for  mission  critical                                                                    
status.                                                                                                                         
                                                                                                                                
Mr.  Pannone   replied  that  a  30   percent  increase  was                                                                    
effective  when  utilized  as  related  to  recruitment  and                                                                    
retention.                                                                                                                      
                                                                                                                                
Ms. Harbour agreed.                                                                                                             
                                                                                                                                
Ms.  Harbour  looked  at  page  24,  as  related  to  health                                                                    
insurance increases for the legislative branch.                                                                                 
                                                                                                                                
9:29:17 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman requested a brief overview of all totals.                                                                      
                                                                                                                                
Ms.   Harbour  replied   that   the   total  for   operating                                                                    
supplementals was  $102.4 million  in UGF, $20.6  million in                                                                    
DGF, $15.2  million in  other funds,  and $115.2  in federal                                                                    
funds.  The total  for  operating  supplementals was  $253.5                                                                    
million.                                                                                                                        
                                                                                                                                
SB  41  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB  54  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:35:32 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:40:52 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 29                                                                                                            
                                                                                                                                
     "An   Act   relating   to  civics   education,   civics                                                                    
     assessments,    and    secondary   school    graduation                                                                    
     requirements; establishing the  Alaska Civics Education                                                                    
     Commission; and providing for an effective date."                                                                          
                                                                                                                                
9:41:26 AM                                                                                                                    
                                                                                                                                
Senator Bishop  MOVED to ADOPT the  committee substitute for                                                                    
SB 29, Work Draft 33-LS0246\R (Marx, 4/14/23).                                                                                  
                                                                                                                                
9:41:48 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:42:04 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:42:11 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
9:42:32 AM                                                                                                                    
                                                                                                                                
TIM  LAMKIN, STAFF,  SENATOR  GARY  STEVENS, introduced  the                                                                    
legislation. The  bill put emphasis  on civics  education in                                                                    
the state education system.                                                                                                     
                                                                                                                                
KEN ALPER, STAFF, SENATOR DONNY OLSON, explained the CS.                                                                        
                                                                                                                                
9:44:57 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:45:06 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
Senator Bishop rescinded his action  and restated the moving                                                                    
of the committee substitute.                                                                                                    
                                                                                                                                
Senator Bishop  MOVED to ADOPT the  committee substitute for                                                                    
SB 29, Work Draft 33-LS0246\R (Marx, 4/14/23).                                                                                  
                                                                                                                                
Co-Chair Olson OBJECTED for discussion.                                                                                         
                                                                                                                                
Mr. Alper stated that there was  a hope that the fiscal note                                                                    
would be  reduced because of  the costs associated  with the                                                                    
changes in the committee substitute.                                                                                            
                                                                                                                                
Co-Chair Olson  wondered whether  the sponsor  supported the                                                                    
changes.                                                                                                                        
                                                                                                                                
Mr. Lamkin replied in the affirmative.                                                                                          
                                                                                                                                
Co-Chair  Olson  WITHDREW  the  OBJECTION.  There  being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Senator Bishop  MOVED to  REPORT SB  29 from  committee with                                                                    
individual recommendations and  attached fiscal notes. There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
CSSB 29  (FIN) was REPORTED  out of committee with  four "do                                                                    
pass" recommendations, one "no  recommendation" and with one                                                                    
new fiscal note  from the Department of  Education and Early                                                                    
Development.                                                                                                                    
                                                                                                                                
9:47:30 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:49:57 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 87                                                                                                            
                                                                                                                                
     "An Act  relating to a lumber  grading training program                                                                    
     and  lumber grading  certificates; relating  to use  of                                                                    
     lumber  graded  and certified  by  a  person holding  a                                                                    
     lumber  grading   training  program   certificate;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:50:21 AM                                                                                                                    
                                                                                                                                
SENATOR  JESSE BJORKMAN,  SPONSOR, provided  a recap  of the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Stedman  wondered whether an individual  could have                                                                    
the certification to grade a smaller lumber mill.                                                                               
                                                                                                                                
Senator Bjorkman replied in the  negative. He explained that                                                                    
a local lumber miller would  receive training to grade their                                                                    
own lumber.                                                                                                                     
                                                                                                                                
Co-Chair Olson  wondered why there  was not an  inclusion of                                                                    
allowing someone to grade other lumber.                                                                                         
                                                                                                                                
Senator Bjorkman  replied that the legislation  was based on                                                                    
programs  that exist  in other  states. He  stated that  the                                                                    
goal was to verify the quality of their own work.                                                                               
                                                                                                                                
9:55:04 AM                                                                                                                    
                                                                                                                                
Senator Kiehl  surmised that there  was nothing in  the bill                                                                    
that addressed  the risk of  heights of the  structures, but                                                                    
asked  for  detail of  other  statutes  that addressed  that                                                                    
issue.                                                                                                                          
                                                                                                                                
Senator Bjorkman deferred to Ms. Achee.                                                                                         
                                                                                                                                
9:55:42 AM                                                                                                                    
                                                                                                                                
LAURA  ACHEE, STAFF,  SENATOR JESSE  BJORKMAN, replied  that                                                                    
there were  other requirements  in state  law that  say that                                                                    
structures  over a  certain height  required a  stamp of  an                                                                    
engineer or architect on the design.                                                                                            
                                                                                                                                
9:57:55 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:58:12 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:58:17 AM                                                                                                                    
                                                                                                                                
Senator Wilson wondered whether  local grade lumber would be                                                                    
insurable.                                                                                                                      
                                                                                                                                
Senator Bjorkman replied in the affirmative.                                                                                    
                                                                                                                                
Senator  Wilson  wondered whether  a  home  seller or  buyer                                                                    
needed to disclose that they used local wood.                                                                                   
                                                                                                                                
Senator Bjorkman replied that it  would be no different than                                                                    
normal grade standards.                                                                                                         
                                                                                                                                
10:00:42 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman spoke in support of the bill.                                                                                  
                                                                                                                                
Senator Bishop echoed Co-Chair Stedman's comments.                                                                              
                                                                                                                                
Co-Chair Olson  congratulated Senator Bjorkman  on advancing                                                                    
the bill through the legislature.                                                                                               
                                                                                                                                
Senator Merrick MOVED to REPORT  SB 87 out of committee with                                                                    
individual recommendations and attached fiscal note.                                                                            
                                                                                                                                
SB  87 was  REPORTED out  of committee  with five  "do pass"                                                                    
recommendations,  one  "no  recommendation",  and  with  one                                                                    
previously published fiscal impact note: F1(DNR).                                                                               
                                                                                                                                
10:05:03 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:09:13 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 104                                                                                                           
                                                                                                                                
     "An Act relating to appropriations to the civil legal                                                                      
     services fund."                                                                                                            
                                                                                                                                
10:09:58 AM                                                                                                                   
                                                                                                                                
SENATOR FORREST  DUNBAR, SPONSOR, provided a  summary of the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Senator Wilson wanted  to ensure that the  Alaska Legal Fund                                                                    
was not the grantee.                                                                                                            
                                                                                                                                
Senator Dunbar agreed.                                                                                                          
                                                                                                                                
10:11:58 AM                                                                                                                   
                                                                                                                                
Senator Bishop thanked the bill sponsor.                                                                                        
                                                                                                                                
ARIELLE  WIGGIN, STAFF,  SENATOR FORREST  DUNBAR, introduced                                                                    
herself, and thanked the committee.                                                                                             
                                                                                                                                
10:12:54 AM                                                                                                                   
                                                                                                                                
KEN ALPER, STAFF, SENATOR DONNY  OLSON, explained the change                                                                    
in the fiscal note                                                                                                              
                                                                                                                                
Senator Bishop wondered whether there  was any impact on the                                                                    
Court System.                                                                                                                   
                                                                                                                                
Mr. Alper replied  that the Court was funded by  UGF, so the                                                                    
filing fees went to general appropriation.                                                                                      
                                                                                                                                
10:14:46 AM                                                                                                                   
                                                                                                                                
Senator  Kiehl  MOVED  to  REPORT  SB  104  with  individual                                                                    
recommendations  and attached  fiscal note.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SB 104  was REPORTED out  of committee with three  "do pass"                                                                    
recommendations,  three "no  recommendations", and  with one                                                                    
new fiscal  note from the Department  of Commerce, Community                                                                    
and Economic Development.                                                                                                       
                                                                                                                                
10:14:46 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:24:00 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 107                                                                                                           
                                                                                                                                
     "An  Act   relating  to  the  Alaska   permanent  fund;                                                                    
     relating  to  income  of  the  Alaska  permanent  fund;                                                                    
     relating to the amount  available for appropriation and                                                                    
     appropriations  from  the   earnings  reserve  account;                                                                    
     relating to the permanent  fund dividend; and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
10:24:45 AM                                                                                                                   
                                                                                                                                
KEN  ALPER,  STAFF,  SENATOR   DONNY  OLSON,  discussed  the                                                                    
presentation,  "Senate Bill  107, How  We Got  Here: Use  of                                                                    
Savings to Balance the Budget  Permanent Fund, CBRF, and the                                                                    
POMV" (copy on file).                                                                                                           
                                                                                                                                
10:25:47 AM                                                                                                                   
                                                                                                                                
Mr.  Alper addressed  slide 2,  "The  Permanent Fund,  1977-                                                                    
2017":                                                                                                                          
                                                                                                                                
     • For 40  years, the Permanent Fund mostly  grew in the                                                                    
     background and  was not used for  general government in                                                                    
     any way                                                                                                                    
     • Half of statutory  earnings, defined by formula, were                                                                    
     distributed as dividends                                                                                                   
     • The "other  half" could have been used  by the state,                                                                    
     but was left in the fund                                                                                                   
        Therefore,  the  fund now  includes  the  compounded                                                                    
     earnings on the state's "half" that was not used                                                                           
                                                                                                                                
10:26:32 AM                                                                                                                   
                                                                                                                                
Mr. Alper pointed to slide 3, "The Permanent Fund, 1977-                                                                        
2017":                                                                                                                          
                                                                                                                                
     • What would it have been used for?                                                                                        
          o Additional state spending                                                                                           
          o Larger PFDs                                                                                                         
          o Lower oil taxes                                                                                                     
          o Invested separately in another savings fund                                                                         
     •  2016-2017  Dividend  Reduced from  formula  by  veto                                                                    
     (2016) or budget action (2017)                                                                                             
     • 2018 Passage of SB26,  with a sustainable "percent of                                                                    
     market value"  draw tied to  a five-year  lookback fund                                                                    
     value                                                                                                                      
                                                                                                                                
10:28:13 AM                                                                                                                   
                                                                                                                                
Mr. Alper discussed slide 4, "Constitutional Budget Reserve                                                                     
History":                                                                                                                       
                                                                                                                                
     • 1977-1990:  Multiple lawsuits  between state  and oil                                                                    
     industry    regarding    pipeline   tariffs,    royalty                                                                    
     valuation, and petroleum taxes                                                                                             
     • 1990: As these cases  were settling, Art. IX, Sec. 17                                                                    
     passed as a  place to hold settlement  funds apart from                                                                    
     general revenue                                                                                                            
     o Two methods  to draw funds: by simple  majority or by                                                                    
     supermajority                                                                                                              
     •  1994,  Hickel  v.  Halford,  Supreme  Court  greatly                                                                    
     limited  possibility for  simple majority  draw, making                                                                    
     the "¾ vote" necessary in almost all cases                                                                                 
     •  1994-2005, annual  budget  balancing draws  totaling                                                                    
     $5.5 billion                                                                                                               
     •  2006-2010, budget  surpluses were  used to  pay back                                                                    
     full amount                                                                                                                
     •  2011-2013, no  CBRF  draws;  budget surpluses  saved                                                                    
     elsewhere                                                                                                                  
     • 2014-2017, draws totaling about $11 billion                                                                              
                                                                                                                                
10:30:10 AM                                                                                                                   
                                                                                                                                
Mr. Alper displayed slide 5, "Constitutional Budget Reserve                                                                     
History":                                                                                                                       
                                                                                                                                
     • 2018-2021, ongoing concern of balance hitting zero                                                                       
     • 2022-2023, small repayments due to:                                                                                      
          o Failure of "reverse sweep"                                                                                          
          o FY22 surplus after spring '22 price spike                                                                           
          o Veto of SBR deposit passed last session                                                                             
                                                                                                                                
10:31:55 AM                                                                                                                   
                                                                                                                                
Mr. Alper pointed to slide 6, "POMV, Dividends, and Year                                                                        
End Balances 2018-2028."                                                                                                        
                                                                                                                                
10:34:31 AM                                                                                                                   
                                                                                                                                
Mr. Alper addressed slide 7, "What If the Senate Version of                                                                     
SB26 Had Passed?"                                                                                                               
                                                                                                                                
     • (The House version  had similar provisions, including                                                                    
     a 67/33  POMV split, although  all were removed  by the                                                                    
     conference committee)                                                                                                      
     • 75/25 Split                                                                                                              
     •  If  certain oil  revenue  (production  tax plus  UGF                                                                    
     portion  of  royalty)  exceeds $1.2  billion,  POMV  is                                                                    
     reduced dollar for dollar by the amount over that                                                                          
          o The reduction comes from the GF portion, not                                                                        
          the dividend portion                                                                                                  
     • When  the ERA exceeds  four times the  current year's                                                                    
     POMV,  the  amount in  excess  of  this sweeps  to  the                                                                    
     principal (replaces inflation proofing)                                                                                    
          o Internal to the fund, so does not impact this                                                                       
          analysis                                                                                                              
     •  Appropriation  cap  of $4.1  billion,  plus  capital                                                                    
     budget and PFD, less  debt service, plus inflation from                                                                    
     7/1/16                                                                                                                     
                                                                                                                                
10:36:45 AM                                                                                                                   
                                                                                                                                
Mr. Alper pointed to slide 8, "What If the Senate Version                                                                       
of SB26 Had Passed?"                                                                                                            
                                                                                                                                
     And then:                                                                                                                  
     • How would budgets have changed?                                                                                          
     • Future POMV adjustments due to claw back                                                                                 
     • Etc.                                                                                                                     
                                                                                                                                
10:39:16 AM                                                                                                                   
                                                                                                                                
Mr. Alper discussed slide 9, "What CSSB107(FIN)\Y Does":                                                                        
                                                                                                                                
     • Establishes the 75/25 Split (25 percent of POMV to                                                                       
     dividends)                                                                                                                 
     • Sets a "trigger" by which the split increases to                                                                         
     50/50 (50 percent of the POMV to dividends):                                                                               
          o  If,   in  any   year  starting  in   2026,  the                                                                    
          legislature passes  at least  $900 million  in new                                                                    
          revenue, the POMV split increases to 50/50                                                                            
          o Must be new,  annually recurring revenue, versus                                                                    
          what was in statute as  the law read on January 1,                                                                    
          2023                                                                                                                  
          o  The condition  must be  agreed to  by both  the                                                                    
          Commissioner  of  Revenue   and  the  Director  of                                                                    
          Legislative Finance                                                                                                   
          o If  this doesn't  happen by 2037,  the condition                                                                    
          expires and the 75/25 remains                                                                                         
                                                                                                                                
10:40:39 AM                                                                                                                   
                                                                                                                                
Mr. Alper pointed to slide 10, "Potential additional                                                                            
amendments to the POMV":                                                                                                        
                                                                                                                                
     • Modify the "trigger" (for the switch from 75/25 to                                                                       
     50/50)                                                                                                                     
          o Different revenue amount than $900 million                                                                          
          o Add  multiple "steps"  of new revenue  where the                                                                    
          POMV split would change gradually                                                                                     
     • Add additional "triggers"                                                                                                
     o Minimum savings amount                                                                                                   
          o Condition to passing some other legislation                                                                         
     • Add additional pieces from SB26                                                                                          
          o    lawback"  /  volatility piece  (POMV  reduced                                                                    
          when oil revenue is high)                                                                                             
          o Automatic  sweep from ERA to  Principal when ERA                                                                    
          hits certain size                                                                                                     
                                                                                                                                
10:42:06 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:43:03 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:43:03 AM                                                                                                                   
                                                                                                                                
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, looked at the                                                                        
presentation, "Historical Capital Budgets" (copy on file).                                                                      
He looked at slide 1.                                                                                                           
                                                                                                                                
Mr.  Ecklund discussed  slide  2. He  noted  that the  slide                                                                    
showed some of the deferred  maintenance needs in the state,                                                                    
and school major maintenance needs.                                                                                             
                                                                                                                                
10:45:36 AM                                                                                                                   
                                                                                                                                
Mr. Ecklund pointed  to slide 3. He remarked  that the slide                                                                    
was from the  Office and Management and  Budget (OMB), which                                                                    
addressed preventative maintenance.                                                                                             
                                                                                                                                
Mr. Ecklund looked at slide 4.  He stated that the slide was                                                                    
drafted by Senator Bishop.                                                                                                      
                                                                                                                                
Senator Bishop stated  that the slide showed  that the slide                                                                    
would  slowly address  the issue,  because  it adjusted  for                                                                    
inflation as related to deferred maintenance .                                                                                  
                                                                                                                                
Mr.  Ecklund pointed  to slide  5. He  noted that  the slide                                                                    
pointed to the modeling assumptions.                                                                                            
                                                                                                                                
Mr. Ecklund pointed  to slide 6. He remarked  that the slide                                                                    
was built into the assumption for education.                                                                                    
                                                                                                                                
Mr.  Ecklund discussed  slide  7. He  noted  that the  slide                                                                    
showed the  assumptions, which were similar  to other budget                                                                    
items throughout the session.                                                                                                   
                                                                                                                                
10:50:32 AM                                                                                                                   
                                                                                                                                
Mr.  Ecklund pointed  to slide  8. He  noted that  the slide                                                                    
showed  what  was  needed  in  revenue to  get  to  a  50/50                                                                    
dividend.                                                                                                                       
                                                                                                                                
Mr.   Ecklund   displayed   slide  9,   which   showed   the                                                                    
probabilistic modeling.                                                                                                         
                                                                                                                                
Co-Chair Olson noted the CBR probability.                                                                                       
                                                                                                                                
Mr. Ecklund agreed                                                                                                              
                                                                                                                                
Mr.  Ecklund  addressed  slide 10,  which  showed  that  the                                                                    
reduction in  the budget  would reflect  the history  of the                                                                    
budgets.                                                                                                                        
                                                                                                                                
10:56:09 AM                                                                                                                   
                                                                                                                                
Co-Chair Olson looked at slide 6, and wondered whether the                                                                      
supplemental budget was slated at $50 million per year.                                                                         
                                                                                                                                
Mr. Ecklund replied in the affirmative.                                                                                         
                                                                                                                                
Co-Chair Olson felt that assumption was low for the                                                                             
supplemental budget.                                                                                                            
                                                                                                                                
SB 107 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Olson discussed the following meeting's agenda.                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:58:03 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:58 a.m.                                                                                         

Document Name Date/Time Subjects
SB 54 FY2023_Cap_Supp_Summary_Spreadsheet_4-17-23.pdf SFIN 4/18/2023 9:00:00 AM
SB 54
SB 54 FY23CapSuppBackup.pdf SFIN 4/18/2023 9:00:00 AM
SB 54
SB 54 FY23OpSuppBackup.pdf SFIN 4/18/2023 9:00:00 AM
SB 54
SB 54 FY2023_Op_Supp_Summary_Spreadsheet_4-17-23.pdf SFIN 4/18/2023 9:00:00 AM
SB 54
SB 54 23.04.18 OMB Supplemental Budget Overview SFIN.pdf SFIN 4/18/2023 9:00:00 AM
SB 54
SB 104 DCCED DCRA 041523.pdf SFIN 4/18/2023 9:00:00 AM
SB 104
SB 29 Version R Summary of Changes.pdf HEDC 4/26/2024 8:00:00 AM
SFIN 4/18/2023 9:00:00 AM
SB 29
SB 29 work draft version R.pdf HEDC 4/26/2024 8:00:00 AM
SFIN 4/18/2023 9:00:00 AM
SB 29