Legislature(2015 - 2016)SENATE FINANCE 532

04/09/2015 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Overview FY17 Operating Budget TELECONFERENCED
+ SB 56 MUNI ENERGY IMPROVEMNT ASSESSMNTS/BONDS TELECONFERENCED
Heard & Held
+= SCR 1 CIVICS EDUCATION TASK FORCE TELECONFERENCED
Moved CS SCR 1(EDC) Out of Committee
+= SJR 2 CONST. AM: G.O. BONDS FOR STUDENT LOANS TELECONFERENCED
Moved SJR 2 Out of Committee
+ SB 22 MOTOR VEHICLE REG. TAX: COLLECTION COSTS TELECONFERENCED
Heard & Held
SB 50 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT
<Pending Referral>
= SB 26 BUDGET: CAPITAL
Moved CSSB 26(FIN) Out of Committee
                  SENATE FINANCE COMMITTEE                                                                                      
                       April 9, 2015                                                                                            
                         1:55 p.m.                                                                                              
                                                                                                                                
1:55:23 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the   Senate  Finance  Committee                                                                   
meeting to order at 1:55 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Gene  Therriault, Deputy  Director,  Statewide Energy  Policy                                                                   
Development,   Alaska   Energy   Authority,   Department   of                                                                   
Commerce,  Community and  Economic  Development; Emily  Ford,                                                                   
Energy   Policy   and   Outreach   Manager,   Alaska   Energy                                                                   
Authority,  Department of  Commerce,  Community and  Economic                                                                   
Development;  Kathy   Wasserman,  Alaska  Municipal   League,                                                                   
Juneau;  Tim Lamkin,  Staff,  Senator Gary  Stevens;  Kristen                                                                   
Pratt,   Staff,  Senator   Anna   MacKinnon;  Senator   Cathy                                                                   
Giessel,   sponsor;  Laura   Pierre,   Staff,  Senator   Anna                                                                   
MacKinnon;  Pat Pitney,  Director, Office  of Management  and                                                                   
Budget,  Office  of  the  Governor;  Mary  Siroky,  Director,                                                                   
Division   of   Administrative    Services,   Department   of                                                                   
Transportation and Public Facilities.                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Chris  Rose,  Executive  Director,  Renewable  Energy  Alaska                                                                   
Project   (REAP),   Anchorage;   Daniel   Moore,   Treasurer,                                                                   
Municipality of Anchorage, Anchorage.                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 22     MOTOR VEHICLE REG. TAX: COLLECTION COSTS                                                                              
                                                                                                                                
          SB 22  was HEARD and HELD in committee  for further                                                                   
          consideration.                                                                                                        
                                                                                                                                
SB 26     BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          CSSB 26(FIN)  was REPORTED out of committee  with a                                                                   
          "do pass" recommendation.                                                                                             
                                                                                                                                
SB 56     MUNI ENERGY IMPROVEMNT ASSESSMNTS/BONDS                                                                               
                                                                                                                                
          SB 56  was HEARD and HELD in committee  for further                                                                   
          consideration.                                                                                                        
                                                                                                                                
SCR 1     CIVICS EDUCATION TASK FORCE                                                                                           
                                                                                                                                
          CS SCR  1(EDC) was REPORTED  out of  committee with                                                                   
          a "do  pass" recommendation  and with one  new zero                                                                   
          fiscal note  from the Senate Finance  Committee for                                                                   
          the Legislature.                                                                                                      
                                                                                                                                
SJR 2     CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                               
                                                                                                                                
          SJR  2 was  REPORTED out  of committee  with a  "do                                                                   
          pass"  recommendation   and  with   one  previously                                                                   
          published zero fiscal note: FN1 (GOV).                                                                                
                                                                                                                                
Co-Chair MacKinnon discussed the schedule.                                                                                      
                                                                                                                                
SENATE BILL NO. 56                                                                                                            
                                                                                                                                
     "An Act  adopting the Municipal Property  Assessed Clean                                                                   
     Energy  Act;  authorizing  municipalities  to  establish                                                                   
     programs to  impose assessments for  energy improvements                                                                   
     in  regions   designated  by  municipalities;   imposing                                                                   
     fees; and providing for an effective date."                                                                                
                                                                                                                                
1:56:43 PM                                                                                                                    
                                                                                                                                
GENE  THERRIAULT, DEPUTY  DIRECTOR,  STATEWIDE ENERGY  POLICY                                                                   
DEVELOPMENT,  ALASKA ENERGY  AUTHORITY  (AEA), DEPARTMENT  OF                                                                   
COMMERCE,   COMMUNITY  AND   ECONOMIC  DEVELOPMENT   (DCCED),                                                                   
discussed SB  56, and explained  that the bill would  offer a                                                                   
new  mechanism to  municipal  governments  to work  with  the                                                                   
commercial property  owners to implement  energy improvements                                                                   
to  their  facilities.   He  recounted  that  in   2010,  the                                                                   
legislature set  a goal for a  15 percent increase  in energy                                                                   
efficiency  in the  state by the  year 2020.  He shared  that                                                                   
AEA  had been  tracking the  progress towards  the goal,  and                                                                   
evaluating  areas in which  the state  was moving forward  or                                                                   
not. He explained  that AEA operated a program  that assisted                                                                   
commercial  property  owners  with  energy  audits  of  their                                                                   
properties. He recounted  that AEA had done about  170 of the                                                                   
audits  through  the  program   across  the  state,  and  for                                                                   
properties   that  had   subsequently   moved  forward   with                                                                   
improvements  they generally  saw  yearly  energy savings  of                                                                   
about  30  percent.  He  remarked  on  the  sizable  possible                                                                   
savings  and expressed  a desire that  more businesses  would                                                                   
do  the audits  and  follow  through with  the  improvements.                                                                   
Through  a  survey  of energy  audit  participants,  AEA  had                                                                   
concluded that financing  was one of the  primary impediments                                                                   
for businesses to complete the improvements.                                                                                    
                                                                                                                                
1:59:27 PM                                                                                                                    
                                                                                                                                
Mr. Therriault  related that through  his interaction  with a                                                                   
national  energy association,  he met  with the  participants                                                                   
from different states  and looked at mechanisms  other states                                                                   
were  using  in   the  same  scenario.  He   identified  that                                                                   
Property   Assessed  Clean   Energy   (PACE)  financing   was                                                                   
currently being  used in about  31 other states.  He directed                                                                   
attention  to  the  presentation  "SB  56  Property  Assessed                                                                   
Clean  Energy (PACE)"  (copy  on  file), and  emphasized  the                                                                   
concept   of  "property   assessed"   within  the   financing                                                                   
mechanism.                                                                                                                      
                                                                                                                                
Mr.  Therriault   detailed  that  by  using  PACE,   a  local                                                                   
government  that  assessed  property  tax  could  voluntarily                                                                   
engage a  program under which  they (through a  revenue bond)                                                                   
would collect a  pool of money or work with  local lenders to                                                                   
lend to private  business owners. The repayment  of the loans                                                                   
was made  by a  voluntary assessment  that  was added to  the                                                                   
individual  property owner's  yearly  tax  bill. Because  the                                                                   
loan had  the enforcement and  collection power of  the local                                                                   
government,  the  default rate  was  very low.  He  furthered                                                                   
that because  of the  low default rate,  the loans  were low-                                                                   
risk, could lead  to lowered interest rates,  and could allow                                                                   
the  property owner  to stretch  the payments  over a  longer                                                                   
period of between 10 and 20 years.                                                                                              
                                                                                                                                
Mr. Therriault  stated that  AEA's goal was  to offer  a low-                                                                   
cost  source of  capital  with a  long  repayment period,  so                                                                   
that  on a  yearly  basis  individual property  owners  could                                                                   
have  net-positive cash  flow through  lowering their  energy                                                                   
cost  by more  than  the  yearly  loan repayment  amount.  He                                                                   
noted that the  legislation was modelled after  a bill passed                                                                   
in Texas a year  previously, and SB 56 contained  a number of                                                                   
protections that were offered in the Texas statute.                                                                             
                                                                                                                                
Mr. Therriault  agreed to point  out the various  protections                                                                   
as  the committee  was  viewing the  remaining  presentation,                                                                   
including  those that  pertained to  local government,  local                                                                   
business,  and  existing  banks.  He continued  that  he  had                                                                   
worked with  the Alaska  Banking Association,  and they  were                                                                   
supportive  of   the  legislation  pending  inclusion   of  a                                                                   
specific  provision in  the bill.  Other supporters  included                                                                   
the  Alaska   Municipal  League  and  the   Alaska  Statewide                                                                   
Chamber  of Commerce.  He  characterized  PACE  as a  "common                                                                   
sense tool"  for local governments  to use in  moving towards                                                                   
the goal of energy efficiency.                                                                                                  
                                                                                                                                
2:02:43 PM                                                                                                                    
                                                                                                                                
EMILY  FORD,  ENERGY  POLICY  AND  OUTREACH  MANAGER,  ALASKA                                                                   
ENERGY  AUTHORITY,  DEPARTMENT  OF  COMMERCE,  COMMUNITY  AND                                                                   
ECONOMIC   DEVELOPMENT,   presented   slide   2,   "What   is                                                                   
Commercial PACE?"                                                                                                               
                                                                                                                                
   · PACE was named one of the top 20 "world-changing ideas                                                                     
     by Scientific American magazine."                                                                                          
   · Commercial Property Assessed Clean Energy programs                                                                         
     (PACE) allows property owners to finance qualifying                                                                        
     energy efficiency improvements overtime through a                                                                          
     voluntary assessment on the property tax bill.                                                                             
   · Voluntary    participation    by   municipalities    AND                                                                   
     commercial property owners                                                                                                 
   · Mortgage    holder    consent   is    required    before                                                                   
     applications are approved and assessments are placed                                                                       
   · Improvements can include lighting upgrades, renewable                                                                      
     energy, conversion to natural gas, high-efficiency                                                                         
     boilers, and additional energy efficiency improvements                                                                     
   · The repayment obligation transfers with the sale of                                                                        
     property                                                                                                                   
                                                                                                                                
Ms. Ford discussed slide 3, "Benefits":                                                                                         
                                                                                                                                
     · Energy efficiency upgrades are financed with capital                                                                     
        secured by a primary lien on the property, lower-                                                                       
        interest capital and favorable repayment terms can                                                                      
        be raised from the private sector                                                                                       
     · Allows for longer repayment periods allowing the                                                                         
        building owner to recognize immediate operating                                                                         
        savings while repaying the debt                                                                                         
     · Can use traditional lending sources                                                                                      
     · In Alaska, provides consistency with state energy                                                                        
        policy, energy efficiency and renewable energy goals                                                                    
                                                                                                                                
Ms. Ford presented slide 4, "Creating a PACE Program":                                                                          
                                                                                                                                
     · 31 states have authorized PACE programs                                                                                  
     · State legislatures must provide authority for local                                                                      
        governments to establish and operate commercial PACE                                                                    
        programs                                                                                                                
     · Municipalities to create the program and select                                                                          
        financing models                                                                                                        
     · Resources: U.S. Department of Energy, PaceNow.org,                                                                       
        C-Pace.com                                                                                                              
                                                                                                                                
Ms. Ford noted that there were multiple resources online                                                                        
for municipalities and businesses, including marketing                                                                          
tools and sample contracts.                                                                                                     
                                                                                                                                
Ms. Ford presented slide 5, "Potential PACE Models,"                                                                            
detailing the wide spectrum of PACE programs that could be                                                                      
implemented on the local level:                                                                                                 
                                                                                                                                
     · Local-government driven                                                                                                  
          o Either property assessment office or a PACE                                                                         
             office used as interface with commercial                                                                           
             property owners and potential lenders                                                                              
          o Bond financing                                                                                                      
     · Private-sector driven                                                                                                    
          o Third-party administrator under contract with                                                                       
             local government                                                                                                   
          o Private financing                                                                                                   
     · Hybrid model                                                                                                             
          o Smaller local governments can contract with                                                                         
             other communities or regional organizations to                                                                     
             administer the program                                                                                             
          o Identify all potential funding sources (bonds,                                                                      
             revolving loan funds, private capital)                                                                             
                                                                                                                                
Ms. Ford  discussed that  the local-government-driven  models                                                                   
for states with  many energy efficiency programs  and efforts                                                                   
had   separate   PACE   offices  and   the   government   was                                                                   
responsible  for  the  marketing  and  interfacing  with  the                                                                   
community.  The private-driven  or  "main  street" model  was                                                                   
developed  so   the  work  was   absorbed  by   the  existing                                                                   
assessor's office  and was reliant  on the private  sector to                                                                   
market the program.  She related that most often  there was a                                                                   
hybrid model where all sources of funding were used.                                                                            
                                                                                                                                
2:04:41 PM                                                                                                                    
                                                                                                                                
Ms. Ford  addressed slide 7,  explaining that  the subsequent                                                                   
slides would  consist of  a sectional  analysis of  the bill.                                                                   
She read from slide 7:                                                                                                          
                                                                                                                                
     · Section 1 amends AS 29 by adding a new chapter: AS                                                                       
        29.49: Municipal Property Assessed Clean Energy Act                                                                     
     · AS 29.49.020 Would allow for a property tax                                                                              
        assessment to be added for financing of qualified                                                                       
        projects on real property.                                                                                              
          o Improvements may not be made to vacant lots or                                                                      
             property undergoing  development at the  time of                                                                   
             assessment                                                                                                         
          o Not to finance purchase of temporary products                                                                       
             or  anything  not  permanently   fixed  to  real                                                                   
             property                                                                                                           
     · AS 29.49.30 Would require a written contract between                                                                     
        the local government and record owner of the real                                                                       
        property                                                                                                                
                                                                                                                                
Ms. Ford continued on slide 8:                                                                                                  
                                                                                                                                
     · AS 29.49.040 Establishes the program                                                                                     
          o Local government may enter into a contract with                                                                     
             a  property  owner  to  impose   an  assessment.                                                                   
             Financing can  be provided  by the  municipality                                                                   
             or a third-party                                                                                                   
          o If    third-party   financing    is   used,   the                                                                   
             municipality,  third-party  financer   and  real                                                                   
             property owner must all enter into a contract                                                                      
          o The assessment imposed may cover some costs for                                                                     
             the commercial property owner,  including permit                                                                   
             and lenders  fees,  administration, and  project                                                                   
             development and engineering costs                                                                                  
     · AS 29.49.050 Designates the Eligible Region                                                                              
          o The municipality's governing body may designate                                                                     
             one or more area(s) of the municipality (within                                                                    
             its jurisdiction) as a PACE-eligible region(s)                                                                     
                                                                                                                                
Ms. Ford commented that the provision for designating the                                                                       
eligible region was consistent with land use policies, and                                                                      
was a tool for incentivizing commercial districts.                                                                              
                                                                                                                                
2:06:04 PM                                                                                                                    
                                                                                                                                
Ms. Ford explained went over slide 9:                                                                                           
                                                                                                                                
     · AS 29.49.060 Defines the Procedure to Create the                                                                         
        Program                                                                                                                 
          o If the municipality chooses to create a PACE                                                                        
             program the governing body of a municipality                                                                       
             must (in order):                                                                                                   
            1) Adopt a resolution of intent that                                                                                
               ƒ  shows  that  providing  the   PACE  program                                                                   
                  serves a valid public purpose                                                                                 
               ƒ  includes  a   statement  the   municipality                                                                   
                  intents to make PACE available to                                                                             
                 commercial property owners                                                                                     
               ƒ  includes   a   description   of   qualified                                                                   
                  projects                                                                                                      
               ƒ describes the boundaries of the region                                                                         
               ƒ  describes  the   available  financing   for                                                                   
                  qualified projects (i.e. bonds, local                                                                         
                  lenders, etc.)                                                                                                
               ƒ  describes  the  municipal   debt  servicing                                                                   
                  procedures if third-party financing is                                                                        
                  used                                                                                                          
               ƒ  describes  how the  public  can access  the                                                                   
                  program report required by AS 29.49.070                                                                       
               ƒ  identifies  public contacts  regarding  the                                                                   
                  collection of the proposed contractual                                                                        
                  assessments                                                                                                   
                                                                                                                                
Ms. Ford continued on slide 10:                                                                                                 
                                                                                                                                
     · AS 29.49.060 Defines the Procedure to Create the                                                                         
        Program                                                                                                                 
        o The governing body of a municipality must:                                                                            
          2) hold a public hearing with opportunity for                                                                         
          public comment                                                                                                        
          3) adopt a resolution establishing the program,                                                                       
          including terms consistent with the publicly-                                                                         
          available program report required by AS 29.49.070                                                                     
             o the description of each aspect of the                                                                            
               program can only be amended after another                                                                        
               public hearing                                                                                                   
        o The program can only be amended by resolution                                                                         
        o A municipality may hire and set compensation for                                                                      
          a program administrator, staff or contract for                                                                        
          professional services                                                                                                 
        o A municipality may impose fees to offset the                                                                          
          costs of administering the program, to include an                                                                     
          application fee and/or a component of the                                                                             
          interest rate                                                                                                         
                                                                                                                                
Ms. Ford turned to slide 11:                                                                                                    
                                                                                                                                
     · AS 29.49.070 Requires a Publicly-Available Program                                                                       
        Report                                                                                                                  
          o The report must include:                                                                                            
               ƒ a map of the program region boundaries                                                                         
               ƒ a form contract between the municipality                                                                       
                  and the property owner that specifies the                                                                     
                  terms of the assessment and any financing,                                                                    
                  including third-party and municipal                                                                           
               ƒ if appropriate a form contract between the                                                                     
                  municipalities    and    the    third-party                                                                   
                  financer regarding the servicing of the                                                                       
                  debt through assessments                                                                                      
               ƒ a description of qualified projects                                                                            
               ƒ a plan for ensuring sufficient capital                                                                         
               ƒ if bonds are used the report must include:                                                                     
                    · a maximum aggregate annual dollar                                                                         
                       amount for financing                                                                                     
                    · a method for ranking requests from                                                                        
                      property owners                                                                                           
                    · a method for determining the interest                                                                     
                       rate and maximum amount of an                                                                            
                       assessment                                                                                               
               ƒ a method for ensuring the repayment period                                                                     
                  does not exceed the useful life of the                                                                        
                  qualified project                                                                                             
                                                                                                                                
2:07:54 PM                                                                                                                    
                                                                                                                                
Ms. Ford continued on slide 12:                                                                                                 
                                                                                                                                
     · AS 29.49.070 Requires a Publicly-Available Program                                                                       
        Report (continued)                                                                                                      
        o The report must include:                                                                                              
             ƒ a description  of the application  process and                                                                   
               eligibility requirements                                                                                         
             ƒ a  method  for ensuring  qualified  applicants                                                                   
               can  demonstrate financial ability  to fulfill                                                                   
               financial    obligations   and    verify   the                                                                   
               applicant   is   the   legal  owner   of   the                                                                   
               property,   is   current   on   mortgage   and                                                                   
               property  taxes  and is  not  insolvent or  in                                                                   
               bankruptcy                                                                                                       
             ƒ an   explanation   of   the   assessment   and                                                                   
               collection process                                                                                               
             ƒ an   explanation    of   the   lender   notice                                                                   
               requirement provided by AS 29.49.080                                                                             
             ƒ an  explanation   of  the  review  requirement                                                                   
               provided by AS 29.49.090                                                                                         
             ƒ a description  of the marketing  and education                                                                   
               services to be provided                                                                                          
             ƒ a   description  of   quality  assurance   and                                                                   
               antifraud measures                                                                                               
             ƒ collection procedures                                                                                            
             ƒ a   requirement  for   an  appropriate   ratio                                                                   
               between the assessment and property value                                                                        
        o The report must be available online and at the                                                                        
          municipal offices                                                                                                     
                                                                                                                                
Ms. Ford explained slide 13:                                                                                                    
                                                                                                                                
   · AS 29.49.080 Notice to Mortgage Holder Required                                                                            
   · AS 29.49.090 Review Required                                                                                               
     o A third-party baseline energy audit and projected                                                                        
        energy savings are required                                                                                             
     o Once a qualified project is complete, the                                                                                
        municipality shall obtain third-party verification                                                                      
        that the project was properly completed and                                                                             
        operating as intended                                                                                                   
   · AS 29.49.100 Direct Acquisition by Owner                                                                                   
        o The property owner may be authorized to purchase                                                                      
          directly  the related  equipment  and materials  or                                                                   
          contract  directly, including through  lease, power                                                                   
          purchase  agreement or  other service contract  for                                                                   
          the  installation or  modification  of a  qualified                                                                   
          improvement                                                                                                           
                                                                                                                                
Mr.  Therriault clarified  that  the required  notice to  the                                                                   
mortgage  holder (AS 29.49.080)  was one  of the  protections                                                                   
he  had mentioned  earlier.  He  discussed working  with  the                                                                   
Alaska Bankers  Association, and  noted that if  a commercial                                                                   
business  had a  mortgage to  a local  bank, permission  from                                                                   
the  mortgage  holder  was required  before  initiating  PACE                                                                   
financing.  He explained  that the  PACE financing  appearing                                                                   
on the  property tax  bill would become  a superior  lien and                                                                   
relegate the mortgage  to a secondary position.  He furthered                                                                   
that more banks  across the nation were willing to  do so, as                                                                   
the  PACE financing  was  collateralizing  the mortgages  and                                                                   
making  the associated  businesses  more financially  viable.                                                                   
With  the   provision  included,   the  bankers   association                                                                   
supported the legislation.                                                                                                      
                                                                                                                                
Mr. Ford read from slide 14:                                                                                                    
                                                                                                                                
   · AS 29.49.110 Contractual Assessment must be Noticed                                                                        
        o Written notice of each contractual assessment                                                                         
          shall  be filed  by  the municipality  in the  real                                                                   
          property   records,    including   the   assessment                                                                   
          amount,  legal description  of  the property,  name                                                                   
          of  each property  owner and  the reference  to the                                                                   
          statutory  assessment   lien  provided  under  this                                                                   
          chapter                                                                                                               
   · AS 29.49.120 Contractual Assessments and any Interest                                                                      
     or Penalties are Primary Liens on the Property                                                                             
        o exceptions are municipal tax liens and special                                                                        
          assessments                                                                                                           
        o enforcement provided in AS 29.45.320-470                                                                              
        o contractual assessment liens stay with the land                                                                       
          and not eliminated by foreclosure                                                                                     
        o penalties and interest may be added to delinquent                                                                     
          installments, as provided in AS. 29.45.250                                                                            
        o municipalities may recover cost and expenses,                                                                         
          including  attorney  fees to  collect a  delinquent                                                                   
          installment                                                                                                           
   · AS 29.49.130 Collection of Assessments                                                                                     
        o Municipalities    may    contract   with    another                                                                   
          governing  body of another  taxing unit  to perform                                                                   
          assessments collections                                                                                               
                                                                                                                                
Ms. Ford  noted that  AS 29.49.130  was important to  smaller                                                                   
communities that  might not have the internal  capacity to be                                                                   
able to administer a PACE program.                                                                                              
                                                                                                                                
2:10:24 PM                                                                                                                    
                                                                                                                                
Ms. Ford presented slide 15:                                                                                                    
                                                                                                                                
   · AS 29.49.140 Municipalities may Issue Bonds or Notes                                                                       
     to Finance Qualified Projects                                                                                              
        o These may not be general obligations bonds and                                                                        
          must be secured by one or more of the following:                                                                      
             ƒ payments of the contractual assessments                                                                          
             ƒ municipal reserves from grants, bonds, or                                                                        
               net proceeds and other lawfully available                                                                        
               funds                                                                                                            
             ƒ municipal bond insurance, lines of credit,                                                                       
               public  or  private guarantees,  standby  bond                                                                   
               purchase  agreements, collateral  assignments,                                                                   
               mortgages,  or  available means  of  providing                                                                   
               credit support or liquidity                                                                                      
             ƒ any other funds lawfully available for                                                                           
               purposes consistent with this chapter                                                                            
        o A municipal pledge of assessments, funds, or                                                                          
          contractual   rights   in   connection   with   the                                                                   
          issuance  of  bonds  is  a  first  lien  valid  and                                                                   
          binding against  any other person, with  or without                                                                   
          notice                                                                                                                
        o Bonds or notes issued must further an essential                                                                       
          public   and   governmental    purpose,   including                                                                   
          reducing   energy   costs,   improving   electrical                                                                   
          reliability,   reduction   of  energy   demand   on                                                                   
          utilities,  economic  development,  employment  and                                                                   
          enhancement of property values                                                                                        
                                                                                                                                
Mr.  Therriault  pointed  out   that  the  section  contained                                                                   
another   of   the   aforementioned    protections;   general                                                                   
obligation bonds could  not be utilized, and PACE  could be a                                                                   
sub-unit of  the borough. A  revenue bond would  entail money                                                                   
loaned  out and  paid back  by the  specific property  owners                                                                   
that used the funds.                                                                                                            
                                                                                                                                
Ms. Ford moved to slide 16.                                                                                                     
                                                                                                                                
     · AS 29.49.150 Joint Implementation                                                                                        
          o  Any combination of  municipalities may  agree to                                                                   
             jointly implement or administer a program or                                                                       
             contract with a third party. A public hearing                                                                      
             as outlined in AS 29.49.060 is required.                                                                           
     · AS 29.49.160 Prohibited Acts                                                                                             
          o A municipality that establishes a PACE region                                                                       
             may not compel a property owner to use PACE or,                                                                    
             make any permit, license, or authorization                                                                         
             contingent on a property owner using PACE.                                                                         
     · AS 29.49.900 Adds Definitions of Program, Qualified                                                                      
        Improvement, Qualified Project, Real Property and                                                                       
        Region.                                                                                                                 
     · AS 29.49.995 Adds the Short Title "Municipal                                                                             
        Property Assessed Clean Energy Act."                                                                                    
     · Section 2 Establishes an Immediate Effective Date                                                                        
                                                                                                                                
Mr.  Therriault  spoke  to  AS 29.49.160  of  the  bill,  and                                                                   
stated  that it  was an  important protection;  if the  local                                                                   
government  chose to offer  PACE, they  could not coerce  any                                                                   
business  owner   to  use  the  mechanism.  They   could  not                                                                   
withhold any license  or permit, and it needed to  be used by                                                                   
the business owner on a completely voluntary basis.                                                                             
                                                                                                                                
2:12:02 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  thanked the testifiers for  their concise                                                                   
and clear overview.                                                                                                             
                                                                                                                                
Senator  Bishop asked  if  Sections 29.49.130  and  29.49.150                                                                   
helped  the hybrid  model be  conforming.  He referenced  the                                                                   
potential  PACE models  listed on  slide 5  and thought  that                                                                   
those sections  of the bill made  the hybrid model  work. Ms.                                                                   
Ford  agreed, stating  that it  pertained  to the  collection                                                                   
aspect of the model.                                                                                                            
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony for SB 56.                                                                           
                                                                                                                                
2:13:31 PM                                                                                                                    
                                                                                                                                
KATHY WASSERMAN,  ALASKA MUNICIPAL LEAGUE,  JUNEAU, testified                                                                   
in  support  of  the bill.  She  stated  that  the  municipal                                                                   
league was  in favor of  the bill, and  related that  she had                                                                   
talked at length  with Mr. Therriault about  the legislation.                                                                   
She supported  the fact  that the  program was optional.  She                                                                   
discussed  cities and  boroughs that  might participate,  and                                                                   
thought  that  the legislation  could  benefit  the  business                                                                   
owners  as  well  as the  municipalities.  She  stressed  the                                                                   
importance  that the bill  allowed for  a public process,  so                                                                   
that the  members of the community  would know what  the city                                                                   
was doing with the funds.                                                                                                       
                                                                                                                                
2:15:01 PM                                                                                                                    
                                                                                                                                
CHRIS  ROSE,   EXECUTIVE  DIRECTOR,   REAP,  ANCHORAGE   (via                                                                   
teleconference),  testified  in   support  of  the  bill.  He                                                                   
related  that REAP  was a  statewide  education and  advocacy                                                                   
group  for  renewable  energy   and  energy  efficiency.  The                                                                   
project  had been  promoting  the idea  of  property-assessed                                                                   
clean energy for a couple of years.  He considered it to fill                                                                   
a gap in the state to incentivize  commercial building owners                                                                   
to do energy  retrofits. He echoed Mr.  Therriault's comments                                                                   
regarding the  30 percent increase in efficiency.  He pointed                                                                   
out the  advantage to communities  of having more  funds stay                                                                   
locally rather  than being exported for energy  costs without                                                                   
the increased efficiencies.                                                                                                     
                                                                                                                                
Senator Dunleavy  asked Mr. Rose  if his group  would benefit                                                                   
from the  legislation, and  in what  way. Mr. Rose  responded                                                                   
that the project would not benefit from the bill.                                                                               
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony for the bill.                                                                        
                                                                                                                                
2:17:01 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  asked  about Section  29.49.070  of  the                                                                   
bill, and  whether community members  were required to  be in                                                                   
good standing  with regard  to their  credit rating.  She had                                                                   
observed there were  some parameters, but did  not notice one                                                                   
in relation  to credit rating.  Mr. Therriault did  not think                                                                   
there was  a specific requirement  related to  credit rating,                                                                   
and  inquired if  Co-Chair MacKinnon's  concern pertained  to                                                                   
securing a source  of funds in the bond market  or related to                                                                   
the credit rating of the individual property owner.                                                                             
                                                                                                                                
Co-Chair  MacKinnon  commented  that there  was  no  language                                                                   
pertaining  to good standing,  and expected  that a  business                                                                   
owner should  be in  good credit standing  in order  to enter                                                                   
into  a relationship  with  the municipality.  She  discussed                                                                   
other funds she  had reviewed while chairing  the Legislative                                                                   
Budget and Audit  Committee, and wondered if  there should be                                                                   
good standing language  in the bill in order to  be assured a                                                                   
business  was  handling  its finances  well.  Mr.  Therriault                                                                   
thought  that  there  was  language  somewhere  in  the  bill                                                                   
intended to make  sure that businesses were  in good standing                                                                   
and not  in arrears,  delinquent, or  in bankruptcy;  but was                                                                   
unable  to point  it out  at the  moment. He  agreed to  work                                                                   
with Co-Chair  MacKinnon's  staff to point  out the  relevant                                                                   
text in the bill.                                                                                                               
                                                                                                                                
2:18:48 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  about AS  29.49.090, dealing  with                                                                   
review requirements  of the loan; and wondered  whether there                                                                   
was  a  savings  requirement or  specific  efficiency  for  a                                                                   
business  to project  in  order  to qualify.  Mr.  Therriault                                                                   
relayed that there  was a requirement that a  business get an                                                                   
energy  audit,  then  show  a  plan  demonstrating  estimated                                                                   
savings  after improvements.  He  highlighted the  importance                                                                   
of a  business showing  it was  capable of repayment  through                                                                   
the savings.                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  elaborated  that PACE  was  an  optional                                                                   
program; and  observed that in  the "green" programs  she had                                                                   
reviewed,  it had  been beneficial  to set  a minimum  energy                                                                   
efficiency level.  She thought  people could start  borrowing                                                                   
funds  for improvements  at a  lower cost  than was  provided                                                                   
through   the  bill,   resulting   in  increased   debt   for                                                                   
municipalities.  She   hoped  that  after   the  municipality                                                                   
incurred  debt  through  the program,  the  goal  of  energy-                                                                   
efficient buildings would be met.                                                                                               
                                                                                                                                
Mr. Therriault remarked  that the bond owners  would evaluate                                                                   
the savings achieved  through the program to  assess that the                                                                   
funds would  pay back the revenue  bond. He pointed  out that                                                                   
the  bill language  specifically  prohibited  the funds  from                                                                   
becoming  a general  obligation  of the  government, and  the                                                                   
repayment stream  for the loans  were actually  the repayment                                                                   
for the bonds.                                                                                                                  
                                                                                                                                
2:21:16 PM                                                                                                                    
                                                                                                                                
Senator Olson found  it unusual that a mortgage  holder would                                                                   
agree  to be  listed as  a secondary.  He  thought that  most                                                                   
banks wanted  to retain  the primary  position, and  wondered                                                                   
what would  happen in  the eventuality of  a downturn  in the                                                                   
economy. Mr.  Therriault stated  that individual  banks would                                                                   
have to  consider the factors,  and would have  the decision-                                                                   
making  power  to  deny  requests  if  the  economy  was  not                                                                   
favorable. He  clarified that  PACE would still  be available                                                                   
to any business that had no outstanding mortgage.                                                                               
                                                                                                                                
Mr.  Therriault   referred  back   to  Co-Chair   MacKinnon's                                                                   
question regarding  the verification of good standing  of the                                                                   
property  owner, and  pointed out  the relevant  text on  the                                                                   
bottom of page 6 and the top of page 7 of the bill:                                                                             
                                                                                                                                
     (b) The method for ensuring a demonstration of                                                                             
     financial ability under (a)(9) of this section must be                                                                     
     based on appropriate underwriting factors, including                                                                       
           (1) providing for verification that                                                                                  
               (A) the property owner requesting to                                                                             
               participate under the program is                                                                                 
                     (i) the legal owner of the benefited                                                                       
                    property;                                                                                                   
                    (ii) current on mortgage and property                                                                       
                    tax payments; and                                                                                           
                    (iii) not insolvent or in bankruptcy                                                                        
                    proceedings; and                                                                                            
                                                                                                                                
Ms. Ford added  that bill also required an  appropriate ratio                                                                   
between the assessed  value of the property  and the proposed                                                                   
improvements.                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  asked about AS 29.49.140  regarding bonds                                                                   
under  notes. She  inquired  if municipalities  would  access                                                                   
the  state municipal  bond bank  to provide  backing for  the                                                                   
loans.  Mr. Therriault  did  not  believe so,  and  clarified                                                                   
that the revenue  bonds were backed by the  program they were                                                                   
operating,  rather than  being  a general  obligation of  the                                                                   
municipality.                                                                                                                   
                                                                                                                                
Mr.  Therriault relayed  that  the bill  sponsors had  worked                                                                   
with  members of  the other  body  on "small  tweaks" to  the                                                                   
bill, and advised  that he would be amenable  to working with                                                                   
Co-Chair  MacKinnon's staff  to make  recommendations as  she                                                                   
considered  any changes  to the  bill. He  agreed to  provide                                                                   
the changes in writing.                                                                                                         
                                                                                                                                
SB  56   was  HEARD  and   HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
SENATE CONCURRENT RESOLUTION NO. 1                                                                                            
                                                                                                                                
     Relating to a legislative task force on civics                                                                             
     education.                                                                                                                 
                                                                                                                                
2:24:42 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon stated  that SCR 1  was previously  heard                                                                   
and the public testimony had been opened and closed.                                                                            
                                                                                                                                
Vice-Chair  Micciche discussed  FN 2,  explaining that  there                                                                   
was a  zero fiscal note  on operating  from FY 16  through FY                                                                   
21.  He explained  that  this  revised fiscal  note  differed                                                                   
from  the  previous in  that  the  $5.9 thousand  dollars  in                                                                   
travel  costs  requested  on   the  previous  note  would  be                                                                   
absorbed, and it was truly a zero fiscal note.                                                                                  
                                                                                                                                
Co-Chair  MacKinnon  asked  for confirmation  that  the  bill                                                                   
would be of no additional cost to the state.                                                                                    
                                                                                                                                
TIM LAMKIN,  STAFF, SENATOR GARY  STEVENS, explained  that FN                                                                   
2 was  indeed  a zero  fiscal note  and the  bill would  have                                                                   
zero cost.                                                                                                                      
                                                                                                                                
Senator Dunleavy  stated that  he had heard  the bill  in the                                                                   
Senate  Education  Committee   and  thought  it  was  a  good                                                                   
approach  to trying  to deal  with  an issue  of civics  that                                                                   
seemed  to be  a growing  problem  in the  United States.  He                                                                   
supported the legislation.                                                                                                      
                                                                                                                                
2:26:53 PM                                                                                                                    
                                                                                                                                
Senator  Olson  wondered  if  the bill  would  be  viewed  by                                                                   
educators  as an unfunded  mandate. Mr.  Lamkin related  that                                                                   
it was  not the intent  of the  sponsor to increase  mandates                                                                   
or  obligations for  school districts.  He  thought the  task                                                                   
force would be sensitive to the issue of unfunded mandates.                                                                     
                                                                                                                                
Senator Olson wondered  if the sponsor had heard  from any of                                                                   
the school  districts  as to whether  they  were in favor  of                                                                   
the bill.  Mr. Lamkin  did not  have anything  in writing  to                                                                   
demonstrate  such  support,  but   noted  that  school  board                                                                   
members were  listed in  the resolution as  part of  the task                                                                   
force.                                                                                                                          
                                                                                                                                
Vice-Chair  Micciche  MOVED to  REPORT  CSSCR  1(EDC) out  of                                                                   
committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSSCR 1(EDC) was  REPORTED out of committee with  a "do pass"                                                                   
recommendation  and with one  new zero  fiscal note  from the                                                                   
Senate Finance Committee for the Legislature.                                                                                   
                                                                                                                                
2:28:44 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:30:38 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE JOINT RESOLUTION NO. 2                                                                                                 
                                                                                                                                
     Proposing an amendment to the Constitution of the                                                                          
     State of Alaska relating to contracting state debt for                                                                     
     postsecondary student loans.                                                                                               
                                                                                                                                
2:30:50 PM                                                                                                                    
                                                                                                                                
KRISTEN  PRATT,  STAFF,  SENATOR  ANNA  MACKINNON,  explained                                                                   
that she  was available to go  over the resolution  or answer                                                                   
any questions from the committee.                                                                                               
                                                                                                                                
2:31:32 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:31:56 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Senator  Dunleavy discussed  the  fiscal  note. He  explained                                                                   
that the  bill would  put a constitutional  amendment  on the                                                                   
ballot, and the  fiscal note was estimated at  $1500 to print                                                                   
ballots. He thought  that the two page fiscal  note indicated                                                                   
the cost  could go  up to  $22 thousand  [he later  corrected                                                                   
himself].                                                                                                                       
                                                                                                                                
2:32:34 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:33:15 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Senator Dunleavy  corrected himself and explained  that there                                                                   
was a zero fiscal note.                                                                                                         
                                                                                                                                
Co-Chair MacKinnon  confirmed that the fiscal note  was zero.                                                                   
She remarked that  passage of the resolution  would require a                                                                   
constitutional  amendment  to  appear  on  the  2016  general                                                                   
election ballot.                                                                                                                
                                                                                                                                
Senator  Dunleavy MOVED  to  REPORT SJR  2  out of  committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SJR  2  was  REPORTED  out of  committee  with  a  "do  pass"                                                                   
recommendation  and   with  one  previously   published  zero                                                                   
fiscal note: FN1 (GOV).                                                                                                         
                                                                                                                                
2:34:01 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:36:39 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 22                                                                                                            
                                                                                                                                
     "An Act relating to the collection costs for the                                                                           
     municipal   motor   vehicle    registration   tax;   and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
2:36:47 PM                                                                                                                    
                                                                                                                                
SENATOR  CATHY GIESSEL,  SPONSOR,  introduced  the bill.  She                                                                   
explained  that  since the  inception  of the  motor  vehicle                                                                   
registration tax  system in 1993,  the cost to the  state (in                                                                   
collecting  taxes   for  municipalities)  had   been  reduced                                                                   
considerably,  while  the  rate charged  to  communities  had                                                                   
not.  SB 22  proposed to  reduce  the amount  that the  state                                                                   
collected  from   each  community  that  signed   on  to  the                                                                   
program. She directed  attention to the second page  of FN 1,                                                                   
and discussed  the list of  communities in which  local motor                                                                   
vehicle taxes  were collected and  8 percent was  retained by                                                                   
the  state. She  pointed  out that  the  communities did  not                                                                   
incur  8   percent  cost  to   conduct  the  tax   collecting                                                                   
activity,   and    the   bill   proposed   to    reduce   the                                                                   
administrative  fee to 5.5 percent.  The proposed  amount was                                                                   
more closely calculated  to the actual cost  for the Division                                                                   
of Motor  Vehicles (DMV). She  emphasized that there  were no                                                                   
new  costs or  fees  to the  state, and  the  bill left  more                                                                   
money in the communities.                                                                                                       
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
2:39:35 PM                                                                                                                    
                                                                                                                                
DANIEL   MOORE,   TREASURER,   MUNICIPALITY   OF   ANCHORAGE,                                                                   
ANCHORAGE (via  teleconference), testified in support  of the                                                                   
bill.  He   related  that  in   2012,  the  Municipality   of                                                                   
Anchorage increased  its rate schedule for the  motor vehicle                                                                   
registration  program,  almost doubling  the  rates to  match                                                                   
the  rates  of  Mat-Su.  He  described  the  disproportionate                                                                   
administrative  costs   of  the  tax  collection   after  the                                                                   
dramatic increase  in fees, despite  the fact that  the scope                                                                   
of work  was unchanged.  He estimated  that the  Municipality                                                                   
of  Anchorage was  paying  the DMV  about  $500,000 more  per                                                                   
year  than  it  had  in  prior   years.  He  added  that  the                                                                   
Anchorage area had  45 percent of all registered  vehicles in                                                                   
the  state, and  prior  to 2012  it paid  45  percent of  the                                                                   
administrative  cost  to  DMV.   Due  to  the  rate  schedule                                                                   
update,  the municipality  currently paid  59 percent  of the                                                                   
administrative  cost. By changing  the statutory rate  from 8                                                                   
percent  to 5.5  percent,  the new  payment  amount would  be                                                                   
proportionate and  benefit the participating  communities. He                                                                   
estimated  the each  community  would  gain about  3  percent                                                                   
additional  revenue  if  the bill  successfully  passed  into                                                                   
law.                                                                                                                            
                                                                                                                                
2:42:02 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Co-Chair   MacKinnon  reiterated   that  the  committee   was                                                                   
working  on the  capital budget,  and would  stand in  recess                                                                   
until later in the day.                                                                                                         
                                                                                                                                
SB  22   was  HEARD  and   HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
2:42:55 PM                                                                                                                    
RECESSED                                                                                                                        
                                                                                                                                
8:50:51 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 26                                                                                                            
                                                                                                                                
     "An   Act  making   appropriations,  including   capital                                                                   
     appropriations   and   other    appropriations;   making                                                                   
     appropriations  to capitalize  funds; and providing  for                                                                   
     an effective date."                                                                                                        
                                                                                                                                
8:51:19 PM                                                                                                                    
                                                                                                                                
Vice-Chair Micciche  MOVED to ADOPT the  committee substitute                                                                   
for  SB 26,  Work  Draft  29-GS1781\I (Martin,  4/9/15).  Co-                                                                   
Chair MacKinnon OBJECTED for discussion.                                                                                        
                                                                                                                                
LAURA PIERRE,  STAFF, SENATOR  ANNA MACKINNON, explained  the                                                                   
difference  between the  proposed  committee substitute  (CS)                                                                   
and  the previous  version of  the bill,  detailing that  the                                                                   
committee cut the  governor's proposed capital  budget by $40                                                                   
million  for a total  capital budget  of $1,500,829,300.  She                                                                   
specified  that the budget  was broken  into an  Unrestricted                                                                   
General  Fund  (UGF)  total  of  $108,318,036,  a  Designated                                                                   
General  Fund (DGF)  total of  $56,325,100,  an "Other"  fund                                                                   
total   of  $61,233,800,   and   $1,274,952,400  in   Federal                                                                   
Receipts.                                                                                                                       
                                                                                                                                
Ms. Pierre  discussed the  changes reflected  in the  CS. The                                                                   
new  bill  consolidated  the allocations  for  the  Municipal                                                                   
Harbor Facility  Grant Fund, which would give  the Department                                                                   
of   Transportation   and  Public   Facilities   (DOT)   more                                                                   
flexibility   in  how   it  could  disperse   the  funds   to                                                                   
municipalities  and  complete  projects. She  continued  that                                                                   
the new  bill funded  the Alaska  Donor Services Program  for                                                                   
operational  costs in  the amount  of $75,000;  and in  order                                                                   
for the  program to  access the  funds an  allocation in  the                                                                   
capital   budget    was   required.   The   bill    added   a                                                                   
reappropriation of  legislative appropriations in  the amount                                                                   
of $211,000 for  the Senate Special Committee  on the Arctic,                                                                   
for  work  to  be conducted  during  the  29th  Alaska  State                                                                   
Legislature.  Additionally,  reappropriations  were added  to                                                                   
the  Alaska  Housing  Capital   Corporation  (AHCC)  account,                                                                   
brought forward by members who were lapsing.                                                                                    
                                                                                                                                
Ms. Pierre  continued that  a $45  million fund transfer  was                                                                   
removed  from the  Alaska  Capital Income  Fund  to the  AHCC                                                                   
account. As  a result,  $43,237,400 was  added to the  School                                                                   
Construction Grant  Fund to build  a new school  for Kivalina                                                                   
per  the consent  decree and  settlement  agreement from  the                                                                   
Kasayulie  lawsuit [a 2011  settlement for  the 1997  case of                                                                   
Kasayulie  vs.  State  of  Alaska  pertaining  to  equity  in                                                                   
education].                                                                                                                     
                                                                                                                                
8:54:38 PM                                                                                                                    
                                                                                                                                
Ms.  Pierre  specifically  thanked  Hilary  Martin  from  the                                                                   
Legislative Legal  Department and staff from  the Legislative                                                                   
Finance Division.                                                                                                               
                                                                                                                                
Co-Chair  MacKinnon WITHDREW  her OBJECTION.  There being  NO                                                                   
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
Co-Chair   MacKinnon  MOVED   to  ADOPT   Amendment  1,   29-                                                                   
GS1781/I.1, Martin, 4/9/15 (copy on file):                                                                                      
                                                                                                                                
     Page 33, following line 18:                                                                                                
     Insert a new subsection to read:                                                                                           
                                                                                                                                
     "(e) The  amount necessary  for Dalton Highway  disaster                                                                   
     emergency   repairs,  not   to  exceed  $5,000,000,   is                                                                   
     appropriated  from the  general fund  to the  Department                                                                   
     of  Transportation   and  Public  Facilities   for  that                                                                   
     purpose."                                                                                                                  
                                                                                                                                
Vice-Chair Micciche OBJECTED for discussion.                                                                                    
                                                                                                                                
Co-Chair  MacKinnon explained  that  the  amendment had  been                                                                   
brought  to   the  committee   by  the  administration.   She                                                                   
mentioned  that  there  was an  emergency  happening  on  the                                                                   
Dalton Highway.                                                                                                                 
                                                                                                                                
8:56:01 PM                                                                                                                    
                                                                                                                                
PAT  PITNEY,  DIRECTOR,  OFFICE  OF  MANAGEMENT  AND  BUDGET,                                                                   
OFFICE OF  THE GOVERNOR,  explained Amendment  1. She  stated                                                                   
that  on March  13, 2015;  there was  an ice jam  on the  Sag                                                                   
River  (mile   390  to  410   of  the  Dalton   Highway  near                                                                   
Deadhorse)  which created  an  ice floe/flood  over the  road                                                                   
and stopped traffic.  The road had been closed  for some time                                                                   
and  when  open was  limited  to  one  lane of  traffic.  She                                                                   
recounted  that she  had shared  photos  of the  ice jam  and                                                                   
highway  blockage with  Co-Chair  MacKinnon's office  earlier                                                                   
in  the day.  She related  the DOT  Commissioner Marc  Luiken                                                                   
was on  site, and highlighted  the importance of  getting the                                                                   
road  open. She  continued  that  industry members  had  been                                                                   
working closely  with state personnel to  provide contractors                                                                   
to  help  clear  the  road. The  previous  day  there  was  a                                                                   
disaster  declaration for  the  flooding on  the road,  which                                                                   
put the state  into a faster procurement role.  She furthered                                                                   
that  the  amendment  would  provide  up  to  $5  million  to                                                                   
continue  to  mitigate  flooding  and  keep  traffic  passing                                                                   
through the area.                                                                                                               
                                                                                                                                
Vice-Chair Micciche  wondered if there was any  potential for                                                                   
federal aid to  offset the costs of cleanup  and repairs. Ms.                                                                   
Pitney  replied  that she  was  optimistic that  the  federal                                                                   
government  would offer  financial aid  based on the  state's                                                                   
disaster declaration.  She related  that the Federal  Highway                                                                   
Administration   (FHWA)  would  be   coming  to   assess  the                                                                   
flooding to  determine whether  it fit  within the  rules for                                                                   
federal response.  She specified  that if criteria  were met,                                                                   
some  of  the  federal  response   would  be  funded  at  100                                                                   
percent,  and other  work  would be  funded  at the  90 -  10                                                                   
federal rate.  There were  items that  would not qualify  for                                                                   
federal    response,   however    the   administration    was                                                                   
"cautiously  optimistic"  that there  would  be some  federal                                                                   
aid.  She  reiterated  the importance  of  getting  the  road                                                                   
open,  and estimated  that at  a minimum the  state would  be                                                                   
responsible  for $700,000  in up-front  costs. She  explained                                                                   
that  until  the threshold  was  passed,  there would  be  no                                                                   
sharing of costs.                                                                                                               
                                                                                                                                
8:59:19 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
8:59:44 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Micciche  wondered if  the funds in  the amendment                                                                   
were  only a  contingency, and  the  state would  not end  up                                                                   
using  the $5  million being  requested.  Ms. Pitney  replied                                                                   
that there  would be a minimum  of $700,000 used.  She agreed                                                                   
to share  Commissioner  Luiken's eyewitness  account of  with                                                                   
Vice-Chair Micciche  after the meeting; and related  that the                                                                   
commissioner was  optimistic there would be  federal funding.                                                                   
She  related that  the commissioner  had been  amazed by  the                                                                   
size and amount of ice.                                                                                                         
                                                                                                                                
Co-Chair  MacKinnon wondered  if there  was any comment  from                                                                   
DOT/PF  with  regard  to  use   of  the  funds,  and  perhaps                                                                   
assurance as to how they would be used.                                                                                         
                                                                                                                                
MARY SIROKY,  DIRECTOR, DIVISION OF ADMINISTRATIVE  SERVICES,                                                                   
DEPARTMENT  OF TRANSPORTATION  AND PUBLIC FACILITIES,  shared                                                                   
that DOT had  officially notified FHWA of the  intent to seek                                                                   
emergency  response  funding.   The  department  had  various                                                                   
conversations  with  regional  federal  representatives,  and                                                                   
she thought  there had  also been  conversations at  a higher                                                                   
level. She  shared that  the department  was optimistic  that                                                                   
FHWA would  participate in the  disaster relief  efforts. She                                                                   
discussed  the concern  over  what  the FHWA  would  consider                                                                   
"fundable"  and what the  state considered  necessary  to get                                                                   
the road  open. She  remarked that there  may be  more severe                                                                   
infrastructure  damage to  the  road, once  the flooding  was                                                                   
under control and ice was removed.                                                                                              
                                                                                                                                
Ms.  Siroky  continued that  the  department  had a  plan  in                                                                   
place, had  contractors on site,  and hoped to have  at least                                                                   
one lane open by the following day.                                                                                             
                                                                                                                                
9:02:39 PM                                                                                                                    
                                                                                                                                
Senator  Olson  wondered  if  any  occurrences  of  the  same                                                                   
magnitude had  happened in the  area in the past.  Ms. Siroky                                                                   
replied  that  there had  never  been  anything of  the  same                                                                   
magnitude  before.  She  described  photos  of  the  site  as                                                                   
amazing, and stated  that it was impossible  to discern where                                                                   
the  overflow ice  started  and  ended. She  reiterated  that                                                                   
Commissioner Luiken had been astounded at the sight.                                                                            
                                                                                                                                
Senator Olson asked  if there were plans in  place to prevent                                                                   
a  recurrence. Ms.  Siroky replied  that  there were  already                                                                   
two projects  for raising the  roadbed on the  Dalton Highway                                                                   
that were  already in the funding  queue. She added  that the                                                                   
projects were anticipated to start the following summer.                                                                        
                                                                                                                                
9:04:00 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon WITHDREW  her OBJECTION  to Amendment  1.                                                                   
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
                                                                                                                                
Senator  Olson MOVED  to ADOPT  Amendment 2  (copy on  file).                                                                   
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
Senator Olson explained  the amendment, which would  fund the                                                                   
Kivalina road  at $2.5  million. He  remarked that  there was                                                                   
funding   in  the  budget   for  the   Kivalina  school   for                                                                   
approximately $43  million, but a road was  needed before the                                                                   
school could  be built. He  remarked that there  were several                                                                   
estimates on the  cost for the road. The $2.5  million in the                                                                   
amendment  would  provide seed  money  in  order to  try  and                                                                   
secure  federal funding  from  the Bureau  of Indian  Affairs                                                                   
(BIA), Indian  Reservation Roads Program (IRR).  He commented                                                                   
that the  governor was  in support of  the amendment.  He and                                                                   
pointed  out  that the  amendment  in  no way  obligated  the                                                                   
state to  fund the remainder of  the road, and referred  to a                                                                   
relevant  memo  from  the  Division  of  Legal  and  Research                                                                   
Services dated April 9, 2015 (copy on file).                                                                                    
                                                                                                                                
Senator  Dunleavy   also  objected   to  the  amendment.   He                                                                   
remarked  that there  were  various  issues with  moving  the                                                                   
amendment  forward. He  did not  think the  state should  get                                                                   
involved  in  building   a  road  that  may   lead  to  later                                                                   
obligations  of  moving  the town  of  Kivalina  [as  erosion                                                                   
would necessitate].  He did  not feel  that the state  should                                                                   
take on the construction of the road.                                                                                           
                                                                                                                                
Co-Chair MacKinnon handed the gavel to Vice-Chair Micciche.                                                                     
                                                                                                                                
9:06:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:07:19 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon  shared that  the committee was  currently                                                                   
reviewing  several pieces of  correspondence from  Department                                                                   
of  Education  and  Early  Development   (DEED)  Commissioner                                                                   
Michael Hanley  regarding the litigation associated  with the                                                                   
Kivalina school, and  did not believe that the  road was part                                                                   
of the resultant Kasayulie settlement.                                                                                          
                                                                                                                                
Senator Dunleavy MAINTAINED his OBJECTION.                                                                                      
                                                                                                                                
Senator Olson shared  that the amendment had  been an element                                                                   
of  concern  due  to  costs  associated  with  the  road.  He                                                                   
discussed the  Kasayulie settlement, and recognized  the need                                                                   
for the road. He  referred back to the letter  from the legal                                                                   
department   that   indicated   that  the   state   was   not                                                                   
necessarily  liable  for  its   construction.  He  asked  for                                                                   
support of the amendment.                                                                                                       
                                                                                                                                
A roll call vote  was taken on the motion to  adopt Amendment                                                                   
2.                                                                                                                              
                                                                                                                                
IN FAVOR: Olson                                                                                                                 
OPPOSED:   Kelly,   Bishop,  Dunleavy,   Hoffman,   Micciche,                                                                   
MacKinnon                                                                                                                       
                                                                                                                                
The MOTION FAILED (6/1).                                                                                                        
                                                                                                                                
Senator Dunleavy  MOVED to ADOPT  Conceptual Amendment  3. He                                                                   
described the  amendment as legislative intent  regarding the                                                                   
Kivalina School:                                                                                                                
                                                                                                                                
     a. The  legislature declines  to fund the  Kivalina K-12                                                                   
     School  renovation/addition   under  the   2011  consent                                                                   
     decree and  settlement agreement in Kasayulie  vs. State                                                                   
     (3AN-97-3782CIV   September   1st,  1999)   because   of                                                                   
     concerns about erosion and viability of the school                                                                         
     site.                                                                                                                      
                                                                                                                                
     b.  The   legislature  declines   to  fund   a  Kivalina                                                                   
     replacement  school at  the new school  site because  of                                                                   
     concerns about  erosion and viability of the  new school                                                                   
     site.                                                                                                                      
                                                                                                                                
     c. The settlement terms of the January 7, 2015 letter                                                                      
     from the Citizens for the Educational Advancement of                                                                       
     Alaska's Children are unacceptable to the legislature.                                                                     
                                                                                                                                
Senator Dunleavy  explained that  the amendment would  remove                                                                   
the funding for  the Kivalina School project.  He argued that                                                                   
the  decree  specifically  provided for  the  legislature  to                                                                   
decline funding  which would not  trigger a reopening  of the                                                                   
case.  The  amendment  also put  the  findings  on  permanent                                                                   
record as to avoid future misunderstanding.                                                                                     
                                                                                                                                
9:11:00 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:11:42 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon  brought up the aforementioned  legal memo                                                                   
pertaining to  the Kivalina  School construction,  and shared                                                                   
that she  would speak in  opposition to Conceptual  Amendment                                                                   
3 based  on  advice from  the Attorney  General's office,  as                                                                   
well  as the  memo.  It was  her belief  that  the state  was                                                                   
responsible for  some amount of  money to Kivalina,  although                                                                   
the matter was  still in dispute and not final  as to whether                                                                   
the project should  be a renovation (for much  less funds) or                                                                   
a new school entirely.                                                                                                          
                                                                                                                                
Senator  Olson referred  to  the  consent decree  and  stated                                                                   
there  was  strong  evidence  that  it  was  not  up  to  the                                                                   
legislature  to fund  or not  fund; rather,  the funding  had                                                                   
been mandated  and therefore he  wondered about  the validity                                                                   
of the conceptual amendment to withstand legal challenge.                                                                       
                                                                                                                                
9:13:32 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:17:28 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair  Micciche  queried  what conditions  were  on  the                                                                   
previously appropriated  funds for  the Kivalina  School. Co-                                                                   
Chair   MacKinnon   replied   that   there   was   a   direct                                                                   
appropriation  for the  Kivalina  School  in compliance  with                                                                   
the settlement.                                                                                                                 
                                                                                                                                
Ms.  Pierre  announced  that the  appropriation  was  to  the                                                                   
School Construction  Fund, and  would lapse after  five years                                                                   
if unspent (like any other capital project).                                                                                    
                                                                                                                                
9:19:00 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy  directed the committee's attention  to page                                                                   
1, second paragraph of the memo. He read the passage:                                                                           
                                                                                                                                
     Note, as a  preliminary matter, that the  consent decree                                                                   
     specifically provides  that the parties cannot  bind the                                                                   
     legislature.                                                                                                               
                                                                                                                                
Senator  Dunleavy pointed  out  the words  "legislature"  and                                                                   
"state",  and reminded  the  committee  that the  legislature                                                                   
was the fiduciary or funding arm of state government.                                                                           
                                                                                                                                
Senator Dunleavy  directed the committee's attention  to page                                                                   
2, first paragraph of the memo. He read the passage:                                                                            
                                                                                                                                
     (Consent decree,  p. 6.) The consent decree  is slightly                                                                   
     ambiguous in this regard…                                                                                                  
                                                                                                                                
Senator  Dunleavy remarked  that he was  attempting to  clear                                                                   
up  any ambiguity,  so that  the legislature  (as opposed  to                                                                   
the state) was  not liable for future obligations  toward the                                                                   
"whole Kivalina concept."                                                                                                       
                                                                                                                                
9:20:49 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy  directed the committee's attention  to page                                                                   
2, second paragraph of the memo. He read the passage:                                                                           
                                                                                                                                
     The consent  decree requires that the state  include the                                                                   
     "Kivalina  K-12   school  renovation/addition"   in  the                                                                   
     governor's   proposed  capital   appropriations   budget                                                                   
     bill. (Id.)  The consent  decree also provides  that "if                                                                   
     the   Legislature   declines    to   fund,   or   places                                                                   
     contingencies  on the  Kivalina  school project  because                                                                   
     of  concerns about  erosion or viability  of the  school                                                                   
     site,  the lack of  funding or  contingencies will  have                                                                   
     no effect on the settlement, and cannot be used by                                                                         
     plaintiffs to reopen the litigation."                                                                                      
                                                                                                                                
Senator  Dunleavy   stated  there  was  an  issue   with  the                                                                   
terminology  used in  the  memo, and  considered  the use  of                                                                   
"legislature" and  "state" to be incorrectly  differentiated.                                                                   
He argued  that the  legislature  was part  of the state.  He                                                                   
suggested  that the  administration had  put the  legislature                                                                   
in an  obligation, to some  degree, regarding the  school. He                                                                   
recognized  that   there  was  a  legitimate   issue  in  the                                                                   
Northwest  Arctic in  the town  of Kivalina.  He pointed  out                                                                   
that  the  project had  originally  been  a settlement  on  a                                                                   
school to do  a renovation on-site, starting with  a cost $14                                                                   
million. He  expressed concern  that the state  inadvertently                                                                   
would be responsible for a much larger obligation.                                                                              
                                                                                                                                
Senator  Dunleavy  referred  back  to  the  legal  memo,  and                                                                   
pointed  out  that  the  document  referred  to  "state"  and                                                                   
"legislature" and rarely mentioned "administration."                                                                            
                                                                                                                                
Senator Dunleavy  directed the committee's attention  to page                                                                   
2, third paragraph of the memo. He read the passage:                                                                            
                                                                                                                                
     Further, under  the consent decree, the  legislature can                                                                   
     decline to  fund the Kivalina K-12 school  project if it                                                                   
     has  concerns   about  erosion   or  viability   of  the                                                                   
     existing school site.                                                                                                      
                                                                                                                                
Senator Dunleavy  further explained  Conceptual Amendment  3.                                                                   
He  reiterated  that  the  purpose would  be  to  remove  the                                                                   
school funding,  and stated that  he would not  have objected                                                                   
to  funding the  school  and having  the  funds  be put  into                                                                   
escrow  or   contingency  funds  that  isolated   the  monies                                                                   
specifically  for  the  Kivalina  School. He  hoped  the  end                                                                   
result  was  that the  funding  would  remain  school-focused                                                                   
rather  than  being used  for  road  or town  site  projects,                                                                   
which he thought  should be separate discussions.  He thought                                                                   
there were  ambiguities  (as the letter  mentioned) and  that                                                                   
the legislature  was singled  out as  not being obligated  to                                                                   
fund the  school. He continued  that there was  discussion in                                                                   
the  memo   implying  that  the   state  was   obligated.  He                                                                   
reiterated that the  purpose of the amendment  was to isolate                                                                   
the  school  funding  to  keep it  designated  only  for  the                                                                   
particular school.                                                                                                              
                                                                                                                                
9:25:32 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:00 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Senator Dunleavy  asked for the support of  the committee for                                                                   
Conceptual Amendment 3.                                                                                                         
                                                                                                                                
Co-Chair  MacKinnon  directed  the committee's  attention  to                                                                   
page  3,  paragraph  4  of  the  legal  memo.  She  read  the                                                                   
passage:                                                                                                                        
                                                                                                                                
     Failure  to appropriate any  funding does not,  however,                                                                   
     resolve the state's constitutional obligations.                                                                            
                                                                                                                                
Co-Chair MacKinnon MAINTAINED her OJECTION.                                                                                     
                                                                                                                                
A  roll  call   vote  was  taken  on  the   motion  to  adopt                                                                   
Conceptual Amendment 3.                                                                                                         
                                                                                                                                
IN FAVOR: Dunleavy                                                                                                              
OPPOSED: Olson, MacKinnon, Bishop, Hoffman, Micciche, Kelly                                                                     
                                                                                                                                
The MOTION FAILED (6/1).                                                                                                        
                                                                                                                                
9:27:09 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy offered Conceptual Amendment 4:                                                                                
                                                                                                                                
     Any  funds  appropriated   for  this  project  shall  be                                                                   
     placed in  a joint escrow  account to be spent  only for                                                                   
     direct  construction/design   for  a   school  structure                                                                   
     serving  Kivalina.  These   funds  shall  automatically,                                                                   
     without further  action by  either party, be  swept back                                                                   
     into the state  general fund if construction  is not yet                                                                   
     commenced prior to April, 2022.                                                                                            
                                                                                                                                
Senator Dunleavy  characterized the  amendment as  an attempt                                                                   
to safeguard the  public funds for the issue  of the Kivalina                                                                   
School. He  reiterated that the  idea was to focus  solely on                                                                   
funding the school  rather than a road, relocation,  or a new                                                                   
site.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
Co-Chair  MacKinnon found  the amendment  to be  "intriguing"                                                                   
and  thought  that  it  had  merit.  She  remarked  that  the                                                                   
previous  amendment  also  had  merit  for  the  purposes  of                                                                   
discussion and reducing  the state's liability in  a piece of                                                                   
legislation and  litigation that was before  the legislature.                                                                   
She expressed  a commitment  to working  towards making  sure                                                                   
the  children  of  Kivalina  saw   direct  benefit  from  the                                                                   
appropriation  and   allocation  being  considered   for  the                                                                   
Kivalina School.  She opposed the amendment and  believed the                                                                   
committee should  work with the legislative  legal department                                                                   
to ensure  there was compliance  with the decree.  She wanted                                                                   
to  review  the  relevant  language  and  work  with  Senator                                                                   
Olson.                                                                                                                          
                                                                                                                                
Senator Olson  inquired how Senator  Dunleavy came up  with a                                                                   
construction commencement deadline of 2022.                                                                                     
                                                                                                                                
9:29:40 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:29:50 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Senator  Dunleavy explained  that the date  specified  in the                                                                   
amendment  was   an  estimate  based  on   seven  consecutive                                                                   
construction seasons.                                                                                                           
                                                                                                                                
Senator  Dunleavy  WITHDREW  Conceptual  Amendment  4.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Senator Dunleavy  MOVED Conceptual Amendment 5.  He explained                                                                   
that  the  amendment  would  remove  all  references  to  the                                                                   
figure of  $43,237,400  for the Kivalina  School and  replace                                                                   
it  with   $14,724,714  [the  original  capital   improvement                                                                   
project  (CIP) amount  for  major maintenance]  adjusted  for                                                                   
present day  value from July 1,  2012. He explained  that the                                                                   
amounts in  question pertained to  language in the  decree on                                                                   
the CIP  list when  the funds  were earmarked  for that  date                                                                   
for renovation of the school.                                                                                                   
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
9:31:12 PM                                                                                                                    
                                                                                                                                
Vice-Chair Micciche  stated that he supported  $43,237,400 in                                                                   
school funding  for Kivalina  in order  to prevent  the state                                                                   
from  being  at  risk  for  litigation   being  reopened  and                                                                   
subsequently  being  responsible   for  the  purchase  of  an                                                                   
entire school at a much higher cost (nearing $100 million).                                                                     
                                                                                                                                
Vice-Chair  Micciche referred  to page 5  of the legal  memo,                                                                   
which  discussed  a  limit  to   the  state's  liability.  He                                                                   
specified  that  the  cost  of  the  replacement  school  for                                                                   
Kivalina was based  off of the 2013 CIP process.  He referred                                                                   
to the  second paragraph  on page 5,  and read the  following                                                                   
passage:                                                                                                                        
                                                                                                                                
     Because  the consent decree  specifically provides  that                                                                   
     the  amount of  the  appropriation  would be  determined                                                                   
     through  the  2013  CIP   process,  the  consent  decree                                                                   
     places  the risk of  a project  that exceeds the  budget                                                                   
     on   Kivalina.  If   the  project   exceeds  the   costs                                                                   
     estimated  in  the  2013  CIP,  the  state  may  not  be                                                                   
     required   to  provide   additional   funding.  If   the                                                                   
     legislature  takes this  approach, the  state will  have                                                                   
     met its  obligations and CEAAC  would not have  a strong                                                                   
     argument for reopening the litigation.                                                                                     
                                                                                                                                
Vice-Chair  Micciche reiterated  his concern  that the  state                                                                   
could be  responsible for greatly  increased costs if  it did                                                                   
not meet its responsibility to fund the school as planned.                                                                      
                                                                                                                                
Senator  Olson agreed  with  Vice-Chair  Micciche that  there                                                                   
was  a possibility  of litigation  over  the Kivalina  School                                                                   
being  reopened. He  respectfully asked  Senator Dunleavy  to                                                                   
withdraw his amendment.                                                                                                         
                                                                                                                                
Senator Dunleavy  expressed appreciation for  Senator Olson's                                                                   
words,  but  wanted  the  committee  to  vote  on  Conceptual                                                                   
Amendment 5.                                                                                                                    
                                                                                                                                
9:33:41 PM                                                                                                                    
                                                                                                                                
Co-Chair    MacKinnon   expressed    appreciation   for    an                                                                   
opportunity  to  discuss  the   issue  and  the  children  of                                                                   
Kivalina,  who had  waited for  15 years while  the issue  of                                                                   
the  school was  debated.  It  was her  view  that the  state                                                                   
should meet its  obligation to take care of  the children and                                                                   
students of Kivalina.                                                                                                           
                                                                                                                                
A  roll  call   vote  was  taken  on  the   motion  to  adopt                                                                   
Conceptual Amendment 5.                                                                                                         
                                                                                                                                
IN FAVOR: Dunleavy                                                                                                              
OPPOSED: Micciche, Olson, Kelly, Bishop, Hoffman, MacKinnon                                                                     
                                                                                                                                
The MOTION FAILED (6/1).                                                                                                        
                                                                                                                                
9:34:24 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy  expressed appreciation for  the discussion.                                                                   
He  agreed  with  Co-Chair MacKinnon  that  the  children  of                                                                   
Kivalina  deserved  a  school   and  a  great  education.  He                                                                   
reminded  the  committee that  he  had  spent 13  years  near                                                                   
Kivalina,  much of it  as an educator  and administrator.  He                                                                   
relayed that he  had visited Kivalina on  numerous occasions,                                                                   
and looked  forward to  the fact that  the children  would be                                                                   
getting  a  new school.  He  emphasized  that he  would  like                                                                   
continued discussion  pertaining to constraining  the funding                                                                   
in  some way  so  it did  not  morph into  funding  something                                                                   
other  than a school.  He referred  back to  the legal  memo,                                                                   
and claimed  it "betrays  a weak link  in our situation."  He                                                                   
opined  that  the  state  was   responsible  for  things  the                                                                   
administration had  agreed to, and for that  reason he wanted                                                                   
to pursue further discussion.                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  brought up  the  aforementioned  letters                                                                   
from  DEED and  concurred that  the  department had  exceeded                                                                   
its authority in  some of the language that was  used for the                                                                   
Kivalina School appropriation.                                                                                                  
                                                                                                                                
Vice-Chair   Micciche  shared   the   concerns  of   Co-Chair                                                                   
MacKinnon  and Senator  Dunleavy.  He highlighted  protecting                                                                   
the  state from  additional expenses  and possible  reopening                                                                   
of litigation over the Kivalina School.                                                                                         
                                                                                                                                
9:37:28 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon made a statement:                                                                                            
                                                                                                                                
     In  1999 Kasayulie  vs.  State  a superior  court  found                                                                   
     that  the legislature  had  not met  its  constitutional                                                                   
     obligations  to maintain,  by general  law, a system  of                                                                   
     public  school open  to all  children of  the state.  In                                                                   
     response to  the superior court  order, and to  meet the                                                                   
     state's   obligation  under   the  consent  decree,   we                                                                   
     entered  in to resolve  the litigation. The  legislature                                                                   
     had  previously   provided  appropriations   for  school                                                                   
     construction    projects    in    Emmonak,    Koliganek,                                                                   
     Nightmute,  Kwethluk.  Through the  capital  improvement                                                                   
     project   grant  program   and  passed  legislation   to                                                                   
     equalize   funding  for   rural  and  municipal   school                                                                   
     construction  needs, in this  budget the legislature  is                                                                   
     appropriating  $43,237,399  for school  construction  in                                                                   
     Kivalina.  Kivalina  is  the  last  of  the  five-school                                                                   
     construction  project   the  state  agreed   to  request                                                                   
     funding  for in the  Kasayulie consent  decree. By  this                                                                   
     appropriation  the  state  is  providing  rural  schools                                                                   
     with  the  assurance  of  adequate  facilities,  funding                                                                   
     under  the  capital improvement  project  grant  program                                                                   
     and   meeting   its   constitutional    obligations   to                                                                   
     establish and  maintain a system of public  schools open                                                                   
     to all children  in the state. With  this appropriation,                                                                   
     the  legislature   intends  to  resolve   the  Kasayulie                                                                   
     litigation and  further the goal of providing  for equal                                                                   
     education opportunities  and adequate  facilities across                                                                   
     the state.                                                                                                                 
                                                                                                                                
Vice-Chair  Micciche  MOVED to  REPORT  CSSB 26(FIN)  out  of                                                                   
committee  with individual  recommendations.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSSB 26(FIN) was  REPORTED out of committee with  a "do pass"                                                                   
recommendation.                                                                                                                 
                                                                                                                                
9:39:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:41:03 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Senator  Dunleavy thanked  the committee  for the  discussion                                                                   
and  working hard  on the  budget.  He referred  back to  the                                                                   
Kivalina School,  and foresaw the need for  future discussion                                                                   
about education  and other  items that were  constitutionally                                                                   
mandated  by  the  state.  He thought  it  was  important  to                                                                   
ponder the  different ways  of doing  education, and  thought                                                                   
it  was possible  to  do  it differently  while  providing  a                                                                   
quality education for all kids.                                                                                                 
                                                                                                                                
Senator  Hoffman thanked  Co-Chair  MacKinnon  and her  staff                                                                   
for providing  leadership to continue  to reduce  the capital                                                                   
budget.  He  stressed that  many  people  in Alaska  did  not                                                                   
fully  comprehend the  magnitude  of the  financial  problems                                                                   
the state  was faced  with. He  recognized  the needs of  the                                                                   
constituency,  and  the  difficulty   of  trimming  a  budget                                                                   
further than what the governor had proposed.                                                                                    
                                                                                                                                
9:43:09 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  commended  Co-Chair MacKinnon  and  the                                                                   
co-chair  of  the  operating  budget  for  persevering  in  a                                                                   
difficult   and  unpleasant   process.   He  recognized   the                                                                   
pressure the co-chairs  were under, and opined  that Co-Chair                                                                   
MacKinnon was consistent and fair.                                                                                              
                                                                                                                                
Senator Bishop said "good job."                                                                                                 
                                                                                                                                
Co-Chair MacKinnon thanked the committee for their efforts.                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
9:46:24 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:46 p.m.                                                                                          

Document Name Date/Time Subjects
SB 56 Supporting Document BOSCOS letter - Copy.pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB 56 PACE Presentation SFIN 04 09 15.pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB056 A Supporting Documents- Letter REAP.docx SFIN 4/9/2015 1:30:00 PM
SB 56
SB056A Hearing Request Letter .pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB056A Supporting Documents- Letter IGU.pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB056A Supporting Documents- Letter FNSB.pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB056A Supporting Documents- Letter City of Fairbanks .pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB056A Supporting Documents- Letter Alaska Bankers Association.pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB056A Sectional Analysis.pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SB 56 Governor Sponsor Statement.pdf SFIN 4/9/2015 1:30:00 PM
SB 56
SJR 2 Letter of Support-University of Alaska.pdf SFIN 4/9/2015 1:30:00 PM
SJR 2
SJR 2 Letter of Support-Juneau Chamber of Commerce.pdf SFIN 4/9/2015 1:30:00 PM
SJR 2
SJR 2 Sectional Analysis.pdf SFIN 4/9/2015 1:30:00 PM
SJR 2
SJR 2 Sponsor Statement.pdf SFIN 4/9/2015 1:30:00 PM
SJR 2
SB 22 - Additional Questions to DMV.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - Analysis of DMV Responses by Dan Moore.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - Commission Agents Cost to DMV.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - DMV Data Summary.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - DMV PCN Info.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - DMV-MVRT Information.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - DMV-MVRT Leasing Costs.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - Fact Sheet.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - Motor Vehicle Registration Tax Communities.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - Sectional Analysis.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - Sponsor Statement.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 22 - Supporting Documents Letter of Support from MOA.pdf SFIN 4/9/2015 1:30:00 PM
SB 22
SB 26 Amendment 1 - MacKinnon.pdf SFIN 4/9/2015 1:30:00 PM
SB 26
SB 26 work order version I.pdf SFIN 4/9/2015 1:30:00 PM
SB 26
SB 26 Legal Opinion - Kivalina School Construction.pdf SFIN 4/9/2015 1:30:00 PM
SB 26
SB 26 Amendment 2 - Olson.pdf SFIN 4/9/2015 1:30:00 PM
SB 26