Legislature(2017 - 2018)SENATE FINANCE 532

05/07/2018 02:00 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Meeting Postponed to 3:00 p.m. --
+= SB 142 APPROP: CAPITAL BUDGET TELECONFERENCED
Moved CSSB 142(FIN) Out of Committee
Bills Previously Heard/Scheduled
+= HB 212 REAA & SMALL MUNI SCHOOL DISTRICT FUND TELECONFERENCED
Heard & Held
+= HB 233 EXTEND EDUCATION TAX CREDITS TELECONFERENCED
Moved SCS CSHB 233(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                        May 7, 2018                                                                                             
                         3:05 p.m.                                                                                              
                                                                                                                                
3:05:14 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair MacKinnon called the Senate Finance Committee                                                                          
meeting to order at 3:05 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Chris Tuck,  Sponsor;  Ken Alper,  Director,                                                                    
Tax  Division, Department  of  Revenue;  Juli Lucky,  Staff,                                                                    
Senator Anna MacKinnon;  Jane Pierson, Staff, Representative                                                                    
Neal Foster;  Tim Mearig, Facilities Manager,  Department of                                                                    
Education  and  Early   Development;  Laura  Cramer,  Staff,                                                                    
Senator Anna MacKinnon.                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 142    APPROP: CAPITAL BUDGET                                                                                                
                                                                                                                                
          CSSB 142(FIN) was REPORTED out of committee with                                                                      
          a "do pass" recommendation.                                                                                           
                                                                                                                                
CSHB 212(RLS)                                                                                                                   
          REAA & SMALL MUNI SCHOOL DISTRICT FUND                                                                                
                                                                                                                                
          CSHB 212(RLS) was HEARD and HELD in committee for                                                                     
          further consideration.                                                                                                
                                                                                                                                
CSHB 233(FIN)am                                                                                                                 
          EXTEND EDUCATION TAX CREDITS                                                                                          
                                                                                                                                
          SCS CSHB  233(FIN) was  REPORTED out  of committee                                                                    
          with a  "do pass" recommendation and  with one new                                                                    
          fiscal   impact  note   from  the   Department  of                                                                    
          Revenue.                                                                                                              
                                                                                                                                
CS FOR HOUSE BILL NO. 233(FIN) am                                                                                             
                                                                                                                                
     "An  Act  relating  to   the  insurance  tax  education                                                                    
     credit,  the income  tax education  credit, the  oil or                                                                    
     gas  producer   education  credit,  the   property  tax                                                                    
     education   credit,  the   mining  business   education                                                                    
     credit,  the fisheries  business education  credit, and                                                                    
     the  fisheries resource  landing tax  education credit;                                                                    
     providing  for  an  effective  date  by  repealing  the                                                                    
     effective dates of  secs. 3, 5, 7, 10, 14,  16, 18, 21,                                                                    
     23, 25,  28, 30, 32,  35, 37, 39,  42, 44, 46,  49, 51,                                                                    
     53, and  55, ch. 92,  SLA 2010,  sec. 14, ch.  7, FSSLA                                                                    
     2011, secs.  15, 17, 19,  21, 23,  and 25, ch.  74, SLA                                                                    
     2012, sec. 49, ch. 14, SLA  2014, secs. 37, 40, 43, and                                                                    
     46, ch. 15, SLA 2014, and  secs. 26 and 31, ch. 61, SLA                                                                    
     2014; providing  for an effective date  by amending the                                                                    
     effective  date of  secs. 1,  2,  and 21,  ch. 61,  SLA                                                                    
     2014; and providing for an effective date."                                                                                
                                                                                                                                
3:06:49 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  Vice-Chair Bishop  to review  the                                                                    
fiscal note.                                                                                                                    
                                                                                                                                
Vice-Chair   Bishop   complied.   He  reported   that   some                                                                    
discussion had  ensued about the  $50,000 fiscal note  for a                                                                    
regulation  package. The  fiscal note  before the  committee                                                                    
reflected  that  the  $50,000  regulation  package  was  not                                                                    
included in  the bill.  The numbers in  the outyears  of the                                                                    
fiscal note  remained the same.  He reiterated there  was no                                                                    
fee for a regulation package associated with the bill.                                                                          
                                                                                                                                
Co-Chair MacKinnon  announced that  the bill  had originally                                                                    
been heard as  the companion bill SB 116 on  March 26, 2018.                                                                    
The current  bill had been heard  on April 26, 2018  where a                                                                    
new  committee  substitute  (CS)  had  been  presented,  the                                                                    
sectional analysis  had been reviewed, and  public testimony                                                                    
had  been  heard  and  closed. The  fiscal  notes  had  been                                                                    
reviewed again. She asked to hear from the bill sponsor.                                                                        
                                                                                                                                
                                                                                                                                
REPRESENTATIVE CHRIS  TUCK, SPONSOR, detailed that  the bill                                                                    
would extend  the education tax credits  that had originated                                                                    
in 1987  to January  1, 2025. He  relayed the  credits would                                                                    
expire on December 31, 2018 without the legislation.                                                                            
                                                                                                                                
Vice-Chair Bishop MOVED  to REPORT SCS CSHB  233(FIN) out of                                                                    
committee with  individual recommendations  and accompanying                                                                    
fiscal note. There being NO OBJECTION, it was so ordered.                                                                       
                                                                                                                                
SCS CSHB 233(FIN)  was REPORTED out of committee  with a "do                                                                    
pass"  recommendation and  with one  new fiscal  impact note                                                                    
from the Department of Revenue.                                                                                                 
                                                                                                                                
3:08:52 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:11:00 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon  relayed that the committee  had reported                                                                    
out SCS CSHB 233(FIN).                                                                                                          
                                                                                                                                
KEN ALPER,  DIRECTOR, TAX  DIVISION, DEPARTMENT  OF REVENUE,                                                                    
heard  the  committee  had  moved the  bill  before  he  had                                                                    
arrived.                                                                                                                        
                                                                                                                                
Co-Chair  MacKinnon  offered  Mr. Alper  an  opportunity  to                                                                    
share  anything related  to  the fiscal  note  for SCS  CSHB                                                                    
233(FIN).                                                                                                                       
                                                                                                                                
Mr. Alper  discussed that the  fiscal note  discussed during                                                                    
the morning  meeting had contemplated revenue  to cover some                                                                    
of the  Department of Revenue's (DOR)  administrative costs.                                                                    
The  department had  removed the  associated costs  from the                                                                    
fiscal note; the costs would  be absorbed by the department.                                                                    
He supported the bill and  believed the education tax credit                                                                    
was an  important program. He  added it was merely  a matter                                                                    
of downsizing the program to Alaska's fiscal reality.                                                                           
                                                                                                                                
Co-Chair  MacKinnon apologized  that  the  meeting time  had                                                                    
moved.  She understood  DOR  was  following the  committee's                                                                    
activities and was working hard to be available.                                                                                
                                                                                                                                
Mr. Alper replied the department  would be presenting to the                                                                    
committee  the following  morning  on a  different piece  of                                                                    
legislation.                                                                                                                    
                                                                                                                                
CS FOR HOUSE BILL NO. 212(RLS)                                                                                                
                                                                                                                                
     "An  Act relating  to funding  for school  construction                                                                    
     and  major   maintenance;  relating  to   the  regional                                                                    
     educational attendance area  and small municipal school                                                                    
     district fund; and providing for an effective date."                                                                       
                                                                                                                                
3:12:46 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  reported the  bill  had  been heard  on                                                                    
April 23,  2018 when the  public hearing had been  heard and                                                                    
closed and the fiscal notes had been reviewed.                                                                                  
                                                                                                                                
Vice-Chair Bishop  MOVED to  ADOPT the  committee substitute                                                                    
for CSHB 212(RLS), Work Draft 30-LS0741\M (Laffen, 5/4/18).                                                                     
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
JULI LUCKY, STAFF, SENATOR ANNA  MACKINNON, reviewed the two                                                                    
changes  in the  CS.  She referenced  previous bill  hearing                                                                    
where there had  been discussion on the  effective date. The                                                                    
effective  date had  been changed  to immediate  in the  CS.                                                                    
Additionally,  the   previous  version   of  the   bill  had                                                                    
specified  20  percent for  major  maintenance.  The new  CS                                                                    
removed the 20  percent specification, but noted  on page 1,                                                                    
lines 10 through 11 that  the fund's primary function was to                                                                    
fund school construction projects.                                                                                              
                                                                                                                                
3:14:09 PM                                                                                                                    
                                                                                                                                
JANE PIERSON,  STAFF, REPRESENTATIVE NEAL  FOSTER, discussed                                                                    
the  bill. She  explained the  bill would  allow more  major                                                                    
maintenance in  Regional Educational Attendance  Area (REAA)                                                                    
and small municipal  school districts. The bill  did not add                                                                    
more money  to increase  the size of  the pie.  She detailed                                                                    
the bill  would reallocate  how the  pie was  cut. Currently                                                                    
the  REAA and  Small  Municipal School  District Fund  could                                                                    
only be  used for  new school  construction. The  bill would                                                                    
allow the fund to be  used for major maintenance in addition                                                                    
to  new  school construction  in  REAA  and small  municipal                                                                    
school district areas,  with construction taking precedence.                                                                    
The  bill would  help reduce  the deterioration  of schools,                                                                    
which would  save millions of  dollars in the long  run. For                                                                    
example, it  was preferable  to be  proactive and  replace a                                                                    
roof than to  be reactive and replace an  entire school. The                                                                    
sponsor  had  reviewed  the  CS  and  was  amenable  to  the                                                                    
changes.                                                                                                                        
                                                                                                                                
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO                                                                       
further OBJECTION, Work Draft 30-LS0741\M was ADOPTED.                                                                          
                                                                                                                                
Co-Chair MacKinnon MOVED to ADOPT Amendment 1, 30-LS0741\M                                                                      
(Laffen, 5/4/18) (copy on file):                                                                                                
                                                                                                                                
     Page 1, following line 4:                                                                                                  
     Insert new bill sections to read:                                                                                          
                                                                                                                                
     "* Section 1. AS 14.11.013(a) is amended to read:                                                                          
     (a)  With  regard  to projects  for  which  grants  are                                                                    
    requested under AS 14.11.011, the department shall                                                                          
     (1)  annually review  the six-year  plans submitted  by                                                                    
     each district  under AS  14.11.011(b) and  recommend to                                                                    
     the  board  a  revised  and  updated  six-year  capital                                                                    
     improvement  project  grant  schedule that  serves  the                                                                    
     best  interests  of the  state  and  each district;  in                                                                    
     recommending   projects   for    this   schedule,   the                                                                    
     department  shall  verify  that each  proposed  project                                                                    
     meets  the criteria  established under  AS 14.11.014(b)                                                                    
     and qualifies as a project required to                                                                                     
     (A) avert  imminent danger or  correct life-threatening                                                                    
     situations;                                                                                                                
     (B)  house students  who would  otherwise be  unhoused;                                                                    
     for  purposes   of  this  subparagraph,   students  are                                                                    
     considered unhoused  if the  students attend  school in                                                                    
     temporary facilities;                                                                                                      
     (C)   protect   the   structure  of   existing   school                                                                    
     facilities;                                                                                                                
     (D)  correct building  code  deficiencies that  require                                                                    
     major  repair  or  rehabilitation   in  order  for  the                                                                    
     facility  to continue  to be  used for  the educational                                                                    
     program;                                                                                                                   
     (E) achieve an operating cost savings;                                                                                     
     (F) modify  or rehabilitate facilities for  the purpose                                                                    
     of improving the instructional program;                                                                                    
     (G) meet an  educational 1 need not specified  in (A) -                                                                    
     (F) of this paragraph, identified by the department;                                                                       
     (2) prepare an  estimate of the amount  of money needed                                                                    
     to finance each project;                                                                                                   
     (3) provide to the governor,  by November 1, and to the                                                                    
     legislature within  the first  10 days of  each regular                                                                    
     legislative  session, a  revised  and updated  six-year                                                                    
     capital  improvement project  grant schedule,  together                                                                    
     with a proposed schedule of appropriations;                                                                                
     (4) encourage  each school  district to  use previously                                                                    
     approved school construction  design plans and building                                                                    
     systems if the use will  result in cost savings for the                                                                    
     project;                                                                                                                   
     (5)   consider  the   regionally  based   model  school                                                                    
     standards developed under AS 14.11.017(d).                                                                                 
                                                                                                                                
     * Sec. 2. AS 14.11.013(b) is amended to read:                                                                              
     (b) In  preparing the construction grant  schedule, the                                                                    
     department  shall establish  priorities among  projects                                                                    
     for which  grants are requested and  shall award school                                                                    
     construction   grants   in   the  order   of   priority                                                                    
     established. In establishing  priorities the department                                                                    
     shall evaluate at least  the following factors, without                                                                    
     establishing an absolute priority for any one factor:                                                                      
     (1) emergency requirements;                                                                                                
     (2)  priorities   assigned  by  the  district   to  the                                                                    
     projects requested;                                                                                                        
     (3) new local elementary and secondary programs;                                                                           
     (4)   existing   regional,    community,   and   school                                                                    
     facilities,  and their  condition; this  paragraph does                                                                    
     not include administrative facilities;                                                                                     
     (5)  the amount  of district  operating funds  expended                                                                    
     for maintenance; [AND]                                                                                                     
     (6) other  options that would  reduce or  eliminate the                                                                    
     need for the request;                                                                                                      
     (7) the  district's use  of previously  approved school                                                                    
     construction design  plans and building systems  if the                                                                    
     use will result in cost savings for the project; and                                                                       
     (8) consideration  of regionally  1 based  model school                                                                    
     standards under AS 14.11.017(d).                                                                                           
                                                                                                                                
     * Sec. 3. AS 14.11.013(c) is amended to read:                                                                              
     (c) The department may                                                                                                     
     (1) modify a project  request when necessary to achieve                                                                    
     cost-effective school construction;                                                                                        
     (2)  require  that  a school  construction  project  be                                                                    
     phased   for   purposes   of  planning,   design,   and                                                                    
     construction;  [AND] (3)  reject  project requests  and                                                                    
     omit them from the six-year schedule due to                                                                                
     (A)  incomplete information  or documentation  provided                                                                    
     by the                                                                                                                     
     district;                                                                                                                  
     (B)  a determination  by the  department that  existing                                                                    
     facilities   can    adequately   serve    the   program                                                                    
     requirements, or  that alternative projects are  in the                                                                    
     best interests of the state;                                                                                               
     (C)  a determination  that the  project is  not in  the                                                                    
     best interest of the state; and                                                                                            
     (4) require that a  school construction project include                                                                    
     all  or  part  of  the regionally  based  model  school                                                                    
     standards  developed  under  AS 14.11.017(d)  or  reuse                                                                    
     previously approved  design plans and  building systems                                                                    
     that would result in capital  or operating cost savings                                                                    
     for the project.                                                                                                           
                                                                                                                                
     *  Sec. 4.  AS 14.11.017  is  amended by  adding a  new                                                                    
     subsection to read:                                                                                                        
     (d)  The  department  shall  develop  and  periodically                                                                    
     update  regionally  based   model  school  construction                                                                    
     standards  that  describe acceptable  building  systems                                                                    
     and  anticipated  costs  and  establish  school  design                                                                    
     ratios to  achieve efficient and  cost-effective school                                                                    
     construction.   In   developing  the   standards,   the                                                                    
     department  shall consider  the standards  and criteria                                                                    
     developed under AS 14.11.014(b)."                                                                                          
                                                                                                                                
     Page 1, line 5:                                                                                                            
     Delete "Section 1"                                                                                                         
     Insert "Sec. 5"                                                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
Vice-Chair Bishop OBJECTED for discussion.                                                                                      
                                                                                                                                
Co-Chair  MacKinnon explained  the  amendment. She  detailed                                                                    
the legislature had been going  through a process for over a                                                                    
decade looking at schools and  how schools were built across                                                                    
Alaska.  The research  had been  to determine  whether there                                                                    
was a different  way the state could do  business that would                                                                    
allow designs  to be  reused and  building components  to be                                                                    
standardized.  A  study  had been  done  by  the  department                                                                    
[Department  of   Education  and  Early   Development]  that                                                                    
specified the changes would not  bring a cost savings unless                                                                    
multiple schools were being built.  There were three schools                                                                    
on the  REAA list in the  same district that were  all being                                                                    
built and  had developed  designs independent of  each other                                                                    
that were  costing the state  $30 million, $35  million, and                                                                    
$40  million-plus  schools.   The  amendment  established  a                                                                    
guideline - if districts allowed  and under the direction of                                                                    
the department - to organize and  try to save the state some                                                                    
money in  design development and building  construction. She                                                                    
relayed  a  process  had  been   conducted  and  the  review                                                                    
committee had  rejected the process  with cost  savings. She                                                                    
asked the department to address the committee.                                                                                  
                                                                                                                                
3:17:26 PM                                                                                                                    
                                                                                                                                
TIM MEARIG, FACILITIES MANAGER,  DEPARTMENT OF EDUCATION AND                                                                    
EARLY DEVELOPMENT  (DEED), relayed the  amendment introduced                                                                    
a  couple  of  provisions  not  currently  in  statute.  The                                                                    
amendment allowed  the opportunity  to develop  the criteria                                                                    
for regionally based model  school construction standards in                                                                    
a  new  paragraph  under  AS  14.11.017(d),  Section  4.  He                                                                    
believed  the  opportunity  to  develop  the  standards  and                                                                    
describe acceptable  building systems  to be used  in Alaska                                                                    
schools was  positive and would allow  the state, districts,                                                                    
and  department to  work  collaboratively.  He detailed  the                                                                    
provision  impacted   other  areas   of  the  bill   as  the                                                                    
department analyzed school  construction grant applications.                                                                    
The other  provision was  based around  considering previous                                                                    
school designs and when they  could appropriately be used in                                                                    
establishing a  design for another  school. There  were some                                                                    
additional provisions in the amendment  that would allow the                                                                    
department   to   encourage,   measure,  and   enforce   the                                                                    
consideration of when previous  school designs could be used                                                                    
when designing other schools.                                                                                                   
                                                                                                                                
Co-Chair MacKinnon asked whether  her staff had been working                                                                    
with Mr.  Mearig on  the amendment.  Mr. Merrick  replied in                                                                    
the affirmative.                                                                                                                
                                                                                                                                
3:19:27 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  WITHDREW the  OBJECTION. There  being NO                                                                    
further OBJECTION, Amendment 1 was ADOPTED.                                                                                     
                                                                                                                                
Co-Chair MacKinnon asked if Ms.  Pierson had any comments on                                                                    
Amendment  1.  Ms.   Pierson  reported  that  Representative                                                                    
Foster was amenable to the amendment.                                                                                           
                                                                                                                                
Senator  Micciche  spoke  about  the  materials  components,                                                                    
construction   experience,  and   transportation  of   goods                                                                    
related to school  construction. He asked if  the items were                                                                    
something DEED would look at in the future to reduce costs.                                                                     
Mr.   Mearig  answered   that  the   provision  to   develop                                                                    
regionally  based  model  school  standards  would  help  to                                                                    
identify best  practices in the  areas mentioned  by Senator                                                                    
Micciche   as  well,   including   logistics  and   systems.                                                                    
Specifically,  the department  was looking  at standards  of                                                                    
acceptable building systems and  associated costs as well as                                                                    
design ratios that would  achieve efficiency. The department                                                                    
would  measure  things  like the  exterior  envelope  square                                                                    
footage for  the building volume to  identify an appropriate                                                                    
building efficiency.  For example, the process  would ensure                                                                    
a building  did not  end up  with 100  corners. Many  of the                                                                    
costs  mentioned by  Senator Micciche  were not  necessarily                                                                    
things that were  easy for DEED to develop  in standards. He                                                                    
explained  that mobilization  and  shipping  costs would  be                                                                    
difficult  for  DEED  to control.  However,  the  department                                                                    
understood  that   the  heavier   the  material,   the  more                                                                    
expensive the school would be to construct.                                                                                     
                                                                                                                                
Vice-Chair  Bishop appreciated  the amendment.  He asked  if                                                                    
DEED worked  with the Cold  Climate Housing  Research Center                                                                    
(CCHRC) at  the University of  Alaska and whether  that work                                                                    
would  be  incorporated  into  actions  directed  under  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Mr.  Mearig  responded that  DEED  had  not had  significant                                                                    
interaction with  CCHRC with  regard to  commercial building                                                                    
and  schools. He  followed CCHRC's  work and  believed there                                                                    
was  good  opportunity  for collaboration  between  the  two                                                                    
entities in regard to actions under the amendment.                                                                              
                                                                                                                                
Co-Chair   MacKinnon  suggested   that  the   Alaska  Energy                                                                    
Authority (AEA) may be another  natural partner to help with                                                                    
weatherization of  the commercial buildings. She  noted that                                                                    
sometimes there  was a substantial  amount of glass  used in                                                                    
the buildings. Part of the  problem she had with the current                                                                    
design  process  was  that  the  architect  chose  what  the                                                                    
building would  look like and sometimes  beautiful entrances                                                                    
were created that were not  functionally compatible with the                                                                    
climate. She hoped  the amendment would enable  DEED to work                                                                    
with districts  to obtain a beautiful  and functional school                                                                    
design.                                                                                                                         
                                                                                                                                
Co-Chair MacKinnon  communicated the  committee did  not yet                                                                    
have the fiscal note for  the bill, which she believed would                                                                    
be around $300,000.  She believed the bill  would report out                                                                    
the following day.                                                                                                              
                                                                                                                                
CSHB 212(RLS)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
3:24:34 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:25:37 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 142                                                                                                           
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,       supplemental      appropriations,                                                                    
     reappropriations,  and   other  appropriations;  making                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
3:26:15 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  reported the  bill  had  been heard  on                                                                    
April 26, 2018  when the public hearing had  been opened and                                                                    
closed.                                                                                                                         
                                                                                                                                
Vice-Chair Bishop  MOVED to  ADOPT the  committee substitute                                                                    
for SB 142, Work Draft 30-GS2565\R (Martin, 5/7/18).                                                                            
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
3:26:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:27:51 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
LAURA  CRAMER, STAFF,  SENATOR  ANNA MACKINNON,  highlighted                                                                    
the changes in  the CS. Page 3, line 18  included $2 million                                                                    
for  the  Alaska  Travel Industry  Association  for  tourism                                                                    
marketing  and development.  Page 4,  line 31  included $2.5                                                                    
million   for  the   Wrangell  junkyard   contaminated  site                                                                    
cleanup. Page 5,  line 19 included $300,000  for vessels and                                                                    
aircraft   maintenance,  repair,   and   upgrades  for   the                                                                    
Department of  Fish and Game (DFG).  She detailed originally                                                                    
the item had been in the  bill's language section and due to                                                                    
incorrect  information from  DFG the  lapsing funds  were no                                                                    
longer available; therefore, the item  had been moved to the                                                                    
numbers section  of the bill.  Page 7, line 33  through page                                                                    
8, line  4 included $750,000  for the Department  of Natural                                                                    
Resources for  legal and financial due  diligence associated                                                                    
with  the  AKLNG  project.  Page  8,  lines  29  through  31                                                                    
included $750,000  for the Department  of Revenue  for legal                                                                    
and  financial  due  diligence  associated  with  the  AKLNG                                                                    
project. Page  9, line  23 pertained  to the  Alaska Housing                                                                    
Finance  Corporation  (AHFC)   Weatherization  Program.  She                                                                    
elaborated the  previous bill  version had  erroneously left                                                                    
the  increment  out  of the  bill's  language  section;  the                                                                    
numbers had  been correct,  but the  increment had  not been                                                                    
listed in the bill.                                                                                                             
                                                                                                                                
Ms. Cramer continued  to outline the changes in  the CS. She                                                                    
moved  to  page 10,  line  18  that included  other  federal                                                                    
program  match  for  the Department  of  Transportation  and                                                                    
Public  Facilities (DOT).  The item  had been  added to  the                                                                    
numbers section  due to  a reduction  in lapsing  funds from                                                                    
AHFC in the Home Energy  Rebate Program. Originally the item                                                                    
had been located  in the language section -  a reduction had                                                                    
caused the change in the  numbers section of the current CS.                                                                    
Page 10, line  20 included an adjustment to  the federal aid                                                                    
highway state  match due to some  reappropriations that were                                                                    
no longer available.  Page 17, lines 10  through 13 included                                                                    
$75,000 for community and neighborhood  watch programs to be                                                                    
distributed as  grants through  the Department  of Commerce,                                                                    
Community and  Economic Development  (DCCED). Page  17, line                                                                    
14  included  $60,000  for  the   City  of  Nenana  for  the                                                                    
financial  review  and  analysis  of  its  city  financials.                                                                    
Currently  the city  was unable  to  receive some  community                                                                    
assistance  due  to some  issues  with  its financials;  the                                                                    
increment would enable  DCCED to work with  Nenana to ensure                                                                    
financials  were in  order prior  to distributing  community                                                                    
assistance funds.                                                                                                               
                                                                                                                                
Ms. Cramer  moved to the  next change  on page 17,  lines 20                                                                    
through  22 included  $250,000 for  a study  for the  Health                                                                    
Care Transformation  Project - the  next step in  the health                                                                    
care authority  feasibility study,  which would  bring along                                                                    
patients,  providers, and  policy makers.  Page 17,  line 25                                                                    
included $500,000 for the  Hillcrest subdivision clean water                                                                    
improvement  district   to  help  with   contaminated  water                                                                    
systems.  Page  17,  line  28 included  $2  million  to  the                                                                    
Anchorage Police Department  for crime prevention, response,                                                                    
and  equipment.   Page  18  included   $2  million   to  the                                                                    
Department of Public Safety  for crime prevention, response,                                                                    
and equipment.  Page 35 included  backstop language  for DOT                                                                    
reappropriations   for  federal   aid  highway   match.  The                                                                    
language had  been included in  the capital budget  the last                                                                    
year  as well.  The language  designated that  general funds                                                                    
would  be  used  to  match  federal  funds  if  any  project                                                                    
reappropriation balances fell short.                                                                                            
                                                                                                                                
3:33:12 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  for the  page number.  Ms. Cramer                                                                    
replied the  change appeared  on page  35, lines  10 through                                                                    
14.                                                                                                                             
                                                                                                                                
Ms.  Cramer continued  to  address changes  in  the CS.  She                                                                    
turned  to page  36, lines  3 through  19 that  included the                                                                    
reappropriation  of funds  that had  been reappropriated  in                                                                    
the  previous  year to  the  greater  Lynn Canal  area.  The                                                                    
balance  of $21.2  million was  reappropriated  back to  the                                                                    
Juneau Access project. The final  change was located on page                                                                    
37, line  3 through 9,  where the remaining balance  for the                                                                    
Friends of  the Jesse  Lee Home  to the  City of  Seward for                                                                    
site remediation.                                                                                                               
                                                                                                                                
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
further OBJECTION, Work Draft 30-GS2565\R was ADOPTED.                                                                          
                                                                                                                                
3:34:42 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  shared that it  was difficult to  be the                                                                    
committee  chair when  there was  no  money for  communities                                                                    
around  the  state.  She  had  tried  to  help  the  limited                                                                    
requests where  possible in  the CS.  She remarked  that the                                                                    
bill  contained  no  personal  discretionary  spending.  She                                                                    
reported the budget prioritized  public safety and health in                                                                    
some  communities. She  noted  that  the Wrangell  [junkyard                                                                    
contamination  cleanup] project  was  $5  million, not  $2.5                                                                    
million. She  explained that  if the  House added  the other                                                                    
$2.5 million, the project would  move forward. She continued                                                                    
that the budget was funded  with Alaska's savings account to                                                                    
provide for the  people of Alaska in broad  ways. The budget                                                                    
went  a long  way in  using the  limited funds  to create  a                                                                    
budget of  over $1 billion  in combination with  federal and                                                                    
other funds.  She would provide the  difference to committee                                                                    
members  and believed  it was  substantially lower  than the                                                                    
administration's request.  She reported there was  no joy in                                                                    
passing a budget that was  smaller than the administration's                                                                    
request,  but  it  reflected the  practical  fact  that  the                                                                    
legislature  was having  to draw  every dollar  from savings                                                                    
accounts;  there were  some things  absent  from the  budget                                                                    
that were important to many people.                                                                                             
                                                                                                                                
3:36:41 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  thanked Co-Chair MacKinnon and  her staff                                                                    
for bringing the  CS forward. He believed  the committee had                                                                    
been responsive  to public  testimony; it  had done  what it                                                                    
could with the means available.                                                                                                 
                                                                                                                                
Senator Micciche  agreed with Vice-Chair  Bishop's comments.                                                                    
He thanked Co-Chair  MacKinnon and her staff  for their hard                                                                    
work.                                                                                                                           
                                                                                                                                
Co-Chair  MacKinnon  thanked  her   chief  of  staff,  Laura                                                                    
Cramer.  She  felt  that  Ms.   Cramer  had  succinctly  and                                                                    
accurately represented  the changes  requested in  the bill.                                                                    
She  acknowledged there  were many  things requested  by the                                                                    
committee  that   were  not  included   in  the   bill.  She                                                                    
reiterated   that  the   bill  did   not  contain   personal                                                                    
recommendations or  discretionary money. The  bill reflected                                                                    
a fairly  straight forward  and back  to the  basics budget.                                                                    
She thanked  Legislative Legal Services and  the Legislative                                                                    
Finance Division for their work.                                                                                                
                                                                                                                                
3:39:05 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop remarked that it  was a $1 billion budget,                                                                    
but when accounting for the  multiplier effect that went out                                                                    
through the economy and construction  projects, it got to be                                                                    
a good-sized number.                                                                                                            
                                                                                                                                
Co-Chair  MacKinnon   reported  that  the   budget  invested                                                                    
$148,642,900  in projects  throughout  Alaska and  leveraged                                                                    
for a  total budget of  $1,461,960,200. The budget  was $265                                                                    
million less than the governor's request.                                                                                       
                                                                                                                                
Vice-Chair  Bishop  MOVED to  REPORT  CSSB  142(FIN) out  of                                                                    
committee  with individual  recommendations. There  being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSSB  142(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation.                                                                                                           
                                                                                                                                
3:40:28 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:42:24 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon reviewed the schedule for the following                                                                      
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
3:42:58 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:42 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 212 SCS FIN work draft version M.pdf SFIN 5/7/2018 2:00:00 PM
HB 212
HB 212 SCS FIN v. M Explanation.pdf SFIN 5/7/2018 2:00:00 PM
HB 212