Legislature(2019 - 2020)SENATE FINANCE 532

03/14/2019 09:00 AM FINANCE

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Audio Topic
09:03:37 AM Start
09:05:25 AM SB20
09:10:59 AM SB38
09:41:52 AM Public Testimony
10:09:04 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 20 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= SB 38 APPROP: SUPP; CAP; DISASTER RELIEF TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 14, 2019                                                                                            
                         9:03 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:03:37 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate Finance Committee                                                                            
meeting to order at 9:03 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Natasha von Imhof, Co-Chair                                                                                             
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Click Bishop                                                                                                            
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Mike Shower                                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
David  Teal, Director,  Legislative Finance  Division; Lacey                                                                    
Sanders, Budget  Director, Office of Management  and Budget;                                                                    
Pete  Ecklund, Staff,  Senator Bert  Stedman; Senator  Cathy                                                                    
Giessel.                                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Bryan Fisher, Emergency Program Manager, Department of                                                                          
Military and Veterans Affairs, Anchorage.                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 20     APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          SB 20 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SB 38     APPROP: SUPP; CAP; DISASTER RELIEF                                                                                    
                                                                                                                                
          SB 38 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SENATE BILL NO. 20                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;  making appropriations  under art.  IX,                                                                    
     sec. 17(c),  Constitution of the State  of Alaska, from                                                                    
     the constitutional  budget reserve fund;  and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
Co-Chair Stedman discussed housekeeping.                                                                                        
                                                                                                                                
9:05:25 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof MOVED to ADOPT  the committee substitute                                                                    
for SB 20, Work Draft 31-GS1905\S (Bruce, 3/11/19).                                                                             
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
9:06:01 AM                                                                                                                    
                                                                                                                                
DAVID   TEAL,   DIRECTOR,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
explained the  committee substitute.  He stated that  it was                                                                    
designed to simplify the  amendment process by incorporating                                                                    
all the superficial changes to  the bill before that process                                                                    
began. He  noted that  the Office  of Management  and Budget                                                                    
(OMB)  had reviewed  the  changes to  the  document and  had                                                                    
agreed  that the  cs  retained the  original  intent of  the                                                                    
governors    proposal  and   that   the  transactions   were                                                                    
identical to version  M. He noted that there  was a document                                                                    
on  the  internet  that   showed  the  significant  language                                                                    
differences between versions M and S.                                                                                           
                                                                                                                                
9:07:45 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman stated  that the  committee substitute  be                                                                    
amending  version  S  and then  would  craft  the  committee                                                                    
version of the bill in several weeks.                                                                                           
                                                                                                                                
9:08:12 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  REMOVED  the OBJECTION.  There  being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SB  20  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:08:34 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:10:10 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 38                                                                                                            
                                                                                                                                
     "An  Act making  supplemental  appropriations for  fire                                                                    
     suppression   activities   and   restoration   projects                                                                    
     relating  to earthquake  disaster relief;  capitalizing                                                                    
     funds; and providing for an effective date."                                                                               
                                                                                                                                
9:10:59 AM                                                                                                                    
                                                                                                                                
LACEY  SANDERS, BUDGET  DIRECTOR, OFFICE  OF MANAGEMENT  AND                                                                    
BUDGET,  discussed  the  presentation,  "38  38  -  Disaster                                                                    
Relief Supplemental Overview" (copy on file).                                                                                   
                                                                                                                                
9:11:17 AM                                                                                                                    
                                                                                                                                
Ms.   Sanders   looked   at  Slide   3,   "FY2019   Disaster                                                                    
Supplemental Bill":                                                                                                             
                                                                                                                                
     ? 2018 Cook Inlet Earthquake                                                                                               
          ? Disaster Relief Fund Capitalization                                                                                 
         ? Federal Highway Administration Funding                                                                               
          ? State Facilities Costs Not Covered by Insurance                                                                     
     ? FY2019 Fire Suppression Activity                                                                                         
                                                                                                                                
She  stressed  the  urgency  of   moving  the  bill  forward                                                                    
quickly. The bill  requested a total of  general and federal                                                                    
funds of $139,304.0; $37,301.7  in general funds, $102,002.3                                                                    
in federal funds.                                                                                                               
                                                                                                                                
9:12:44 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders  highlighted  Slide 4,  "Disaster  Supplemental                                                                    
Historical  Comparison."  The  slide  offered  a  historical                                                                    
summary  of disaster  supplemental appropriations  from FY14                                                                    
to FY 19, in general fund and federal funds.                                                                                    
                                                                                                                                
9:13:12 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders addressed  Slide 5,  "Disaster  Relief FY  2019                                                                    
Supplemental   Request  ($   Thousands)."  She   listed  the                                                                    
requests:                                                                                                                       
                                                                                                                                
DNR                                                                                                                             
Fire Suppression Activity (Language)                                                                                            
$7,900.0 UGF                                                                                                                    
                                                                                                                                
DOT&PF                                                                                                                          
Earthquake  Response, Repair  and  Rebuild Multi-Year  FY19-                                                                    
FY20  -  $65  million   estimate  with  $6.5  million  match                                                                    
requirement  FHWA (Language)                                                                                                    
$6,500.0 UGF                                                                                                                    
$65,000.0 FED                                                                                                                   
                                                                                                                                
DOT&PF                                                                                                                          
Earthquake   Response,   Repair   and  Rebuild   for   State                                                                    
Facilities (Language)                                                                                                           
$1,000.0 UGF                                                                                                                    
                                                                                                                                
Fund Cap                                                                                                                        
Capitalization of the Disaster Relief Fund (Language)                                                                           
$21,901.7 UGF                                                                                                                   
$46,002.3 FED                                                                                                                   
                                                                                                                                
Ms.  Sanders  that the  Alaska  Department  of Military  and                                                                    
Veterans   Affairs  (DMVA),  which  manages  the  fund,  had                                                                    
provided OMB  information that reduced the  fund cap request                                                                    
to $12.2 million;  however, OMB wanted to  move forward with                                                                    
the $21 million request and  use the $9 million for response                                                                    
to future disasters.                                                                                                            
                                                                                                                                
9:15:56 AM                                                                                                                    
                                                                                                                                
Co-Chair  von Imhof  noted  the extra  $9  million for  fund                                                                    
capitalization  and   queried  the  regularity   of  forward                                                                    
funding for future disasters.                                                                                                   
                                                                                                                                
9:16:17 AM                                                                                                                    
                                                                                                                                
Ms. Sanders  replied that  there was  not a  typical request                                                                    
level.  She understood  that in  FY19,  the legislature  had                                                                    
deposited an additional  $10 million into the  fund to raise                                                                    
the  fund balance  to a  sustainable amount.  She said  that                                                                    
amounts in  prior years had  been low. The extra  $9 million                                                                    
would  allow  the  department  to  respond  to  now  unknown                                                                    
emergency needs throughout the state.                                                                                           
                                                                                                                                
9:17:43 AM                                                                                                                    
                                                                                                                                
Senator Shower  asked what happened  to the money if  it was                                                                    
not used by the end of the fiscal year.                                                                                         
                                                                                                                                
9:17:45 AM                                                                                                                    
                                                                                                                                
Ms. Sanders replied that it would  stay in the fund until it                                                                    
was utilized for a specific disaster.                                                                                           
                                                                                                                                
Senator Shower  asked whether extra  funds rolled  over from                                                                    
year to year.                                                                                                                   
                                                                                                                                
Ms. Sanders replied in the affirmative.                                                                                         
                                                                                                                                
9:18:04 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked whether the fund was sweepable.                                                                          
                                                                                                                                
9:18:07 AM                                                                                                                    
                                                                                                                                
Ms. Sanders replied no.                                                                                                         
                                                                                                                                
9:18:17 AM                                                                                                                    
                                                                                                                                
Senator  Bishop thought  that much  of the  work that  would                                                                    
need to  be done would  not be  seen until after  the spring                                                                    
thaw. He  wondered whether contingencies  had been  built in                                                                    
to avoid another disaster supplemental in FY21.                                                                                 
                                                                                                                                
9:19:06 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders   understood  that  the  request   from  DOT&PF                                                                    
considered  what would  be needed  for roads  as the  spring                                                                    
thaw occurred. She  added that there could  be an additional                                                                    
request in  FY20. She stated  that DMVA was working  an what                                                                    
those additional costs  could be and would  provide OMB with                                                                    
the information.                                                                                                                
                                                                                                                                
9:19:55 AM                                                                                                                    
                                                                                                                                
Co-Chair    Stedman   explained    that   this    fast-track                                                                    
supplemental  budget  had  an earlier  effective  date.  The                                                                    
committee  still  needed  to work  on  the  FY  Supplemental                                                                    
Budget  and could  use that  as a  vehicle to  provide extra                                                                    
funds after the spring that.                                                                                                    
                                                                                                                                
9:20:38 AM                                                                                                                    
                                                                                                                                
Senator Micciche understood  that approximately $140 million                                                                    
of  the  $148  million  of the  fund  was  dedicated  toward                                                                    
response  and the  capitalization of  the fund.  He wondered                                                                    
about the  total of the $140  million of fund that  would be                                                                    
spent on the earthquake response.                                                                                               
                                                                                                                                
Ms. Sanders  asked whether he was  referring specifically to                                                                    
the Disaster Relief Fund.                                                                                                       
                                                                                                                                
Senator  Micciche  clarified that  there  was  a request  to                                                                    
capitalize on the fund; additionally,  there was the request                                                                    
for earthquake  response. He assumed  that OMB  assumed that                                                                    
part  of the  Disaster Relief  Funds would  be spend  in the                                                                    
response.                                                                                                                       
                                                                                                                                
9:21:19 AM                                                                                                                    
                                                                                                                                
Ms. Sanders  replied that  the maximum  number that  she had                                                                    
received that  applied to the  Disaster Relief Fund  was $60                                                                    
million  in total  state cost.  She said  that the  cost was                                                                    
dependent  on   what  would  be   covered  by   the  federal                                                                    
government. She reiterated the DMVA  was working through the                                                                    
analysis  to determine  what the  additional need  could be.                                                                    
She noted that  there was existing funding in  the fund that                                                                    
had been  obligated. She repeated  that the ask was  for $12                                                                    
million,  with an  additional $9.7  that  could be  utilized                                                                    
toward the  Cook Inlet  earthquake if  needed. There  was an                                                                    
anticipation that  there may  be the  need for  more general                                                                    
funds to  be deposited into  the fund,  but that it  had not                                                                    
been determined what that need would be.                                                                                        
                                                                                                                                
9:22:25 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof expressed concern about  the possibility                                                                    
that  millions  of  dollars more  could  be  requested.  She                                                                    
queried  the  evaluation  process  being  used  to  approach                                                                    
repairing buildings damaged by the earthquake.                                                                                  
                                                                                                                                
9:23:27 AM                                                                                                                    
Ms.  Sanders  referred the  question  to  Bryan Fisher  from                                                                    
DMVA.                                                                                                                           
                                                                                                                                
9:23:55 AM                                                                                                                    
                                                                                                                                
BRYAN  FISHER,  EMERGENCY  PROGRAM  MANAGER,  DEPARTMENT  OF                                                                    
MILITARY    AND    VETERANS   AFFAIRS,    ANCHORAGE,    (via                                                                    
teleconference),  related  that   schools  affected  by  the                                                                    
earthquake in  Eagle River  and Anchorage  were going  to be                                                                    
repaired in-place. He said that  cost analysis had been done                                                                    
about  whether  to  shutter  or repair  them  and  that  the                                                                    
analysis had  shown that repairs  to the  standing buildings                                                                    
would be  most cost effective.  He said that  the department                                                                    
and  the  school  district  would   work  with  the  Federal                                                                    
Emergency  Management Agency  (FEMA) to  determine the  most                                                                    
reasonable and cost-effective method going forward.                                                                             
                                                                                                                                
9:25:50 AM                                                                                                                    
                                                                                                                                
Co-Chair  von Imhof  thought  that  the most  cost-effective                                                                    
thing  to do  would be  to consolidate  schools and  capture                                                                    
excess  capacity, and  not to  repair the  two schools.  She                                                                    
thought  that a  list of  the roads  that were  going to  be                                                                    
repaired  with earthquake  funds should  be compared  to the                                                                    
list of  roads that were  going to be repaired  with Capital                                                                    
Budget   funds,  to   assure   that  there   were  not   any                                                                    
redundancies.                                                                                                                   
                                                                                                                                
9:26:17 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  said that  the list  could be  provided to                                                                    
the committee. He believed  that further conversation should                                                                    
be had about consolidation versus rebuilding.                                                                                   
                                                                                                                                
9:27:06 AM                                                                                                                    
                                                                                                                                
Senator Shower  asked if the  same comparison could  be made                                                                    
for Huston.                                                                                                                     
                                                                                                                                
9:27:28 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman said  that the road repairs  for the entire                                                                    
earthquake  zone  could  be  compared  to  already  existing                                                                    
capital  projects  in  order to  wed  out  redundant  repair                                                                    
projects.                                                                                                                       
                                                                                                                                
9:27:37 AM                                                                                                                    
Senator  Micciche   understood  that   the  money   OMB  was                                                                    
requesting was not related to  school repair but was related                                                                    
to road and state facility repairs.                                                                                             
                                                                                                                                
9:27:55 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders responded  that the  Disaster  Relief Fund  was                                                                    
utilized to respond to disasters,  the Cook Inlet earthquake                                                                    
was  declared  a  disaster,  schools  could  apply  for  the                                                                    
funding.                                                                                                                        
                                                                                                                                
9:28:25 AM                                                                                                                    
                                                                                                                                
Senator Micciche  asked whether the  fund could be  used for                                                                    
residential damage.                                                                                                             
                                                                                                                                
9:28:30 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders  deferred to  DMVA  but  believed that  private                                                                    
residents could apply for relief through the fund.                                                                              
                                                                                                                                
9:28:52 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders  looked  at  Slide  6,  "Disaster  Relief  Fund                                                                    
Snapshot."  She shared  that the  point-in-time snapshot  on                                                                    
                                                           st                                                                   
the slide  showed the  fund balance  history as  of July  1                                                                     
each year.                                                                                                                      
                                                                                                                                
9:29:20 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders  highlighted  Slide 7,  "Disaster  Relief  Fund                                                                    
Snapshot":                                                                                                                      
                                                                                                                                
     ? Fund Balance as of March 5, 2019                                                                                         
          ? $362.9 (GF)                                                                                                         
     ? Fund will be full expended by April 1, 2019                                                                              
                                                                                                                                
9:29:41 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski  asked who  had the discretion  to make                                                                    
payouts from  the fund. He  asked whether the  payments were                                                                    
done  through  request  for proposal  or  were  sole  source                                                                    
contracts issued.                                                                                                               
                                                                                                                                
9:29:54 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders replied  that  DMVA  administered the  disaster                                                                    
relief funds. She deferred to DMVA.                                                                                             
                                                                                                                                
9:30:36 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders discussed  Slide 8,  "  Disaster Relief  FY2019                                                                    
Supplemental Amendments ($ Thousands)":                                                                                         
                                                                                                                                
     ? Department of Transportation and Public Facilities -                                                                     
     $1,000.0 UGF                                                                                                               
          ?    Surface     transportation    "administrative                                                                    
          activities"  not covered  by  the Federal  Highway                                                                    
          Administration   (FHWA)   and  Federal   Emergency                                                                    
          Management Agency (FEMA)                                                                                              
     ? Department of Labor and Workforce Development -                                                                          
     $1,000.0 FED                                                                                                               
          ?  Disaster  Unemployment   Assistance  Program  -                                                                    
          assistance  to  individuals  whose  employment  or                                                                    
          self-employment has been lost  or interrupted as a                                                                    
          direct result of a major disaster                                                                                     
                                                                                                                                
9:32:11 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski asked whether any  of the DOT funds had                                                                    
already  been spent,  and if  so, where  had the  money been                                                                    
spent.                                                                                                                          
                                                                                                                                
Ms. Sanders  replied that some  of the money had  been spent                                                                    
on  response  to  disaster needs.  She  offered  to  provide                                                                    
information detailing where the expenditures had been made.                                                                     
                                                                                                                                
9:33:00 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski was curious  whether the funds had been                                                                    
spent within the agency or on private contractors.                                                                              
                                                                                                                                
9:33:10 AM                                                                                                                    
                                                                                                                                
Ms. Sanders  assured the committee  that the money  had been                                                                    
spent within the agency.                                                                                                        
                                                                                                                                
Senator  Wielechowski   assumed  that  the   positions  were                                                                    
already salaried and wondered if  the funds were being spent                                                                    
for overtime services.                                                                                                          
                                                                                                                                
Ms. Sanders said  that the employees of  the department were                                                                    
project  specific and  their  time had  to  be allocated  to                                                                    
individual  projects. Those  projects could  not be  used to                                                                    
cover  other   costs  within  the  agency,   so  areas  were                                                                    
identified  where employees  were not  able to  charge their                                                                    
current  salaries  to  a   specific  project  because  those                                                                    
projects were covered with general  funds and not as a long-                                                                    
term capital project.                                                                                                           
                                                                                                                                
9:33:43 AM                                                                                                                    
                                                                                                                                
Senator Bishop  said that some  of the work that  would need                                                                    
to be done was going to  be a match to federal authority. He                                                                    
asked what the  $1 million in federal dollars  could be used                                                                    
for.                                                                                                                            
                                                                                                                                
9:34:20 AM                                                                                                                    
                                                                                                                                
Ms. Sanders understood  that the funds would be  used to pay                                                                    
for potential wages lost during the disaster.                                                                                   
                                                                                                                                
9:34:42 AM                                                                                                                    
                                                                                                                                
Co-Chair  von  Imhof  thought   that  capital  projects  had                                                                    
declined as  a result  of the  shrinking Capital  Budget and                                                                    
wondered about  project specific  employees in  a department                                                                    
that might not have many projects.                                                                                              
                                                                                                                                
9:35:10 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders said  that the  yearly Capital  Budget included                                                                    
significant highway funding and  funding for inspections for                                                                    
various   infrastructure.    She   said    that   additional                                                                    
information  on  the  departments  position  control  number                                                                    
(PCN) count.                                                                                                                    
                                                                                                                                
9:35:41 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  did not  think the  additional information                                                                    
would  be necessary.  He said  that the  Capital Budget  had                                                                    
been minimized  down to federal  match over time.  He stated                                                                    
that  there had  not  been  an excess  revue  stream to  add                                                                    
projects  to  the  budget. He  understood  that  DOT&PF  had                                                                    
trouble crossing appropriation lines  or moving money around                                                                    
in its budget.                                                                                                                  
                                                                                                                                
9:36:28 AM                                                                                                                    
                                                                                                                                
Ms.  Sanders  explained  that  there  were  restrictions  on                                                                    
crossing the  appropriation lines. She did  not know whether                                                                    
those restrictions extended to  the $1 million in questions.                                                                    
She said that  the request was to cover costs  that were not                                                                    
associated with projects for employees  that were doing work                                                                    
related to the Cook Inlet disaster.                                                                                             
                                                                                                                                
9:36:59 AM                                                                                                                    
                                                                                                                                
Senator  Wilson requested  details of  where the  department                                                                    
was spending money and for a list of disaster projects.                                                                         
                                                                                                                                
9:37:28 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman   said  that  the  information   would  be                                                                    
provided to the committee.                                                                                                      
                                                                                                                                
9:37:48 AM                                                                                                                    
                                                                                                                                
Ms. Sanders clarified  that DOT&PF may not  know the exactly                                                                    
which  projects  would be  completed  on  the road,  as  the                                                                    
spring  thaw progressed  the department  would get  a better                                                                    
idea of possible projects. She  said that additional details                                                                    
for administrative activities could be provided.                                                                                
                                                                                                                                
9:38:36 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman requested more  detail on both Supplemental                                                                    
Amendments on Slide 8 on the presentation.                                                                                      
                                                                                                                                
9:39:21 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof MOVED to ADOPT  the committee substitute                                                                    
for SB 38, Work Draft 31-GS1037\U (Caouette, 3/13/19).                                                                          
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
9:39:53 AM                                                                                                                    
                                                                                                                                
PETE  ECKLUND, STAFF,  SENATOR BERT  STEDMAN, explained  the                                                                    
committee  substitute.  He  stated   that  Ms.  Sanders  had                                                                    
already discussed  the two major  changes from  the previous                                                                    
version.  Section  1, page  1  showed  the funding  for  the                                                                    
Disaster Unemployment  Assistance Program.  Page 2  showed a                                                                    
word change on  line 3 that restated the purpose  of the $65                                                                    
million  to  DOT&PF   for  surface  transportation  disaster                                                                    
repair.  Page  2,  line  12, showed  the  amendment  for  $1                                                                    
million  to DOT&PF  for  non-covered service  transportation                                                                    
costs. Finally,  the last change  could be found on  Line 22                                                                    
that  showed that  all of  Section 3  had a  capital project                                                                    
lapse date.                                                                                                                     
                                                                                                                                
9:41:31 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  REMOVED  the OBJECTION.  There  being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
^PUBLIC TESTIMONY                                                                                                             
                                                                                                                                
9:41:52 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman OPENED public testimony.                                                                                       
                                                                                                                                
Co-Chair Stedman requested comments from Mr. Fisher.                                                                            
                                                                                                                                
9:42:10 AM                                                                                                                    
                                                                                                                                
Mr.  Fisher  stated  that  the  agency  was  responsible  to                                                                    
implement  the provisions  of the  Alaska Disaster  Act. The                                                                    
agency  coordinated and  managed funding  from the  Disaster                                                                    
Relief Fund to other  state agencies, local governments, and                                                                    
school districts  for repairs to infrastructure  damaged due                                                                    
to a declared  disaster. He added that the  agency managed a                                                                    
program  on  residential  damages  included  in  the  damage                                                                    
declaration. For the 2018  earthquake, the governor declared                                                                    
both   public   and    individual   assistance.   Individual                                                                    
assistance provided  support to repair essential  areas of a                                                                    
primary residence for homeowners  affected by the earthquake                                                                    
and personal  property loss.  He noted  that on  January 31,                                                                    
2018,  the  President  of the  United  States  had  declared                                                                    
federal funds be  made available for repairs  related to the                                                                    
earthquake. He  said that  the department  was in  the early                                                                    
stages  of  determining  the  cost   of  all  the  necessary                                                                    
repairs.  He expressed  concern  about the  spring thaw  and                                                                    
shared  that   FEMA  had  never   responded  to   a   frozen                                                                    
earthquake   before.   He  related  that  state   and  local                                                                    
governments,  tribal governments,  and certain  private non-                                                                    
profits  that provided  essential  government services  were                                                                    
eligible for  state and  federal disaster  assistance funds.                                                                    
He  furthered that  any of  the infrastructure  damages that                                                                    
were eligible for reimbursement would  be reimbursed on a 75                                                                    
percent  federal, 25  percent state,  cost share.  He shared                                                                    
that  the  public  assistance  program  was  a  reimbursable                                                                    
program,  applicants  were  expected to  complete  projects,                                                                    
then  request a  draw down  from FEMA  and the  state to  be                                                                    
reimbursed  for expenses.  He said  that the  department was                                                                    
required to follow all the  federal OMB guidance procurement                                                                    
regulations, trainings  were currently  happening on  how to                                                                    
perform  proper  procurements.  He  said  that  sole  source                                                                    
contracts were rare. He spoke  to two programs available for                                                                    
individuals seeking  reimbursement for damages  to essential                                                                    
living areas  of a  primary home.  He stated  that temporary                                                                    
housing   assistance   was   also   provided   housing   for                                                                    
individuals  who were  displaced  due to  major damages.  He                                                                    
said  that   there  were  currently,   approximately  14,000                                                                    
applicants for  state program and  6,000 for  FEMA programs.                                                                    
He  related that  the states   administrative code  mandated                                                                    
that when a federal disaster  was declared, residents had to                                                                    
go through  FEMA and the  U.S Small  Business Administration                                                                    
for  potential low  interest loans  before they  could avail                                                                    
themselves of  the state disaster  assistance. He  said that                                                                    
the process  was currently underway. He  said that applicant                                                                    
briefings  were beginning  for  school  districts and  local                                                                    
governments to  develop the scope  of work needed  to repair                                                                    
facilities to  pre-disaster conditions.  He said  that there                                                                    
was potential to  mitigate some of the  damaged buildings to                                                                    
prevent further damage from future earthquakes.                                                                                 
                                                                                                                                
9:49:36 AM                                                                                                                    
                                                                                                                                
Senator Wilson  aske whether there  would be  a supplemental                                                                    
application process after the spring thaw.                                                                                      
                                                                                                                                
9:50:04 AM                                                                                                                    
                                                                                                                                
Mr. Fisher  responded that the state  application period had                                                                    
ended.  The FEMA  registration period  could be  extended to                                                                    
May 31, 2019. He said  that damages that were revealed after                                                                    
the  spring that  would  be cause  for  reassessment of  the                                                                    
situation.                                                                                                                      
                                                                                                                                
9:51:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  von Imhof  asked whether  school  districts had  a                                                                    
deadline  for   submitting  formal  requests   for  specific                                                                    
schools.                                                                                                                        
                                                                                                                                
9:51:38 AM                                                                                                                    
                                                                                                                                
Mr.  Fisher  replied  that school  districts  had  submitted                                                                    
their  initial requests  and were  in the  program. He  said                                                                    
that the agency would work  with districts to make sure that                                                                    
scopes of work  and estimates were developed for  any of the                                                                    
work that needed to be done to any of the facilities.                                                                           
                                                                                                                                
9:52:09 AM                                                                                                                    
                                                                                                                                
Co-Chair   von   Imhof    understood   that,   through   the                                                                    
applications, the agency  had an idea of the  scope of funds                                                                    
needed in the districts.  She wondered whether districts had                                                                    
been asked to provide both a Plan  A and a Plan B. She asked                                                                    
whether any schools would close entirely.                                                                                       
                                                                                                                                
9:53:00 AM                                                                                                                    
                                                                                                                                
Mr.  Fisher  related  that  the   budget  presented  in  the                                                                    
disaster  supplemental  bill  was  based  on  a  preliminary                                                                    
damage assessment  conducted in December 2018.  He said that                                                                    
moving forward, FEMA  would bring in engineers  to work with                                                                    
districts to look at all  damaged buildings to determine the                                                                    
most cost-effective  repairs or  replacements. He  said that                                                                    
the  agencys   primary role  in  that  process would  be  to                                                                    
assure  that  schools  districts  were being  heard  and  to                                                                    
advocate for those districts.                                                                                                   
                                                                                                                                
9:54:31 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof  thought it would be a good  idea for all                                                                    
agencies to work together on  a true effort to control costs                                                                    
and to investigate systems that might be inefficient.                                                                           
                                                                                                                                
9:55:52 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski  declared   a  potential  conflict  of                                                                    
interests.  He  worked  during   the  interim  for  a  labor                                                                    
organization that represented Alaskan  workers. He asked how                                                                    
any of the contracts were  requests for proposal versus sole                                                                    
source contracts.                                                                                                               
                                                                                                                                
9:56:22 AM                                                                                                                    
                                                                                                                                
Mr. Fisher  replied that the contracts  were primarily RFPs.                                                                    
He said  that some  of the earlier  contracts had  been sole                                                                    
source, but  primarily, the  contracts had  been put  out to                                                                    
bid.                                                                                                                            
                                                                                                                                
9:57:21 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski requested  a list  of all  sole source                                                                    
contracts,  who  the  contracts were  awarded  to,  and  the                                                                    
amounts of the contracts.                                                                                                       
                                                                                                                                
Co-Chair  Stedman  asked  what  information  could  be  made                                                                    
available to the committee.                                                                                                     
                                                                                                                                
9:57:37 AM                                                                                                                    
                                                                                                                                
Mr.  Fisher  said that  the  information  would have  to  be                                                                    
collected;  the  contracts  were  done on  an  applicant  by                                                                    
applicant  basis and  local  governments, school  districts,                                                                    
and non-profits  would have the information.  He stated that                                                                    
the  information would  become  available  as the  permanent                                                                    
repair projects and reimbursement projects were completed.                                                                      
                                                                                                                                
9:58:08 AM                                                                                                                    
                                                                                                                                
Senator Shower  asked whether  an update  on the  repairs to                                                                    
the middle school in Huston was available.                                                                                      
                                                                                                                                
9:58:27 AM                                                                                                                    
                                                                                                                                
Mr.  Fisher did  not have  specifics  on the  status of  the                                                                    
middle school. He relayed that  the damage to the school had                                                                    
been significant.  He estimated that if  the building needed                                                                    
to  be  demolished,  and  rebuilt,  funding  could  be  made                                                                    
available  to  bring  the   building  back  to  pre-disaster                                                                    
condition.  He  reported  that  if the  cost  to  bring  the                                                                    
building  back to  pre-disaster condition  in a  repair mode                                                                    
was  greater than  50 percent  of  the cost  to replace  the                                                                    
school,  options  would  be negotiated  between  the  school                                                                    
district and  FEMA    the state would  be involved  in those                                                                    
negotiations.                                                                                                                   
                                                                                                                                
9:59:18 AM                                                                                                                    
                                                                                                                                
Senator Olson requested a copy  of the sole source contracts                                                                    
requested by Senator Wielechowski.                                                                                              
                                                                                                                                
9:59:25 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman assured the  committee that any information                                                                    
sent to the committee would be distributed to all members.                                                                      
                                                                                                                                
9:59:39 AM                                                                                                                    
                                                                                                                                
Senator Wilson  declared a conflict  of interest. He  was an                                                                    
employee  of the  Mat-Su school  district. He  asked whether                                                                    
the state and FEMA had  differing standard for what would be                                                                    
determined as a primary residence.                                                                                              
                                                                                                                                
10:00:18 AM                                                                                                                   
                                                                                                                                
Mr. Fisher  replied that the state  utilized guidelines like                                                                    
FEMA for determining  primary residence.    He shared that a                                                                    
 primary residence   was home  that was  lived in  more than                                                                    
half of the year and that  the homeowner had to be living in                                                                    
the  home at  the  time  of the  earthquake.  He offered  an                                                                    
example of  military personnel that  might be  deployed out-                                                                    
of-state and leasing  the home at the time  of the disaster;                                                                    
in  that case,  the homeowner  could apply  for low-interest                                                                    
disaster  loan from  the Small  Business Administration  but                                                                    
would not be eligible for grant funding.                                                                                        
                                                                                                                                
10:01:18 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman understood  that  if a  person was  posted                                                                    
overseas, but their primary residence  was in the earthquake                                                                    
zone, they would not qualify for disaster relief.                                                                               
                                                                                                                                
10:01:33 AM                                                                                                                   
                                                                                                                                
Mr. Fisher replied in the affirmative.                                                                                          
                                                                                                                                
10:01:47 AM                                                                                                                   
                                                                                                                                
Senator Shower asked if the  spouse of the deployed military                                                                    
personnel  was still  living in  the  residence, would  that                                                                    
count on the applications.                                                                                                      
                                                                                                                                
10:02:06 AM                                                                                                                   
                                                                                                                                
Mr. Fisher replied in the  affirmative. If the family of the                                                                    
homeowner was  living in the  house, they would  be eligible                                                                    
for grant assistance.                                                                                                           
                                                                                                                                
10:03:08 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman CLOSED public testimony.                                                                                       
                                                                                                                                
10:03:24 AM                                                                                                                   
                                                                                                                                
Senator Wilson queried  whether the eligibility requirements                                                                    
for the  disaster funding  created additional  hardships for                                                                    
Alaskans.   He   wondered   whether  a   review   of   those                                                                    
requirements,  and how  funds  were  administered, could  be                                                                    
done.                                                                                                                           
                                                                                                                                
10:04:04 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman replied that  there was an expectation that                                                                    
a lot  would be learned as  the state dealt with  the damage                                                                    
caused by the earthquake.                                                                                                       
                                                                                                                                
SB  38  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:04:54 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  discussed the  schedule for  the following                                                                    
week.                                                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:09:04 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:09 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 20 Work Draft Version S.pdf SFIN 3/14/2019 9:00:00 AM
SB 20
3-9-19 - SB 20 CS Zero Language Differences Explanation.pdf SFIN 3/14/2019 9:00:00 AM
SB 20
3-11-19 Senate SB 20 CS Zero Compare (Version M to Version S).pdf SFIN 3/14/2019 9:00:00 AM
SB 20
DRF FY19 Supplemental LFD Inquiry Response 3.7.19 Final.pdf SFIN 3/14/2019 9:00:00 AM
SB 38
SB 38 03.07.2019 - Disaster Response Process and Status Update - FINAL.pdf SFIN 3/14/2019 9:00:00 AM
SB 38
SB 38 Work Draft Version U.pdf SFIN 3/14/2019 9:00:00 AM
SB 38
SB 38 Enclosure A B to Major Disaster Request.pdf SFIN 3/14/2019 9:00:00 AM
SB 38
SFC 3.14.19 FY2019 Supplemental Overview SB 38 - Disaster Relief Supplem.._.pdf SFIN 3/14/2019 9:00:00 AM
SB 38
SB 38 Updated Amounts - Disaster Supplemental.pdf SFIN 3/14/2019 9:00:00 AM
SB 38