Legislature(2017 - 2018)SENATE FINANCE 532
02/19/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB142 || SB144 || SB168 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 142 | TELECONFERENCED | |
| += | SB 144 | TELECONFERENCED | |
| += | SB 168 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 19, 2018
9:02 a.m.
9:02:07 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Pat Pitney, Director, Office of Management and Budget,
Office of the Governor; Neil Steininger, Chief Budget
Analyst, Office of Management and Budget; Shawnda O'Brien,
Assistant Commissioner, Finance and Management Services,
Department of Health and Social Services.
PRESENT VIA TELECONFERENCE
Andy Mack, Commissioner, Department of Natural Resources,
Anchorage.
SUMMARY
SB 142 APPROP: CAPITAL BUDGET
SB 142 was HEARD and HELD in committee for
further consideration.
SB 144 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 144 was HEARD and HELD in committee for
further consideration.
SB 168 APPROP: SUPPLEMENTAL OP.; FUND; AMENDING
SB 168 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 142
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
SENATE BILL NO. 144
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental 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."
SENATE BILL NO. 168
"An Act making supplemental appropriations and other
appropriations; making an appropriation to capitalize
a fund; amending appropriations; and providing for an
effective date."
9:03:29 AM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced herself.
9:03:47 AM
NEIL STEININGER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT
AND BUDGET, discussed the "FY 2019 Governor Amended
Summary" (copy on file). He relayed that amendments totaled
$2.6 million in undesignated general funds (UGF); $250
thousand in designated general funds (DGF); and $2.3
million in federal funds. He said that fund transfers
represented the deposit of various funds back into the
general fund (GF) and was a negative number. He stated that
there was $10 million UGF, and $14.2 million in federal
funds in the Capital Budget request, which would be
discussed in detail further in the meeting.
9:04:59 AM
Ms. Pitney directed committee attention to the spreadsheet,
"FY2019 Amendments to HB 286 / SB 144 / HB 284 / SB 142 /
HB 321 / SB 168."
9:05:20 AM
AT EASE
9:05:45 AM
RECONVENED
9:06:11 AM
Mr. Steininger looked at Line 2 of the spreadsheet.
UGF: ($7,014.0)
Department: Health and Social Services
Component: Health Care Medicaid Services
Description: CHIP Reauthorization The United States
Congress re-authorized the Children's Health Insurance
Program (CHIP) and the reauthorization was signed into
law on January 25, 2018. CHIP reauthorization
maintains the 88% enhanced federal match rate through
federal fiscal year 2019, starting in federal fiscal
year 2020 the enhance match rate will be stepped down
over two years until it reaches 65% in federal fiscal
year 2021.
Mr. Steininger shared that as of December 2017, the federal
government had not reauthorized the Children's Health
Insurance Program. A supplemental request had been included
for the cost difference in anticipated loss of federal
revenue. The program had been subsequently reauthorized,
which reduced the need for UGF for the program. The federal
match was built into the FY 18 budget request.
9:07:18 AM
Mr. Steininger looked at Lines 5 and 6, which were
reappropriations from the remaining balance from the
Susitna-Watana project. The first was $960 thousand for
Newtok-Mertarvik Community Development to assist in
relocation efforts and march to Denali Commission funding.
He said that Line 6 reflected the estimated $899,711 for
enhanced rural safety. Both were FY 2018 Capital
Supplemental Amendments.
9:07:55 AM
Mr. Steininger highlighted Line 10. Lines 10 through 16
reflected FY 2019 Operating Budget amendments. Line 10 was
a technical correction to align the fund source for the
Office of Information Technology.
9:08:28 AM
Mr. Steininger discussed Line 11:
UGF: $97.8
Department: Education and Early Development
Component: Student and School Achievement
Description: Additional Support for Data Collection,
Analysis, and Reporting The one new Research Analyst
I/II/III flex (Range 13/16/18) position will serve as
a liaison to school districts by providing technical
assistance and support for the additional data that
will be collected. In addition, this position will
provide more longitudinal and comparability data
analysis using existing and new datasets. This
position will work across divisions within the
department and increase the reporting capacity of the
data management team.
9:09:15 AM
Mr. Steininger highlighted Line 12:
DGF: $250.0
Department: Education and Early Development
Component: MEHS Facilities Maintenance
Description: Add General Fund Program Receipt
Authorization for the Mt. Edgecumbe Aquatic Center In
order for the state to accept entrance fees, and other
event fees, at the new Mt. Edgecumbe High School
(MEHS) Aquatic Center, general fund program receipt
(GF/PR) authorization must be added to the MEHS
Facility Maintenance budget structure.
9:09:40 AM
Mr. Steininger addressed Line 13:
UGF: $111.0
Federal Funds: $47.6
Department: Health and Social Services
Component: Children's Services Management
Description: Establish Children's Services Safety
Officer The primary duties of the Safety Officer would
include safety policy development, workplace
inspections, accident investigations, training and
coaching, regulatory compliance, safety data
management and reporting, and workspace modification.
Co-Chair Hoffman asked where the position would be located
and whether additional travel funds would be requested.
Ms. Pitney deferred to Ms. O'Brien.
9:11:18 AM
SHAWNDA O'BRIEN, ASSISTANT COMMISSIONER, FINANCE AND
MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, relayed that the position would be located in the
state office; significant travel expenses were not
anticipated for the position. He believed that training for
the program could be worked online.
9:11:43 AM
Co-Chair Hoffman wondered whether the 52 districts in the
state all had requested the increased safety coordination.
Ms. O'Brien responded that the position had been created as
the result of several discoveries made by the division. The
division was in receipt of several penalties, in addition
to a lawsuit, resulting from the assault of a former
employee.
9:12:29 AM
Co-Chair MacKinnon asked whether the position would be
based in Juneau.
Ms. O'Brien believed that the position would be located in
Juneau or Anchorage. The exact location was undecided.
9:12:59 AM
Senator Stevens clarified that the position was being
created for the safety of employees.
Ms. O'Brien replied in the affirmative.
9:13:35 AM
Mr. Steininger addressed Line 14:
UGF: $129.0
Federal Funds: $72.0
Department: Health and Social Services
Component: Front Line Social Workers
Description: Security Guards for Kenai and Fairbanks
Recent threats and incidents has led to a growing
concern for workers safety. Security guards will be
used to prevent crime, maintain security, assist
clients and employees, and lead safety meetings and
drills.
9:14:09 AM
Mr. Steininger looked at Line 15:
UGF: $2,214.3
Federal Funds: $2,214.4
Department: Health and Social Services
Component: Public Assistance Field Services
Description: New Positions to Address Increased
Caseloads During FY2013 the average monthly caseload
for an eligibility technician was 569 while FY2017 is
estimated at 676. This is an increase of 18.80
percent. 41 additional positions would allow the
division to reduce the average monthly caseload per
technician and address the growing backlog.
9:14:41 AM
Mr. Steininger highlighted Line 16:
UGF: $100.0
Federal Funds: $100.0
Department: Natural Resources
Component: Project Management and Permitting
Description: Alaska Geospatial Council The Alaska
Geospatial Council has been funded by a capital
project that will exhaust all funds by March 2019.
This allows the council and its services to continue
through the end of FY2019.
9:15:20 AM
Ms. Pitney added that the item was an ongoing operation to
coordinate state agencies and federal agencies on the
mapping priorities for the state. It was anticipated that
the function would be ongoing but needed to be examined for
efficiency. She said that it should be built into the FY
2020 Operating Budget at the $400,000 range.
9:16:07 AM
Mr. Steininger looked at Line 17, the Funding Summary -
Operating Numbers Amendments. He relayed that the total of
the operating amendments to the FY 19 budget was $2.6
million UGF, $250.0 DGF, and $2.3 million in federal
receipts.
9:16:27 AM
Co-Chair MacKinnon queried the number of new positions
requested in the Supplemental Budget.
Ms. Pitney replied that there were 42 positions.
9:16:43 AM
Co-Chair MacKinnon thought that there were 44 positions.
Ms. Pitney replied that the security guard positions were
contract jobs and not positions. She said that the Safety
Officer and the position to address increased caseloads
were actual positions.
9:17:06 AM
Co-Chair MacKinnon referred to Line 15. She wondered
whether expediting eligibility would increase matching
costs for the state.
Ms. Pitney replied that the cost was indeterminate. She
said that currently people were waiting months to become
eligible for food stamps. She said that the line item would
address the backlog for those Alaskans in need of services.
9:18:13 AM
Co-Chair MacKinnon thought that it was difficult to hear
requests for new positions while the state faced
significant financial challenges. She asked whether the
positions had been filled.
Ms. Pitney replied in the negative
9:18:39 AM
Co-Chair Hoffman wondered how long it would take for the
division to address the backlog and whether the positions
would be necessary once the backlog was reconciled.
Ms. Pitney believed that the current backlog would take 3
to 5 years to completely address. She added that the impact
of the recession had increased applications and it was
possible that if the recession eased there could be fewer
applicants.
9:19:48 AM
Co-Chair MacKinnon recalled a similar request to address
the backlog in the previous year or the year before that
had led to a double digit increase in positions. She
lamented that the Department of Health and Social Services
had not been able to control spending, and she found that
unfortunate.
9:20:18 AM
Senator Micciche asked whether the request had been made
before the memorandum of understanding (MOU) had been
signed with certain entities to begin handling their own
Office of Children's Services (OCS) responsibilities. He
wondered whether all of the positions were necessary.
Ms. Pitney responded that the request had been made in
approximately the same timeframe as the signing of the MOU.
She said that the request took into account the anticipated
effort to be able to coordinate with those entities.
9:21:13 AM
Senator Micciche thought that the increase was related to
OCS, and not Public Assistance field services. He
understood that this was a new request.
Ms. Pitney said yes. She explained that the OCS request was
31 positions but that the funding that was provided had not
covered the 31 positions, which was why they were in the
December budget request. She stated that the positions
included eligibility technicians that addressed senior
benefits, food stamps, Medicaid, heating assistance, and
other public assistance programs.
9:22:27 AM
Senator von Imhof asked whether an analysis had been done
about what the downstream affects will be on the state
budget once the backlog was reconciled.
Ms. Pitney reiterated that the number was indeterminate.
9:23:41 AM
Senator von Imhof asked whether there was a way to
outsource the work to a private contractor.
Ms. Pitney replied that the department had looked into
contract work but was currently updating its technology,
once the technological updates were complete the
administration intended to explore outsourcing options.
9:24:42 AM
Co-Chair MacKinnon spoke of the MOU with Tribal Health.
Senator Micciche said that the state had a signed MOU with
tribal organizations in the state to localize the handling
of a portion of the OCS cases.
9:25:30 AM
Co-Chair MacKinnon relayed that the state had shared
services with smaller communities in the state that had
taken over healthcare responsibilities, but when those
communities could not get increased for the state
government they had relinquished responsibility to the
state. She asserted these same individuals had been rehired
at a higher rate as the state took on the healthcare cost.
She asked whether any of the 41 positions had a similar
history. She asked whether the department was supporting
the MOUs that were being signed with state workers.
Ms. Pitney responded that the 41 positions were not
currently eligibility technicians in any organization.
9:26:34 AM
Co-Chair MacKinnon restated her question.
Ms. Pitney deferred to Ms. O'Brien.
9:27:14 AM
Ms. O'Brien restated her understanding of the question.
9:27:27 AM
Co-Chair MacKinnon clarified her question.
Ms. O'Brien explained that the compact agreement with OCS
was with certain tribal organizations and Tribes to take on
certain aspects of work from OCS. She said that the state
was not intending to backfill any of the costs but was
intending to offset state dollar costs with the support
that would be received from the tribes. She said that the
positions for public assistance was not going to be
outsources; the type of work that the positions
accomplished required that they remain state employees as
federal regualtion prohibited the state from outsourcing or
using other entities to do this particular work.
9:29:26 AM
Co-Chair Hoffman asked whether there was an estimation of
how many people were backlogged, which category they fell
into, and where they resided in the state.
Ms. O'Brien replied that there were approximately 15
thousand application in the backlog, the majority of those
were for Medicaid. She said that exact numbers could be
provided to the committee.
9:29:54 AM
Co-Chair Hoffman asked whether applicant locations could be
given as well.
Ms. O'Brien thought that the data could be complied for the
committee.
9:30:11 AM
Senator Olson said that he had received calls from elderly
constituents that had not received their food stamps in a
timely manner. He wondered whether once a person was
eligible if benefits could be applied retroactively.
Ms. O'Brien replied that Medicaid applications were
retroactive from the date of application, before the date
of application in some cases. She was not sure if food
stamp applications could be applied retroactively.
9:31:26 AM
Senator Olson thought that because of the retroactivity,
there was no additional significant cost but there was
faster service.
Ms. O'Brien said that instances where applications were
worked because of emergent need or because a call was
received that raised concern, the application could be
processed faster. She said that the other work that existed
would then be put off for another day and that it was a
constant shuffle of priorities from moment to moment. She
relayed that the number of vacancies that the division
currently had was 73, which was significant in a workforce
that was only several hundred people, approximately one-
third. She shared the 144 positions had turned over in the
past year. She stated that the average length of vacancy
was approximately 5 months. She concluded that there were
workforce challenges in addition to addressing crisis
public assistance needs.
9:33:00 AM
Co-Chair Hoffman queried the number of employees that were
processing the applications. He wondered how the size of
the backlog was able to grow to 15,000 people.
Ms. O'Brien replied that there were currently 260 positions
that processed eligibility paperwork, with additional
support staff. She shared that the backlog was due to a
number of factors; the increase in the number applications
(11,000 received monthly), recertification for existing
eligible persons, and the technological change over that
was underway. She stressed that the volume of applications
and the federally facilitated marketplace added to the
backlog.
9:34:56 AM
Vice-Chair Bishop queried the additional cost to the state
of the backlog and not hitting targets in a timely fashion.
Ms. O'Brien replied that the department did not had the
staff support to research the issue.
9:36:34 AM
Vice-Chair Bishop thought that a cost benefit analysis
would be helpful.
9:36:59 AM
Senator von Imhof thought that an analysis of a
departmentwide impact on the state budget would be possible
if it were made a priority. She believed this would help to
predict what the department's monetary needs were going to
be in the future. She asked what the department had planned
in order to meet the state obligation cashflow for the next
few years.
Ms. O'Brien clarified that she had been speaking to the
Division of Public Assistance, specifically. She stated
that the department employed analysists to analyze the
budget and the effects of the programs that it administered
and managed. She related that this work was constantly
underway and efficiencies were regularly being sought.
9:39:24 AM
Senator von Imhof queried the department's plan to meet the
increase in applications for public assistance.
Ms. O'Brien responded that the plan to meet the increase
for the overall department was to contain the costs that it
had control over. She said that the cost drivers that had
been discussed in recent hearings were things that the
department had not been able to control. The increase to
Medicaid services was due to the number of people receiving
benefits under that program, which was out of the hands of
the department.
9:40:22 AM
Senator von Imhof surmised that requesting new revenue for
the expansion of Medicaid numbers was cost containment and
the department had no ideas for new revenue at this point
other than searching for new federal fund or changing
Medicaid eligibility standards.
Ms. O'Brien responded that the Medicaid expansion revenues
for the state were largely federal. Many of the
department's programs were established nationwide and the
funds for some of those programs (food stamps, for example)
were 100 percent federally funded and were not a part of
the department's budget. She said that to the extent that
program authority could be increased, the department was
researching areas where people could pay for services
provided. She said that the department was at its limit for
fund sources, with the exception of increased federal
claiming potential.
9:41:43 AM
Co-Chair Hoffman asked how much of a priority to the
department was addressing eligibility requirements for
Medicaid.
Ms. O'Brien said that the conversation was new. She assured
that committee that the discussion was underway about how
changes would be made and how they would impact the state.
9:42:32 AM
Co-Chair Hoffman asked whether the department would compare
Alaska's requirements to those of other states.
Ms. O'Brien replied in the affirmative. She said that the
department regularly looked at how services were being
provided in other states.
9:43:07 AM
Senator Micciche spoke to the Public Assistance Field
Service position. He asked whether the position shared any
responsibilities for processing Medicaid application or
providing Medicaid services.
Ms. O'Brien replied that the positions requested in public
assistance were the positions that determined eligibility
for Medicaid services, food stamps, senior benefits,
heating assistance, general relief, and adult public
assistance.
9:43:47 AM
Senator Micciche thought that the 31 categories for
eligibility needed to be evaluated. He said that the
Legislature determined eligibility; the department
delivered the services.
9:45:46 AM
Co-Chair MacKinnon understood that the department had a
significant vacancy factor.
Ms. O'Brien said that the actual vacancies in the division
were significant.
9:47:40 AM
Co-Chair MacKinnon wondered why the department was not
looking to fill the vacant positions before asking for 41
additional positions.
Ms. O'Brien related that the recruitment efforts for the
department were continually underway. She said that
retention was a challenge because people promoted out of
positions. She said that the infusion of the new positions
would allow for more positions to be filled at a given
period in time. Currently, one-third of the eligibility
technician positions were vacant.
9:48:23 AM
Co-Chair MacKinnon questioned that reasoning. She felt that
from a financial perspective all positions should be full
before a request was made for more. She understood that 260
positions were managing 11,000 new eligibility requests per
month. She surmised that the increase in total caseload
would be 240,000 for FY 19, which resulted in a large
number of cases per position.
Ms. O'Brien agreed.
9:49:14 AM
Co-Chair MacKinnon understood that each position would
handle approximately 42 cases.
Ms. O'Brien pointed out to the committee that ongoing
casework was another body of work that was taking place on
a regular basis.
9:49:21 AM
Co-Chair MacKinnon asked whether the ongoing work was
included in the 11,000 number of caseloads.
Ms. O'Brien replied that the ongoing work was in addition
to processing applications for eligibility.
9:50:07 AM
Co-Chair MacKinnon spoke of the processing of Indian Health
System (IHS) clients. She asked whether those applicants
had to be recertified in the process.
Ms. O'Brien clarified that Co-Chair MacKinnon was talking
about Medicaid recipients that were covered under IHS.
9:51:00 AM
Co-Chair MacKinnon said yes. She added that those
recipients had been migrated into the state system, which
had created available dollars to spend through IHS. She
wondered whether the migration was contributing to the
backlog.
Ms. O'Brien did not believe that the IHS recipients were
different form other recipients; if IHS recipients applied
for services then they were included in the Medicaid
application process. She said that the department was not
serving IHS recipients outside of the Medicaid process. She
said that the increase in application was not attributable
to IHS recipients.
9:51:58 AM
Co-Chair Hoffman interjected that IHS recipients were
considered Alaskan citizens and were entitled to all rights
and benefits allotted to residents. He thought that
recipients classified under IHS were reducing state
expenditures because of the 100 percent federal recovery
waivers.
9:53:00 AM
Co-Chair MacKinnon agreed with Co-Chair Hoffman's
statements but still wondered whether some of the need for
the new positions was being driven by the migration.
9:53:54 AM
Ms. Pitney stated that the next category of items on the
spreadsheet addressed "fund clean-up."
9:54:05 AM
Mr. Steininger discussed lines 19 through 24, which were
clean-ups of dormant funds that had not been used for a
period of time. He said that the total amount of authority
that would be deposited back into the General Fund was
approximately $6.4 million. He spoke to Line 19:
UGF: ($200.9)
Federal Funds: ($200.9)
Department: Fund Transfers
Component: Mining Revolving Loan Fund
Description: FY2019 Transfer Balance of the Mining
Loan Fund No new loans have been made from the mining
loan fund since 1986 and no appropriations have been
made from the fund since FY2004. As such, the balance
of this fund is available to be transferred to the
general fund.
Mr. Steininger discussed Line 20:
UGF: ($2,755.4)
Federal Funds: ($2,755.4)
Department: Fund Transfers
Component: Alternative Energy Conservation
Description: FY2019 Transfer Balance of the
Alternative Energy Conservation Revolving Loan Fund No
new loans are being made from the alternative energy
conservation revolving loan fund and no appropriations
have been made from the fund since FY2004. As such,
the balance of this fund is available to be
transferred to the general fund.
Mr. Steininger continued to Line 21:
Department: Fund Transfers
Component: Misc. General Fund Transfers
Description: FY2019 Transfer Balance of the Investment
Loss Trust Fund (Shows as Revenue) The balance of the
investment loss trust fund (AS 27.09.010) as of June
30, 2019, estimated to be $2,298,862, is appropriated
to the general fund.
9:55:23 AM
Ms. Pitney interjected that the line was the amount of
revenue available in the fund that was not required in the
fund for the purpose of the fund.
9:56:00 AM
Mr. Steininger highlighted Line 22:
Department: Fund Transfers
Component: Misc. General Fund Transfers
Description: FY2019 Transfer Investment Earnings on
Bond Proceeds of the Northern Tobacco Securitization
Corp (Shows as Revenue) The amount of investment
earnings on the bond proceeds of the Northern Tobacco
Securitization Corporation as of June 30, 2019,
estimated to be $231,773, is appropriated to the
general fund.
Mr. Steininger continued to Lines 23 and 24:
Department: Fund Transfers
Component: Misc. General Fund Transfers
Description: FY2019 Transfer Balance of The Municipal
Capital Project Matching Grant Fund (Shows as Revenue)
The balance of the Municipal Capital Project Matching
Grant Fund (AS 37.06.010) as of June 30, 2019,
estimated to be $253,500, is appropriated to the
general fund.
Department: Fund Transfers
Component: Misc. General Fund Transfers
Description: FY2019 Transfer Balance of The
Unincorporated Community Capital Project Matching
Grant Fund (Shows as Revenue) The balance of the
Unincorporated Community Capital Project Matching
Grant Fund (AS 37.06.020) as of June 30, 2019,
estimated to be $646,200, is appropriated to the
general fund.
9:57:01 AM
Ms. Pitney added that the funds could be closed out when
the balances were taken out and would no longer be
reflected on the books.
9:57:12 AM
Mr. Steininger continued to Pages 3 though 6, which
contained the amendments to the Capital Budget.
9:57:27 AM
Senator Micciche wondered where the resulting funds would
be allocated.
Mr. Steininger replied that the fill $6.4 million would be
deposited into the General Fund.
9:58:40 AM
Ms. Pitney furthered that the Lines 19 and 20 showed up as
a negative expenditure in the budgeting system. Lines 21
through 24 counted a positive revenue.
9:59:06 AM
Senator Micciche hoped to understand better how the funds
were accounted for in the revenue outlook.
9:59:08 AM
Co-Chair Hoffman explained that funds from one account were
transferred into another.
9:59:11 AM
Co-Chair MacKinnon looked at Line 22. She wondere4d why
those funds were not applied toward the bond debt that the
state owed, rather than to the General Fund.
Ms. Pitney said that a certain amount was already applied
to the bonds. The amount on the line reflected the amount
in excess. She said that the legislature could chose to use
the excess against the bond debt.
10:00:07 AM
Co-Chair MacKinnon suggested that the legislature make the
choice to use the excess toward the bond debt. Her
projections had revealed that the money was going to run
out before the debt was repaid.
10:00:26 AM
Mr. Steininger looked at Line 28:
Federal Funds: $4,000.0
Department: Environmental Conservation
Component: Appropriation
Description: Fairbanks PM2.5 Nonattainment Area
Voluntary Heating Device Change Out Program This
project continues a voluntary heating device change-
out program for residents in the Fairbanks North Star
Borough's fine particulate matter (PM2.5) serious
nonattainment area. The program is aimed at minimizing
particulate matter emissions and improving air quality
in the Borough. The Borough has the highest recorded
levels of PM2.5 in the nation. Federal grant funds
have been applied for from EPA through the Targeted
Air Shed Program.
10:01:02 AM
Mr. Steininger looked at Line 29:
UGF: $10,000.0
Federal Funds: $10,000.0
Department: Natural Resources
Component: Appropriation
Description: Seismic Data Collection Recent federal
government actions opened the 1002 area of the Arctic
National Wildlife Refuge (ANWR) to oil and gas
leasing, exploration and development. Availability of
seismic data will improve interest in exploring for
oil and gas within the 1002 area. This funding allows
the state to work with other interested parties to
provide seismic data which will enhance state revenue
from lease sales and decrease time to drilling and
production.
10:01:32 AM
Senator von Imhof understood that the state would sell the
data to potential investors.
Ms. Pitney agreed.
10:02:03 AM
Senator von Imhof queried the amount of interest for
investors in ANWAR. She wondered whether the state could
wait and see if there were interested investors that would
be willing to take on the risk of gathering the data on
their own.
Ms. Pitney stated that $10 million would not go very far in
for seismic data collection; the state would partner with
other entities to fund the gathering of seismic data. She
said that 50 percent of the revenue form the leasing and
royalty went to the state. She said that if there were
additional interest, which it was believed that the seismic
data information could provide, more people would be
interested in the lease sale.
10:03:36 AM
Senator von Imhof agreed that putting money into an
investment that could yield future revenue was a good idea;
however, she was concerned about prioritization of spending
across all state departments. She queried the spending
priorities of the administration.
Ms. Pitney responded that there were spending priorities to
meet current needs and priorities to position the state for
a positive fiscal future. She believed that the $10 million
would position the state for a more positive fiscal future.
10:04:50 AM
Co-Chair MacKinnon asked whether the state would partner in
shooting for seismic data or would buy someone else's data.
Ms. Pitney replied that the interest was twofold; one, to
have experts to analyze currently available information and
two, to gather data to increase interest in lease sales.
10:05:51 AM
Co-Chair MacKinnon requested to direct a question to Andy
Mack from the Department of Natural Resources.
Co-Chair Hoffman replied in the affirmative.
10:06:03 AM
Co-Chair MacKinnon recalled that the state owed tax credits
for seismic data that had already been completed. She
wondered whether the state was paying for the data that the
tax credits were being applied to.
10:06:40 AM
ANDY MACK, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,
ANCHORAGE (via teleconference), replied that the existing
program were tax credits were paid for data would not be a
part of the proposal on Line 29. He said that there was a
schedule to pay back existing tax credits, but this was a
new proposal to partner with entities interested in
shooting data. He shared that the it was estimated that
$2.2 million in bonus bids could be generated by the first
two lease sales, half of the proceeds from those sales
would go to the state. He said that the department had
learned thorough the tax credit program how valuable and
interesting the information is to people. He said that many
people visited the Geological Materials Center and that the
existing tax credit data was at the center. He believed
that this would be a powerful tool for generating the
interest necessary for the proposed lease sale.
10:08:48 AM
Co-Chair MacKinnon hoped that the state would not be
offering tax credits for seismic data that it was funding.
Commissioner Mack assured the committee that this would not
happen.
10:08:53 AM
Senator von Imhof understood that there was $1 billion to
$2 billion in lease revenue expected from the release of
the seismic data.
Commissioner Mack replied that this was his understanding.
10:10:26 AM
Senator von Imhof understood that the first lease sale
could generate $1 billion to $2 billion for the state,
which could come with or without the $10 million investment
in seismic data.
Commissioner Mack believed that the impact of the initial
seismic data as hard to gage, much of the end result would
be driven by opportunity and price. He said that every
company would examine the lease sale, the terms, and the
opportunity. He said that the department felt strongly that
the seismic data would be useful and important for
promoting the 1002 area in ANWAR.
10:12:59 AM
Vice-Chair Bishop lamented that the state had been trying
to develop ANWAR for 40 years. He thought that money had
already been spent to lobby congress to develop ANWAR. He
wondered whether $10 million would be enough money to be
successful in developing ANWAR. He thought that good data
could help in moving the possibility of development
forward.
10:14:34 AM
Commissioner Mack agreed that it was a "one-shot" deal. He
believed that a majority of the area would be leased in the
first lease sale.
10:15:01 AM
Senator Micciche said that investing in an analysis that
favored one area over another could result in discounting
viable acreage. He thought that developers would take risks
if they believed that all areas had potential. He felt that
the state owned a substantial amount of data for other
areas that had not been analyzed. He asserted that advanced
seismic data could support efforts in the ANWAR area but
could also narrow the scope of available leases.
10:16:39 AM
Ms. Pitney highlighted Line 30:
Federal Funds: $10,233.4
Department: Commerce, Community, and Economic
Development
Component: Appropriation
Description: National Petroleum Reserve - Alaska
Impact Grant Program This request amends the original
Governor's FY2019 capital budget request by adding
$10,233,376 for a new requested total of $11,611,722.
This change is due to updated revenue estimates for
FY2019, which results in FY2019 National Petroleum
Reserve - Alaska (NPR-A) recommended awards to
communities being higher than the estimate provided in
the original Governor's FY2019 capital request. The
NPR-A program provides grants to communities for
public facilities and services. Priority is given to
those communities directly or severely impacted by the
leases and development of oil and gas within the NPR-
A. Funding comes from the federal government as a
share of the funds received on leases issued within
NPR-A.
Co-Chair Hoffman requested a list of affected communities.
10:17:45 AM
Co-Chair MacKinnon looked at Lines 38 and 42. She said that
she saw a 25 percent administrative cost and wondered
whether the same cost applied to all of the grants that
were being provided.
Ms. Pitney agreed to provide the information about rules
that applied to grants to the committee.
10:18:26 AM
Co-Chair MacKinnon asked whether the grants had ever been
audited.
Ms. Pitney agreed to provide the information to the
committee.
10:18:42 AM
Ms. Pitney concluded her presentation.
10:18:56 AM
Senator Stevens looked at Line 5, and requested information
on the population of Newtok, the amount of housing needed,
and whether people were willing to move to the new
community. He wanted to know the age of the barracks and
whether it made sense to refurbish rather than build new.
Ms. Pitney agreed to provide the information.
10:19:54 AM
Co-Chair Hoffman discussed housekeeping.
SB 142 was HEARD and HELD in committee for further
consideration.
SB 144 was HEARD and HELD in committee for further
consideration.
SB 168 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:20:22 AM
The meeting was adjourned at 10:20 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 021918 FY2019 Combined Amendment Summary and Detail.pdf |
SFIN 2/19/2018 9:00:00 AM |
SB 144 |
| 021918 Combined_Budget_Amendments_Detail_Backup_2-13-18.pdf |
SFIN 2/19/2018 9:00:00 AM |
SB 144 |
| SB 168 FY2018_Supplemental_Summary_Feb_13.pdf |
SFIN 2/19/2018 9:00:00 AM |
SB 168 |
| SB 168 FY2019_Amendment_Summary_Feb_13.pdf |
SFIN 2/19/2018 9:00:00 AM |
SB 168 |