Legislature(2019 - 2020)SENATE FINANCE 532
03/12/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB37 | |
| SB19 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 19 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 37 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
March 12, 2019
9:02 a.m.
9:02:11 AM
CALL TO ORDER
Co-Chair von Imhof called the Senate Finance Committee
meeting to order at 9:02 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
Juli Lucky, Staff, Senator Natasha von Imhof; Jill Lewis,
Deputy Director, Division of Public Health, Department of
Health and Social Services; David Teal, Director,
Legislative Finance Division; Lacey Sanders, Budget
Director, Office of Management and Budget; Laura Cramer,
Deputy Director, Office of Management and Budget; Shelly
Wilhoite, Budget Analyst, Office of Management and Budget;
Robb Arnold, Alaska Marine Highway System, Juneau; Trina
Arnold, Alaska Marine Highway System, Juneau; Nils
Andreassen, Executive Director, Alaska Municipal League,
Juneau; Representative Louise Stutes.
PRESENT VIA TELECONFERENCE
Leslie Jackson, Ketchikan Gateway Borough Transit,
Ketchikan; Bryan O'Callaghan, Executive Director, Center
for Community, Sitka; Lynette Clark, Self, Fox; Glenn
Miller, Transportation Director, Fairbanks North Star
Borough, Fairbanks; John Lamont, Self, Wasilla; Frank
Kelty, Mayor, Unalaska; Sue Steinacher, Self, Nome; John
Rozzi, Mat-Su Coalition on Housing and Homelessness, Mat-
Su.
SUMMARY
SB 19 APPROP: CAPITAL BUDGET; SUPPLEMENTAL
SB 19 was HEARD and HELD in committee for further
consideration.
SB 37 RENEWAL OF VACCINE ASSESSMENT PROGRAM
CSSB 37(FIN) was REPORTED out of committee with a
"do pass" recommendation and with three new
fiscal impact notes from the Senate Finance
Committee for Department of Health and Social
Services, Fund Transfer, and Fund Capitalization.
SENATE BILL NO. 37
"An Act relating to the statewide immunization
program."
9:03:03 AM
Senator Bishop MOVED to ADOPT the committee substitute for
SB 37, Work Draft 31-LS0162\U (Marx, 3/9/19).
Co-Chair von Imhof OBJECTED for discussion.
9:03:49 AM
JULI LUCKY, STAFF, SENATOR NATASHA VON IMHOF, explained
that the Department of Health and Social Services (DHSS)
switch the account to a fund.
Ms. Lucky discussed the Sectional Analysis (copy on file):
Section 1:
Amends AS 18.09.200(b)(1) by removing the "phase in"
language from statute as the Alaska Vaccine Assessment
Program is now fully implemented.
Section 2:
Amends AS 18.09.220(a) by removing the "phase in"
language from statute as the Alaska Vaccine Assessment
Program is now fully implemented.
Section 3:
Amends 18.09.230 by creating the vaccine assessment
"fund" in the general fund for the purpose of
providing funds for the program that will be
appropriated by the legislature, that can also include
program receipts, penalties, money from other sources
along with interest earned from the fund. These
appropriations to the fund will not lapse.
Section 4:
Repeals and reenacts AS.18.09.230 allowing the
commissioner to administer the fund in accordance to
the provisions of the statewide immunization program.
Section 5:
Amends 37.05.146(c)(75) changing the word "account" to
"fund"
Section 6:
Repeals AS 18.09.220(e) by removing the "opt out"
option for assessees since the program is no longer in
the "phase-in" stage.
Section 7:
Repeals the sunset provisions (to repeal the program
in 2021) that were in section 5 of the original bill,
SB 169 in 2014.
Senator Olson queried an affect on some of the rural
hospitals.
Ms. Lucky deferred to Ms. Lewis. She understood that it was
only a renaming of a fund, and would not affect how the
fund works.
9:06:36 AM
JILL LEWIS, DEPUTY DIRECTOR, DIVISION OF PUBLIC HEALTH,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, agreed with Ms.
Lucky.
Senator Olson wondered whether there was any opposition
from the rural hospitals.
Ms. Lewis replied that the bill had no opposition from
anyone.
Ms. Lucky assured the committee that Senator Giessel
approved of the CS.
Co-Chair von Imhof wondered whether there were further
comments.
Ms. Lewis stated that she did not have anything further to
add.
Co-Chair von Imhof WITHDREW the OBJECTION.
There being NO further OBJECTION, the proposed committee
substitute was ADOPTED.
9:08:23 AM
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained the fiscal notes.
Co-Chair von Imhof stated that there was an amendment.
Co-Chair von Imhof MOVED to ADOPT Conceptual Amendment 1.
There being NO OBJECTION, it was so ordered.
Co-Chair von Imhof felt that it might make sense to
capitalize the fund, should there be emergencies in the
state.
9:14:13 AM
Senator Wielechowski wondered how it was not creating a
dedicated fund.
Mr. Teal replied that a dedicated fund was something that
must occur under the constitution. He stated that the bill
created a fund that was designated, but not dedicated.
Senator Olson wondered whether there was concern about
giving more power to the administration.
Mr. Teal replied that the bill provided the commissioner to
rapidly respond.
9:20:52 AM
Senator Bishop MOVED to REPORT CSSB 37(FIN) from committee
with individual recommendations and attached fiscal notes.
There being NO OBJECTION, it was so ordered.
CSSB 37(FIN) was REPORTED out of committee with a "do pass"
recommendation and with three new fiscal impact notes from
the Senate Finance Committee for Department of Health and
Social Services, Fund Transfer, and Fund Capitalization.
SENATE BILL NO. 19
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
9:21:36 AM
Co-Chair von Imhof declared a conflict concerning the
Capital Budget. She noted that her husband had a rental car
business that could benefit from Alaska Travel Industry
Association (ATIA) tourism advertising dollars or a new
visitor's center in Denali.
Senator Wielechowski declared a conflict, because he worked
for a labor organization that could potentially benefit
from a changed capital budget.
9:22:45 AM
AT EASE
9:23:32 AM
RECONVENED
9:23:37 AM
Senator Bishop declared a conflict for the same reasons as
Senator Wielechowski.
9:24:20 AM
LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, discussed the presentation, "State of Alaska,
Office of Management and Budget; SB 19 - FY2020 Capital
Overview; Presentation to the Senate Finance Committee;
March 12, 2019" (copy on file).
9:24:31 AM
LAURA CRAMER, DEPUTY DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, introduced herself.
9:24:38 AM
SHELLY WILHOITE, BUDGET ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, introduced herself.
9:24:49 AM
Ms. Sanders addressed slide 3, "FY 2020 Capital Budget
Requests Total ($ Thousands).
FY 2020 Capital Project Requests
-Deferred Maintenance
-Meet Federal Matching Requirements
-Maximize Federal Funding for Project Grants
Ms. Sanders highlighted slide 4, "Historical Comparison FY
2016-FY2020 ($ Thousands).
Ms. Sanders discussed slide 5, "FY 2020 Capital Budget
Snapshot ($ Thousands).
Ms. Sanders addressed slide 6, "FY 2020 Capital Budget
Highlights ($ Thousands)":
Department of Transportation and Public Facilities
Federal Highway Surface Transportation:
$690,000.0 Federal, $35,000.0 UGF State
Highway Match
$25,000.0 Reappropriation from F/V Tustumena
Replacement to Federal-Aid Highway Match.
Airport Improvement Program $198,700.0
($187,200.0 Fed, $11,500.0 Other)
Statewide Federal Programs $48,738.3 ($8,500.0
Federal, $10,000.0 Other, $238.3 UGF)
Department of Commerce, Community, and Economic
Development
National Petroleum Reserve - Alaska Impact Grant
Program $19,000.0 (Fed)
Co-Chair Stedman looked at the Tustumena replacement, and
understood that there were many discussions with Department
of Transportation and Public Facilities (DOT/PF). He looked
at the impact grant, and asked that the grant applicants
provide some recent history.
Ms. Cramer agreed to provide that information.
9:30:06 AM
Senator Olson noted the Alaska Impact Grant Program
applications, and wondered where the grant applications
originated.
Ms. Sanders wondered if Senator Olson was referring to the
North Slope Borough.
Senator Olson wondered how many applications came from
boroughs outside of the North Slope.
Ms. Sanders agreed to provide that information.
Co-Chair von Imhof wondered whether all of the federal
dollars for DOT/PF were included in the budget.
Ms. Sanders stated that she was awaiting a response from
DOT/PF, and agreed to provide that information.
Ms. Sanders addressed slide 7, "FY 2020 Capital Budget
Highlights ($ Thousands)":
Department of Environmental Conservation
-Village Safe Water Projects $64,830.0 ($52,250.0
Federal, $12,080.0 UGF, $500.0 Other)
Department of Natural Resources
-South Denali Visitor's Center $25,000.0 Alaska
Industrial Development and Export Authority
(AIDEA)
-Possibility of Federal and private funds
Deferred Maintenance
-Administration: Public Building Fund $4,500
Other
-Courts: Statewide $2,783.7 UGF
-Office of the Governor: Statewide Prioritized
$26,600.0 DGF
-Education: K-12 Major Maintenance: $7,400.0 DGF
- University: $5,000.0 DGF
Ms. Sanders noted an error in the slide. She explained that
project consisted of $10.2 million of AIDEA receipts. In
addition there was $10.3 million of available AIDEA
dividends, and $4.5 million of Alaska Housing Finance
Corporation (AHFC) dividends.
Senator Bishop wondered when there would be a deeper
discussion regarding this issue.
Co-Chair von Imhof replied that she wanted to continue the
slide, and felt that it was appropriate to get into further
conversations.
Ms. Sanders concluded her discussion of the slide.
Senator Bishop asked for more information about the South
Denali Visitor Center, and wondered whether the state was
getting into the hotel business.
9:37:06 AM
Ms. Cramer stated that it was phase II of the project, and
stressed that it was not a hotel. She stated that there was
projected revenue of $1 million annually after the fifth
year. She noted that a small cruise line was planning to
build a hotel near South Denali, so there was an
expectation of increased visitor to the park.
Senator Bishop surmised that the visitor center was
expected to be a revenue generator.
Ms. Cramer replied in the affirmative.
Senator Micciche wondered whether the $26 million statewide
prioritized DGF for Office of the Governor was normally in
the DOT/PF budget.
Ms. Sanders replied that it had been in the Office of
Governor for the previous two years with the hope to work
together with DOT/PF to analyze what needs were prioritized
and who was prioritizing those lists.
Senator Micciche asserted that the projects were typically
managed by DOT/PF, once it was determined where the $26
million was going.
Ms. Sanders agreed.
Senator Micciche asked whether the detail would be included
through the fiscal year, or whether it would be seen
sooner.
Ms. Cramer agreed to provide that information.
9:40:10 AM
Co-Chair von Imhof believed that there had been previous
presentations that included that list.
Senator Wielechowski wondered whether Department of Natural
Resources (DNR) would own the visitor's center. He wondered
whether the 4 percent rate of return after 5 years would be
considered a good return according to AIDEA.
Ms. Cramer remarked that the receipts from AIDEA were up
for appropriation by the legislature, and there were
current conversations about a state partnership.
Co-Chair von Imhof stated that there would be a future
presentation from AIDEA.
Senator Shower wondered whether the state would be
obligated to build for the new companies.
Ms. Cramer replied that there were ongoing deferred
maintenance costs. The park facilities were self-sustaining
through DNR, so the revenues from the project would be
reinvested in state facilities.
Senator Shower felt that there was always a sneaking
suspicion that the state would be required to pay further
money.
Ms. Cramer stressed that the funding was from AIDEA
dividends, and it was anticipated that it was one-time
project money.
Co-Chair Stedman requested more information about the
visitor's center, and the source of the funds for the major
maintenance.
Ms. Cramer replied that the legislature passed SB 107 in
the previous session, which prioritized the capital income
fund specifically for deferred maintenance.
9:45:03 AM
Co-Chair Stedman asked for more information on that
subject.
Ms. Sanders stated that the AIDEA and AHFC dividends were
considered UGF. There was a tracking code for those
dividends to see the amount coming to the state each year.
Co-Chair Stedman remarked that he had several other
questions.
9:45:54 AM
Senator Bishop wondered whether there was a consideration
of having a long-term lease, and therefore takes the state
of deferred maintenance.
Ms. Cramer replied in the affirmative, and agreed to follow
up on more information.
Co-Chair von Imhof hoped for more of a plan about the
visitor center.
Co-Chair Stedman asked for elaboration on the Prince
William Sound Science Center.
Ms. Sanders noted the project within the Department of
Commerce, Community and Economic Development (DCCED). The
project utilized receipts.
Co-Chair Stedman asked for a definition of the receipts.
Ms. Sanders replied that the receipts were from the Exxon
Valdez oil spill settlement funds. She stated that the
council approved the resolution requesting $17.5 million in
coordination with DCCED to begin design and construction on
that facility.
Ms. Cramer furthered that in the year prior a group had
brought forward the idea of the project, and wanted to
spend approximately $250,000 to study the potential for the
project. That was not included in the year prior's capital
budget, and instead asked that they thoroughly vet the
project. She stated that this was the vetted proposal.
9:50:13 AM
Co-Chair Stedman felt that it would be a good subject to
have further hearings. He looked at the Cook Inlet Stock
Assessment for $1 million. He wanted further information on
the project.
Ms. Sanders replied that it was a request from Department
of Fish and Game (DGF) asking for $1 million to increase
their ability to collect information on salmon stocks that
were bound for the Susitna and Kenai River drainages. She
stated that the information would be used in ensure that
the stocks were managed with the best interest of the
economy and the well-being of the state.
Co-Chair Stedman recalled a reduction from the other
submittal of $2 million down to $1 million. He wondered
what was not being done in the proposal compared to what
DFG might be interested in earlier in the fall.
Ms. Cramer explained that in reviewing the capital budget,
departments were asked to determine their own priorities.
Co-Chair Stedman looked at the sport fish hatchery
upgrades. He noted that there were other hatcheries across
the state, so asked for information about why that hatchery
was selected to be included in the budget.
Ms. Sanders echoed Ms. Cramer's comments about departments
prioritizing their projects.
Co-Chair Stedman asked for an examination of the other
proposals.
9:54:39 AM
Senator Bishop looked at the Census Commission funding
removal, and asked why it was moved into the Department of
Administration (DOA). He wanted to ensure that the state
had a proper census count.
Ms. Sanders replied that there was a $1 million request in
the Office of the Governor. She stated that it was
previously proposed in the Operating Budget, and was moved
to the Capital Budget, because of the timeline of the
project. The Office of the Governor would need to begin the
census in FY 20, and the larger majority of the funding
would be expended in FY 21.
Senator Bishop requested a follow up on execution of those
funds.
Ms. Sanders agreed to provide that information.
Co-Chair von Imhof agreed that the census was important,
and understood that there had been some changes since the
previous administration.
Senator Bishop stressed that the money in the budget said
that it was for redistricting.
Ms. Sanders explained that she understood that it would be
for redistricting and the census, and agreed to provide
clarification.
Senator Micciche asked about the Arctic Slope
Transportation and Resources Project (ASTAR). He noted the
$2.5 million for the studies that would be completed in FY
20. He requested detail on a plan moving forward.
Ms. Cramer agreed to provide that information.
9:59:36 AM
Senator Wielechowski queried the number of nonprofits that
were direct recipients general fund dollars under the
capital budget.
Ms. Cramer agreed to provide that information.
Senator Wielechowski noted that there were significant cuts
for Alaska Energy Authority (AEA), and wondered whether
they were transferred or cut.
10:00:20 AM
Ms. Cramer stated that those items had been removed from
the Capital Budget. She pointed to the capital
appropriations status report (CASR), which had all the
outstanding capital projects. She stated that there were
significant outstanding funds for both of those items. She
agreed to provide the information about impacted
communities.
Senator Wielechowski noted that the current budget had $22
million for divesting the Alaska Marine Highway System
ferries and terminals.
Ms. Sanders noted the capital project that would utilize
the balances of the Marine Highway Fund and the Marine
Highway System Replacement Fund into a single project to
allow for DOT/PF to work through the process of divesting,
if that is the direction that the consultant would advise.
The funding would be used in a manner that would allow
DOT/PF to pay back money that would be owed on facilities
and vessels that have been built utilizing federals funds.
She stated it would also be used for maintenance to the
vessels in order to sell them.
Co-Chair Stedman stated that there would be an examination
of each budget and the possible fund source changes. He
suggested a slower approach.
Co-Chair von Imhof noted that the two budgets worked in
harmony.
Co-Chair Stedman asked for more information about the $140
million for rural airports.
10:05:17 AM
Ms. Sanders stated that she did not have much detail on the
program. She remarked that there was $140 million of
federal receipts requested to address needs at 242 rural
airports in the system. She explained that DOT/PF would
distribute money to enhance airports.
10:06:19 AM
Co-Chair Stedman wanted to look deeper into the rural
airports.
Co-Chair von Imhof felt that there may be a meeting with
transportation subjects.
Senator Micciche noted that there was only one project in
Department of Public Safety (DPS). He recalled that there
was a request for improving Alaska Trooper housing, which
was important to retaining troopers in rural Alaska. He
wondered why that proposal was removed.
Ms. Sanders felt that the item was in the supplemental
budget.
Senator Micciche felt that it might be considered for the
current budget.
Ms. Sanders remarked that it was a technical item.
Senator Micciche noted that the DOT/PF equipment
replacement was for the same amount as the year prior. He
wondered whether the $15 million reflected the most
efficient use of the equipment.
Ms. Cramer replied that DOT/PF originally requested $25
million. She felt that there was always efficiencies that
could be found in government.
Co-Chair von Imhof stated that there were many people
waiting to provide public testimony.
Senator Shower queried the timeline of the ferry study.
Ms. Cramer replied that the marine consultant would provide
a report in August of the current year.
^PUBLIC TESTIMONY
10:11:40 AM
Co-Chair von Imhof OPENED public testimony.
10:12:33 AM
LESLIE JACKSON, KETCHIKAN GATEWAY BOROUGH TRANSIT,
KETCHIKAN (via teleconference), spoke in opposition of
funding that would provide state matching funds for
transportation assistance.
10:14:16 AM
BRYAN O'CALLAGHAN, EXECUTIVE DIRECTOR, CENTER FOR
COMMUNITY, SITKA (via teleconference), spoke in opposition
of funding that would provide state matching funds for
transportation assistance.
10:16:51 AM
LYNETTE CLARK, SELF, FOX (via teleconference), stressed
that the governor has veto power. She felt that the budget
was past due. She encouraged to do the will of the people.
She felt that Alaska was the "biggest and best" special
interest group. She remarked that it was time to make tough
decisions. She felt that the governor had proposed a
legitimate budget. She did not want money taken from the
Permanent Fund Dividends.
10:18:42 AM
GLENN MILLER, TRANSPORTATION DIRECTOR, FAIRBANKS NORTH STAR
BOROUGH, FAIRBANKS (via teleconference), spoke against the
removal of the matching funds for transportation
assistance.
10:21:20 AM
JOHN LAMONT, SELF, WASILLA (via teleconference), spoke
against the removal of the matching funds for
transportation assistance.
10:24:47 AM
FRANK KELTY, MAYOR, UNALASKA (via teleconference), felt
that it was too early to move the ferry fund.
10:27:51 AM
ROBB ARNOLD, ALASKA MARINE HIGHWAY SYSTEM, JUNEAU, noted
that the money for the Tustumena was already approved, so
did not understand why that money would be removed.
10:30:29 AM
TRINA ARNOLD, ALASKA MARINE HIGHWAY SYSTEM, JUNEAU, spoke
against removal of money for the Tustumina.
10:32:26 AM
NILS ANDREASSEN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, JUNEAU, spoke in support of deferred maintenance,
community development block grants, village safe water,
fish and game funding, and the state match for
transportation projects. He felt that the funding for the
census should include funding for the Complete Count
Commission.
10:34:50 AM
SUE STEINACHER, SELF, NOME (via teleconference), shared
that most of rural Alaska was in crisis, because housing
was disgraceful for most rural residents.
10:38:02 AM
JOHN ROZZI, MAT-SU COALITION ON HOUSING AND HOMELESSNESS,
MAT-SU (via teleconference), spoke to the budget cut to the
grant to find housing for the homeless people.
10:40:57 AM
Co-Chair von Imhof CLOSED public testimony.
10:41:43 AM
Co-Chair von Imhof discussed the agenda for the following
day's meeting.
SB 19 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:42:06 AM
The meeting was adjourned at 10:42 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB0037 v.U Sectional.pdf |
SFIN 3/12/2019 9:00:00 AM |
SB 37 |
| SB 37 Work Draft Version U.pdf |
SFIN 3/12/2019 9:00:00 AM |
SB 37 |
| 031219 SFC SB 19 Capital Budget Overview.pdf |
SFIN 3/12/2019 9:00:00 AM |
SB 19 |
| SB0037 Conceptual Amendment #1 Von Imhof.pdf |
SFIN 3/12/2019 9:00:00 AM |
SB 37 |