HOUSE BILL NO. 284 "An Act making appropriations, including capital appropriations, supplemental appropriations, reappropriations, and other appropriations; making appropriations to capitalize funds; and providing for an effective date." HOUSE BILL NO. 285 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." HOUSE BILL NO. 286 "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." HOUSE BILL NO. 321 "An Act making supplemental appropriations and other appropriations; making an appropriation to capitalize a fund; amending appropriations; and providing for an effective date." 1:34:36 PM PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, introduced herself. NEIL STEININGER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, reviewed the details of the handout, "FY2019 Amendments to HB 286/ SB 144 / HB 284 / SB 142 / HB 321 / SB 168" (copy on file): Line 2: 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. Line 5: Reapprop for Newtok - Mertarvik Community Development - NTE $960,000 The Newtok Village Council is coordinating with the Denali Commission to bring critical housing to the community of Mertarvik. This project will match federal Denali Commission funds of $3.84 million to refurbish, ship, and install 13 barracks available on Joint Base Elmendorf-Richardson to Mertarvik. The barracks will be converted into 4- bedroom residences and will add to the current housing stock of eight existing homes in Mertarvik. Line 6: Reapprop for Enhanced Rural Safety - Est $899,711 This provides additional funding to respond to the rural public safety crisis and continues to advance the goals of the State's Public Safety Action Plan. The Governor is working with the Departments of Law and Public Safety, as well as institutions and rural leadership most directly involved and affected, and will seek innovative solutions to rural public safety needs. The funding is requested in the Governor's Office to denote the priority of solving this issue but also allows distribution to the department that is most able to address the specific issue. Law, Labor, Public Safety, and Commerce could each play a part in addressing these pressing needs. Representative Wilson asked if the funds were out of the general funds (GF). Mr. Steininger responded that they were reappropriation dollars from the GF for a capital project. Representative Pruitt wondered asked the original location of the reappropriated funds. Mr. Steininger replied that it was a reappropriation from the Susitna-Watana project. Mr. Steininger relayed that those were the total of negative $7 million in GF through the supplemental request. Vice-Chair Gara asked for clarification, and surmised that they were amendments to the 2019 budget. 1:38:36 PM Mr. Steininger continued with the amendments: Line 10: Align Information Service Fund Receipts Replace interagency receipts with Information Service Fund. This is a technical adjustment to align the Office of Information Technology's (OIT) budget with the most appropriate fund source. Line 11: 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. Line 12: 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. Representative Wilson looked at line 10, and queried the total money in the Information Service Fund. She also queried the age of the fund. Ms. Pitney replied that the fund was set up around the prior information technology organization, so the fund may have been around for 15 years. She shared that there was an oversight of having interagency receipt authority. She remarked that the Information Services Fund was the same type of money, but from an accounting change, there were statutory rules that focused on the information technology needs. She remarked that it was a technical accounting change, because there was an inadvertent use of interagency receipts. She shared that the number was the annual anticipated operating cost. Representative Wilson queried the total in the fund. 1:41:59 PM Mr. Steininger continued with the amendments: Line 13: 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. Line 14: 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. Representative Pruitt wanted to better understand the structure of funding. He wondered if $129 was required for matching. Mr. Steininger replied that the Office of Children's Services (OCS) had cost allocation plans. He shared that it was not a direct matching requirement. He explained that the collection of federal revenue was more dependent on the types of children in care, and the types of activities performed by the case workers and employees. Representative Pruitt asked about the number of people that would be hired. Mr. Steininger responded that there would be one person in the Safety Officer position; and the security guards in Kenai and Fairbanks would be contracted through a security firm. Representative Pruitt wondered whether the $72,000 of federal funds would be lost, should there be no GF funds. Mr. Steininger replied that they would not be able to collect the federal funds with the general funds. Representative Wilson wondered how much authority was given for the federal funds. She surmised that, because of the complicated calculation, the state may not lose the federal funding. She stressed that there was a maximum available to each state, and Alaska may almost be at that maximum. Ms. Pitney replied that five years prior, there were not as many qualified families under the 4E. She explained that the program had a much higher federal rate. She stated that the request balanced it to what was eligible to fund, and the balance of the state and federal funds. She remarked that the federal funds were increasing over time, because there was more eligibility in the 4E area versus those in the GF. Representative Wilson felt that it was about the number of people enrolled in the program, and not about how many positions were hired. Ms. Pitney agreed. She stated that the request was a balance of funding that would allow the contract for the individuals, given the other commitments in that operation. 1:47:57 PM Vice-Chair Gara understood that it was not federal money that would be taken from other use. He felt that there was room for additional federal funds, as the positions were added. Ms. Pitney agreed. Co-Chair Seaton wondered whether it was a maintenance of effort amount, rather than a direct federal match percentage. Ms. Pitney responded in the negative, and explained that it was the amount covered in the contract amount. Mr. Steininger continued with the amendments: Line 15: 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. Representative Wilson wondered whether the request was within the same department that removed public assistance to fund other workers. Mr. Steininger replied that the adult public assistance program was within the Division of Public Assistance. He explained that the request was for Public Assistance field services, which were people who determined eligibility for programs like SNAP, Medicaid, and other similar programs. Vice-Chair Gara shared that there were nearly a dozen public assistance programs that the workers would administer. He surmised that the request was related to the federally funded or partially federally funded public assistance backlog. Mr. Steininger replied in the affirmative. Representative Pruitt felt that the goal was to have an influx of people to eliminate the backlog. He felt that 41 positions was more than what would be needed in the long- term. He wondered whether the intent was to reduce the numbers, or whether 41 was expected in perpetuity. Ms. Pitney responded that there was a period of time as the backlog grew, when the Alaska Mental Health Trust Authority (AMHTA) filled several positions on a temporary basis to help address the backlog. She stated that there was more progress than the current situation. She anticipated that the positions would be needed in the short-term, of three to five years. She furthered that, if there were systems and simplifications of processes, there would be room for savings. She did not anticipate that the positions would only be one or two years. 1:54:47 PM Representative Pruitt asked how the total numbers would change in terms of percentages. He wondered if the department had any openings in the department. Ms. Pitney answered that the department had openings at present, with 6 to 7 percent increase. The vacancy rate was higher than expected. The department needed to hire vacancies and filling the 41 positions. Representative Guttenberg thought it was great that the department was getting back to adequate numbers He asked if the department was doing anything else to ensure they stay a long time. Ms. Pitney did not have specifics on the particular department. Representative Tilton asked about the considerations taken up in the subcommittee process. Ms. Pitney replied that any additions in the budget were scrutinized at a tedious level. She stressed that there had been several reviews of the department. 2:00:54 PM Vice-Chair Gara stated that the department wanted additional positions. He stated that the department had lower paying employees work overtime, which led to a 40 percent burnout rate within the first year. Mr. Steininger continued: Line 16: 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. Ms. Pitney added that the last capital project started at the end of 2015. She explained that the council began in the early 2000s to bring the department mapping resources, needs, and priorities under one statewide umbrella. She stated that the request put it through the next year, with anticipation that it would continue. Representative Guttenberg queried the purpose. Ms. Pitney answered that there were 3 to 4 main costs. She explained that there was a contract with a mapping provider that leverages money from the federal government. She stated that it was about $400 thousand spent on an annual basis Mr. Steininger relayed that the total of operating amendments was $2.652 million in UGF; $2.334 million in federal funds; and $250,000 in DGF. 2:05:54 PM Mr. Steininger continued with the amendments: Line 19: 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. Line 20: 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. Line 21: 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. Line 22: 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. Line 23: 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. Line 24: 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. Representative Pruitt wondered whether all of the items were sunsetting. Ms. Pitney replied that the only program that was not sunsetting was the Norther Tobacco Securitization; and the Investment Loss trust fund. She stated that those were funds that were available to be deposited.; Representative Pruitt acknowledged the work of Representative Tilton. 2:09:20 PM Mr. Steininger continued with the amendments: Line 28: 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. Line 29: 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. Line 30: 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. Line 31: North Slope Borough - Monitoring Waterfowl in the NPR- A This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $337,550.00. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project provides support to the North Slope Borough Department of Wildlife Management to monitor population trends in waterfowl that will build upon a study that has been ongoing for over fifteen years. This grant will fund labor, fringe benefits, contractual, materials, supplies, freight, travel, and 25% administration. Line 32: North Slope Borough - Area-Wide Air Quality Study This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $1,187,500. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. The purpose of this project is to collect base line data on air quality in areas that are currently not developed by oil and gas industry. This grant will fund labor, fringe benefits, contractual, material, supplies, travel, and 25% administration. Line 33: North Slope Borough - Monitoring Nearshore Fish and their Habitats in the NPRA This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $562,500. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project provides support to the North Slope Borough Department of Wildlife Management (DWM) to conduct studies on the abundance and health of nearshore fisheries in the NPR-A region. DWM will work with local subsistence fisherman and collect samples across lagoon and nearshore subsistence waters to assess the abundance and distribution of fishes and characterize their biological and physical habitat. Line 34: City of Nuiqsut - Youth Center Operations and Maintenance This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $267,826. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to continue operations and maintenance of the youth center. Grant funds are requested for labor, fringe benefits, supplies, freight, maintenance, repairs, fuel oil, communications, utilities, cultural camps, and special events. Line 35: City of Nuiqsut - Local Government Operations and Maintenance This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $949,203. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project will provide continued funding for local government operations and maintenance for the city of Nuiqsut. Grant funds are requested for labor, fringe benefits, office equipment purchase, materials, supplies, travel, maintenance, communications, utilities, fuel oil, and insurance. Line 36: City of Wainwright - Youth Program This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $289,272. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project will continue the Youth Program established in 2005, which provides a safe and drug-free environment with adult supervision for youth ages 6-18 years old. Grant funds will be used for labor, fringe benefits, insurance, contractual services, recreational materials, supplies, utilities, communication, and building maintenance and repairs. Line 37: City of Wainwright - Local Government Operations This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $499,251. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to provide continued operations and maintenance necessary to successfully operate the local government of Wainwright. Grant funds will go towards labor, fringe benefits, insurance, contractual services, communications, utilities, travel, materials, supplies, and maintenance and repairs. Line 38: North Slope Borough - Monitoring Fish in the Colville River for Presence of Water Mold (Saprolegnia) This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $187,500. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project will monitor broad whitefish, especially for presence of mold, on the Colville River by recording catch from subsistence caught specimens and deploy real-time data loggers to monitor temperature on the river in six locations from break- up to October. Grant funds will pay for labor, fringe benefits, contractual services, materials, supplies, freight, travel, and 25% administration. Line 39: City of Atqasuk - Local Government Operations and Youth Program This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $393,061. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to supplement the operations and maintenance costs necessary to successfully operate the local government of Atqasuk and provide continued services to residents, including the Youth Program. Grant funds will pay for labor, fringe benefits, insurance, professional services, travel, utilities, communications, maintenance and repairs, materials, and supplies. Line 40: City of Nuiqsut - Kisik Center Maintenance Project This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $192,035. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project will repair the Kisik Community Center HVAC system, as well as fund general maintenance to the facility such as electrical, plumbing, and mechanical. Grant funds will be used for contractual services and building materials. Line 41: City of Anaktuvuk Pass - Local Operations and Community Center Upgrades This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $571,535.44. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to support the general operations and renovation activities of the city of Anaktuvuk Pass, enabling the city to continue to build capacity for effective and efficient local government operations during a period of increased NPR-A related oil and gas development. Line 42: North Slope Borough - Community Winter Access Trails (CWAT) This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $3,576,798. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to establish the North Slope Borough Winter Access Trails, develop permits, agreements, protocol with regulatory agencies and industrial users that will allow for local community use. Grants funds are requested for contractual services, equipment purchase, materials, supplies, freight, travel, contingency and 25% administration. Line 43: City of Utqiagvik - Repair of the City of Utqiagvik's Shop Subfloor and BCI Support This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $160,000. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to replace the old shop floor by installing BCI support and all new subfloors at the city's maintenance shop. Grant funds are requested for contractual services, materials, supplies, and freight. Line 44: City of Utqiagvik - Local Government Operations This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $1,890,000. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to continue operations including city council, administration cost, maintenance department, business licensing, Department of Motor Vehicles, taxicab regulation services, alcohol registration services, concessions, scholarship expenses, and recreational activities. Line 45: City of Utqiagvik - Purchase of New John Deere Loader This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $400,000. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project will be used to purchase a loader. Grant funds are requested for equipment purchase and freight. Line 46: City of Utqiagvik - Purchase of New Tent for Existing Hockey Facility This request amends the original Governor's FY2019 capital budget request by adding allocation level funding of $147,690. This change is due to the timing of approval of individual National Petroleum Reserve Alaska grants. This project is to purchase a tent cover for the hockey and curling facility. Grant funds are requested for material, supplies, and freight. 2:11:42 PM Representative Wilson asked about line 28. She wondered whether the $4 million would allow the borough to look for the grant, or whether there was another grant for the changeout program of $4 million awaiting an appropriation. Ms. Pitney responded that it was not in hand but was eminent. Representative Wilson asked whether it had the same restrictions. Ms. Pitney agreed to provide that information. Co-Chair Seaton asked that HB 284 was HEARD and HELD in committee for further consideration. HB 285 was HEARD and HELD in committee for further consideration. HB 286 was HEARD and HELD in committee for further consideration. HB 321 was HEARD and HELD in committee for further consideration. 2:13:44 PM AT EASE 2:14:18 PM RECONVENED