Legislature(2021 - 2022)ADAMS 519
05/03/2022 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB283 | |
| HB413 | |
| HB358 | |
| SB201 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 413 | TELECONFERENCED | |
| + | HB 358 | TELECONFERENCED | |
| + | SB 201 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 283 | TELECONFERENCED | |
HOUSE BILL NO. 283
"An Act making appropriations, including capital
appropriations, reappropriations, and other
appropriations; making supplemental appropriations;
and providing for an effective date."
9:03:55 AM
Co-Chair Merrick indicated she planned to adopt a committee
substitute to HB 283 that included some additional
projects.
Co-Chair Foster MOVED to ADOPT proposed committee
substitute for HB 283(FIN), Work Draft 32-GH2436\G
(Dunmire, 5/2/22).
Co-Chair Merrick OBJECTED for discussion.
9:04:46 AM
TALLY TEAL, STAFF, REPRESENTATIVE KELLY MERRICK, referred
to Report A, Report B, Handout C, and Handout D (copies on
file). She read the summary of changes to the committee
substitute (copy on file):
Fiscal Summary:
FY 22 UGF: $914,306,200
FY 23 UGF: $384,271,300
Total UGF: $1,298,577,500
Total All Funds FY 22 and FY 23: $3,743,426,300
Changes to Section 4: FY 22 Budget
Page 33, line 21 Clean Hydrogen Research, Development,
and Demonstration Opportunities
$5,000,000 FED
Page 34, line 26 Alliance for Support of American
Legion Baseball-Safety Upgrades, Equipment Replacement
and Repairs to Existing Facilities $200,000
Page 35, line 5 Anchorage School District-Birchwood
Boiler
$3,850,000
Page 35, line 7 Anchorage School District-Fire Lake
Safety Vestibule $524,000
Page 35, line 9 AWAIC-Shelter and Transitional Housing
Renovations $347,000
Page 35, line 29 Careline Alaska-Facility Replacement
and Equipment $1,500,000
Page 36, line 19 Moore Street Seniors, Inc.-Automatic
Doors for Senior Housing $27,138
Page 36, line 30 Seawolf Hockey Alliance-Purchase of
Bleachers and Scoreboard for the University Rink
$340,000
Page 37, line 28 Fairbanks North Star Borough-Oil to
Gas Conversion Assistance $1,250,000
Page 38, line 7 Kenai-Kenai River Bluff Stabilization
$6,500,000
Page 38, line 14 Municipality of Anchorage-Port of
Alaska Modernization Program $200,000,000
Page 38, line 17 Port of Nome-Deep Draft Port
$175,300,000
Page 38, line 18 Wrangell-Water Treatment Plant
Improvements $5,000,000
Page 40, line 3 Anchorage-Muldoon Library Critical
Updates $1,307,000
Page 40, line 10 Fairbanks North Star Borough-Noel
Wien Library Broadband Access Expansion and capital
Improvement Project $3,580,000
Page 40, line 22 Petersburg Medical and Public Health
Center $11,413,000 (from $20,000,000)
Page 40, line 28 United Human Services of SE Alaska-
Teal Street Center, a Social Service Hub $3,700,000
Page 41, line 33 Eagle River Fire Crew Facility
$13,859,439
Page 42, line 5 Eklutna Lake Trail $90,000
Page 42, line 20 State Parks Public Use Cabins
$1,640,000
Page 43, line 10 Sand Lake Road-Dimond and Raspberry
Traffic Study $30,000
Page 43, line 12 Sand Lake Road Lighting $484,000
Page 43, line 13 Signalized Intersection at Tudor Road
& Patterson Street $6,000,00000
Ms. Teal stopped for questions on the numbers section.
9:09:29 AM
Representative LeBon had a question about the $1.5 million
designated for the Careline Alaska Facility Replacement and
Equipment. He wondered if the funding was for the purchase
of a new building or for repair of an old building.
Ms. Teal responded that in conversations with Alaska Mental
Health Trust Authority (AMHTA), she had learned there was a
facility that the trust intended to purchase for $1
million. The additional $500,000 was intended to replace
the equipment and technology associated with the new
acquisition.
Representative LeBon understood that the trust was
occupying to rent and not to purchase. He did not
understand the intent of the $1.5 million.
Co-Chair Merrick indicated she would follow up with
additional information.
Representative Josephson asked for an explanation of what
Careline did.
Co-Chair Merrick reported Representative Grier Hopkins had
joined the meeting.
9:11:10 AM
AT EASE
9:13:20 AM
RECONVENED
Co-Chair Merrick indicated Representative Rasmussen had
joined the meeting.
Co-Chair Merrick invited Representative Ivy Spohnholz to
comment on the Careline facility.
REPRESENTATIVE IVY SPOHNHOLZ, CO-CHAIR, HOUSE LABOR AND
COMMERCE COMMITTEE, explained that Careline would be
operating the 9-8-8 crisis hotline that was being
developed. She clarified that Careline would be renting the
new facility that it planned to occupy. A potential
purchase agreement might also be reached. Recent
conversations with Careline informed her that the facility
project would still need funding, but the amount would not
be as high as originally anticipated.
Co-Chair Merrick asked for updated funding numbers. She
reported that Representative Sara Hannan had joined the
meeting.
Representative Rasmussen expressed her support for the Port
of Alaska stabilization project. She indicated the project
would impact at least 80 percent of Alaska.
Co-Chair Merrick indicated Chief Norm McDonald was online
and asked him to comment on the need for the Eagle River
Fire Crew Facility.
9:16:23 AM
NORM MCDONALD, CHIEF, FIRE AND AVIATION, DIVISION OF
FORESTRY, PALMER (via teleconference), explained that the
Eagle River facility was intended to house two fire crews.
The crews were based out of a facility in Palmer that was
built in the 1990s, but the lease for the building had just
expired and the building was no longer available to the
crews. The facility in Eagle River was damaged in the 2018
earthquake and needed to be demolished, but there were some
elements of the facility that could be utilized in the
rebuild. The two crews affected were the only permanent
full-time fire crews in Southcentral Alaska. Other
locations had been considered, but the location in Eagle
River was deemed as the most cost efficient and the central
location allowed the crews to quickly respond to incidents.
9:19:15 AM
Representative Johnson asked how the project would dovetail
with the Division of Forestry at the airport in Palmer.
Chief McDonald responded that there was no room at the
airport location for the additional 45 firefighters that
needed a new facility. All firefighters fell under the same
organization and management structure. He intended for the
new location to not only house the 45 firefighters, but to
house up to 80 firefighters as a staging location during
wildfires.
Representative Johnson asked if the facility in Palmer
would change.
Chief McDonald replied that the Palmer facility would not
change.
Co-Chair Foster commented that he supported funding the
Port of Alaska. He also highlighted the need for matching
funds for the Port of Nome.
Representative Josephson had spoken to Mr. Miles Baker who
indicated that there were no matching federal dollars for
the Port of Anchorage.
Co-Chair Foster relayed that the U.S. Army Corps of
Engineers had made the Port of Nome one of its highest
priorities nationwide. The state's congressional delegation
had been working to get the $250 million for Nome into the
Infrastructure Investment and Jobs Act (IIJA). He would
hate to see Alaska lose out on the funds.
9:23:45 AM
Vice-Chair Ortiz referred to "Clean Hydrogen Research,
Development, and Demonstration Opportunities" on page 33,
line 21 in the summary of changes. He understood it to
involve federal funding and asked about the source of the
federal funding.
Ms. Teal replied that there were discretionary grants in
IIJA which applied to the items mentioned by Vice-Chair
Ortiz. The administration had indicated that it would like
to apply for the grants.
Vice-Chair Ortiz asked if different entities within the
state could apply directly with the federal government or
if grants would be administered through a particular
entity.
Ms. Teal indicated the state entity that would administer
the grant was the Alaska Gasline Development Corporation
(AGDC). She deferred to Mr. Neil Steininger for a more
detailed response.
9:25:33 AM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, was trying to get Mr. Miles Baker
online who could better answer the question. He understood
that the grant was a competitive opportunity that AGDC was
seeking. If AGDC was successful in obtaining the grant, the
money would be allocated by the fall of 2022. He did not
believe the grant would pass through other organizations in
the state.
Representative Wool asked Mr. Steininger to elaborate on
the nature of the project. He thought it looked like a
research project.
Mr. Steininger would get back to the committee with answers
to the questions in writing. He understood that the work
would make the wider gasline project more viable.
Co-Chair Merrick indicated she would keep an eye out for
Mr. Baker.
Representative Wool thought it sounded like the pipeline
was being developed to run hydrogen or another version of
natural gas.
9:28:00 AM
Representative Rasmussen asked if Co-Chair Foster could
provide more information about the elevated importance of
the Port of Nome.
Co-Chair Foster responded that the port had originally
started out as an Arctic port but was becoming more widely
used for shipping and fishing. Currently, the federal
delegation was looking at the port as a potential U.S.
Coast Guard facility and the port was important considering
the geopolitical landscape and the war in Ukraine. He
relayed that U.S. Senator Dan Sullivan had thought it would
be advantageous to have a naval presence in Nome.
Co-Chair Merrick invited Ms. Teal to move to the language
section.
9:30:09 AM
Ms. Teal reviewed the changes to the language section of
the bill (copy on file):
SECTION 21: adds a new section that appropriates an
amount estimated to be $200,000 from the Exxon Valdez
Oil Spill Restoration Fund to the Prince William Sound
Science Center for a research facility.
SECTION 24: removes (l) and (m), which appropriated
$25,000,000 to the Municipality of Anchorage
contingent on the $25,000,000 match by the
Municipality (can be in-kind) for the purpose of
preparing a full financial package for final
investment decision for the Port of Alaska.
SECTION 25: adds (l), which appropriates an amount not
to exceed $200,000,000 to the Municipality of
Anchorage for the purpose of matching each dollar
received in federal funds for the Port of Alaska
modernization project, excluding money received in the
MARAD settlement.
SECTIONS 33-35: make technical changes to capital
lapse language and effective dates due to section
renumbering.
9:31:34 AM
Representative LeBon asked whether the $200 million for the
Port of Alaska was contingent on a matching federal dollar
amount or if it would be allocated regardless of a federal
match.
Ms. Teal responded that the state would be matching any
federal money. The port was in the process of applying for
several federal grants and once the grants were obtained,
the state would match the money.
Co-Chair Merrick added that there were two $200 million
grants that the state would match. She would have Mr. Baker
respond in writing to the questions that had been brought
forward.
9:33:14 AM
Co-Chair Merrick WITHDREW the OBJECTION. There being NO
further OBJECTION, the committee substitute for HB 283
(FIN) was adopted.
Co-Chair Merrick set an amendment deadline for HB 283 for
Wednesday, May 4, 2022 at 6:00 p.m.
9:33:27 AM
AT EASE
9:36:47 AM
RECONVENED
Co-Chair Merrick indicated Mr. Miles Baker was online.
Representative Josephson referred to Section 25 of the
committee substitute. He understood it to read that the
municipality would receive an additional $200 million for
the Port of Alaska subject to receiving $200 million in
federal matching funds. He wondered if the federal funds
could be forthcoming though IIJA.
9:37:51 AM
MILES BAKER, INFRASTRUCTURE COORDINATOR, OFFICE OF THE
GOVERNOR, responded that there was no direct source of
funding for the port. There were several U.S. Department of
Transportation (DOT) grants for which the port might be
eligible. Most were existing programs and had been around
prior to IIJA but were intended for smaller scale one-time
projects. He had not seen a funding stream as high as $200
million become available in the past.
Representative Josephson suggested that in order for the
port to receive modernization dollars, the legislature and
the governor would have to adopt the numbers section of the
bill which provided a $200 million grant.
Mr. Baker responded that he was not familiar with the
language of the committee substitute and thought there were
a number of ways that funds could be acquired. He agreed
that the fastest way to get money for the project would be
for the legislature to make an appropriation of state
dollars.
Vice-Chair Ortiz referred to page 33, line 21 of the
committee substitute asked for more information regarding
the $5 million available through IIJA for clean hydrogen
research, development, and demonstration opportunities.
Co-Chair Merrick redirected the question to Mr. Frank
Richards of AGDC.
9:42:21 AM
FRANK RICHARDS, PRESIDENT, ALASKA GASLINE DEVELOPMENT
CORPORATION, ANCHORAGE (via teleconference), responded that
the grant funding was coming from a competitive grant
program through the Department of Energy. The program was
looking to implement hydrogen hubs across the nation.
Alaska could use its vast quantities of methane from the
North Slope to generate clean hydrogen through production
of ammonia, which could be used for things like power
generation. The proposal for Alaska to receive the grants
from the Department of Energy would need to be a
collaborative effort between state entities and the private
sector. Up to $2 billion over several years could be
granted for each hydrogen hub, and $5 million in funds
could be granted for accepted phase 1 concepts.
Representative Wool understood that the process involved
the extraction of methane in the ground at the North Slope
which would then be treated to produce ammonia and used for
hydrogen consumption elsewhere. He wondered if he had
summarized the concept accurately.
Mr. Richards responded that Representative Wool's summary
was accurate. He elaborated that the pipeline that would be
constructed from the North Slope to Nikiski could be
utilized to deliver methane molecules to the Alaska
liquefied natural gas (LNG) project. The goal was to
produce hydrogen or ammonia in Southcentral Alaska and
utilize the Cook Inlet reservoir for carbon sequestration,
which was a byproduct of the generation of ammonia.
9:46:36 AM
Representative Wool thought there were other avenues to
obtain federal funds for the port apart from IIJA. He did
not recall the Municipality of Anchorage stating that IIJA
was the only possible funding source.
Mr. Baker thought the question should be directed to the
Municipality of Anchorage.
Co-Chair Merrick indicated someone from the Municipality of
Anchorage was online. She also relayed that Representative
Jonathan Kreiss-Tompkins had joined the meeting.
9:48:46 AM
ROSS RISVOLD, FINANCE MANAGER, MUNICIPALITY OF ANCHORAGE
(via teleconference), was available for questions.
Representative Wool restated his question.
Mr. Risvold responded that the municipality was working
with the federal delegation for earmarks for the port
project. He noted there were several other types of grants
the municipality was pursuing. There was an avenue of
federal granting that the municipality might qualify for
through IIJA that related to port specifically. If matching
was required for the grants, the municipality would
immediately pass an ordinance by the assembly providing for
matching funds sourced through Port of Alaska revenue
bonds. It would be paid for by implementing a port
surcharge for any freight crossing the dock. Any time the
municipality received federal grants, it would reduce the
dollar amount of the revenue bonds the municipality would
be required to issue and consequently reduce the freight
surcharge.
9:52:48 AM
Representative Wool relayed that language in the bill
necessitated matching each dollar received in federal
funds. He was not sure if revenue bonds qualified as
federal funds. He asked if Mr. Risvold felt the goal of
obtaining $200 million in funding was realistic.
Mr. Risvold responded that it was a reasonable amount. He
suggested a match by the municipality that would be
comprised of port revenue bonds or federal funding or other
sources from the municipality. Recently, the municipality
had been awarded a dollar amount in court from the U.S.
Department of Transportation, Maritime Administration
(MARAD), but it was unknown when that money would become
available. He thought some of those monies could be used
for the port. He reiterated that if the municipality did
not reach its funding goal, it would issue revenue bonds to
ensure the success of the project.
9:55:05 AM
Representative Rasmussen asked how much the Municipality of
Anchorage had already invested in the project and how much
was approved to bond.
Mr. Risvold was specifically speaking to phase 2 B of the
cargo dock replacement project. The municipality had $222
million in funds in hand already, but the request was for a
total of $600 million from the state. He reiterated that
other federal fund sources had been identified and it was
reasonable to expect that the requested funding amount
could be attained. If the total funding amount could not be
achieved, the municipality would make up for the difference
with revenue bonds.
Representative Rasmussen asked if the $25 million proposed
in another version of the capital budget would help the
project move forward in any meaningful way.
Mr. Risvold replied that the goal was to develop sources of
funds for the Port of Alaska Modernization Project (PAMP).
The municipality was grateful for any amount of funding it
could receive but the $25 million would be a meaningful
addition. He thought selling debt to finance an
appropriation by the State of Alaska would be the best
practice as opposed to always using cash for financing.
9:59:36 AM
Representative Rasmussen asked whether it would be enough
to leverage federal funding if the state only invested $25
million with a $25 million match clause and the $200
million was not funded.
Mr. Risvold replied that if the municipality came out of
the legislative session with only $25 million with a $25
million match, it would force the municipality to take out
additional revenue bonds to make up the difference. He
indicated if the state could provide more funding, it would
show the federal government the seriousness of the state's
support of the project.
Co-Chair Merrick indicated Ms. Teal had some additional
information on the version of the committee substitute in
the Senate that proposed the $25 million funding amount.
Ms. Teal clarified that the language in Version I of the
committee substitute proposed funding to the municipality
in the amount of $25 million for the purpose of preparing a
full financial package for final investment decision. The
funding was for a specific purpose.
Co-Chair Merrick understood that the purpose was not
construction.
Ms. Teal responded in the affirmative and emphasized that
the funding was for the purpose of preparing the full
financial package.
Representative Rasmussen asked Mr. Steininger to offer his
opinion on her next question.
10:03:25 AM
Mr. Steininger asked Representative Rasmussen to repeat her
question.
Representative Rasmussen had not asked the question yet.
She asked if any other communities had provided a match as
meaningful as the Municipality of Anchorage.
Mr. Steininger responded that he was unaware of any such
match.
Representative Josephson asked if the municipality needed
monies for a full financial package for financial
investment decision.
Mr. Risvold replied the language was confusing to the
municipality and it was not sure what the task would
entail. The municipality had a plan of finance for the Port
of Alaska and suggested that the funds in the plan would be
used for construction purposes and not limited to the
purpose of developing a financial plan. He disagreed with
the proposed language in the Senate version of the bill. He
suggested revisiting the language regarding any
restriction.
Co-Chair Merrick was notified that there had been an
amendment that was adopted in the Senate Finance Committee
which removed "preparing a full financial package for final
investment decision for the Port of Alaska" and inserted
"the Port of Alaska Modernization Project including a full
financial package for final investment decision."
10:07:58 AM
Representative Josephson asked what the magnitude of
difference to the tariff would be if the state did not
invest any more dollars in the Port of Alaska project.
Mr. Risvold asked if Representative Josephson was referring
to cargo dock replacement only or the entire PAMP.
Representative Josephson responded the cargo dock
replacement only to start.
Mr. Risvold responded that if the cargo dock replacement
was funded solely by the municipality, the current tariff
of $3.30 per ton would increase to $23.48 per ton. If the
$1.851 billion PAMP was funded by the municipality, the
current $3.30 per ton tariff would increase to $33.05 per
ton.
Co-Chair Merrick indicated Mr. Michael Partlow with the
Legislative Finance Division was online.
10:10:28 AM
Representative Rasmussen recalled that the Municipality of
Anchorage had funded $222 million to the Port of Alaska
project. She wondered if any other communities had
contributed a dollar-to-dollar match to any similar
infrastructure projects.
MICHAEL PARTLOW, FISCAL ANALYST, LEGISLATIVE FINANCE
DIVISION (via teleconference), could not think of a
specific example of any major infrastructure projects that
were funded in the same manner. However, there were other
communities that contributed a match towards harbor
infrastructure in the community.
Representative Rasmussen asked if Mr. Partlow could speak
to the requirements for local government municipal grants.
She wondered how much the state would match.
Mr. Paltrow responded that he thought it was a dollar-for-
dollar match but he would verify the information and get
back to the committee.
Representative Carpenter assumed that multiple alternatives
for the project would have been successful. He would like a
copy of the alternatives proposed that might be less
costly.
10:13:48 AM
DAVE BRONSON, MAYOR, MUNICIPALITY OF ANCHORAGE, ANCHORAGE
(via teleconference), indicated that $25 million in funding
would not move the project forward in any significant way.
He remarked that it was difficult to obtain a large federal
amount of matching dollars without a maximum buy-in. If the
state would not invest enough of its own dollars, the
federal government would not want to invest. He did not
think $25 million would be enough to convince the federal
government to take the project seriously.
Representative Carpenter did not think his question had
been answered.
Mayor Bronson had not heard Representative Carpenter's
question. He asked him to repeat it.
Representative Carpenter asked what potential viable
alternatives had been considered.
Mayor Bronson asked if Representative Carpenter's question
related to the engineering or the financial structure of
funding.
Representative Carpenter thought his question applied to
both factors. He wondered if there were more cost-effective
alternatives to modernizing the port.
Representative Rasmussen asked Mayor Bronson to describe
the changes the project has undergone over the years. She
thought the requested funding amount had already been
reduced from previous proposals.
Mayor Bronson responded that the municipality was trying to
be as fiscally conservative as possible. He relayed that
the municipality had to lock in an engineering plan in
order to move forward. It was the best plan and the
municipality had committed to the plan. The plan could not
change at this point.
10:19:40 AM
Representative Carpenter was unsure that the engineering
plan was the best plan financially.
Representative Wool asked if someone could provide
information on the structure of the ports in Alaska. He
wondered if funneling most goods coming to the state
through Anchorage was the best option.
Co-Chair Merrick asked if Representative Wool was directing
the question to Mayor Bronson.
Representative Wool thought there was a state-wide interest
in shipping and receiving goods in all of Alaska. He
wondered if there was a more holistic approach to the cargo
issue.
10:22:25 AM
AT EASE
10:23:13 AM
RECONVENED
Co-Chair Merrick indicated the committee would continue its
discussion on the capital budget in the afternoon meeting.
HB 283 was HEARD and HELD in committee for further
consideration.