Legislature(2021 - 2022)ADAMS 519
04/07/2022 01:00 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB414 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 414 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 414
"An Act making appropriations for the operating
expenses of state government and certain programs;
making capital appropriations and supplemental
appropriations; capitalizing funds; and providing for
an effective date."
1:01:57 PM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, thanked members for hearing HB 414
and introduced the PowerPoint presentation: "Infrastructure
Appropriation Bill: HB 414." He would provide a high-level
overview of the ways in which the bill would impact the
state budget. He began by detailing the table on slide 2
and shared that HB 414 impacted fiscal year (FY) 22 and FY
23 operating and capital budgets. There was a total of $1.3
billion in HB 414, which came primarily from federal funds.
There was a required match in addition to some unrestricted
general funds (UGF) that were associated with other
opportunities and not necessarily required by the federal
Infrastructure Investment and Jobs Act (IIJA). In FY 22
there was a total of $352 million in funds, which included
$38.5 of UGF. He explained that the other funds reflected
on the table were a combination of capital improvement
program agency receipts and clean drinking water funds for
projects within the Department of Environmental
Conservation (DEC).
Mr. Steininger advanced to slide 3 and indicated that the
Office of Management and Budget (OMB) had prepared an
updated fiscal summery based on IIJA and all amendments put
forward by the administration. In FY 23, OMB was projecting
that the total UGF revenue in FY 23 would be just over $7
billion and total UGF expenditures would be just over $4.8
billion. The projection for FY 22 was $6 billion of
anticipated revenue. The projected changes were due to the
statutory payment of oil and gas tax credits.
1:06:09 PM
MILES BAKER, INFRASTRUCTURE INVESTMENT COORDINATOR, OFFICE
OF THE GOVERNOR, continued to slide 4 to review IIJA. He
indicated that OMB had spent the last several months
combing through IIJA to better understand it. He clarified
that in addition to new spending, the bill reauthorized
surface transportation and the Environmental Protection
Agency (EPA) programs. Also, much of the money in the
federal bill would not go to the state, though some would
go to eligible municipalities and tribes. The presentation
would outline the monies that would be coming to Alaska.
The state would not have discretion on how to spend the
money because it would specifically target chosen federal
programs. The state would not be receiving significant
tranches of money that it could designate as it saw fit.
Approximately 60 percent of the funds would come about by
formula and 40 percent would come about through grants on a
national basis.
1:08:13 PM
Co-Chair Merrick indicated Representative Thompson and
Representative Johnson had joined the meeting.
Vice-Chair Ortiz asked about the funds that would be going
to municipalities and tribes rather than the state. He
wondered if the funding would be competitive or if the
allocation would be based on community population.
Mr. Baker responded that most of the funds would be
competitive. He added that there were some that were not,
such as money for cybersecurity.
Vice-Chair Ortiz asked for a summary of the types of
programs for which the municipalities would be competing.
Mr. Baker replied that transportation would be a large
funding source for which there would be competition. There
were many available grants, such as energy efficiency
conservation block grants and grants to help fund school
busses. There were also water program grants that DEC was
involved in that communities applied for each year.
1:11:18 PM
Mr. Baker discussed transportation and other infrastructure
on slide 5 via a graph. He indicated the large blue section
showed the total spending of IIJA and the light blue
section showed the new spending. The new spending was split
between transportation and other infrastructure, which
included energy, broadband, water, and environmental
remediation. He noted that the federal bill appropriated
monies over a five-year time frame from FY 22 to FY 26.
Mr. Baker advanced to slide 6 and reported that in
developing the bill, the governor's office used some
guiding principles listed on the slide:
• Include identifiable funding coming in FY22 or FY23
• Identify coordination & implementation needs
• Maintain pressure on UGF spending
• Provide Local Government & Tribal Support
• Maintain tight nexus to programs in federal
legislation
• Pursue significant competitive opportunities for which
Alaska is uniquely positioned
Mr. Baker reviewed the HB 414 infrastructure overview by
category on slide 7. He suggested that the chart was listed
in decreasing order of flexibility and discretion. The
first category was titled "Federal Programs & Match" and
included programs such as the rural ferry program, the
electric vehicle (EV) program, federal highway programs,
and others. There was a UGF match of $56 million, which
represented about 70 percent of the UGF match. The next
category was a small amount of UGF that the governor felt
was appropriate in order to provide more state spending on
federal programs, such as critical mineral mapping and
cybersecurity. He noted that the United States Congress
recently finished the FY 22 budget cycle which earmarked
the state's congressionally designated spending.
Co-Chair Merrick indicated Representative Carpenter and
Representative Wool had joined the meeting.
Representative Carpenter noted that Mr. Baker had spoken
about the supplementals for FY 22 and FY 23. He asked what
the numbers were in reference to and whether the numbers
referred to the supplementals, FY 23, or both.
Mr. Baker responded that the numbers were a combination of
both. He referred back to slide 2 which delineated the
numbers.
1:16:49 PM
Mr. Baker moved to slide 8 to review the federal programs
and match funding. The largest category of investment was
in the area of broadband. The Department of Commerce,
Community and Economic Development (DCCED) would house the
Office of Broadband. There was also significant investment
in public water and sewer projects. He indicated that
Alaska Oil and Gas Conservation Commission (AOGCC) would be
leading three new programs: Orphaned Well Plugging,
Remediation, and Restoration. The amount of money to start
the programs would be $32.3 million and would be paid out
in contracts.
Mr. Baker indicated that the Alaska Energy Authority (AEA)
would also receive monies for its programs, including two
new programs. There was a substantial increase to Alaska
Housing Finance Corporation (AHFC) funding for the purpose
of the weatherization assistance program and for energy
efficiency research and training.
Co-Chair Merrick indicated there were about 15 people from
various agencies that were online and available for
questions.
1:19:59 PM
Representative Edgmon asked when the money would actually
be available to Alaska.
Mr. Baker expected the $22 million for the programs listed
on the slide would be available soon and the additional $23
million would be available starting October 1, 2022 [the
start of the federal fiscal year]. He added that there were
some programs for which the final estimates had been
announced, but all final details had not been implemented
yet. It was possible that there could be some delays and
the money would not be received on precisely October 1, but
the money was expected over the course of the year.
1:20:57 PM
Representative Wool asked whether the $35 million dedicated
to the weatherization assistance program under AHFC was a
grant or a revolving loan.
Mr. Baker responded that the weatherization assistance
program was a formula program at the federal level. He was
unsure of the basis for the formula.
1:22:15 PM
JAMES WIEDLE, BUDGET DIRECTOR, ALASKA HOUSING FINANCE
CORPORATION (AHFC) (via teleconference), responded that the
weatherization program funds were administered via a grant
through a variety of agencies throughout the state. The
funds would be administered in the same way that all other
weatherization programs were administered.
Representative Wool asked if an individual would need to
apply for a grant if they wanted to improve the
weatherization of their house.
Mr. Wiedle responded that Representative Wool was correct.
Vice-Chair Ortiz asked if it was appropriate to ask
questions about future slides.
Mr. Baker replied that he was ready to move to slide 9.
Vice-Chair Ortiz asked about the first bullet on slide 9
for the Department of Fish and Game. He wondered what the
$24 million designated for wildlife restoration would
specifically involve.
1:24:28 PM
RACHEL HANKE LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND
GAME (via teleconference), replied that the wildlife
restoration project was designed to increase the use of
Pittman-Robertson (PR) funds which the department expected
to dramatically increase in the future.
Vice-Chair Ortiz shared his understanding that the $24
million in question would be used to better utilize more
money that would be coming from PR funds.
Mr. Baker replied that the wildlife restoration program
also included the sportfish program. The sportfish access
piece was not increased when it was reauthorized by the
federal legislation. However, the PR program was based on
gun and ammunition sales and the revenue from the program
had substantially increased. The $24 million reflected the
increase in federal funds. She explained that wildlife
restoration included wildlife research, management, and
equipment. It was essentially a supplemental item to the
normal line item that was in the budget every year.
1:27:29 PM
Representative Josephson asked if the funding necessarily
related to federal funding and IIJA or if it was added into
HB 414.
Mr. Baker confirmed that the funding all fell under the
category of federal programs that were increased, changed,
or appropriated in IIJA.
Mr. Baker continued on slide 9. He explained that the only
program in IIJA that was under the Department of Health and
Social Services (DHSS) was a small Low-Income Home Energy
Assistance Program (LIHEAP). The Department of
Administration would be involved in the allocation of a
state and local cybersecurity grant related to military and
veteran's affairs. He moved to the Department of Natural
Resources (DNR) and explained that there was a substantial
focus in IIJA on securing a better domestic supply chain
for critical minerals and rare earth elements. There would
also be money allocated towards the earth mapping resources
initiative, the abandoned mine lands reclamation program,
and community wildfire defense grants.
1:30:48 PM
Representative Carpenter asked whether the cybersecurity
grants would be infrastructure focused, equipment focused,
or training and personnel focused.
Mr. Baker indicated that it would involve all categories.
He noted that Homeland Security and the United States
Department of Energy received money for cybersecurity. The
grants would be focused on a combination of equipment,
software, and training.
Representative Carpenter shared his understanding that
federal dollars would contribute to bringing in
cybersecurity experts to the state and the state could
continue to fund these positions after the federal dollars
were spent. He asked if he was correct.
Mr. Baker deferred the question.
1:32:23 PM
BOB ERNISSE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS (DMVA) (via
teleconference), responded that the grant program would
help state, local, and tribal governments improve
cybersecurity and address cybersecurity threats and risks.
He did not think that the state would be responsible for
supporting the cybersecurity experts brought in to
implement and improve the programs once the federal dollars
had been spent. He would follow up with more information.
Representative Carpenter commented that he was not
questioning military and veterans' affairs specifically. He
asked if there would be an impact on the state's personnel
costs for any of the programs that involved new positions
supported by an increase in federal dollars.
Mr. Baker added that it was one of the new programs in the
bill that was authorized for four years instead of five.
There would be $1 billion spread over four years and it was
slightly different because the match requirement would
change over the course of the four-year period. The match
would start at 10 percent and would then increase by 10
percent every year.
Mr. Steininger referenced Attachment 5 (copy on file) which
showed the permanent full-time, part-time, and non-
permanent positions associated with each item. There was a
total of 27 full-time positions and five non-permanent
positions that the state would expect to continue to
support through FY 23 to manage some of the programs.
1:35:15 PM
AT EASE
1:35:45 PM
RECONVENED
Co-Chair Merrick asked if there were further questions on
Attachment 5.
Mr. Baker pointed out that the Department of Military and
Veterans' Affairs was not expecting to need any further
personnel for cybersecurity purposes.
Representative Johnson asked if the abandoned mine lands
reclamation program would take place on state lands.
Mr. Baker responded that the allocation was based on the
tons of coal historically produced in the state. It was
based on an estimate and no state was to receive less than
$20 million over the course of the 15-year program. The
$1.3 million figure on slide 9 represented the $20 million
target divided by the 15-year time frame.
1:38:07 PM
DAVID LEPAIN, DIRECTOR, DIVISION OF GEOLOGICAL AND
GEOPHYSICAL SURVEYS, DEPARTMENT OF NATURAL RESOURCES (via
teleconference), could not speak to the issues and deferred
to the Division of Mining Land and Water.
1:38:26 PM
JUSTIN IREYS, ENGINEERING ASSOCIATE, DIVISION OF MINING
LAND AND WATER, DEPARTMENT OF NATURAL RESOURCES (via
teleconference), responded that the $1.3 million in
question could be applied to any land status around the
state. It could be used for state, federal, or private land
as long as the landowner had consented.
Representative Johnson was thinking specifically of the
Sutton area of the state where there had been a significant
amount of coal produced. She thought it was likely that
there was overlapping land ownership in the area.
Mr. Ireys responded that there had been a number of
abandoned mine reclamation projects in the Sutton area over
the life of the program, which dated back to the early
1980s. The program would continue to be working in the area
over the coming years.
Vice-Chair Ortiz asked if the number of locations around
the state where mines had been abandoned was known. He
wondered whether there was a significant number of mines
that needed to be mitigated.
Mr. Ireys replied that there were several abandoned mines
around the state. The first effort of the program in the
early 1980s was to take an inventory of the abandoned
mines, particularly coal mines. There was about $45 million
of reclamation projects still in the inventory and $38
million had been expended to date in the effort to complete
reclamation projects. The majority of the outstanding
inventory was located in the Healy Valley in the interior
of the state and there was also a significant number in the
Sutton area. The Healy and Sutton areas were the two
largest coal producing regions in the history of Alaska.
Co-Chair Merrick asked Mr. Baker to finish his
presentation.
1:42:58 PM
Mr. Baker continued to review the federal programs and
match funding on slide 10. There was a huge investment of
federal dollars into water and wastewater projects under
DEC. The village safe water program in the state would
receive about $2 billion through the Indian Health
Services' sanitation program. He relayed that DEC would
play a large administrative and management role in the
program.
Mr. Baker continued to review the federal programs and
match funding on slide 11. The items on the slide were
reflective of the operating budget.
1:45:22 PM
Representative Carpenter asked why permanent positions
would be funded through temporary grants and monies.
Mr. Baker responded that DEC could better answer the
question.
1:46:18 PM
AT EASE
1:46:59 PM
RECONVENED
CARRIE BOHAN, ADMINISTRATIVE SERVICE DIRECTOR, DEPARTMENT
OF ENVIRONMENTAL CONSERVATION (via teleconference),
responded that the majority of the work that would be done
was already contracted out. The positions would primarily
be engineers responsible for overseeing project
implementation. The department had a realistic vision of
projects through the funding process, and it was clear
which projects would be coming to fruition next. There was
concern about the competitive nature of engineering
positions and it was unwise to create non-permanent
positions where individuals had little incentive to stay in
the roles. The projects were often five to ten years in
duration and there was a risk of projects slowing down if
staffing was frequently changed.
1:49:41 PM
Representative Carpenter thought it would be possible to
compile contracts that included staffing needs for five-
year projects without requiring permanent and full-time
positions. He did not think it would be difficult to turn
permanent positions into contract positions that would not
incur additional personnel costs to the state. He did not
understand why permanent positions were preferred over
contract positions.
Mr. Baker would provide some additional information to the
committee.
1:50:50 PM
Mr. Baker continued to review the federal programs and
match funding on slide 12. He had indicated earlier in the
presentation that about half of the federal funding would
go towards transportation, and that certainly held true at
the state level. Baseline spending for transportation costs
was expected to increase by about 19 percent over the next
year. There were also four new programs which were expected
to cost about $45 million per year.
Mr. Baker discussed additional support of federal
initiatives on slide 13. The areas where additional state
support would be beneficial were administration,
environmental conservation, and natural resources. He
indicated that DEC received significant funding for state
brownfield site clean-up in the amount of $1 million of
UGF. It was also important for the state to be able to map
and assess its own mineral bases in preparation for the
influx of federal funding.
Co-Chair Merrick indicated that the committee would adjourn
after slide 14.
Mr. Baker moved to slide 14 and indicated there were two
congressional earmarks that needed additional authority:
the Alaska Housing Finance Corporation (AHFC) and natural
resources. There had been $2 million appropriated to AHFC's
successful housing program for rural professionals. The
governor matched the appropriation with $2 million of UGF.
Under the category of natural resources, there was an
additional earmark for coastal and nearshore mapping.
Co-Chair Merrick indicated she would have the presenters
return at a later date. She reviewed the agenda for the
following meeting.
HB 414 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 414 22.04.07 Attachment 1 - Infrastructure Bill Summary.pdf |
HFIN 4/7/2022 1:00:00 PM |
HB 414 |
| HB 414 22.04.07 Attachment 2 - DOTPF Airport Improvement Program Details.pdf |
HFIN 4/7/2022 1:00:00 PM |
HB 414 |
| HB 414 22.04.07 Attachment 3 - DOTPF Surface Transportation Program Details.pdf |
HFIN 4/7/2022 1:00:00 PM |
HB 414 |
| HB 414 22.04.07 Attachment 4 - Capital Projects in FY2023 and FY2022 Summary.pdf |
HFIN 4/7/2022 1:00:00 PM |
HB 414 |
| HB 414 22.04.07 Attachment 5 - Detail Backup Spreadsheet.pdf |
HFIN 4/7/2022 1:00:00 PM |
HB 414 |
| HB 414 22.04.07 Attachment 6 - Project Details.pdf |
HFIN 4/7/2022 1:00:00 PM |
HB 414 |
| HB 414 22.04.07 GOV Infrastructure Bill HFIN FINAL - HB414 Corrections.pdf |
HFIN 4/7/2022 1:00:00 PM |
HB 414 |