Legislature(2021 - 2022)SENATE FINANCE 532
09/01/2021 03:00 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Governor's Budget Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB3003 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
THIRD SPECIAL SESSION
September 1, 2021
3:03 p.m.
3:03:06 PM
CALL TO ORDER
Co-Chair Bishop called the Senate Finance Committee meeting
to order at 3:03 p.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Lyman Hoffman
Senator Bill Wielechowski (via teleconference)
Senator David Wilson
MEMBERS ABSENT
Senator Bert Stedman, Co-Chair
Senator Donny Olson
Senator Natasha von Imhof
ALSO PRESENT
Neil Steininger, Director, Office of Management and Budget,
Office of the Governor; Senator Gary Stevens.
PRESENT VIA TELECONFERENCE
Kelly Goode, Deputy Commissioner, Department of
Corrections, Anchorage; April Wilkerson, Director of
Administrative Services, Department of Corrections, Juneau;
Lennon Weller, Economist, Department of Labor and Workforce
Development, Juneau; Micaela Fowler, Director of
Administrative Services, Department of Commerce, Community
and Economic Development, Juneau; Heidi Teshner, Deputy
Commissioner, Department of Education and Early
Development, Juneau.
SUMMARY
CSHB 3003 (FIN) am(brf sup maj fld)
APPROP: OPERATING; PERM FUND; EDUCATION
HB 3003 was SCHEDULED but not HEARD.
^GOVERNOR'S BUDGET AMENDMENTS
3:04:42 PM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed the spreadsheet titled
"HB3003/SB3001 Operating and Capital Amendments" (copy on
file). He noted that the second to the last column that
noted the fund source showed federal relief funds shown as
"1265," which indicated the grant was received directly by
the agency for a specific purpose under one of the Covid-19
federal relief packages. The "1269" fund code indicated a
discretionary pot of federal relief funding to the state
rather than a specific grant. The final column on the chart
listed whether there was an individual available to answer
detailed questions.
Co-Chair Bishop read of list of individuals available from
the departments to answer questions.
Mr. Steininger looked at item 1, which proposed $1.5
million in Unrestricted General Funds (UGF) for the
Division of Corporations, Business and Professional
Licensing (CBPL). He explained that during the Covid-19
pandemic, the administration had put a freeze on license
fee increases, and the proposed funds sought to backfill
some of the management costs for the division in order to
ensure fee increases were not needed while businesses were
recovering after the pandemic.
Co-Chair Bishop asked if there was a specific reason the
administration had chosen one agency, as there were many
agencies with fees in other business units.
Mr. Steininger explained that CPBL ran its operations
entirely from fee revenue support, and by not allowing the
division to adjust its fees it was unable to meet the costs
with other resources in the department. He affirmed that
the administration was working to ensure that the
government action did not have harmful impacts on
businesses.
Co-Chair Bishop asked if the item would be recurring.
Mr. Steininger relayed that the administration was looking
at ways it could make policy changes, whether through a
statutory proposal, regulatory, or otherwise, that would
have lasting impacts on keeping the fees low within CBPL.
He expressed that the administration looked forward to
bringing some of the policy decisions to the legislature in
the future.
3:08:27 PM
Mr. Steininger pointed to item 2, in the Department of
Corrections (DOC), to implement a DNA collection program.
The item proposed an amount just under $1.2 million that
would come from the discretionary federal relief funds. He
reminded that during the previous session 50 percent of the
discretionary relief had been appropriated, and one of the
items had been vetoed from the budget, leaving a remainder
of about $2.7 million from the first portion of the funds.
The item would use a portion of the funds to implement the
governor's initiative to complete testing of DNA test kits
for sexual assault cases that had been a backlog facing the
state for some time.
Co-Chair Bishop yielded to the subcommittee chair for DOC
for any questions.
Senator Wilson asked about the item that was vetoed.
Mr. Steininger informed that one of the items that was
funded with the discretionary federal relief was a grant of
$10 million to the Alaska Seafood Marketing Institute
(ASMI). The administration was able utilize $3 million in
Coronavirus Aid, Relief, and Economic Security (CARES) Act
funding to cover costs within ASMI and reduce the $10
million to $7 million. The $3 million that was vetoed was
proposed to be used for item 2.
Senator Wilson discussed the DNA testing kits and thought
that by law the state should have already been processing
the kits.
Mr. Steininger affirmed that the administration was
intending to test all the kits that were legally required
to be tested, which required resources through DOC.
Senator Wilson asked if there was a time frame for
completion of testing the kits.
Mr. Steininger deferred to DOC.
3:11:10 PM
KELLY GOODE, DEPUTY COMMISSIONER, DEPARTMENT OF
CORRECTIONS, ANCHORAGE (via teleconference), explained that
the Department of Public Safety (DPS) was monitoring the
sexual assault DNA test kits. She could speak to overall
DNA collection for all offenses.
Co-Chair Bishop wondered if DOC was the correct department
to direct the funds.
Ms. Goode replied that DPS was entering into an agreement
with DOC and would be delegating authority in order to
collect the DNA samples. The processing would be a DOC
effort.
Senator Wilson wanted more clarification. He wondered if
the proposed funds were for collection or testing. He asked
if DOC would be running the tests. He wanted more clarity
on how the program was being operated.
Ms. Goode explained that DOC had collected DNA in the past,
but only under certain circumstances. Under the new
initiative, DOC would be delegated authority by DPS to
collect on all DNA with allowable offenses by statute. The
initiative expanded DOC's collection process significantly.
Co-Chair Bishop asked if the funds were for past samples or
future samples to be collected.
Ms. Goode explained that for DNA samples being run, the
funds would be a question for the DPS crime lab. She
continued that the funds for DOC would prospectively fund
statewide positions in order to collect all the DNA the
department would be doing based on the authorization from
DPS. She added that DOC would be collecting DNA upon remand
when an individual was booked into a facility.
Co-Chair Bishop asked if the ten proposed new positions
were permanent or a one-time ask.
Mr. Steininger thought the item would lead to permanent
increased activity in DOC to ensure that there was capacity
to do the testing in the future. He continued that there
could be adjustments after the initial testing.
Co-Chair Bishop asked if the funding would be UGF going
forward.
Mr. Steininger answered in the affirmative.
3:15:03 PM
Senator Wielechowski asked about the DNA collection
requirements, which were passed as an amendment in 2008. He
assumed that the funding had gone into the base funding at
the time. He wondered if the DNA collection funds were
allocated and had been used for the purpose that was
intended.
Mr. Steininger thought it would take some research to see
how the funds from 2008 may have moved around within the
department's budget. He would have to get back to the
committee with a more robust answer.
3:16:02 PM
APRIL WILKERSON, DIRECTOR OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF CORRECTIONS, JUNEAU (via teleconference),
explained that the funding that DOC received in 2008 was
limited and supported the current DNA collection efforts.
The funds were only for individuals charged with specific
crimes or as a result of a subpoena. The current request
was for an expanded effort that would come to DOC under the
new agreement with DPS.
Senator Wielechowski was interested in seeing an analysis
of the funding. He mentioned his work on amendments to
require DNA collection for felony offenses. He mentioned
amendments to require DNA collection for sex offenses. He
recounted that every time the changes had been made there
had been fiscal notes attached. He assumed the funding had
gone into the base and wondered why the funding was not
used for the purpose for which it was implemented. He
mentioned the backlog of DNA test kits, which he thought
had probably resulted in criminals going free.
3:18:07 PM
Mr. Steininger addressed item 3 in the Department of
Education and Early Development (DEED). The item was a
direct grant to DEED for its federal relief for the
Individuals with Disabilities Education Act in the amount
of $9.3 million, part of which would go toward preschool
grants. He continued that item 4 though item 6 were a
reversal of items that were included in the appropriation
bill that the administration was seeking to amend.
Subsequent to the introduction of the bill, instruction to
release expenditures on sweepable funds was given to the
Office of Management and Budget (OMB), and the fund source
changes that were proposed were no longer necessary. The
items would reverse the changes and return the items to an
appropriation supported by the Higher Education Fund.
Mr. Steininger addressed item 7 and item 8, both of which
proposed federal relief going to the Department of Health
and Social Services (DHSS) for a CARES Act Provider Relief
Fund. The items pertained to phase 2 of the grant, with
$400,000 going to the Pioneer Homes of Alaska and $500,000
going to the Alaska Psychiatric Institute. Item 9 was a
restoration of the veto of funding for public health
nursing. He explained that at the time the veto was made,
the Covid-19 response had been much different than
currently, with the consideration of the Delta variant.
3:21:02 PM
Mr. Steininger addressed item 10, pertaining to federal
relief coming to DHSS related to detection and mitigation
of Covid-19 in confinement facilities. The item was in
partnership with DOC but run through DHSS. He continued
that item 11 was an assortment of grants coming into
emergency programs within DHSS and totaled just over $50
million. The department had been receiving multiple smaller
grants that added up to the $50 million, and the item
provided the authority to collect on the grants that came
through federal relief. He offered to provide more detail
and a list of the grants.
Co-Chair Bishop asked who was available from DHSS to
comment.
Senator Wilson had a question about the restoration of the
public health nursing veto. He asked if there were other
vetoes in DHSS that the administration was looking to
reverse due to the uptick in hospitalizations and possible
strain on Medicaid.
Mr. Steininger explained that the item was the only one
that was put forward to restore a veto and was the most
pressing issue to make sure public health nursing had the
resources to respond to current events. He detailed that
the administration continued to examine on a daily basis
whether DHSS had access to resources it needed to respond
to the public health crisis. He assured that if at any
point it was not the case, the administration would come
back to the legislature. The administration felt the
department had resources to make it to the next session.
Senator Wilson asked if Mr. Steininger meant the next
session in January.
Mr. Steininger answered "yes."
Senator Hoffman noted that the item was listed for multi-
year appropriations. He asked if the item would be for two
or three fiscal years or if it was for calendar years. He
noted that the majority of the funds were for high-risk,
rural, and underserved Alaskans. He asked if there was a
breakdown of how much funding was going to the different
groups.
Mr. Steininger affirmed that item 10 would be for FY 23 to
FY 24 and item 11 was intended for FY 22 through FY 25. He
did not have a breakdown of the funding per category. He
thought someone from the department could speak to the
matter, otherwise he would provide an answer in writing.
Senator Hoffman preferred to have the answer provided in
writing, particularly with regard to how the funds for
Covid-19 in rural Alaska were being spent by district.
Mr. Steininger looked at item 12 for $5 million for direct
grants to Senior and Disability Services for services to
seniors impacted by Covid-19. Item 13 was for the
Department of Labor and Workforce Development's
Unemployment Insurance Trust Fund. The fund was an
allowable cost under the discretionary federal award to the
state, as well as an allowable expenditure under the CARES
Act. As the state had CARES Act or State and Local Federal
Relief Fund distribution amounts returned to the state over
the previous several amounts while closing out the books on
the CARES Act, the funds would be deposited into the
unemployment trust to avoid an employer tax increase. The
appropriation would ensure that should the returned funds
not be enough to avoid the additional tax, the state would
be able to backfill the fund with American Rescue Plan Act
(ARPA) discretionary funding. The item was in combination
with use of Coronavirus Relief Fund dollars.
3:26:10 PM
LENNON WELLER, ECONOMIST, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT, JUNEAU (via teleconference), introduced
himself.
Co-Chair Bishop asked about the size of the current
unemployment insurance shortfall.
Mr. Weller replied that without the proposed appropriation,
he projected an ending September balance of $307 million,
which equated to a 2.43 percent reserve ratio. There was a
statutory targeted rate for full solvency of between 3 and
3.3 percent of covered wages.
Co-Chair Bishop thought Mr. Weller might want to prepare a
presentation for the committee possibly for the following
week.
Mr. Steininger addressed item 14 in the Department of
Natural Resources, for a Southeast Alaska Timber Supply
Transitional Support Project. The item proposed $270,000 of
UGF as a result of federal action to reduce timber sales in
Southeast Alaska and provide transitional support for the
region. Item 15 pertained to Statutory Designated Program
Receipt Authority granted from outside entities (not the
federal government) in the amount of $800,000 to fund
critical projects. He noted that some of the third-party
agencies that were funding the item were listed in the
description.
Mr. Steininger looked at items 16, 17, and 18, which were
bargaining unit terms from the Public Safety Employees
Association (PSEA) contract for court services officers and
deputy fire marshals. The item proposed a lump sum payment
equivalent to four percent of the annual wage. There had
been some delays in the ratification of the contract for
PSEA as a result of Covid-19, so the lump sum payment was
to pay for the cost-of-living adjustment (COLA) that
otherwise was negotiated.
Co-Chair Bishop asked if there was an initial plan for the
agency to absorb the cost.
3:29:24 PM
Mr. Steininger recounted that initially the contract was
being considered during the 31st legislative session, when
the session had been truncated due to Covid-19. The
negotiated contract was not submitted in time for inclusion
in the budget bill. The previous session, the contract was
included but midway through the session it was realized
that the 4 percent COLA would not go into place until the
appropriation bill was signed into law, which would
effectively shortchange the employees. As a result, the
administration revisited the agreement and negotiated a
four percent lump sum rather than the initial COLA. The
lump sum agreement had come in too late for inclusion to
the budget bill.
Co-Chair Bishop asked if he should assume that the
employees had not been "made whole" per the agreement, and
the item would make them whole retroactively if the funding
were approved.
Mr. Steininger answered affirmatively. He relayed that the
employees had received the negotiated COLA for FY 22, but
the lump sum would make the employees whole for the pay
they were not given in FY 21.
Senator Wilson thought the bargaining unit had received a 7
percent increase two years previously, an additional 7
percent the previous year, and that the 4 percent was an
additional amount.
Mr. Steininger explained that the lump sum was specific to
certain employees within the bargaining unit. He thought
the 7.5 COLA adjustments had applied to state troopers. The
lump sum proposed to be for the court services officers and
deputy fire marshals that were separated out during the
bargaining process. He referred to the director of
personnel for further detail.
Mr. Steininger addressed item 19, which was a backfill of
Public School Trust Fund monies that were appropriated into
DOR. There was a statutory 5 percent of market value (POMV)
draw on the fund, and there had been an over-appropriation
of slightly more than 5 percent.
3:32:39 PM
AT EASE
3:33:02 PM
RECONVENED
Mr. Steininger continued to discuss item 19, an over-
appropriation of the Public School Trust Fund to ensure the
fund was not overdraw. The veto was made from the
Department of Revenue Treasury Division. The veto was not
intended to short fund the division, but was placed there
because the only other place to veto the fund was from K-12
support. The item ensured the treasury was still able to
effectively manage the fund and would backfill a technical
veto.
Co-Chair Bishop felt that the item would "keep the auditor
happy."
Mr. Steininger addressed item 20, which was a 3 percent
COLA for the Masters, Mates, and Pilots bargaining unit
negotiation. The contract had been negotiated at the very
end of the previous session and had not been done in time
to submit in the budget bill.
Mr. Steininger addressed item 21, an economic development
grant for $1 million in the Department of Commerce,
Community and Economic Development. The grant would fund a
variety of state economic development initiatives and was a
direct grant from the federal government.
Co-Chair Bishop asked for a snapshot of how the funds might
be allocated.
3:34:48 PM
MICAELA FOWLER, DIRECTOR OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT,
JUNEAU (via teleconference), introduced herself.
Co-Chair Bishop asked what types of grants might be funded
through item 21.
Ms. Fowler replied that the $1 million initial grant could
be used to fund work such as the Comprehensive Economic
Development Plan for the state or broadband planning. She
mentioned the mariculture industry as another allowable
area that could potentially benefit from the grant program.
Mr. Steininger spoke to item 22, another Economic
Development Administration grant for just under $10.5
million, specific to state tourism.
Co-Chair Bishop asked how the grant might be executed. He
commented on the importance of tourism, and thought
residents had "picked up the slack" on travel within the
state after out of state tourism was diminished. He wanted
to see the funding executed in a timely fashion to promote
tourism in Alaska.
Senator Wilson asked about the grant recipient and how the
money would be allocated.
Mr. Steininger deferred to Ms. Fowler.
3:37:15 PM
Ms. Fowler asked Senator Wilson to reiterate his question.
Senator Wilson asked if the funds would offset the veto of
the Alaska Travel Industry Association (ATIA) funding.
Ms. Fowler relayed that the grant required that if the
state was the grant recipient, that it competitively award
grants from the funding. She explained that potentially the
monies could be in part allocated to ATIA as an offset for
some of the veto. Should the state take in the funding, it
would need to be able to competitively bid the funding
rather than allocating it to a full recipient.
Senator Wielechowski wondered, if under the new
interpretation of how the Statutory Budget Reserve (SBR)
funds were swept or not, if funds were restored for
tourism.
Mr. Steininger replied that the $10 million in funding for
ATIA was vetoed and was not impacted by the determination
on spending of appropriations made in HB 69.
Senator Wielechowski asked what had changed since the veto
to have the governor consider putting the funds into the
budget.
Mr. Steininger stated that proposed $10 million would be
competitively awarded and was different than the named
recipient grant to ATIA that was vetoed.
Senator Wielechowski requested a list of the things the
governor had vetoed that were now proposed to be funded.
Mr. Steininger listed the $1.25 million for public health
nursing, which was the only restoration of a vetoed item
being presented. He noted that there were items where there
was federal relief available for a similar purpose to an
item that was vetoed. He added that quite a few of the
vetoes made out of HB 69 were because there had been
federal relief funding available for the same purpose.
3:40:48 PM
Senator Wilson wondered whether the grants for tourism
would be based on region or a statewide approach for
promotion.
Ms. Fowler stated that there was not yet a determination,
but the department anticipated that the approach would
include ensuring cultural tourism was included and was not
only funding of traditional marketing programs. She noted
that there were new and more innovative aspects of tourism
marketing and support for the tourism industry included in
how the funds would be utilized. Whether the funds would be
granted to one entity or multiple entities was yet to be
determined.
Mr. Steininger referred to items 23 through item 33, which
were all similar in nature and pertained to round 13 of the
Renewable Energy Grant funds. He offered to go through the
individual projects or speak to the items as a package.
Co-Chair Bishop queried the members.
Senator Hoffman stated he was familiar with the program on
renewable energy and did not have any questions about the
projects.
Senator Wilson was fine with the projects.
Mr. Steininger moved to Item 34, within DEED, which
proposed $3.1 million for demolition of the Napakiak K-12
school. He noted that the school had erosion issues, which
had recently escalated over the previous few months. The
demolition of the school was the first step to ensure the
school did not fall into the river, after which a school
rebuild was needed.
3:43:55 PM
Senator Hoffman said that the demolition would prevent
potential pollution to the Kuskokwim River. He assumed
design and planning could expedite the rebuild project. He
thought the school district had identified a site and had
piling but not the funds to place the piling. He emphasized
the importance of considering DEED's plans to continue to
provide education for the students. He recounted that the
school district had brought the issue forward two years
previously, and the school itself was on the new
construction list. The department had been asked to
reevaluate the situation, after which the project moved
from second to third on the new construction list. He knew
there was a concern that the school would fall into the
river, but thought more importantly it was crucial to
ensure that students in the rural community be provided
with education.
Co-Chair Bishop wanted to put the matter into perspective.
He noted that the committee room was about forty feet long
in comparison of the distance between the school and the
river. He had seen an aerial drone photograph of the school
the previous week.
Senator Hoffman thought that there had been over 200 feet
of riverbank lost in one season.
Mr. Steininger knew there were plans in place and thought
the department was working with the school district. He
deferred to DEED for specific comments.
3:47:49 PM
HEIDI TESHNER, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION
AND EARLY DEVELOPMENT, JUNEAU (via teleconference),
addressed Senator Hoffman's remarks. She affirmed that DEED
was having active conversations with the school district
regarding the Napakiak school. As of a few weeks
previously, the district was making a determination of how
many portable buildings would be needed to provide ongoing
education in Napakiak. There was a site visit with the
project architect planned for the following week, and a
DEED staff was planning to attend. She continued that the
district had an initial plan of a partial demolition of one
of the wings of the facility and one of the utility
buildings. After the site visit there would be a greater
ability to assess whether a full or partial demolition
would be needed.
Ms. Teshner continued her remarks. She had spoken with the
superintendent the previous week and understood that the
school district was waiting to enter into its long term
lease with the Napakiak Corporation in order to drill for
the pilings on the location for the new school. She relayed
that she knew the district had a plan for continuing the
education of the students.
3:49:26 PM
Senator Hoffman wanted to address the subject of the
pilings. He recalled that the district had been
anticipating assistance from the state and took measures to
transport the piling to Napakiak from Bethel. When there
was no financial inclusion in the previous budget, the
pilings had been transported back to Bethel. He thought it
seemed as thought the school district did not feel it was
getting the support it needed. He did not feel that the
appropriation went far enough to ensure the students of
Napakiak would receive education the next season.
Senator Hoffman thought Ms. Teshner was well aware of the
project timeline due to the parameters of construction
season and transportation issues. He thought there could
potentially be a three-to-four-year window in which the
students' educational needs would not be met. He recounted
that he brought the matter to the attention of the
committee during the previous regular legislative session
and the committee had not taken action. He thought clearly
there needed to be state assistance for at least providing
modular classrooms. He mentioned fall storms and thought it
was possible the entire school could be closed. He did not
think the state was being proactive enough on the matter.
He acknowledged the state was being proactive with regard
to demolition, which he considered a far cry from looking
out for the educational needs of the community.
Co-Chair Bishop stated that there would be further
announcements regarding the meeting schedule.
ADJOURNMENT
3:53:23 PM
The meeting was adjourned at 3:53 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Copy of HB3003 Amendments 8.25.2021 Department Representatives.pdf |
SFIN 9/1/2021 3:00:00 PM |
HB3003 |
| HB 3003 OMB Document DHSS Public Health COVID Grants.pdf |
SFIN 9/1/2021 3:00:00 PM |
HB3003 |