Legislature(2025 - 2026)ADAMS 519
05/01/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB57 | |
| HB27 | |
| HB194 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 57 | TELECONFERENCED | |
| += | HB 27 | TELECONFERENCED | |
| + | HB 194 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 57(FIN)
"An Act making appropriations, including capital
appropriations and other appropriations; making
reappropriations; making appropriations to capitalize
funds; and providing for an effective date."
1:41:46 PM
Co-Chair Foster MOVED to ADOPT the proposed committee
substitute for CSSB 57(FIN), Work Draft 34-GS1460\U (Walsh,
4/30/25)(copy on file).
Co-Chair Schrage OBJECTED for discussion.
Co-Chair Schrage asked his staff to review the changes in
the Committee Substitute (CS).
ERIK GUNDERSON, STAFF, REPRESENTATIVE CALVIN SCHRAGE,
reviewed the changes in the CS. He summarized that the CS
increased deferred maintenance for kindergarten through
grade twelve (K-12) schools, Judiciary, and the University
of Alaska (UA). It also provided additional funding for the
Alaska Travel Industry Association (AITA) while utilizing
other funds and reappropriations. He noted that a few other
changes were covered in the summary of changes document. He
read from the Summary of Changes (copy on file):
Page 3, lines 10-13: Department of Commerce, Community
and Economic Development - increases the grant amount
to Alaska Travel Industry Association from $2,500,000
to $5,000,000 from the general fund and specifies the
grant is for "Tourism Marketing Activities in National
and International Markets".
Page 3, lines 17-18: Department of Education and Early
Development - increases the appropriation from the
general fund to Mt. Edgecumbe High School for
Replacement of Dorm Windows from $1,365,000 to
$2,730,000.
Page 3, lines 19-21: Department of Education and Early
Development - increases the appropriation to the Major
Maintenance Grant Fund (AS 14.11.007) from $19,055,000
to $38,110,038, providing funding for the top 9
projects on the School Major Maintenance list.
Page 5, lines 11-12: Office of the Governor -
increases the appropriation to the Office of the
Governor for Statewide Deferred Maintenance,
Renovation, and Repair from $10,000,000 to $20,000,000
in designated funds from the Alaska Capital Income
Fund.
1:45:22 PM
Page 36, lines 24-25: University of Alaska - increases
the appropriation from the general fund for Facilities
Deferred Maintenance and Modernization from $5,000,000
to $10,000,000.
Page 37, line 3: Judiciary - increases the
appropriation from the general fund for Building
Repairs from $750,000 to $1,500,000.
Page 43, line 30 through page 44, line 3: Department
of Commerce, Community, and Economic Development
(DCCED) - appropriates from the general fund $600,000
to the Department of Commerce, Community, and Economic
Development for organizational grants under AS
29.05.190 to the Xunaa Borough for Fiscal Years 26,
27, and 28.
Page 44, lines 16 - 18: Department of Education and
Early Development DEED) - inserts new subsection (b)
as backfill language in the event that the balance of
the major maintenance grant fund (AS 14.11.007) is
less than $38,110,038, the shortfall amount would be
appropriated from the general fund.
Mr. Gunderson interjected that the last item was in
relation to the Senate's recent CS for the operating budget
which appropriated an estimated $30 million in FY 25
lapsing operating funds to capitalize DEED's Major
Maintenance Grant Fund.
1:47:58 PM
Co-Chair Schrage noted that Representative Galvin joined
the meeting.
Representative Stapp inquired about the $600,000 grant to
the Hoonah (Xunna) Borough. He asked for details. Mr.
Gunderson answered that the $600,000 was part of an
organizational grant through DCCED. There was a forthcoming
election in Hoonah regarding expanding the city to an
organized borough. Funding was provided via state statute
in the event a community transitions to an organized
borough.
Representative Hannan clarified that the "X" was pronounced
as a "H". The funding was conditional on the outcome of the
election in favor of the expansion.
Representative Stapp asked if the $600,000 was supposed to
be community assistance funding. Mr. Gunderson deferred the
question to the Legislative Finance Division (LFD).
MICHAEL PARTLOW, ANALYST, LEGISLATIVE FINANCE DIVISION (via
teleconference), replied that the organizational grant was
provided for via statute. He delineated that it was
distributed in three payments over three years. The first
payment was $200,000 within 30 days of certification of
incorporation. The second payment of $200,000 was issued
within 30 days of the start of the second fiscal year after
incorporation. Finally, the third payment of $100,000 was
issued within 30 days of the start of the third fiscal
year. He concluded that the grant provided startup money
for a new borough. Representative Stapp asked Mr. Partlow
to repeat his answer. Mr. Partlow reiterated his answer
specifying the distribution of funds.
1:52:20 PM
Representative Stapp asked if the entire $600,000 had to be
front loaded. Mr. Partlow replied that via statute the
funding was all available upfront to the department, but
not the community.
Mr. Gunderson returned to the Summary of Changes:
Page 45, line 19: Department of Transportation and
Public Facilities (DOT) - increases the amount
appropriated from reappropriations to the Department
of Transportation and Public Facilities for federal-
aid highway state match from $47,110,303 to
$49,702,303.
Page 45, lines 23-25: Department of Transportation and
Public Facilities - reappropriates an estimated
balance of $3,457,666 from sec. 13, ch. 29, SLA 2008,
page 159, lines 20-22 Palmer Wasilla Highway
Improvements Phase II, toward federal-aid highway
match.
Representative Johnson had some concerns and questions.
She noted that the prior and following two items were
reappropriations that were all decremented out of
Matanuska-Susitna (Mat-Su) Borough ongoing highway
projects. She thought that reappropriating funding in the
middle of ongoing projects was unusual. She asked for
comment.
Co-Chair Schrage answered that it was a bit unusual, but he
countered that so was the budget process in the current
fiscal situation. He explained that the items were included
in the CS for the committee to consider and scrutinize
whether the progress made on the projects warranted further
funding. He offered that it was a very difficult fiscal
time for the state. He noted that the appropriations were
made five years' prior, and all had significant unobligated
balances. Representative Johnson thought there was a
misunderstanding because the road projects were not
completed and were in the middle of construction. She
voiced that it was highly unusual to remove funding in the
middle of a road project and believed that it was
dangerous." She thought eliminating so much from Mat-Su
projects was "interesting." She would continue to speak to
the issue. Co-Chair Schrage replied that he took any
project with a significant unobligated balance and included
it in the CS for further consideration. He furthered that
on the Palmer Wasilla Highway Improvements project the
original appropriation occurred 17 years ago and it's taken
until the current year to spend one-eighth of the funding.
1:57:24 PM
Representative Johnson shared information regarding the
Glenn Highway project, which was not a project currently in
question. She recalled working on the project in the
planning phases in 2005. She was intimately involved in the
planning from 2010 through 2016 as mayor of Palmer. She
related that right-of-way acquisition took a long time. She
hoped the project would be finished in the coming summer.
The project took 20 years, which was not slow or unusual.
She pointed to the Fairview Loop project that involved a
railroad crossing and right-of-way acquisitions. She would
be looking closely at the reappropriations. She thought it
was a terrible practice to start.
Representative Allard asked if Andy Mills was available
from the Department of Transportation and Public Facilities
(DOT). She asked for clarification on the project. She
shared Representative Johnson's concerns.
Co-Chair Schrage answered in the negative and relayed that
there was another representative available online.
DOM PANNONE, DIRECTOR, PROGRAM MANAGEMENT AND
ADMINISTRATION, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES (via teleconference), asked which project was
being referred to.
Co-Chair Schrage answered that it was the Palmer Wasilla
Highway Improvements Phase II project.
Mr. Pannone replied that it was an "active" project. He
expounded that the remaining balance of funds were for
improvements that were within the scope of the project that
were requested by the City of Wasilla via a resolution. The
funds were encumbered, and the department intended to
expend the funds in the coming summer. The department
collaborated with the city on a planned safety project and
was responding to the public's needs for the project.
Representative Allard asked how the removal of the funds
would impact the area. Mr. Pannone responded that the
safety project entailed turning lanes and traffic patterns
that posed a risk to the traveling public. The funds were
going to be under contract and encumbered. He was not
certain on the technical issues if the funds were
reappropriated while encumbered. He ascertained that if the
project was under contract, it would subject DOT to
potential legal action and the project would be delayed or
stall out due to lack of funding. Representative Allard
asked whether there were safety risks or if lives were at
stake with the liability and she wondered if the state
could be held liable if a lawsuit occurred.
2:03:21 PM
Mr. Pannone did not say the state would be liable. The
project was a requested safety improvement for the
identified portion of road and without the funds it would
not happen.
Representative Bynum noted there were three projects
totaling almost $12 million and only one project was
briefly addressed. He requested more information concerning
the Palmer Wasilla Highway Improvements Phase II project,
the $8.149,630 Fairview Loop Road Reconstruction project
and the Fairview Loop Road pedestrian pathway for $201,221.
He shared that in Ketchikan, there was a Tongass Highway
repaving project that was in the works for a decade and the
project was done in phases due to difficulties in getting
the right of way and other preliminary work done. He asked
about the actual impacts" on all three projects by pulling
the funds before the committee decided on the items.
2:06:28 PM
Mr. Pannone answered that regarding the Palmer Wasilla
Highway project the department intended to be under
construction in the coming summer. He reiterated that the
reappropriation would prevent the work from happening. He
offered to speak to the Fairview Loop projects.
Co-Chair Schrage interjected and inquired if pulling the
funds killed or delayed the project. Mr. Pannone replied
that the department would not be able to proceed .
Representative Bynum wondered about the other projects.
Co-Chair Schrage asked if they were currently under
contract for construction during the coming summer. Mr.
Pannone responded that the funds intended to be under
contract within a "couple of months" but were not currently
under contract.
Representative Hannan asked what the original appropriation
in 2008 was. She noted that it was as a phase two project
and asked about other prior phases. Mr. Pannone replied
that he did not have all of the specific projects or scopes
of work on hand. He would follow up to answer the question.
Representative Hannan asked if it was correct to conclude
that some of the 2008 funding had been spent and the
$3,457,666 was the amount remaining. Mr. Pannone replied
that over $500,000 had been expended from the original $4
million appropriation. The department could also combine
funding with other projects or have "multiple discreet
scopes of work under an appropriation such as this."
2:10:05 PM
Representative Tomaszewski shared that he had heard from a
few contractors concerning the lack of work for the coming
summer. He thought the project looked to be shovel ready
and removal of the funding would stop the project for the
summer. He worried about contractors in the state. He asked
if it would kill the projects and lessen the pool of
contracts. Mr. Pannone answered that he would agree with
the statement that pulling the funding could reduce the
number of projects DOT was trying to put on the street in
the coming summer.
Representative Bynum asked about the communities'
expectation of the project. He also wondered if it had an
impact on federal match. Mr. Pannone replied that the City
of Wasilla assembly had conveyed the desire for DOT to
complete the project. He believed the assembly understood
the department was moving forward on the projects. He added
that if the reappropriation was substituting "hard match"
funding, DOT would continue to request the same amount of
funding.
2:13:55 PM
Representative Galvin asked for clarification if Mr.
Pannone stated there was a federal match for the funds. Mr.
Pannone responded that he was speaking to any
reappropriations being used to provide matching funds for
the current year's federal revenue and if the
reappropriations were not made DOT would continue to
request the original amount of match included in the
governor's budget.
Co-Chair Schrage would work to provide further clarity.
Representative Allard stated that the Mat-Su was the
fastest growing area in the state and pulling the project
would be detrimental.
Mr. Gunderson continued reviewing the changes in the CS:
Page 45, lines 26-28: Department of Transportation and
Public Facilities - reappropriates an estimated
balance of $201,221 from sec. 7, ch.43, SLA 2010, page
36, lines 29-31, Fairview Loop Road pedestrian
pathway, toward federal-aid highway match.
Page 46, lines 1-3: Department of Transportation and
Public Facilities - reappropriates an estimated
balance of $8,149,630 from sec. 1, ch.17, SLA 2012,
page 133, lines Fairview Loop Road reconstruction,
toward federal-aid highway match.
2:16:47 PM
Representative Johnson informed the committee that the road
had been an ongoing issue for quite some time. She
explained that there was an offramp to the Parks Highway
that provided a path to Knik Goose Bay Road. Many commuters
returning from Anchorage took the exit to bypass Wasilla
and arrive at Knik Goose Bay Road, which was a rapidly
growing neighborhood. The current road was an old wagon
farm road that was highly trafficked. She elucidated that
for old roads that had been in place there were a number of
properties that had to be purchased for the right-of-way
acquisition. She shared that the project was in the
acquisition process. She relayed more information regarding
acquisitions and utility relocations over five years
regarding the Glenn Highway project. She emphasized that it
took a lot of negotiations to get things in place before
construction could be completed. The road in question had
many houses and properties along it and was far from
completion.
Representative Allard had never seen reappropriating
funding from ongoing projects. She did not support taking
money from one project for another. She stressed that it
could cost lives and was "dangerous.
Representative Johnson drew attention to the second
project; the pedestrian pathway. She related that the two
projects were interrelated and was under the same
appropriation.
2:21:17 PM
Mr. Gunderson continued with the Summary of Changes:
Page 46, lines 6-9: Department of Transportation and
Public Facilities - reappropriates an estimated
balance of $766, from sec. 1, ch.18, SLA 2014, page
63, line 4 and allocated on page 63, lines 12-13, as
amended by secs. 14(d), 21(g), and 21(h), ch.1, TSSLA
2017, Knik Arm bridge project development, toward
federal-aid highway match.
Representative Johnson relayed that initially there was a
much larger appropriation, and the funding was
reappropriated to the Kivalina School. She hoped they would
follow the rule to keep money in the same district. She
understood the federal funding for the project was
$40,000,000.
Co-Chair Schrage commented that sometimes changes happened
because they were warranted.
Representative Stapp thought it probably cost more than
$766. to reappropriate the $766. He thought the
administrative cost alone exceeded the amount. Co-Chair
Schrage did not have any experts available to perform the
calculation.
2:23:58 PM
Mr. Gunderson continued with the summary of changes:
Page 46, line 15-17: Department of Commerce,
Community, and Economic Development - Alaska Energy
Authority - reappropriates an estimated balance of
$782,125 from sec.14, ch.11, SLA 2022, page 117, lines
19-20, electrical vehicle infrastructure plan, toward
federal-aid highway match. The Department of Commerce,
Community, and Economic Development - removes
reappropriation sec. 14, ch.11, SLA 2022 page 86, line
31, City of Nome, deep draft port.
Representative Bynum cited the electric vehicle program. He
noted that the program was suspended by the federal
government and the program could not be revived. He asked
if he was correct. Co-Chair Schrage answered in the
affirmative. Representative Bynum believed the suspension
was unfortunate.
Representative Hannan related that the item was not in the
summary of changes, but her colleague had spoken to the
idea that reappropriations should remain within the same
district. She pointed out that her district likely had the
biggest loss on page 46, at a total of $36 million being
reappropriated; none to her district. She did not believe
that certain projects or regions were being picked on and
believed that her district was the "biggest loser"
Representative Johnson wanted to speak to the Juneau Access
Road that had much local opposition. She pointed out the
there currently was no road and she did not view it as a
safety issue. Representative Hannan contended that she was
not asserting it was a safety issue but was addressing the
tradition of reappropriations remaining in the district.
2:26:52 PM
Representative Tomaszewski spoke to the road to Juneau. He
would like to see more citizens of Alaska get the
opportunity to come to Juneau via a road.
Co-Chair Schrage noted there was a marine highway that was
available for passenger and vehicle transport to the
capitol.
Mr. Gunderson continued with the Summary of Changes:
Page 51, lines 3-7: Office of the Governor - updates
reappropriation language for lapsing operating funds
from the Office of the Governor to include expenses
related to the commissioning of the USS Ted Stevens,
US Navy Ship, and associated support activities in the
state for fiscal years 2026 and 2027, not to exceed
$100,000.
Page 51, lines 23-28: Office of the Governor - updates
reappropriation language for lapsing operating funds
from the Office of the Governor to include capital
costs and material purchases related to facilities
repairs, information technology improvements and
upgrades, food security, the 2026 Alaska Sustainable
Energy Conference, government efficiencies, and
resource development analyses, studies, and process
reviews.
2:28:51 PM
Representative Stapp thought change on page 51, lines 3
through 7 was an interesting reappropriation. He recounted
that the state did not commission ships. He believed that
reappropriating money from the governor's office for the
items listed in the prior two items was unusual and wanted
further clarification.
2:29:43 PM
AT EASE
2:30:52 PM
RECONVENED
Co-Chair Schrage explained that the Navy destroyer, named
after the late Senator Ted Stevens, would journey to Juneau
and also visit Kodiak, Anchorage, and Ketchikan. He noted
that there were funds reappropriated to provide some
auxiliary support for the effort. Representative Stapp
wondered what they were spending $100,000 on. Co-Chair
Schrage would follow up on the specific costs. He was aware
that the state wanted an active role in the effort.
Representative Allard also would like further details. She
found it peculiar.
Representative Johnson thought that typically the military
took great pride in showing off its equipment. She read the
language from the prior version of the bill [CS SB 57
(FIN)] on page 49, lines 13 through 16:
The unexpended and unobligated general fund balances
of the following appropriations are reappropriated to
the Office of the Governor for capital costs related
to facility repair and maintenance, information
technology infrastructure, elections equipment, and
material purchases
Representative Johnson believed that the reappropriations
were removing the funding out of maintaining
infrastructure. She was concerned that funding was
eliminated for the purchase of elections equipment and
believed that infrastructure should be maintained for
reasons like a visiting ship.
2:34:23 PM
Mr. Gunderson maintained that there was no requirement that
$100,000 was spent by the Office of the Governor. The item
merely granted authority to use up to that amount of
lapsing funds as it saw fit. He read the final items from
the Summary of Changes:
Page 52, lines 22-25 - conforming changes.
Page 52, lines 29-30: Adds contingency language that
the $600,000 appropriation to the Xunaa Borough is
contingent on the incorporation of the Xunaa Borough
on or before December 31, 2025.
Mr. Gunderson relayed high level changes to the CS. He
indicated that there was a projected $730,000 reduction in
Undesignated General Funds(UGF), a $40,000,000 increase in
Designated General Funds (DGF), and a roughly $2,500,000
forecasted increase in other state funds.
2:35:45 PM
Representative Johnson asked about the next step in the
budget process.
Co-Chair Schrage replied that there would be an amendment
deadline set for the following week.
Co-Chair Schrage WITHDREW the objection.
Representative Johnson OBJECTED.
Representative Johnson reiterated her concern regarding the
reappropriations from the Mat-Su appropriations. She
believed that it placed the projects in "jeopardy,
increased the projects' costs and was a "disservice" to the
citizens of Alaska who relied on the safety upgrades.
2:37:49 PM
Representative Bynum supported Representative Johnson's
perspective due to his understanding of the effects of
delaying a project in mid-course.
A roll call vote was taken on the motion.
IN FAVOR: Galvin, Jimmie, Hannah, Schrage, Foster,
Josephson
OPPOSED: Johnson, Bynum, Tomaszewski, Allard, Stapp
The MOTION PASSED (6/5). There being NO further OBJECTION,
work draft 34-GS1460\U (Walsh, 4/30/25) was ADOPTED.
Co-Chair Schrage set an amendment deadline for Monday, May
5 at 12:00 p.m.
Representative Allard remarked on the amendment deadline.
She asked to move the deadline to Tuesday.
Co-Chair Schrage replied that he would not change the
amendment deadline.
CSSB 57(FIN) was HEARD and HELD in committee for further
consideration.
2:40:03 PM
AT EASE
2:40:38 PM
RECONVENED