04/05/2024 09:00 AM Senate FINANCE

SENATE BILL NO. 187                                                                                                           
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations   and   other   appropriations;   making                                                                    
     reappropriations;  making appropriations  to capitalize                                                                    
     funds; and providing for an effective date."                                                                               
                                                                                                                                
9:42:13 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  relayed  that   the  committee  would  be                                                                    
introducing  the first  Committee  Substitute  (CS) for  the                                                                    
capital budget.                                                                                                                 
                                                                                                                                
Co-Chair   Stedman  MOVED   to   ADOPT  proposed   committee                                                                    
substitute  for SB  187,  Work  Draft 33-GS2491\B  (Dunmire,                                                                    
4/4/24). There being NO OBJECTION, it was so ordered.                                                                           
                                                                                                                                
9:43:07 AM                                                                                                                    
                                                                                                                                
TIM GRUSSENDORF,  STAFF TO SENATOR LYMAN  HOFFMAN, discussed                                                                    
the  CS.   He  referenced  Attachment  B,   and  four  other                                                                    
documents  produced  by  the  Legislative  Finance  Division                                                                    
(LFD)  entitled Attachment  A, Attachment  C, Attachment  D,                                                                    
and Attachment E  (copy on file). He relayed  that staff had                                                                    
joint  meetings with  the  administration  and agencies,  as                                                                    
well  as the  Office  of Management  and  Budget (OMB),  the                                                                    
Legislative  Finance Division  (LFD), and  finance committee                                                                    
counterparts in  the House.  He noted  that there  was staff                                                                    
from  LFD available  to speak  to any  questions that  might                                                                    
arise.                                                                                                                          
                                                                                                                                
Mr. Grussendorf  referenced Attachment  B, and made  note of                                                                    
Section  1,  known  as  the  numbers  section.  The  section                                                                    
removed  some of  the Undesignated  General Funds  (UGF) and                                                                    
featured  11 items  with a  reduction of  $63.4 million.  He                                                                    
highlighted  the first  project listed,   Advance Commercial                                                                    
Investment in  the Alaska LNG  Project and  Maintain Project                                                                    
Assets in Ready Status.  He  identified that the project was                                                                    
from the  Alaska Gasline Development Corporation  (AGDC) and                                                                    
signified a reduction of $4.5 million.                                                                                          
                                                                                                                                
Mr.  Grussendorf highlighted  a  $2.5 million  item for  the                                                                    
Alaska Travel  Industry Association (ATIA), which  was not a                                                                    
reduction  but rather  funds being  moved  to the  operating                                                                    
budget. He listed  a project for $2.2  million for statewide                                                                    
security doors and windows in  the Department of Corrections                                                                    
(DOC). The fourth project, also  for DOC, was for  Statewide                                                                    
Security  Perimeter  Fences  and   Gates  Upgrade.   Item  5                                                                    
proposed  $500,000 for  the  Alaska  Military Youth  Academy                                                                    
safety and  security preparedness. He listed  a reduction of                                                                    
$3.575 million in the Department  of Natural Resources (DNR)                                                                    
for  Silviculture  Treatments and Precommercial  Thinning to                                                                    
Boost the Timber Industry.                                                                                                      
                                                                                                                                
Mr.  Grussendorf continued  to address  the items  listed on                                                                    
Attachment B.  He listed  a $6.2  million increment  for the                                                                    
Pilatus  PC12NG Aircraft  Acquisition in  the Department  of                                                                    
Public Safety  (DPS). He  cited a $25  million item  for the                                                                    
Alaska  Housing Finance  Corporations   (AHFC) Down  Payment                                                                    
Assistance   Grant    Program.   In   the    Department   of                                                                    
Transportation  and  Public  Facilities (DOT)  there  was  a                                                                    
$4.35  million  increment  for  Copper  River  Highway  Wood                                                                    
Canyon  Bridges and  Trails. He  listed a  project involving                                                                    
achieving  Research 1  status for  the University  of Alaska                                                                    
Fairbanks (UAF). He noted that  the governor had proposed to                                                                    
fund the  item with $10  million in  UGF and $10  million of                                                                    
University receipts.  The Senate and current  CS proposed to                                                                    
move all $20 million to University receipts.                                                                                    
                                                                                                                                
Mr. Grussendorf  highlighted that  the last project  was the                                                                    
only project  that fell in  the  match  category,  which was                                                                    
the  Alaska   Railbelt  Carbon  Capture   and  Sequestration                                                                    
Project  at  UAF,  for  $2.2 million  and  $8.8  million  in                                                                    
matching funds.                                                                                                                 
                                                                                                                                
9:47:23 AM                                                                                                                    
                                                                                                                                
Mr. Grussendorf  continued his remarks.  He noted  that also                                                                    
in the numbers section, there  was a placeholder for surface                                                                    
transportation.  He   explained  that   there  would   be  a                                                                    
Statewide   Transportation    Improvement   Program   (STIP)                                                                    
amendment to  be coming from  the Office of the  Governor on                                                                    
the following Tuesday, which would  be incorporated into the                                                                    
next CS.                                                                                                                        
                                                                                                                                
Co-Chair Hoffman noted that the  $25 million for housing was                                                                    
to address  a statewide  issue, and  the committee  would be                                                                    
working  with the  governors  office  to see  what could  be                                                                    
done differently from  what was proposed in  the budget. The                                                                    
$25 million had  been reduced. The funds  had been earmarked                                                                    
for down payments for new home  buyers but would not be used                                                                    
for  any new  housing. He  emphasized that  new housing  was                                                                    
needed in  the state and  the committee was looking  at what                                                                    
could be done.                                                                                                                  
                                                                                                                                
Senator Merrick asked Mr. Grussendorf  to repeat his remarks                                                                    
about  the  $8.8  million  in  federal  funding  for  carbon                                                                    
capture,  and asked  if  the state  needed  to provide  $2.2                                                                    
million in matching funds.                                                                                                      
                                                                                                                                
Mr. Grussendorf  relayed that more communication  was needed                                                                    
with UAF  and noted  that UAF  had mentioned  partnership in                                                                    
the project  explanation. He explained the  need for further                                                                    
detail in the project description.                                                                                              
                                                                                                                                
Co-Chair  Hoffman  explained  that it  was  the  committee's                                                                    
intent to work  through the capital budget  process and have                                                                    
a new CS  early the following week, with  the expectation of                                                                    
floor debate in one week.                                                                                                       
                                                                                                                                
9:50:15 AM                                                                                                                    
                                                                                                                                
Mr. Grussendorf  communicated that  the CS proposed  to fund                                                                    
the  top  projects that  agencies  had  brought forward.  He                                                                    
addressed the Supplemental Section in  Section 4 of the bill                                                                    
starting  on  page  22.  The  CS  did  not  change  all  the                                                                    
governors  amendments and  reappropriations. The only change                                                                    
to the section  was for DOT and pertained  to Dalton Highway                                                                    
Heavy Maintenance.  The department had requested  $8 million                                                                    
for the project  on page 23 of the bill,  and the CS reduced                                                                    
the amount  to $4 million.  He explained that  the rationale                                                                    
was that  $4 million would  get the  project to July  1, and                                                                    
the next  budget would replenish  the fund. If  more funding                                                                    
was needed, funds could be  added to the operating budget in                                                                    
the following cycle.                                                                                                            
                                                                                                                                
Mr.  Grussendorf addressed  reappropriations, which  started                                                                    
in Section 7.  He reiterated that the CS did  not remove any                                                                    
of the  governors  proposed reappropriations.  The committee                                                                    
had  added  four  reappropriations  that  were  not  in  the                                                                    
original  bill. He  referenced Section  14, page  29 of  the                                                                    
bill,   with  a   reappropriation   from   the  Bering   Sea                                                                    
Fishermans  Project  from the previous year.  The funds were                                                                    
proposed to be reappropriated to  the Department of Fish and                                                                    
Game (DFG)  to support the  Chinook genetics study  that had                                                                    
been requested of  the department. He noted that  DFG was in                                                                    
a good position to complete  the study and that both parties                                                                    
were in agreement.                                                                                                              
                                                                                                                                
Mr.  Grussendorf  listed  that the  final  three  additional                                                                    
reappropriations were  projects from  individual legislative                                                                    
districts in which  money had lapsed. He  listed Section 15,                                                                    
page  29, for  a reappropriation  to the  Wrangell Emergency                                                                    
Operations.  Section  16  on  page  30 of  the  bill  had  a                                                                    
reappropriation for  the Anchorage Yarman Road  Project. The                                                                    
final project, in  Section 17, would move  lapsed funding to                                                                    
the  Yuut   Elitnaurviat-Peoples   Learning  Center   for  a                                                                    
damaged lift station.                                                                                                           
                                                                                                                                
9:53:50 AM                                                                                                                    
                                                                                                                                
Mr. Grussendorf noted that there  was a reduction in General                                                                    
Funds of $63.395 million. The  total supplemental budget was                                                                    
$23.7  million in  UGF, $8.9  million in  Designated General                                                                    
Funds (DGF).  Other state funds totaled  $11.13 million, and                                                                    
federal receipts  added up  to $251 million  for a  total of                                                                    
$295 million for  the supplemental portion of  the bill. For                                                                    
the current years  proposed capital  items, the CS had a UGF                                                                    
total  $233.7 million,  $87.7 million  in  DGF, other  state                                                                    
funds in  the amount  of $184.2 million,  and $3  billion in                                                                    
federal receipts for a grand total of $3.514 billion.                                                                           
                                                                                                                                
Co-Chair Hoffman set the bill aside.                                                                                            
                                                                                                                                
SB  187  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Hoffman discussed the agenda for the next meeting.