Legislature(2021 - 2022)SENATE FINANCE 532
04/13/2022 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Alaska Employment Wages and Population Trends | |
| SB241 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 241 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SENATE BILL NO. 241
"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."
10:08:32 AM
MILES BAKER, INFRASTRUCTURE INVESTMENT COORDINATOR, OFFICE
OF THE GOVERNOR, introduced himself.
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced himself.
Mr. Baker discussed the presentation, "State of Alaska,
Office of the Governor, Infrastructure Appropriation Bill
SB241, Senate Finance Committee, April 6, 2022" (copy on
file). He started with slide 7 titled "SB 241
Infrastructure Overview by Category" [see Senate Finance
Committee meeting dated April 6, 1:00 p.m. for slides 1
through 6]. The slide showed a table depicting spending
categories ranging from the least discretionary to most
discretionary. The bulk of the bill spending was $950
million in federal funds and undesignated general fund
(UGF) match (70 percent) for reauthorized and new federal
programs. The second spending category was UGF funding for
additional state support of federal programs. He cited
critical minerals mapping as an example. The third category
was Congressional earmarks. He elaborated there had been a
number for Alaska and only two required additional
authority. The governor wanted to match the public safety
housing program operated by Alaska Housing Finance
Corporation (AHFC) dollar for dollar.
Mr. Baker addressed the fourth category on slide 7:
infrastructure coordination and implementation. He relayed
it was an ongoing effort coordinating with local
governments and tribes. The category included money for the
governor's office, a grant for the Alaska Federation of
Natives (AFN) navigator program, and a grant to the Alaska
Municipal League (AML). He characterized the last spending
category as the most policy subjective. The administration
had identified four large areas in the Department of Energy
where Alaska should be competitive that were worth putting
some UGF into exploring and pursuing.
10:12:01 AM
Co-Chair Bishop reminded committee members there were
numerous agencies available online for questions.
Mr. Baker displayed slide 8 titled "Federal Programs and
Match":
Commerce, Community and Economic Development
• Alaska Broadband Office $6,513.0 ($6,000.0 Fed,
$513.0 CIP); 3 PFT
• Rural Utility Business Advisor (RUBA) $666.7
($500 Fed, $166.7 GF Match); 2 PFT
Alaska Oil and Gas Conservation Commission (AOGCC)
• Orphaned Well Plugging, Remediation and
Restoration $32,341.0 Fed
Mr. Baker elaborated that broadband was one of the biggest
game changing new investments in the infrastructure bill
and all states would be required to have a broadband office
to coordinate the planning effort. He reported that every
state would receive a minimum of $100 million and 5 percent
of the funding received could be used on administration.
The state expected to receive another $1 million in federal
planning money for a second program [under the Department
of Commerce, Community and Economic Development (DCCED)].
The broadband increment also included capital improvement
project (CIP) funding for three proposed positions to staff
the broadband office. There was also a tremendous amount of
money coming in through the Environmental Protection Agency
(EPA) water programs. He noted the Rural Utility Business
Advisor (RUBA) program provided outreach to support the
water programs.
Mr. Baker highlighted a large new initiative for the
plugging of oil and gas wells through the Department of
Interior. There were three different programs for state and
private land, federal land, and tribal land. The bulk of
the federal funding was for the state and private land
program. He detailed that AOGCC was the required lead; all
of the national equivalents of AOGCC had been working on
the topic for quite some time. The administration had put
in the request for information (RFI) and had received the
notice. He relayed there were 12 known oil and gas wells on
state land and the funding was the first tranche of funding
the administration expected to receive. He expounded that
AOGCC would contract the work out and would work with the
Department of Environmental Conservation (DEC, Department
of Natural Resources (DNR), RSA, and private contractors.
10:15:10 AM
Co-Chair Bishop asked Mr. Baker to specify the operating
and capital funding in the requests as he continued the
presentation. He looked at the federal funding of
$32,341,000 for AOGCC. He asked if it was funding for one
year, five years, or other. He asked for the information
going forward.
Senator Wielechowski asked if companies responsible for
drilling wells were required to plug, remediate, and
restore wells they had abandoned.
Mr. Baker answered there were requirements for companies
and requirements had changed to become more rigid over the
years. He stated that wells were from various time periods;
therefore, some had been plugged, but not to the current
standard. Some of the wells were plugged long enough ago
that some of the adjacent lands were not properly
remediated. He stated it was all over the map.
Senator Wielechowski requested a list of wells that were
proposed to be plugged, remediated, and restored. He
wondered why the state was assuming the responsibility with
the federal dollars instead of the group that drilled the
wells.
Co-Chair Bishop asked if the funds would "clear the deck"
on the abandoned wells. He asked if it would bring closure
to all of the abandoned wells.
Mr. Baker replied that when the notice came out for the
funding, AOGCC put in a response including the estimated
cost to plug the wells on state land. The cost was $32
million. He clarified the funding reflected the first
tranche; if the costs increased the state could potentially
receive additional money to fill the work. The allocation
was based on the administration's best cost estimate. He
noted the funding was an FY 22 supplemental because the
well sites needed to be looked at in the spring before
alders came up in order to get the best cost estimate.
10:19:05 AM
Senator Wielechowski asked if the work would be bid out via
a competitive bid process.
Mr. Baker replied in the affirmative. He elaborated that
AOGCC was the official receipt entity for the state. The
national organization working on the issue was comprised of
all of the AOGCC equivalents. He explained that AOGCC would
be contracting out and working with DNR and DEC on their
portions of the work.
Senator Wielechowski referenced the $6.5 million and three
permanent full-time employees for the broadband office. He
assumed the positions accounted for several hundred
thousand dollars. He asked where the remaining money would
go.
Mr. Baker replied that the administration was asking for
federal receipt authority of what it expected to get in the
first tranche of available planning funding. The $513,000
was the CIP to pay for the positions. He explained that a
tremendous amount of work would be required. In order to
receive the initial planning funding, the state had to file
a notice of intent to participate in the program. He
furthered that the document was fairly technical and would
include the type of plan and work required. Once the state
received the initial planning funding, which should be
fairly quick after filing the NOI, the administration would
develop a five-year plan that would include setting up
regional advisory groups, getting public input and working
with national agencies. The money would be used for funding
positions, possibly bringing in technical expertise,
holding planning events, and putting together the needed
information.
Senator Wielechowski relayed it would be helpful if Mr.
Baker could reference the page number of the appropriation
request.
Mr. Baker offered to provide the project numbers and would
do his best to provide the requested information.
Co-Chair Bishop stated that no one from DCCED was available
online to answer any questions. He wanted to know the
current number of RUBA employees. He referenced the request
for two additional positions. He wanted to ensure RUBA was
connecting with the United States Department of Agriculture
(USDA). He highlighted another $2 billion pot of funding
for rural utility electrification, water, and broadband. He
wanted to ensure the state accessed every federal dollar
possible to get running water in rural Alaska.
10:24:04 AM
Mr. Baker continued with slide 8, reading as follows:
Alaska Energy Authority (AEA)
• Alternative Energy and Energy Efficiency Programs
$3,655.6 Fed
o Energy Efficiency Conservation Block Grants
o State Energy Program (SEP)
o Energy Efficiency Revolving Loan Fund
Capitalization Program (New)
o Energy Auditor Training Program (New) Alaska
Housing Finance Corporation (AHFC)
• Weatherization Assistance Program $35,000.0 Fed
• Energy Efficiency Research and Training $2,000.0
Fed
Senator Hoffman commented that $3.6 million was not a large
sum of money. He recalled that the weatherization program
was initiated the last time there was a spike in oil
prices. He had learned from AHFC that there were thousands
of homes in the state that still needed weatherization. He
was aware that there was a $1,300 energy rebate proposed by
the other body and the governor had said he was supportive
of the rebate; however, there was no way to ensure that
individuals would actually spend the rebate money on energy
costs, particularly in rural areas. A significant benefit
of the weatherization program was that it saved individuals
from $200 to $500 per month on energy costs, which equated
to millions of dollars saved on energy over the lifetime of
a home.
Senator Hoffman wondered if the administration had looked
into offering financial assistance to Alaskans for home
weatherization. He thought that of all the programs in the
state, the weatherization program made the most significant
strides for Alaskans in reducing energy costs. He noted
that there had been out-migration in the state for the last
eight years, and he believed that the high cost of living
was one of the most significant contributing factors. He
thought that the notion that the proposed sum of $3.6
million was large was laughable. He asked what the
administration thought about the weatherization program and
the benefits it could offer.
10:29:05 AM
Mr. Baker agreed that the term "large" was an inappropriate
descriptor for the sum and apologized if he gave the wrong
impression. He believed that the weatherization program to
which Senator Hoffman was referring was managed by AHFC and
supported by general funds (GF). The federal bill
[Infrastructure Investment and Jobs Act (IIJA)] had around
a $3.5 billion supplemental for weatherization and it was
previously estimated that Alaska's portion would be $35
million, but the estimate was reduced to $18 million in the
prior week. He relayed that the governor wanted to keep the
spending of GF down and limit the amount of discretionary
GF spending. The only exception was a $2 million federal
earmark for AHFC's rural housing program for teachers'
health and public safety. The governor wanted to match the
amount with $2 million of UGF for public safety housing.
Senator Hoffman stated that he had a comment on the topic.
Mr. Baker wondered if representatives from AHFC were
available to comment.
Senator Hoffman asked if the legislature should use the
additional revenue to try to make Alaska a more affordable
place to live. He understood the reasoning behind wanting
to keep GF spending to a minimum but wondered how it would
impact Alaskans. He asked if it would be wiser to help
Alaskans reduce their energy costs directly or to give
Alaskans a check for $1,300 and hope that individuals use
the money for energy costs. He thought the question should
be debated by policymakers. He indicated that Alaskans were
struggling due to the high cost of fuel, and he did not
think a one-time check would be enough to make a change.
After the check was spent, the needs would still be
pressing because the root cause was not addressed.
Co-Chair Bishop asked Mr. Curtis Thayer to comment. He
referred to the last bullet under the AEA section on slide
8 regarding the Energy Auditor Training Program. He asked
how many more auditors Mr. Thayer was hoping to hire.
10:34:49 AM
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY,
ANCHORAGE, (via teleconference) replied that the initial
request was $63,000 for a partial auditor and he
anticipated that additional funding for commercial auditors
would come in later years.
Co-Chair Bishop asked if Mr. Thayer was referring to
commercial property.
Mr. Thayer agreed.
Co-Chair Bishop wondered whether AEA had interfaced with
the Cold Climate Housing Research Center (CCHRC) in
Fairbanks.
Mr. Thayer replied in the affirmative. He furthered that
AEA had a working relationship with AHFC and some of the
auditor training would be shared between the two agencies.
Co-Chair Bishop thought it would be helpful if AEA could
leverage its assets.
Mr. Baker replied to Senator Hoffman's earlier comments. He
explained that the new estimate was $18.4 million for the
weatherization program, which had been reduced from $35
million. He added that there were some other opportunities
in the bill that AHFC wanted to pursue in the area of
energy efficiency research, which was a $2 million federal
receipt authority.
10:36:43 AM
STACY BARNES, ALASKA HOUSING FINANCE CORPORATION,
ANCHORAGE, (via teleconference) introduced herself.
Co-Chair Bishop noted that the estimate had been reduced
from $35 million to $18.4 million over the course of a
week. He asked if the $18.4 million estimate was for the
current fiscal year and whether AHFC expected similar
funding to continue in the future.
JAMES WIEDLE, ALASKA HOUSING FINANCE CORPORATION,
ANCHORAGE, (via teleconference) responded that the money
was expected to be available for the next five years.
Co-Chair Bishop asked if Mr. Wiedle meant $18 million per
year or $35 million per year.
Mr. Wiedle replied $18 million in total.
Co-Chair Bishop asked for more information on the way the
money would be used for the energy efficiency research and
training program.
Mr. Wiedle responded that he did not yet have specific
details about what the program would look like; however, he
would follow up with the information when it came out.
Co-Chair Bishop asked if Mr. Wiedle meant he did not yet
have guidance from the federal government.
Mr. Wiedle answered in the affirmative.
10:38:14 AM
Mr. Baker looked at slide 9, "Federal Programs and Match":
Fish and Game
• Wildlife Restoration (Pittman-Robertson)
$24,000.0 ($18,000.0 Fed, $6,000.0 F and G Fund)
Mr. Baker indicated that the Pittman-Robertson funds had
increased substantially, and the $18 million federal funds
required a match that would come out of the Department of
Fish and Game fund.
Senator Hoffman remarked that restoration of Chinook salmon
in the Yukon-Kuskokwim Delta (YKD) was of great importance
to him. He added that devastation of Chinook salmon was
happening throughout the state, and it was important for
the legislature to try to reverse the trends as Alaskans
living in the YKD area were already experiencing
significant lifestyle changes due to the devastation. He
asked if it was possible to look into restoring Chinook
salmon in YKD and throughout the state. He did not mean to
suggest that salmon populations should be restored to
commercial levels, but simply that salmon should be
available for personal use and food security purposes. He
asked if the administration could help Alaskans achieve
food security in other ways if the funds could not be used
to help restore Chinook populations.
Mr. Baker replied that he believed the money was intended
to be used for game and was therefore non-fish related. He
referred to pages 24 through 26 of the capital backup,
reference number 60594, which showed a list of the types of
projects that qualified. He thought there were other
programs that might have more flexibility and would follow
up with more information on whether salmon restoration
would qualify.
Senator Hoffman remarked that he was not only interested in
learning if salmon restoration would qualify, but if the
legislature was interested in recognizing the problem and
taking steps to reverse the trends to ensure that the
lifestyle of Alaskans on the YKD would not vanish.
10:43:37 AM
Mr. Steininger responded to Senator Bishop's earlier
question regarding the difference between operating and
capital in the presentation. He explained that on slide 8,
the RUBA program and the broadband programs were both
operating items and the rest of the items were part of the
capital budget. On slide 9, the Low Income Home Energy
Assistance Program (LIHEAP) was within the Department of
Health and Social Services (DHSS) operating budget and all
other items were part of the capital budget.
Mr. Baker continued with slide 9:
Health and Social Services
• Low Income Home Energy Assistance Program
(LIHEAP) $314.0 Fed
Mr. Baker commented that the money was a small supplemental
compared to current funding for LIHEAP, which was around
$10 million. There were also some significant tribal awards
for the same purpose that did not come through the state.
Senator Hoffman asked if Mr. Baker had done any analysis on
what energy costs would be in rural Alaska through LIHEAP.
He wondered if the funding would be enough to help Alaskans
facing increased energy costs.
Mr. Baker replied that he would follow up with the
information.
Senator Hoffman was looking forward to it.
10:45:50 AM
Mr. Baker continued with slide 9:
Military and Veterans' Affairs
• State and Local Cybersecurity Grants $2,404.4
($2,164.0 Fed, 240.4 UGF)
Natural Resources
• National Geological and Geophysical Data
Preservation Program (NGGDPP) $3,290.0
($2,290.0 Fed, $1,000.0 UGF)
• Critical Minerals Mapping - Earth Mapping
Resources Initiative (MRI) $7,500.0 Fed
• Abandoned Mine Lands Reclamation Program $1,333.0
Fed
• Community Wildfire Defense Grants (NEW) $3,000.0
Fed
Mr. Baker added that the cybersecurity grant was a four-
year program, and that 80 percent of the funds would be
sub-granted out to local and tribal governments. He
highlighted that the program was one of the few four-year
programs in the bill and that most of the programs were
five-year programs. The match requirement changed from year
to year, beginning with a 10 percent match and increasing
by 10 percent each year.
Co-Chair Stedman recalled that slide 8 indicated there
would be $24 million of Pittman-Robertson funds coming into
the state. There were three major shooting ranges around
the state that were subsidized in the budget every year,
and the increase in Pittman-Robertson funding was due to
the volume of ammunition being sold around the country. He
thought the legislature should consider dedicating more
funds to shooting ranges outside of the three major ranges
in the state. He thought it was beneficial for youth to
learn how to handle firearms. He did not think the funding
was sufficient and suggested implementing a match.
10:49:09 AM
AT EASE
10:53:22 AM
RECONVENED
Senator Wielechowski wondered whether there were any
federal funds that were available that the state did not
accept.
Mr. Baker replied in the negative.
Senator Wilson wondered why there was not more federal
funds for railroad related infrastructure projects. He
asked how many full-time equivalents (FTE) would be needed
and whether the positions would be permanent. He guessed
the number would be around 25.
Mr. Steininger replied that there were 27 full-time
positions and five non-permanent positions represented in
the bill. He stated that the full-time positions would
exist within DEC to help manage the significant increase in
DEC programs. He noted that many of the programs would
experience a five-year increase, however some of the
programs could continue for a decade which was why the
decision was made to add permanent positions. Additionally,
the bill represented the federal dollars that the state was
certain would be incoming. There may be other opportunities
in the future to address other areas such as the railroad.
Mr. Baker furthered that generally, there was no federal
money for the purpose of building new rail, particularly
not freight rail. There was money for Amtrak and inner-city
passenger rails, but there was no new money for capacity
building of rails. The Federal Transit Administration's
(FTA) transit formula programs could elicit an increase in
money for railroads in the state based on passenger
traffic. There were some existing grant programs for which
the Alaska railroad was eligible and regularly applied for,
but there were no new funding sources for the railroad.
Senator Wilson asked if the administration had considered a
passenger rail from the Mat-Su area to Anchorage.
Mr. Baker responded that the administration had not
considered a passenger rail.
10:57:54 AM
Senator Wielechowski asked if there were federal commuter
dollars that the state could utilize.
Mr. Baker responded that there were competitive grant
programs. The largest driver of whether a rail received an
award was based on whether the rail would assist in moving
passenger traffic off roads and onto centralized transit.
He thought a new capacity rail such as a passenger rail
from Mat-Su to Anchorage would be challenged in the
opportunities in the bill. However, it might be worth
looking into if the municipalities and the rail were
interested.
Mr. Steininger furthered that if there was money that was
coming into the state for the railroad that did not pass
through the Department of Transportation and Public
Facilities, it would not be included in the bill because
the railroad was not subject to the Alaska Budget Act. He
explained that if the Alaska railroad received a direct
grant, it would not be included in an appropriation bill
coming from OMB because the railroad was exempt from the
process.
Co-Chair Bishop noted that the committee would discuss the
bill again in the future. He wanted to ensure that the
appropriate agencies would be present at future meetings to
answer questions.
SB 241 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 041322 Senate Finance.April 13 2022.Robinson.pdf |
SFIN 4/13/2022 9:00:00 AM |
|
| SB 241 22.04.06 GOV Infrastructure Bill SFIN FINAL.pdf |
SFIN 4/13/2022 9:00:00 AM SFIN 4/19/2022 9:00:00 AM |
SB 241 |